Wednesday, December 31, 2008

Happy New Year and a Look Ahead

I'm still waiting for the Fed to completely forgive my mortgage, auto loans and credit card debts-hasn't happened yet. GMAC has just announced that they are going to ring in the new year by giving credit to the credit unworthy and we are on the road to truly getting "saved by zero". I am also waiting for Capital One to start handing out $10,000 Mastercards to high school kids, as that should help retail which is about to go bankrupt. An IPhone in every pot should be the new mantra. Shouldn't everyone "always" have nice things even if they have no way of paying for it?

I am considering a fund raiser through this platform for the full page Wall St Journal that I still may take out naming the names of the pundits that have been wrong on every tick in 2008. They need to be accountable and they all need to be fired or even shot on sight. They could find work cold calling for stock brokers or maybe they can become counselors at Hope Now or debt collectors at Capital One. They might even become mortgage brokers because I heard that whole house thingy has bottomed.

If that thing called Christmas didn't get in the way, retail would have fallen into the deep blue sea already, now the inevitability has just been slightly delayed. No one is buying $120 jeans at Abercrombie and even Prada is 50% off. Challenger believes 75,000 retail stores will lose in 2009 and one million job losses alone could come from that sector. JoJo Banks will give you two suits free if you buy one, but things are just swell. Lets not forget the commercial real estate companies that lease space to these failing companies. I believe commercial real estate will look like the set of "I Am Legend" before it's all done.

Home prices will drop further, still too much inventory and unemployment will go higher. Everything else is nonsense, as it is all about jobs. Obama's plan is thoughtful but it's too little too late. Bridges don't get put up in a week and it's too late for the here and now. I'm sure it will help many that don't pay taxes though.

The banks will collapse and retest the lows. This rally has been more of a celebration of bankruptcy avoidance and a short squeeze, nothing positive due to an organic change. Their nationalized anyway, I'll never get long Uncle Sam. Although I do have some warrants, don't I? Credit downgrades are on the way, dividends will become completely eliminated, and dilutive equity raises of biblical proportions are on there way. Capital One will eventually see $5 and will then come for bailout money. Others will follow.

Our last administration made it harder to go bankrupt, this administration will make easier. People will say WTF and roll over as they just can't pay for essentials anymore. Some, obviously not all, but enough to screw up this wonderful bailout plan that many think is a panacea. It's just too flawed in reality. A band aid on cancer if you ask me.

It's tough for me to make forecasts to far into the future because I am way too short term in my thinking. I think it would be arrogant of me to think that I have any clue as to the outcome of this mess. The market could collapse in January, then have a 3000 point move before failing again, or it could rally hard at any point in January and then fail miserably. It would be unfair of me to make a call when I am completely clueless. I rarely held a position overnight in 2008 and I don't think 2009 will be much different.

But in the spirit of the New Year I will throw a few names out that I think could do very well. Unlike the 98% of mutual funds that lost money last year these names are not just blanket buys, but more of hint of where I think the trend is. You are all smart enough to know that, or you be reading Morningstar for ideas and not this blog.

SKF- As I believe the financials go lower. My dream would be a retest of the lows and move move back to $300. Yeah, I know I'm crazy.

IYR- As a short, commercial real estate is hiding in the middle to back pages, it should be front page within a few months.

RTH- As a short, people will try to pay their mortgage before they buy anything.

I want to thank everyone for a great year. The friends and acquaintances I made through this blog will be forever cherished, seriously. You guys made the year fun and the exchange of ideas and opinions was unbelievable. You guys are so much smarter than the pundits. Keep thinking outside the box and be leaders not followers. No sheep allowed here. The great investors didn't get their opinions and ideas from watching CNBC, they developed them from due dilly and asking "what if" a million times a day. The market is a crowd, a big crowd mentality, sectors and stocks get way over crowded on the short side and the long side, so often times no one will blink first even if they want to. As a result, analysts will keep putting buys on the longs and sells on the shorts in the hope of not upsetting the apple cart. The point I make is that the info we get from analysts and the media is never the real deal. It never will be. Maybe a Meredith Whitney, but not many have her guts.

