No Santa For Retail, But Hope For E-Commerce
Posted On Friday, December 26, 2008 at at 1:46 PM by Finance FanaticDid this look like your mall this past week? Well, probably not quite, but I definitely noticed a lot thinner crowd circling the stores these last couple of days. Retailers were hoping for a miracle coming into this last week before Christmas as sales continued to be sluggish week after week leading up to the holiday. Well, it seems as if that didn't happen. It's funny, media and analysts won't call it what it is. It must be the weather that prevented people from shopping this year, or everyone is waiting for the week after Christmas, for the sales. Come on, can we just face the fact that we are heading into one of the worst financial crisis of the century, and many folks aren't going out and buying that extra computer or coat that they did last year. The more they try and cover it up, the more they become vulnerable to devastation. Either way, as the magic 8 ball would say regarding retail for 2009, "Outlook Not So Good."
Early reports from MasterCard are showing retail sales down for November and December anywhere from 5.5% to 8%. They contribute a large portion of this to the 40% decline in gasoline prices, saying that in reality, the number is closer to 2%-4%. Do keep in mind that this is still with the fact of huge discounted prices we saw this year, which will cause profit margins to be slashed. So, when calculating actual net income, the number has to be pretty scary.
Whatever it may be, people just weren't shopping that much. Not only were they not shopping as much, but when they were, they were not going to malls. Amazon is claiming to have its best holiday season yet. As people are becoming more discount aware, they are flocking to the online discounts. I am looking for companies like amazon to make a big push the next couple of years. The biggest barrier to E-commerce was the lack of comfort many people (mostly older) had from buying from online vendors. Well, people are now biting the bullet, putting their prejudices aside, and going where the discount is. I had to people in my immediate family who had never even thought of shopping online before, get most of their gifts this year from online retailers. I'll be keeping my eye on more e-commerce companies like Amazon and Overstock for potential buys for my portfolio. We could see a strong push for these companies in 2009 and 2010.
Overall, the day as a whole was pretty boring and lethargic. I assume most people won't be back at their computers trading until at least Monday, if not after New Year's. The Dow finished up another moderate .56% with the trading volume at about 86.6M, extremely low. At any rate, I don't see any big moves being made until the volume comes back.
It is not good to see these early signs of suffering from the retailers as it should only get worse in 2009. I expect this to directly affect SRS, as vacancy, in my opinion, for commercial retail will surely bounce anywhere from 15-30% depending on the market, which should lead to a lot of defaults on these conduit loans that come due this next year and in 2010. This is why I chose SRS as my number 1 pick for 2009, despite the few negative articles which have been written on the inverse etfs. I feel very comfortable with it.
Well, we all have a lot of things to discuss in the near future as we begin to tackle this beast called 2009. I appreciate the input from all of you. There are a lot of smart investors out there that can bring some great concepts to this forum. Please feel free to contribute and share your own successes. Also, several of the readers of this site have joined up with Lending Club, the p2p lending site we discussed last week. I would also like to hear from those that have and any successes or frustrations you have had from them. As I have heard from few, it has been a great source for some serious returns(anywhere from 6-15%), which may seem impossible in this market, which is also why I would like to hear from you that have been involved. Please comment below and let us know of your experience, and if you're interested in joining, see Lending Club for more information.
I hope everyone had a great holiday. There should be some serious discounts at the malls this week, as retailers will be desperate to liquidate some of this year end inventory to pay for their new inventory purchases. So get out and get some goods. Happy Trading.
Rally Comes Early For Hedge Funds Despite Bad News Across The Board
Posted On Friday, November 7, 2008 at at 1:41 PM by ChrisThis is why I prefaced this week with "Rave Week." News today consisted of:
- Slightly higher than expected job loss reports
- GM and Ford earnings horrible
- Retail sales lowest in 35 years
- Dollar weakening in strength
- Oil went up
So what do I do? I load up more. I am going to wait and see how we react Monday, but if we see FXP go lower, I would love top pick up some more shares. Also, my .QAADB Apple option is getting pretty close to buy price again. I usually wait for that to get down to $10, where then I load up and sell at $20.
We could very well see this market shoot up close to 10000 next week. This does not mean FXP will go to $40. FXP was especially rocked today, because of the strong performance of the China Market last night. SKF and SRS were not hurt nearly as much by the gains today. I don't see FXP going much lower than the high 60's (if that) and if I can get my hands on some shares at that price, I will be quite pleased.
For those that just got into FXP, be patient. It pays off. Today may have caused some to make a mess in their pants, but don't panic. Just as hard as it gets hit it goes up. We are still experiencing some market uncertainty with the elections and these redemptions. Like I've said before, give it a month or two on this go around. We were fortunate enough last time to have 100% gains in a week, but that was a gift. Financials got hit pretty hard today and with talks of a second bailout being discussed, UYG is a good stock to look at for next week. I still like GDX, even though it was down today. STP was up over 20% today. Solar should remain very volatile until Obama is in office. This stock is still very undervalued.
So not the kind of day I was hoping to end on for the week, but what could I expect from Rave Week? Next week should be interesting and I would love to see the S&P get a strong bump so I could load up on SDS. If we can see these shorts get slammed next week, that will tee us up perfectly for loading up for the end of year. There is no stopping the storm ahead. Have a great weekend and I will see you on Monday. Depending on the weekend, I may give a Sunday evening update. Happy Trading.
Wall Street Update - How to make money in the stock market right now?
Posted On Monday, October 20, 2008 at at 3:56 PM by ChrisSELL! SELL! SELL! That's what everyone's been saying the past few months, and with the Dow Jones still under 10,000, it seems as thought that is what people have been doing. Many people have already seen their retirement accounts cut in half or even worse. Is there any hope? Should I liquidate everything I have, take my losses, and walk away? These have been the questions several of you have been asking yourself the past 6 months. Hopefully, I can show you some things that have been working for me.
Right now, the volatility of the stock market is like nothing we have ever seen. Today the VIX closed at 52.97 (down 24%), giving this market a wide range of trading area. Just within the past two weeks, I have seen several days where the market has had over 700 point swings in the same day. For some, this causes them to grind their teeth and pull out there hair. For others, it creates a great opportunity to make some good cash in a short period of time. Day traders have switched from Penny Stocks to Apple. What you need to make sure of is to be on the right side of the bump. If you are, you chance at making anywhere from 30-300% return on your investment, all in one day.
In days to come, I will keep you up to date of information on stocks that I am playing in my portfolio. Currently, Year to date, I am up 20% in my porfolio, which some may find impossible. There are ones to play on the long side, and ones to play on the short. With the help of ETF funds, people can play the short side without having to go naked on stocks. It's great. And as we continue to see our market get worse and worse, these short positions will take off. For starters, take a look at the ETF, FXP. It closed today around $90. Let's return to this stock in a week and see where it is, my guess is that it will be much higher in between now and then. Continue to check back for other ideas for your portfolio. There are ways to make A LOT of money in this market.