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00:00 Speaker A
The one sector that kind of uh rides in the middle that I think nobody’s really talking about is in industrials. And industrials indeed are sitting at very elevated valuations, but they are beneficiaries of rising commodity costs to some degree. They’re also beneficiaries of tax reform in that any company that is going to spend on long-dated investment gets to immediately depre or immediately expense that investment over the course of this year and next and and into perpetuity now. That is a big benefit to the industrials companies that are dependent upon that long-dated spending.
00:29 Speaker A
So, industrials tend to, I think there’s a reason why industrials have performed so well and have kind of fallen beneath the radar, if you will. They’re breaking out higher, at least until the last couple of days of market weakness.
00:41 Speaker A
The industrial sector is also a big part of the small cap space. Uh it tends to get ignored somewhat in the large cap index, but it’s it’s um a sector that has done re- reasonably well in small caps too.
00:54 Speaker A
And then the other thing that I would say about industrials where it’s just, you know, kind of flying beneath the radar is it’s defense spending. When you have this multi-decade potential reset and defend defense spending given geopolitical risks globally, industrials may be a pretty big beneficiary of that.
01:08 Speaker A
So, that’s the one segment that I’m watching really carefully is maybe this is the one that endures.