A lot of investors learned a very important lesson today. There is an old saying that goes something like, “a falling tide lowers all ships.” For many topics, the adage makes sense. But for investors, it is just plain old bad advice. IBM’s surprise earnings forecast today proves my point.

It is easy to see the nation is enduring an economic slowdown. As the shouts of an impending recession get louder and louder, the overall markets sink lower and lower. But not every company does poorly as the American economy lags.

IBM is soaring today because too few analysts realize this point. When the technology bellwether announced a better-than-expected 2008 forecast and a surge in fourth-quarter revenues, Wall Street was caught off guard. Now, the value of the $135 billion company has soared by nearly 10%.

The company announced this morning that its 2007 Q4 earnings rose by 24% to $2.80 per share, thanks to revenues of $28.9 billion, a 10% increase from last year.

So why is this company doing so well when most other American firms are desperately trying to keep their head above the quicksand? The answer is simple. IBM is not an American company.

Sure, its headquarters are in New York, but much of its revenues come from overseas. Europe accounts for over 25% of sales. Asia is quickly becoming a huge profit center. And India, with its huge technology sector, is expected to be worth over $1 billion in revenues in 2008. The company is called International Business Machines for a reason, you know. Its reach is global.

While domestic sales may be hurt by a slowing economy, international sales are expected to continue to grow. Not only is the global economy soaring, but the weakened American dollar is making IBM’s products look cheaper than ever. With a Euro currently selling for $1.49, any American-made products are looking like bargain-basement deals. According to estimates, six percent of IBM’s Q4 double-digit revenue growth came thanks to a weakened dollar.

This is a very valuable lesson for investors. All too often, when we hear the word recession, we grab our money and run for the hills. The cash market is busting at the seams. But it does not have to be that way. There are still plenty of equity investments worth your attention. The more international exposure a company has, the better it will do over the next year or so.

Just remember, if the economy is on this side of the pond, it has to be booming somewhere else. Find that growing economy and make some serious money.

By Andrew Snyder
Baltimore (TFN)