Monday, 25 February 2008

I am bearish...really bearish...selling stocks here:

I am an avid reader of Mish, and lately Reggie Middleton's BoomBustBlog. They are probably the two most informative producers of economic and market related information anywhere, and everything I read here, and elsewhere, points me to a continuing deterioration in economic fundamentals, pretty much led by the US (although exported to Europe/Asia through risk transfer mechanisms such as CDO's).

Homebuilders look screwed, monolines seem finished, as I can't see the plan to split them into two parts, a "good" part and a "bad" part, being anything other than fraudulent conveyance, REITs look like the next crash victim as the CRE crunch hits hard and fast (lots on this posted over at Calculated Risk also), and with the housing crash in full force, bank lending taps turned off and unemployment increasing, retail looks set to get hosed also.

On that note, I've put on some more shorts, selling:

Aeropostale (ARO), a US clothing retailer, at $27.44 in ~$27k
Hovnanian Enterprises (HOV), the builder, at $10.01 in ~$20k
Centex (CTX), the builder, at $23.30 in ~$23k
Boston Properties (BXP), a REIT, at $88.04 in ~$26k
Simon Property Group (SPG), a REIT, at $85.77 in ~$25k

These all look like near-guaranteed to go down over the medium term, with fundamentally flawed businesses in this environment. I'm also looking at shorting Assured Guaranty (AGO), the monoline, and getting long Jones Soda (JSDA)...really struggling to find longs I like, but this one looks like it has potential. More later.

I'll get the spreadsheet updated in a bit, have been on the road for a couple of weeks so not been as active. Time to get back to it, I was hoping February would be a more profitable month, but the Oil short caught me out, and I didn't keep on the long AUD versus both Yen and the Pound which would have really paid out. Oh well, plenty more opportunities out there.


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