Have you heard of this company? HITT

While the financial media and various pundits and intellectuals remain focused on visions of impending economic armageddon, we recommend investors stick to their investment discipline -- and we have written many times that we believe the best foundation for a solid investment discipline is allocating investment capital to well-run, growing businesses.

Over the weekend, the UK's Telegraph ran an article entitled "With the US trapped in depression, this is really starting to feel like 1932." The story opened with a quotation from academic and neo-Keynesian Robert Reich who opines: "The economy is still in the gravitational pull of the Great Recession. All the booster rockets for getting us beyond it are failing."

Meanwhile, the New York Times ran an article on July 2 which remains their most-emailed story of the week, about "A Market Forecast that says 'Take Cover'" -- featuring a technical analyst who believes the Dow will drop well below 1,000 (the Dow is currently at 9,743).

We don't claim to be able to predict the economy's next move (although we think economist Brian Wesbury does an excellent job dismantling the 1932 argument here), and we never claim to be able to predict where the Dow is going to go next (we categorize systems that purport to tell you what the market is about to do as "snake oil," and we discuss the problems with predictions of extreme market collapse in this March 2009 post about a similar prediction from Harry Dent). We believe investors should devote their energies to searching out something that they actually can identify with a reasonable degree of effort: well-run businesses in fields of future growth.

To that end, we have highlighted various characteristics of a "Taylor Frigon growth company" and provided readers with examples of actual companies we own in our investment strategy that we believe fit that description -- see previous posts describing Dolby, Tractor Supply, and ResMed.*

Another company we own in our Core Growth Strategy is Hittite Microwave.* Hittite designs and develops high-performance integrated circuits, modules, subsystems, and instrumentation for technically-demanding applications operating in very high frequency ranges.

They are a leader in chips used for applications in the microwave band (generally from six to twenty gigahertz) and the even higher-frequency millimeterwave band (from twenty gigahertz to one hundred ten gigahertz). These wavelengths are used primarily for military and commercial radar systems, satellite uplink and downlink stations, military electronic countermeasures, vehicle anti-collision systems, and for the point-to-point microwave radio receivers that can be used for wireless traffic "backhaul."

In the world of wireless data (including all the data you send and receive on your cellphone/smartphone/netbook/laptop/tablet device operating on a cellular network), "backhaul" refers to the transport of the data from the cell tower back (after your mobile device sends the data to the cell tower). Increased traffic demands -- especially the increased demands from video, as discussed in this recent article -- make backhaul capacity extremely important for wireless providers.

While backhaul can be accomplished with copper cable or with fiber optic cable, it can also be done via point-to-point microwave, which does not require digging trenches and laying cable and which thus enjoys some cost and flexibility advantages, especially wherever laying cable may not be practical, as well as wherever ease and speed of deployment are a factor.

Hittite's return on equity is over 17%, its long-term debt is zero, and its most-recent quarter saw year-over-year growth in operating earnings of 58.8%. We believe it is a good example of the kind of companies investors should be searching for, even in the face of what we have previously called "unfriendly business climates."

We would argue that this type of focus is the best antidote to some of the nonsense being pumped out of the financial media right now.

* The principals of Taylor Frigon Capital Management own securities issued by Dolby (DLB), Tractor Supply Company (TSCO), ResMed (RMD), and Hittite Microwave (HITT).

For later posts on this same subject, see also: