Good morning!

It's starting to feel like a bull market again, with some remarkable recoveries in share prices from the recent Brexit sell-off. This is probably because most companies reporting seem to be dumbfounding the doomsters, and saying that it's pretty much business as usual.

Although we should also bear in mind that economic downturns happen gradually, and then feed on themselves, so we could have a deterioration yet to come. I have been pondering the recent comments from Victoria (LON:VCP) (in which I hold a long position), saying that the impact of Brexit is positive for them - mainly due to weaker sterling.

This got me thinking - we don't have to buy or hold the entire market. We can & should cherry-pick. So based on reports from many companies in the last month, at the moment I'm looking for bombed out shares with the following favourable characteristics;

Dollar earnings - or a broad spread of international earnings, which insulates (or benefits from) translation into weaker sterling. E.g. Empresaria (LON:EMR) , or 4imprint (LON:FOUR) .

Exporters - companies based in the UK which export a lot of product - they just got a lot more competitive (although bear in mind that any imported raw materials they use will also rise in price).

Import substitution - UK vendors of products, which are benefiting from weaker sterling, and can steal market share from imports - e.g. Victoria (LON:VCP)

Hospitality - forex movements, and terrorism means more people holidaying in the UK. Also there is some evidence that UK consumers want to do more things, rather than buying more stuff. Pub groups have been reporting good sales recently.

Defensive - anything non-cyclical, or counter-cyclical is worth considering, if it's cheap, and you think there's a recession coming (personally I'm not convinced there necessarily will be a recession, but we'll have to see).

Growth companies, particularly small caps, which have found an exciting niche, tend to carry on doing well, even in an economic downturn. So I'm thinking here about successful, rapidly growing e-commerce businesses, for example Boohoo.Com (LON:BOO) (in which I hold a long position).

Oversold - companies which are trading well, and have stated a positive outlook recently, but where the share price has been battered…

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