Fear, Frustration, and the Eurozone Crisis
Yesterday, I gave a very brief overview of what's going on in the eurozone, and Greece in particular. Today we'll examine how Fools have reacted, and how you can actually benefit from the mess in Europe!
Over the past week, The Motley Fool put out a snap poll asking members what they thought, and how they were reacting to the situation across the pond. Though highly unscientific, the survey revealed some interesting finds; namely, that fear and frustration are dominating.
Not surprisingly, only 20% of you are investing more today than before the eurozone crisis started back in 2009 (of course, there's another variable at play here: the Great Recession). And though share prices for companies that do business in Europe have been depressed lately, only 40% have been able to take advantage of the situation.
This highlights why Warren Buffett's dictum to "be greedy when others are fearful" is so difficult to follow.
Sure, you'd be sitting pretty if you had been prescient enough to pick up shares of Aflac (NYS: AFL) when they dipped down to $10.83 in 2009 on fears that they were overexposed to European hybrid securities.
But you could just as easily have tried to make a profit by jumping on shares everyone was running from -- like the National Bank of Greece (NYS: NBG) or Aegean Marine Petroleum (NYS: ANW) -- only to see the shares keep tanking, by 85% and 69%, respectively.
Frustration: Why can't they get their act together over there?!?!
Fifty percent of our respondents are stressed out by the volatility that the eurozone crisis is creating; more than 75% are tired of Europe's inability to handle its finances; and a full 90% think plain, old self-interest is preventing a real solution from being reached.
It's not surprising to see entities acting in their own self-interest. After all, that is the basis for capitalism. The real trouble seems to be from the entanglements that the creation of the eurozone has spawned.
What were once 17 independent countries using their own currencies in the late 1990s have become a behemoth of more than 300 million people of different languages, customs, and -- it appears -- approaches to fiscal responsibility, all lumped together as one. Because Greece admittedly fudged its numbers to gain acceptance to the eurozone, its people are now being told what they can and can't do by forces outside of their country, creating an untenable situation for all parties involved.
What's an investor to do?
In a recent installment of the Fool's MarketFoolery podcast, our crack team of analysts pointed out that by simply investing in companies with little exposure to Europe, we can mitigate some of the continent's pitfalls.
Taking a cue from their suggestion, you could easily put your money in Apple (NAS: AAPL) , which, though it does have sales in Europe, is doing far better in Asia. Or you could go after Berkshire Hathaway (NYS: BRK.B) , a conglomerate of businesses handpicked by Warren Buffett and guarded by an unmatched balance sheet. Or you could simply go for North American cigarette maker Altria (NYS: MO) , which throws off a hefty 6% dividend yield. Be sure you pick Altria, and not its international spinoff, Philip Morris International (NYS: PM) , if you're trying to avoid Europe at all costs.
Finally, if you want the stabilizing and income-producing benefits that come along with owning dividend stocks, I highly suggest you take a gander at The Motley Fool's newest special free report: Secure Your Future With 11 Rock-Solid Dividend Stocks. The report details 11 companies whose dividends will help pad your retirement account for years to come. The report is yours today, absolutely free!
At the time this article was published Fool contributorBrian Stoffelowns shares of Berkshire Hathaway, Aflac, and Apple. You can follow him on Twitter at @TMFStoffel. The Motley Fool owns shares of Aflac, Philip Morris International, Berkshire Hathaway, Apple, and Altria Group.Motley Fool newsletter serviceshave recommended buying shares of Apple, Berkshire Hathaway, Philip Morris International, and Aflac, and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.