A little insight on possible investment ideas

From Brad Setser's Follow the money:

Update: Jon Anderson of UBS argues that China’s electronics exports have collapsed in line with the exports of the rest of Asia. However, China’s low-tech exports — shoes, textiles, toys, furniture — have held up well. To put it just a bit differently, he argues that a lot of the press coverage about the fall in China’s low-end exports and the resulting fall in employment has the story wrong. China’s low-end, labor-intensive exports are doing (relatively) well compared to China’s electronics assembly business. He also argues that the fall in investment in Chinese real estate and related materials has added to the woes of other Asian exporters.

It's absolutely true that the lower end goods will be more sustainable than their more expensive counterparts. Overall, people will spend a much smaller portion of their income on lower value goods.

And from basic economics, we know that goods which claim a higher portion of a person's income are very elastic, while goods at the other end of the spectrum are inelastic. In other words change in income won't affect how much consumers behave towards the good. At this point, a good dividend payer which can make a reasonable amount of money in the low value goods department might be a reasonable bet to do well in this recessionary environment.