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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (36860)	4/27/2002 9:43:23 PM
From: j g cordes	Respond to of 68396

Three ideas from the short side "Don't get your shorts in a bind! By Chris Kraeuter, CBS.MarketWatch.com Last Update: 12:47 AM ET April 26, 2002 DALLAS (CBS.MW) - It seems a lot of pros had no problem picking losing stocks in the last three years. The difference between them and David Tice is that Tice meant to do it. His Prudent Bear Fund (BEARX: news, chart, profile), with $210 million in assets, makes money by shorting stocks, or picking stocks that long-term investors should avoid and betting they will go down. As the market has tumbled this year, his portfolio has returned 21 percent, according to fund researcher Lipper. During the past three years, Prudent Bear is up 52 percent, cumulatively, vs. a nearly 20 percent decline in the S&P 500. Tice still sees more carnage to come for the stock market and has several stocks that he thinks long-term investors should avoid, unless they want to bet directly against them. "We have not cured the excesses," said David Tice. "Corporate earnings will continue to decline further." Tice said Retek (RETK: news, chart, profile), a developer of retail management software, is due for a tumble and should be avoided because its days of rapid revenue growth are over. He said he's already seen a slowdown in sequential revenue growth and he expects a "rapid deceleration in future revenue as retailers cut back on their capital expenditures." Shares closed up 66 cents Thursday to $22.57. He also dislikes sub-prime auto lender AmeriCredit (ACF: news, chart, profile). Shares recently traded at $46.13 - yet another high for 2002 - but Tice said the good times can't last with so many people out of work. "In the current economy, with the consumer dramatically debt-laden, we expect defaults to increase significantly. We are observing signs that the company has kept its delinquency rate down by 'extending' some of its loans, by essentially forgiving a month's payment and tacking it on to the end of the term." Shares fell $1.25 to $44. He also takes issue with Eli Lilly (LLY: news, chart, profile) and its hefty price tag: "One of the highest big pharmaceutical company valuations even as earnings are collapsing with earnings down 22 percent in the first quarter." He expects the company to miss its revenue target for the current quarter and for further price pressures for Prozac, which will also hurt profits. Shares rose 51 cents to $70.40."