Defense and Winning Championships

The popular wisdom in sports is that the team with the best defense wins. Wall Street Journal Online writer David Gaffen builds on this theme in profiling money managers who are getting back into the market with defensive stocks.

In the MarketBeat blog post Defense Wins Championships… and Helps Returns, Gaffen notes that several managers see the recent steep fall off in the market as an opportunity to buy undervalued stocks at discounts that are rarely seen.

Managers are focusing on companies that can move higher despite a struggling economy, such as defense contractors, staples and even some oil companies.

In particular, Gaffen notes that since Thursday’s close, the defense-oriented AMEX SPADE Defense Sector ETF (PPA) is up 6%, and the Consumer Staples Select Sector SPDR Fund (XLP) has gained 4%.

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