{"id":114,"date":"2009-04-06T09:23:00","date_gmt":"2009-04-06T13:23:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=114"},"modified":"2018-08-23T13:12:18","modified_gmt":"2018-08-23T17:12:18","slug":"research-development-spending-continues","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2009\/04\/06\/research-development-spending-continues\/","title":{"rendered":"Research & development spending continues"},"content":{"rendered":"

I hope that everyone’s<\/span> weekend was outstanding!<\/span><\/p>\n

Waaaay<\/span> back when the blog was in its early days I had said that strong, well-managed businesses typically behave in a rational way, even if their investors do not. That meant that there would be opportunities in a recession that did not exist in a boom. When the economy is in recession everything is cheaper: labor, raw materials, other businesses, etc. So I have been on the lookout for evidence that businesses are behaving rationally and there is good evidence of that. Hence today’s post.<\/span><\/p>\n

The Wall Street Journal is reporting today that U.S. businesses, while they are cutting jobs and wages, are still spending on research & development (R&D). They specifically say:<\/span><\/p>\n

“Wary of emerging from the recession with obsolete products, big U.S. companies spent nearly as much on research and development in the dismal last quarter of 2008 as they did a year earlier, even as their revenue fell 7.7%, according to a Wall Street Journal analysis. The sampling looked at 28 of the largest U.S. R&D spenders, excluding deeply troubled auto makers and the drug industry, where R&D spending is dictated by government requirements.<\/span><\/p>\n

“Big R&D spenders say they’ve learned from past downturns that they must invest through tough times if they hope to compete when the economy improves. Many innovative products, from the iPod<\/span> to fuel-efficient aircraft engines, were hatched during downturns. If past patterns hold, today’s spending may plant the seeds of innovations that triumph in the recovery.”<\/span><\/p>\n

Interestingly, the second paragraph is almost identical to something I wrote back in the autumn. The secret to investing success and to business success can be summarized in four little words: “buy low, sell high.” So it’s nice to know that some businesses out there agree. An investment tip for everyone…<\/span><\/p>\n

If you want to know who the strong businesses are, and that are good candidates for long-term investment are, then pay attention to which businesses can afford to spend big money in a down turn. That tells you that the business has solid: products, management and prospects. In fact, when I was buying stocks for the first time in 5 years recently, I was buying those businesses that have demonstrated<\/span> over the last many recessionary months that they meet the criteria I outlined.<\/span><\/p>\n

Here comes another post…<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

I hope that everyone’s weekend was outstanding! Waaaay back when the blog was in its early days I had said that strong, well-managed businesses typically behave in a rational way, even if their investors do not. That meant that there would be opportunities in a recession that did not exist in a boom. When the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-114","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=114"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/114\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}