Good luck in 2009 and THANK YOU!!!!!!

Joe
Upsidetrader

19 comments:

Bob Brill said...

Joe-
All the best to you and yours. Always enjoy your posts and tweets :-)

B-rad said...

Awesome post. I think you are spot on. Pumped for 2009. Happy New Year!

Scott said...

Joe,

Thanks so much for your insightful comments. They have saved me so much this year. I read you, Howard and The Fly with great regularity.

Thanks to folks like you, I have come to understand that "THE bottom" will not be in until people like Cramer are off the air. Or, better yet, CNBC becomes a "Nature Only" channel.

My quick question is this... I do not have the skill or the time (day job in technology) to trade. But, I want to not only protect any investments (mainly by being cash). But, I want to get them to grow in this environment. Is there a way to "follow" you in on trades? Is there a way for us intrepid "believers" in the wisdom of this community to gain as well? I am not looking for an "easy" way. It is just that those of us who work all day... who can grab 15-20 minutes per day... and read you and make a trade, would like a way to participate and prosper. Now, THIS is a very valuable business need. 99% of the financial planners are idiots. How do people like me get the benefit of you and this community?

Thanks,
Scott

dvr1962 said...

i've been following for a few months.just figured out how to post a comment.had a great yr shorting financials (BSC, LEH and WM to name a few). the reits and SRS look ripe for 09. Think the ad is a great idea, count me in!

upsidetrader said...

dvr
thanks and will do

upsidetrader said...

B-rad
thanks and you two

upsidetrader said...

thanks bob, and same to u and your family-all the best in 09

James said...

If you decide to do a fundraiser I will gladly contribute. We keep hanging on to this system and installing the same morons who got us here in the first place. Greenspan and Bernanke are charlatans.

upsidetrader said...

thanks,and yes they are

dvr1962 said...

As a former bond trader for 20 years, i can tell you TBT, which i started buyin this a.m. looks like it's got some major upside. fyi, AZO looks ripe to shrt here.

upsidetrader said...

DVR
thanks for input, funny, im long and holding and i dont hold anything

Danny said...

thanks for the posts Joe. Can I call you Joe? lol.

Anyway, I enjoyed reading your stuff this year, great perspective, here's to a '09 filled with unbridled kickassery!

[clinks champagne bottle with UT]

upsidetrader said...

dany
no problem pal and clink back at ya

Jonny said...

Great post, Joe. Thanks for taking the time , as ever. But how come you didn't reply to my email a few weeks back? Lazy git!
I'm giving up the day job to build some Bond Villain-esque wealth in 09 courtesy of SRS, SKF, DXO, IYR, SLW... well... maybe. Happy New year to the Upsides.

Jonny

Ray The Money Man said...

Great post Joe, now when is the mainstream media including CNBC going to get people with correct minded views like yours on the front page.

Here's to a prosperous 2009 for all of us even if we have to short em to get it done!

upsidetrader said...

scott,
thanks for the comment. in this environment my time frames are short, anywhere from a few minutes to a day so it is tough for someone like you to really get an edge with what i do. However you can follow me and some other traders over on stocktwits.com. Many folks like you are benefiting greatly from that site.It's as close to "real time" as u can get. Shoot me an e-mail anytime, if i am able i would be happy to.

upside

upsidetrader said...

hey ray

thanks man and have an awesome 09

upsidetrader said...

jony
sorry man re shoot the email if its still relevant--sorry bro must have missed

Scott Clous, chief Artist said...

I've enjoyed tweetering with you. 1. It is fearful that things are bad, but 2. the proposed solutions are worse. 3. No good solutions appear, which will be acted on. 4. I've enjoyed the conversations, but have only made profits in the most conservative investments, my timing and level of knowledge being that of a beginner -- I've enjoyed how you and others on Stocktwits have shared your opinions.

5. Yes, I also think financials have a way to go, but we have such weird times, predicting the outcome is a real challenge.

6. What other investments would you suggest?

About Me

My photo
I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.