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While some investors crave optimistic reassurance about a road to recovery paved with stimulus and lined with green shoots, this Fool is interested only in straight talk.
Separating straight talk from spin can be tricky, but when corporate executives express views that could chase you out of their sector for a time, then you know you have boarded the corporate version of the “Straight Talk Express.”
I've identified straight talkers for each of the sectors I follow closely:
- For sticking his neck out to warn of a potential catastrophe facing dry bulk shippers and their financiers, Anastassis Margaronis of Diana Shipping (NYSE: DSX ) earns this Fool's straight-talk badge of honor.
- For pointing out the inconvenient truth that China's commodity buying spree does not equate to sustainable demand resumption, Joy Global's (Nasdaq: JOYG ) Michael Sutherlin takes the prize.
- For upstaging Lakshmi Mittal of ArcelorMittal (NYSE: MT ) with an unabashed reality check regarding the American economy and its struggling steel industry, Nucor's (NYSE: NUE ) Daniel DiMicco is this Fool's newest champion for truth in a world full of parroting cheerleaders.
When the CEO of the nation's top steelmaker tells you "we are in for a prolonged and slow recovery" and that "you best be prepared for it if you're going to be a survivor," Fools are advised to take note. Remember, it's customary for CEOs to downplay challenges and instill confidence among investors. Keep that in mind as we consider what DiMicco said next:
This will be the longest jobless recovery in U.S. history ... the granddaddy of all jobless recoveries. I'm afraid we are "plateaued" out.
It sounds like he's describing a full-fledged depression … a word few have been willing to toss around since this equity rally sprouted in March. Indeed, DiMicco asserts a real jobless rate of 16% -- and atrocious outlooks for construction and automotive manufacturing (through at least 2012) -- as the writing on the wall. Keep DiMicco's perspective in mind when assessing the wisdom of a stake in Ford (NYSE: F ) , the valuation of a construction play like USG (NYSE: USG ) , or the likely impacts of another wave of mortgage defaults on the likes of Bank of America (NYSE: BAC ) .
Readers of my CAPS blog know that I've been using the dreaded D-word since early 2008 (I'm a laugh a minute at parties). Thoughts of a protracted depression to rival the experience of our forbears are unnerving, to say the least, and I completely understand the attachment to optimistic scenarios. Like Daniel DiMicco, though, I value earnest discussion and comprehensive analysis over the temptation of wishful thinking.