With stock markets crashing like there was no tomorrow, the fear of a global recession is becoming a reality. During such times, smart institutional and private investors don‘t watch from the sidelines but are deploying their capital into recession-proof sectors that provide “essential services“. With all kinds of stocks getting liquidated at the moment, investors and portfolio managers alike are basically just re-allocating funds to re-balance their portfolios in order to adapt to the new realities. At best, recession-proof stocks are added to investment portfolios to safeguard them against times of uncertainty and economic decline – while at the same time, betting on the next big industry evolving as a clean winner out of this dirty mess.
Renowned John Persinos describes in his article “The Recession-Resistant Power of Utilities” why this specific breed of service providers is known to be immune to recessions:
“The growing need for utilities will never wane... Whether we’re in an expansion or contraction, in a bull or bear market, people will always need certain necessities... Utilities confer growth, safety and income, in good times or bad. In these fraught market conditions, when the daily news sometimes seems like a nightmare, utilities are a sleep-well-at-night sector...”
With Zinc8 Energy Solutions Inc. targeting utilities, they have focused on some of the most stable partners and customers in the market place. Unlike many other companies, business at public power utilities typically does not slow down during a recession but decision makers, following state government regulations, tend to even increase capital investments, ramping up (e.g. efficiency projects) in order to make services more affordable for their customers.