Ideas
Safe bonds gain in crises, provide liquidity.
Short-term government bonds and Treasury bills (liquidity) provide almost total protection during market crashes because central banks cut rates, boosting their value. They also serve as dry powder to buy distressed assets. Historical data since 1929 shows positive returns in every major crisis. Outside crises, expected return is below 4%, but experts like Ray Dalio recommend keeping 10-15% in such instruments for ballast and optionality.
Gold royalty stocks undervalued, low-risk leverage.
Gold royalty companies (Franco Nevada, Royal Gold, Wheaton) combine the best of gold miners and gold ETFs: they have leveraged upside to gold prices without operational mining risk, high margins, diversified revenue, and low costs. They have multiplied capital 6-7x over two decades. Franco Nevada fell only 10% in 2008 and has since multiplied 14x plus dividends. Currently trading at ~24x earnings versus a historical average near 50x, offering a rare valuation opportunity as gold consolidates.
REITs resilient in crises, undervalued today.
US REITs own essential real estate (apartments, hospitals, logistics) and have historically returned ~11% annually. During recessions they gained an average 10% while physical real estate fell, except in 2008 which was a black-swan credit event. REITs are currently flat because of high rates, but lower rates in the next crisis will lift property values and demand for REIT shares. They offer a compelling risk-return profile with high, mandatory dividends.
Realty Income compounds wealth monthly.
Realty Income (O) is the iconic monthly-dividend REIT. With dividends reinvested, it returned 13% annualized, turning a $10k investment into $500k. Drawdowns in 2008 and 2020 were shallow and recovered quickly. Its net-lease model with essential tenants provides crisis resistance. The high dividend and compounding make it a cornerstone for long-term wealth building.
Self-storage leader undervalued, crisis-resistant growth.
Extra Space Storage (EXR) is a best-in-class self-storage REIT. Self-storage has returned 18-19% annually over 28 years with low volatility. EXR maintained FFO even in a high-rate, weak-economy environment. When rates fall in the next crisis, its earnings will reaccelerate and shares will reprice higher. It currently trades at 17x earnings vs a 20x historical average, an attractive entry point.
Defensive sectors outperform in all cycles.
Consumer staples, healthcare, and utilities have historically risen during recessions and delivered higher 30-year returns than the broad market (11-14% vs 10%). Their demand is guaranteed in any economy, they pass through inflation, and they attract safe-haven flows during crises. After recent underperformance due to high rates and neglect, they offer both protection and strong long-term upside.
McDonald's resilient compounder, undervalued now.
McDonald's (MCD) combines a defensive consumer staple with a real estate business. It rose 17% in 2008 and has compounded at 11% annually. Growth runs on four levers: 2-3% new units, 3% price increases from inflation pass-through, operating leverage, and 1% annual buybacks, plus a growing ~3% dividend. Almost half its income comes from captive franchisee rents, insulating it in downturns. Currently trading at 21x earnings versus a 24x historical average, below its typical premium.
Old Dominion overvalued, risky despite quality.
Old Dominion (ODFL) is a high-quality counter-cyclical freight company that has multiplied 380x, but it now trades at 40x earnings, double the market average. While the business would hold up well in a crisis, the stretched valuation makes it extremely sensitive to a drawdown, with potential for very large declines despite its quality.
Undervalued counter-cyclical stocks compound through crises.
A curated group of counter-cyclical stocks that rose during the 2008 crisis and continued delivering high returns now trade at reasonable valuations: AutoZone (car repair proxy, 17% post-crisis annual return), AMGEN (healthcare, 14x earnings), AJ Gallagher (insurance), Pulte Group (homebuilder at 12x, 50% discount to market), Netflix (near-utility at 23x, subscribers sticky), Waste Management (essential waste services), and Darden Restaurants (quality-value dining). These offer crisis protection plus strong compounding, currently overlooked.
Walmart overvalued at 40x earnings.
Walmart (WMT) is the only counter-cyclical stock in the review that trades at a very high valuation of nearly 40x earnings versus its historical average of 20x. Although it is a strong business, the current multiple leaves little margin of safety and makes it vulnerable to a re-rating lower.
This El Arte de Invertir video, published July 05, 2026,
features Alejandro Estebaranz
discussing Short-term government bonds / Treasury bills, FNV, RGLD, WPM, VNQ, O, EXR, XLP, XLV, XLU, MCD, ODFL, AZO, AMGN, AJG, PHM, NFLX, WM, DRI, WMT.
10 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Alejandro Estebaranz
· Tickers:
Short-term government bonds / Treasury bills,
FNV,
RGLD,
WPM,
VNQ,
O,
EXR,
XLP,
XLV,
XLU,
MCD,
ODFL,
AZO,
AMGN,
AJG,
PHM,
NFLX,
WM,
DRI,
WMT
