A Big-Cap to Buy When There's Blood in the Streets

Last week, I mentioned starting a "Blood in the Streets, LP" fund to invest in war-torn areas like Darfur, and I'm quite serious about the idea.

As I outlined in that prior piece, some misguided activists are pressuring investors to sell their assets in these countries. But I argue that smart investors want to be on the buying side of pressured liquidations. Besides, if these areas are vacated by the capitalists, they'll only become more isolated.

To build on this, I've started to dig up ideas for some big-cap ways to invest in the concept. With a nod to Baron Rothschild's famous saying of "Buy when there's blood in the streets," the thesis is to buy when things are horrible (much like when I launched my tech hedge fund in October 2002) and then invest in those places as they improve. The best way to drive improvement in impoverished and war-torn areas is to make people care about them.

Getting citizens and corporations to risk their capital and look for returns in these troubled places will ensure that we in the private (nongovernmental) developed world have a vested interest in helping these areas create sustainable economies of private ownership and trade. (I refuse to use the word "free" to describe "trade" because, by definition, if two parties engaging in an exchange aren't "free," then it's not really a "trade," is it?)

Certainly, there are huge risks when investing in war-torn places. That's why there's so much upside potential, too.

Today's edition of The Wall Street Journal featured an article about Total (TOT - commentary - Cramer's Take), which underscored why this company based in, yes, France is one name on my list.

France has a long history of colonization in Africa, and Total, which bought its French competitor Elf in 2000, has long invested in oil discovery in Africa. Indeed, the article nails exactly why investing in, say, Darfur -- where civil war and genocide run rampant -- carries so much potential upside: "But the real boost [for Elf/Total] came with the company's decision two decades later [the 1980s] to step into Angola's offshore concessions in the midst of a civil war [Italics mine] ."

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At the time of publication, the firm in which Willard is a partner had no position in any of the stocks mentioned, although positions can change at any time and without notice.

Cody Willard is the manager of CL Willard Capital Management, LLC. He is a regular guest on Fox News, CNBC and other networks, and he writes a monthly column for the Financial Times. He is also an adjunct professor at Seton Hall University and the author of TheCodyReport.net, a monthly stock market newsletter. Willard appreciates your feedback -- click here to send him an email.