The No.2 man at Verizon (VZ) told an investing conference that the telecom company was not seeing any effect from the economic slowdown. Management from News Corp (NWS) made similar comments recently. The head of CBS (CBS) said that he had seen no impact on his local stations. He commented: We have not seen anything” that points to a recession in any of CBS’ businesses, which he said all are showing growth.

While AT&T (T) has said it sees slowing in its consumer landline operations, it does say that it business and wireless segments are doing fine. Its shares and Verizon’s are trading near their 52-week highs. Wall St. must share management’s confidence.

The search is on for industry pockets which might avoid a big slowdown in GDP. Investors are desperate not to have their money in industries which may suddenly fall apart. American Express (AXP) shareholders learned that the hard way recently.

The trouble with being an investor in a "recession proof" industry is that buyers tend to pile into the stocks. There is an unnatural rise in their value. Too much demand for perceived safety. When any bad news does come out, shareholders are badly injured trying to get to the fire exits.

The cautious view on this is that virtually no big business is going to dodge the bullet of falling GDP and that no stock is safe. But, investors will not accept the premise that they can’t out-think the market. Someone is always smarter than the wisdom of crowds. High IQ trumps the herd mentality every time.

Those are the investors who usually get crushed.

Douglas A. McIntyre

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