By Alan Murray and David Meyer
November 19, 2018

Good morning.

Fortune releases its annual investor’s guide this morning. Picking stocks at a time when the economic cycle could be nearing its end is not for the faint of heart. But our team has done a good job identifying those that they think can weather a downturn. Among their picks:

Facebook – This one takes a strong stomach, given recent revelations, including this story in Sunday’s New York Times suggesting the company’s critics on Capitol Hill are multiplying. But if you believe like I do that the new and divided Congress isn’t going to be able to do much of anything, and if you think the social network can right itself and get its business back on track, then this is one hell of a buying opportunity. The stock is down 36% since July. We also like Alphabet and Texas Instruments.

Activision Blizzard – Even if the economy turns south, video games won’t lose their appeal…indeed, people may have more time to play them! Pay attention to this one, and to Take-Two Interactive Software.

Home Depot – DIY work also stays strong even when the economy turns down. We think TJX and Burlington Stores may also benefit from bargain buying.

And the ageing of the population is inexorable (I just passed a milestone myself on Friday), which makes health care a sure bet. Our team likes Abbott Labs, Merck and Illumina, among others.

You can find more of the Fortune picks here. And if you are wondering: how good are we at this compared to, oh, a dart board or blind finger pointing? Well, last year’s picks returned 5.2%. That beat the MSCI world stock index, but fell short of the S&P 500’s 6.6%. Our downfall was excessive optimism about the five Chinese stocks we picked—including Alibaba and Tencent—which all took a pounding. Our non-China picks delivered an 11.4% return.

More news below.

Note: An earlier version of this article included an incorrect figure for the returns of Fortune’s 2018 stock picks.

Alan Murray
@alansmurray
alan.murray@fortune.com

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