While the economic situation of the eurozone and the upcoming presidential elections have created a climate of uncertainty for investors, they have set the stage for doom and gloom in the minds of many critics.

Analysts have been flooding the media with warnings of a pending market catastrophe. Many doom-and-gloomers push gold and commodities to avoid inflation of the U.S. dollar as a way to weather the downturn. Doctor Doom himself, Marc Faber, predicts a 100% chance that a global recession will ensue by the end of 2013. (That would certainly fuel sales of his newsletters.)

Others are even more extreme. Economist Robert Weidner, for example, expects the United States to reach unseen levels of as much as 50% unemployment, a 90% stock market decline and 100% annual inflation.

Obviously, the doom prophets have an agenda. Most use fear-mongering techniques to sell books and newsletters, and build an audience with such extreme forecasts. Obviously, these tactics work, based on the amount of airtime and publicity  they receive.

But they need to understand they are only doing harm to the economy by scaring investors with their incessant nonsense. Not to mention, annoying those who understand their game.

To have a grasp on what’s really at hand, all you need to do is look at the long-term upward drift of the stock market. Sure, the upward drift is punctuated by sharp declines and panics. But each decline has been short-lived and countered with additional upside. If you look at the short-term picture, then you’ll find that improving U.S. economic numbers, along with progress in the eurozone, indicates that the worst is behind us. 

What I find most telling is that the very stocks you would expect to suffer most during a down economy are actually thriving. These are not companies that sell ammunition, survivalist foods or even basic goods. I’m talking about companies that sell the most luxurious and overpriced items imaginable. 

#-ad_banner-#Their relentless success defies the Dr. Doom types so much, that I call these stocks “anti-doom trades.” These companies sell $10,000 watches and $50,000 diamond necklaces, items one simply wouldn’t purchase if the economy was as bad as the doom-and-gloom brigade want people to believe. 

Stocks such as Richemont (OTC: CFRHF) and Tiffany’s (NYSE: TIF) have been on a nice upward move this year.

Let’s take a closer look at each of these two anti-doom stocks…

Richemont 
This Zurich-based, luxury conglomerate may not be a household name, but as the world’s second-largest luxury goods group, many of its brands are well known. Richemont owns many iconic luxury names such as Cartier, Mont Blanc, Van Cleef & Arpel, Panerai and Roger Dubuis. 

Richemont’s sales have dramatically increased in the past five months, reaching $8.87 billion, a 29% increase from the year-ago period. This is not the type of performance you would expect if the doom-and-gloom brigade were accurate.

The good performance can be attributed to Asia’s economic growth and improving global economies as more of Asia’s population moves into the middle class, the greater the demand for status symbols such as Richemont offers. As a result, Richemont has projected profits to increase 20 to 40% for the first half of its 2012  fiscal year. Shares are trading higher by about 25% this year, with every pull back being aggressively bought.

Tiffany & Co. 
This luxury brand is likely more familiar with consumers than Richemont. This $7.93 billion market cap stock specializes in the design, manufacture and retail of fine jewellery worldwide.

Although the company reported a slight 2% increase in net income and a modest 1.6% sales increase year-over-year in the second quarter of 2012, things have slowed for this luxury retailer.

Despite the announcement of 28 new stores, Tiffany & Co. lowered its sales expectations in May after it failed to meet analysts’ forecasts. Therefore, despite the slowing sales, Tiffany & Co. maintains a very bullish outlook on the future. This internal optimism, as reflected by the expansion, can be a bullish signal for investors. This slowing creates a great entry point with this luxury stock.

If that doesn’t convince you, then you should know that major institutions including the Vanguard Group and JP Morgan Chase own nearly 90% of Tiffany & Co.’s shares. This means that big-money players believe in the stock’s long-term success.

In fact, if we take a look at the technical picture, then we can see that the price formed a double bottom between the end of June and mid-July in the $50 range. It has since rallied nearly 26% to $63. Shares are presently trading above the 50- and 200-day simple moving average.

Also on the bright side, the stock still offers a dividend yield close to 2%. In fact, Tiffany & Co. and Signet Jewelers Ltd. (NYSE: SIG), are the only stocks in the industry that pay a dividend.

Risks To Consider: While I think the luxury sector is signalling bullish times ahead for the stock market, anything can happen. It’s important to note that should there be an actual major economic crisis, then luxury companies may be the first to feel the heat. Remember to always use stops and position size depending on your risk tolerance and account size on every investment.

Action To Take –> I like both of these luxury stocks at current price levels. I like Richemont for the diversity of its product lines, continued success during economic uncertainty and the fact it’s not tied down to retail stores as Tiffany is. Tiffany & Co., on the other hand, paints a compelling picture with its high levels of institutional ownership and dividend payout.