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Strategies & Market Trends : 50% Gains Investing
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To: Suma who wrote (70907)1/8/2009 10:09:22 AM
From: Keith FeralRead Replies (1) of 118717
 
Construction is an absolute disaster at the moment. Virtually everything in commercial and residential construction is taking an extended vacation. I wouldn't hesitate to blow out of the profit in any stock at the moment. Lock and reload!

I think the best theme out there will be mortgage related bonds in 2009. It's the front line of any hopes to create an economic recovery. I'm not really sure how to play it, but insurance related companies seems like the best play within the financial space.

Insurance companies have alot of exposure to MBS on their books. However, they aren't in the same predicament as the banks. REIT's could be a good bet too. HIG and PRU are my favorite insurance stocks and SPG is my favorite REIT. MAC and DRE are high yield plays in the REIT space.

It will be another 6 months before I start looking at any of the cyclicals. I am going to bury myself in yield for the first part of the year, hoping that real estate inventory starts to wind down as mortgage rates fall to 4% and the value of homes stabilizes.

Still, I don't want to have a whole lot to do with the banks unless the price is right. The stock prices are well ahead of their earnings valuations for 2009, and that's not reflecting the fact that banks like JPM will post their first losses in the December quarter. So the banks could be vulnerable to valuation problems for the next few quarters too.
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