By Dan Ferris in the S&A Digest:

Investors overreacted to news on Procter & Gamble today, with the stock down 3% on a 4% drop in its quarterly profit.

P&G is one of the all-time greatest businesses. It sells its products to more than a billion people. It has 23 brands that do $1 billion or more in annual sales, and another 18 that do at least $500 million. It earns more than 50% gross margins, 19% pretax. The company is well known for its ability to build and maintain branding during tough economic times. Procter & Gamble practically gave birth to the modern radio advertising industry during the Great Depression by inventing the soap opera to boost sales. Its products cost only a few dollars at most, and you're almost guaranteed to have at least one of them in your home.

If you're worried about inflation, owning a great business that sells a simple, inexpensive product is the best way to fight it. Example: Our two teenaged boys inhale Pringles, those perfect oval-shaped potato chips in the red can. Pringles were $1 at Wal-Mart not long ago. A couple of days ago, they were $1.50. I don't know if inflation went up 50% the last few months, but Pringles did. When you're charging $1, a 50% price increase isn't perceived as unfair. If Pringles sold cars, furniture, or big appliances, a 50% price hike would put it out of business overnight.

Incidentally, Pringles is a Procter & Gamble brand.

I've got a whole list of the world's greatest businesses, which I call "World Dominators." Seven out of nine of these stocks are showing a profit since we recommended them. Five of them are still screaming bargains.

Every investor knows instinctively that the time to buy is when things look bad. But few investors know how to buy with the confidence of a pro. Buying World Dominators is how you gain the certainty and deep sense of conviction you're going to be more than just OK... you're going to make money.

Crux note: Dan Ferris is the editor of Extreme Value. To gain access to his World Dominator portfolio, click here...

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