Well, we now have a lower high and a lower low it would appear. The glamour/swinger stocks appear to be leading downward. And as a couple of recent posts have noted, the public has bought fully back in. I'd say most of the requisite tumblers have fallen into place to remove the safety from the "sell" button. Now, unless you're already 100% short, I would appreciate more discussion as to the best targets and entry strategies.
As noted, retail and housing were leading us into this downleg. Does that mean they are the best targets to sell into bounces? Do we just sell into bounces, or establish some more exposure at the market? After being burned so many times, I guess I'm inclined to wait for strength to sell into.
I am a little concerned about restaurant shorts. I know it seems like they should suffer, but I was amazed at how well they handled the last few quarters. Revenues dropped off as anticipated, the stocks tanked, but the earnings actually held up surprisingly well as the companies shed costs faster than the declines in revenues. Were we just EARLY? Or WRONG? What is different on this leg down vs. the last time that would take down restaurant earnings?
I also learned something about auto retailers. They don't make their money off auto retailing! They make it off the parts and service (and boy do they! 50% margins!) So, unless something is going to come along to trip up their parts and service biz, or hurt their margins there, they will ride out tough times much better than I'd figured. I don't think I was just early on that one, it seems as though I was flat out WRONG.
I've also been surprised at how many near-death companies have been granted waivers by their creditors. I suspect that will end on the next go 'round as creditors become increasingly concerned about ever seeing *any* of their capital returned.
`BC |
