Stock Market Correction No Big Deal

Without a doubt there are more than a few investors clutching at their hair and ripping it out in painful clumps at the sight of the DOW which has plummeted more than 800 points in just two days. And of course other indexes are falling handily as well.

For those who have no hair, they may just be tearing their eyeballs out.

I don't mean to make total light of the situation. It is painful for anyone to watch their portfolios lose hard earned cash. I don't like it anymore than anyone else. But these things are also inevitable, especially since the stock market has done extremely well for at least the last four or more years. At some point things simply have to turn back to a bit of reality. And the reality is that the markets are and were largely overbought.

And really, the selloffs in the markets are really due to panic, not necessarily sound financials. Earnings reports have not been that bad folks.

There is the issue with China devaluing their currency. There is the issue of the recent Greek crisis and the question as to whether or not Greece is really out of the woods. There is unrest with regard to Iran, and the entire Middle East. There is an upcoming potential change of characters in the political world. And there was a recent pull back in jobs data, and of course there is talk of the Fed upping interest rates.

So I get the unease.

But time and time again markets have fallen and risen back up, and then some. And I see no reason why this would not be more of the same. This is normal for the markets to do this, and because it does happen I always say it is a good idea to buy into the upswings in the markets, but leave enough cash behind so that when the markets lose their tailwind you can buy into the panic and cash in on the other end of it.

Investors are on a selling frenzy. As for me, I will be bargain hunting. Now is the time to buy. Not panic. The stock market correction hurts. But really it is no big deal. But it is a potentially big opportunity. Opportunities like this don't come around often. This opportunity has taken four long years to come around. I say pounce on it.

Monster Or Coke?

For some time I have been eyeing the shares of Monster Beverage Corporation since this happens to be one of the fastest growing companies and stocks in the entire beverage industry. When you're thinking about making any investment decision when it comes to beverages—which are usually quite boring—one certainly would be wise to pay particular attention to anyone in this sector who has the ability to make some waves unlike anyone else, and certainly Monster Beverage Corporation is doing that handily.

Until now I had not been able to come to a conclusion as to exactly how I wanted to approach my interest in this company. First, I wanted to take a closer look at other alternatives, and fully decide my best in to this fast growing brand and the company that owns it. And that brought me back around to Coca-Cola's doors.

That's because Coca-Cola is and has certainly been keeping a close watch on this company as well. And despite claims of rumors as much as two years ago that Coca-Cola was not in talks to buy into Monster, those claims have come full circle—and Coca-Cola now owns nearly 17% of the company and has two board members situated there as well.

My suspicion is that somewhere down the road—and it may be years down the road—The Coca-Cola Company will have quite a lot more to do with Monster Beverage Corporation, be it in distribution, new product development, or marketing. In fact, I believe if the popularity of the Monster brand continues, Coca-Cola may well just buy the entire company.

You have to keep in mind that one thing that Coca-Cola is good at, besides making Coca-Cola of course, is recognizing who the next big player is going to be in the market. Coca-Cola may not be as good at copying trends. But it certainly has the money to buy into who happens to be trendy. And that helps to make Coca-Cola a fairly interesting choice when it comes to buying those trends as an investor.

Coca-Cola has done this in the past by buying Glaecau, makers of Vitamin Water, and by buying into Green Mountain Coffee Roasters and the Keurig and K-Cup empire that belongs to GMCR.

It's true that Coke may have fallen short getting into the energy sector with brands like Full Throttle and NOS not having the ability to capture enough market share from Monster and Red Bull to make any real impact on its presence in this part of the industry. But it can make money on the distribution end of a popular brand like Monster (and has been doing so for quite a while), and it can make money by taking on some ownership of the brand portfolio.

So, what else makes Coca-Cola an enticing prospect over Monster?

Even though Monster Beverage Corporation is more than just the Monster energy drink empire, Monster is really the brand that put it on the map. But it also happens to be a trend. Coca-Cola can as easily buy into a growing trend as it can later sell its interest in that trend if consumer tastes change and the entire sector of the industry goes bust. Just owning Monster could allow you to enjoy a fantastic ride up. But if the brand hits a brick wall, it's also going to be one heck of a ride down as well.

Owning shares of Coca-Cola won't entirely insulate you from any negative movements in any given sector of the beverage industry. But it will provide the investor far more insulation than being entirely invested in a company that may have limited ability to recover from a change in trends that would affect its flagship brand.

If you want to enjoy the upward mobility of a company like Monster Beverage Corporation, I say buy shares of Coca-Cola and you'll enjoy the best of both worlds. And if other trends develop in this sector, you can bet Coke will have its eye on it, and will reach into their pockets to let Coke shareholders in on it as well.

The Markets Are Not Rattling Me, Still

I said yesterday that I did not believe that the announcement by the Fed was a negative for the economy, and despite today's even sharper decline of over 350 points, and like effects happening in other markets across the globe over the Fed's comments, I stand by what I said.

The declines in the markets are an overreaction, and I think the trend that the Fed is indicating is a positive one, not a negative one.

Sure, interest rates did infact rise to a two-year high. But the dollar also rose, and based on the most basic things, I think these are signs of a strengthening of the economy. Not a weakening. Granted, the interest rate hike is not due to the Fed, but rather due to market reaction to the Fed, and certainly the Fed raising interest rates would signal growth in the economy needs to be slowed down (a positive sign), but this is again, just a reaction.

The fundamentals are strong. The markets are overreacting. There is nothing to see here.

I am still a buyer. As I said two days ago, I am cautiously optimistic. I remain so. I can't control the impulse of big players on Wall Street to sell off their stocks and send the markets into a freefall. But I can control my targeted response, which is to react contrary to their negative, and buy into their frantic frenzy to sell.

Shares of my favorite companies are on sale. Shares of companies I have been waiting to buy that were overpriced are coming into target buy territory. I don't see any fundamental reason for the selloff. If the economy improves then the Fed will change course. How is that a negative? If the Fed is suggesting that the efforts it has been employing to prop up a poor economy may soon not be needed, how is that a negative? If the training wheels are not necessary, how is this a negative?

I'm not buying into the idea of the selloff. But you can bet your ass I am buying into the unfounded frenzy that's causing stocks to go on sale. The sharp declines cannot continue contrary to the fundamentals, and that means gains for anyone who is going to buy into this much needed dip in the markets.