Thursday, March 27, 2008

The best strategy for profitable trading in any market

It's basically the "old style" hedge fund strategy, and many modern day hedge funds follow the equity long short or "equity hedge" strategy. But don’t let the name fool you… even though this strategy plays both long and short sides it should not

Wednesday, March 26, 2008

8 Stocks for your shorting pleasure

Looking for a few stocks to go short as the bear market continues to run its course? check out these below, as of the morning of Wednesday, March 26th. The usual disclaimers apply, I take absolutely no responsibility and you have to make your own entry/exit calls. If you know how to make good trading decisions, this should be no problem.

Symbol Company Tuesday's closing price

ARGN Amerigon, Inc 16.15

CSGP Costar Group 43.55

GMCR Green Mtn Cof 31.79

LAMR Lamar Advertising 36.75

WFMI Whole Foods 33.21

TWI Titan Intl 31.97

TOL Toll Brothers 23.95

WGO Winnebago 18.14

And if you want more exposure on the short side, check out the ultrashort S&P 500 reverse ETF, (symbol: SDS). To profit from a decline int he spx you would go LONG this security.

Consumer Confidence Drops to Lowest Since 1973

Consumer confidence plunged to 64.5 in March, the lowest level in about 35 years. Since December, the index has dropped 29% or 26.1 points. "Confidence in the state of the economy continues to fade," said Lynn Franco of the Conference Board Consumer Research Center. "Looking ahead, consumers' outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon."

Goldman sees $1.2 trillion global credit loss

Maybe the economy is getting closer to bottoming out, the news is becoming even more negative:

NEW YORK (Reuters) - Goldman Sachs forecasts global credit losses stemming from the current market turmoil will reach $1.2 trillion, with Wall Street accounting for nearly 40 percent of the losses.

U.S. leveraged institutions, which include banks, brokers-dealers, hedge funds and government-sponsored enterprises, will suffer roughly $460 billion in credit losses after loan loss provisions, Goldman Sachs economists wrote in a research note released late on Monday.

Losses from this group of players are crucial because they have led to a dramatic pullback in credit availability as they have pared lending to shore up their capital and preserve their capital requirements, they said.

Goldman estimated $120 billion in write-offs have been reported by these leveraged institutions since the credit crunch began last summer.

"U.S. leveraged institutions have written off less than half of the losses associated with the bursting of the credit bubble," they said. "There is light at the end of the tunnel, but it is still rather dim."

Of the cumulative losses expected by these leveraged players, bad residential home loans will represent about half, while poor-performing commercial mortgages will represent 15 percent to 20 percent.

The rest of the losses will come from credit card loans, car loans, commercial and industrial lending and non-financial corporate bonds, Goldman economists said.

Facing more credit losses, leveraged institutions have raised about $100 billion in new capital from domestic and foreign investors and reduced dividend payouts. This amount is more than three-quarters of the write-offs to date, the report said.

Thursday, March 13, 2008

Nothin but a short covering rally

The recent gains in equities were nothing more than a quick short covering rally in a longer bear market, and a chance to increase short exposure.... Thursday will be a very "red" day.