Financial winter is here and the temperature of the market seems to be dropping anew. Credit markets are frozen and the line for government handouts grows by the day. There is no easy fix to the morass.
That much is clear.
As such, we will have plenty of time to contemplate exactly where it is we want to go from here. Hopefully, we won't make the same mistakes twice, and, in that way, some good may come out of the carnage after all.
We all know how we got into this mess. Greed and debt led to asset value growth that was unsustainable. The piper is calling in a major way.
He'll have plenty of listeners, mainly those now unemployed. Job losses are growing by the minute with some speculating that unemployment rates will grow to 10% or more before this recession is finished.
Certainly, the craziness in the mortgage market with its Wall Street accomplice had much to do with our troubles today. But then again, so did weakness in our education system. Shortcomings there have as much to do with job losses to overseas competition as anything else.
For too long we have ignored our education system. We have fallen behind the rest of the world in key areas like math and sciences.
We used to be proud of our education system, but that is no longer the case. We need to use this opportunity to correct that, and I think we will.
In most recessions, education is a beneficiary. One sure way to improve your lot in life is to increase your knowledge base.
That's why online educators look to be a safe haven investment during this crazy crisis.
Companies like ITT Educational Services (NYSE: ESI) are poised to benefit from those people who are unemployed and have a desire to change their status.
In the last year, ESI has formed a nice, reverse head-and-shoulders chart that may be a very bullish signal for the stock. Shares are off the highs of the past year, but they have recovered nicely.
Earlier in the year, concerns over student loan financing pushed the education sector lower. Those fears may have been overblown. What is more important is that enrollment looks strong, and in this environment should be getting stronger.
In late October, ESI announced that student enrollment at the end of September was nearly 15% higher. Analysts noted that enrollment benefited from liquidity provided by the government for student loans.
The numbers should only get better as its results did not include the impact of the credit crisis and recessionary conditions. With many expecting a long and deep recession, enrollment should grow during 2009.
Louis Navellier's PortfolioGrader, which rates nearly 5,000 Wall Street stocks, rates ESI a B or Buy.
Jamie Dlugosch is a contributor to InvestorPlace.com.
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