Monday, 01 June 2009 01:00

Sears Q1 2009 Update

The Sears Q1 2009 update is available. I have left a note in the private discussion forums regarding aspects of Sears not mentioned in the note.

Sears Q1 2009 Update Sears Q1 2009 Update 2009-06-01 12:28:26 398.99 Kb

I will probably be releasing the first of the long-biased research in about 2 weeks (probably less). I have found some pretty strong companies. I will explain how I will be using the research (basically as a medium to long term hedge and volatility dampener) before I actually release the research. Let it be known that the recent run-up in many stocks is not fundamentally based (ie, unsustainable) therefore strong fundamental long picks will not necessarily produce the results that layman would expect in the short term. I will be discussing this in depth as the research release draws closer.

Additional, new non-financial and non-real estate related short bias research will be available during the same time frame.

Last modified on Monday, 01 June 2009 01:00

45 comments

  • Comment Link Reggie Middleton Tuesday, 02 June 2009 10:18 posted by Reggie Middleton

    But Phirang says that no one can predict the future, so how could he possibly do such?

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  • Comment Link jarret Tuesday, 02 June 2009 10:15 posted by jarret

    I like the idea that Reggie posted.....Phirang how about you post your top 5 picks for the next 6-12 months and we can compare results.

    I may even post mine if that were to occur :-)

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  • Comment Link Reggie Middleton Tuesday, 02 June 2009 10:12 posted by Reggie Middleton

    That's called investing Phirang. If anything, nobody knows what will happend next week or next month. I knew the real estate market wouuld collapse in 2005 (it collapsed in 2006). I knew banks, insurers and REITS would collapse in 2007 (they collapsed in 2008). I know that the problems that caused both the previous collapses have not been mitigated, hence the recent runup has caused many stocks to become very, very expensive.

    This blog is full of 18 month assumptions, nearly all of them accurate. I do have a question, though. Why are you here so much since you seem to disagree with practically everything here? Several other posters have tried to correct your viewpoint. I spend quite a bit of time answering what I consider to be non-productive comments, ex. here's a hint, this is all wrong, but I have nothing concrete to offer, etc.

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  • Comment Link phirang Tuesday, 02 June 2009 10:06 posted by phirang

    NO ONE knows what the future holds a year and a half out. To claim such is ridiculous. If the US dollar were devalued another 20%, why would ANY stock be down significantly? Would banks still collapse?

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  • Comment Link Reggie Middleton Tuesday, 02 June 2009 10:00 posted by Reggie Middleton

    Phirang, again you are uing short term thinking in a long term game. I make it very clear that my research looks out up to 18 months. When I put out bearish research on GS, everyone thought I was out of my mind. Who was proven correct? GS is almost back up to the same price that it was when I issued the research. The problems are more transparent now than they were then. All recent research on GS are simply updates of the previous stuff. Whey don't you post your performance on the board? Then I am sure many will take you more seriously. Don't give hints, give hard facts, hard ideas, and hard research.


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  • Comment Link phirang Tuesday, 02 June 2009 09:49 posted by phirang

    here's a big hint to your readers (honestly, I should be getting paid for this!): go read up on hedging contracts to see what really drives the gold price.

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  • Comment Link phirang Tuesday, 02 June 2009 09:47 posted by phirang

    I'm talking about your recent GS research, Reggie, not the windfall from last year's/Q109 deflationary spiral where shorting anything made money.

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  • Comment Link shaunsnoll Monday, 01 June 2009 22:19 posted by shaunsnoll

    @rumi, yea, there are some interesting trades in ag too, stock to use ratios are at ridiculous levels. i wasn't bearish on oil, i have long term belief that oil will go higher, but i am more bearish than most on emerging markets and when/if they collapse it will not be good for oil prices, so i like oil very very long term i just don't think the timing is right.

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  • Comment Link kazflair Monday, 01 June 2009 20:18 posted by kazflair

    the chart looks really similar to the '08 head fake that started in March last year, until June roughly, then the crash came. So be very careful. I remember the same feeling of thinking the world was crazy, but as you can see, timing is everything if your not properly leveraged and looking for short term profits. You can make money on either side of the trade in this environment if you either time it correctly or have a strong stomach. Also, does anyone know who is on the wrong side of the GM default swaps, somebody has to be losing money they don't have on that one.

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  • Comment Link Reggie Middleton Monday, 01 June 2009 20:15 posted by Reggie Middleton

    Phirang actually by shorting CRE/banks you are using math. Nobody is tring to disparage you, I am just giving my opinio of the gold trade, in general. I am not big on gold, its fundamental value is difficult to ascertain, if it truly has any above its industrial use. It is bought because others believe it will be bought, not becuase of fundamental demand for it use, inherent income streams, or any other quantifiable metric. In addition, it is the trade of choice on day trading message boards, CNBC, and my reader Phirang.

    Instead of being so combustible, simply outline the reasons why the trade is profitable. For instance, you mentioned Goldmas Sachs, where my reseach came out bearish when it was trading at $180, with a hole host of empirical arguments and reasons why I felt it was worth less. It dropped to $45-50 pr share and is now at $140 (where I feel it will probably drop again). You see, a lucidly outlined, researched trade with quantifiable results. I literlly have dozens of them. I haven't peeked at your trading results, but I presume - and judging from your very short term orientated posts - that you get whipsawed from having a short term trading mentality an thiking in horizons of weeks and months versus quartes and years. The GS commment just serves to bolster my suspicions. If you had a longer term horizon, you would have realized that the GS short was very profitble, even if one held on without taking any profits to this very day, which goes againt my take profits often recommendations.

    I also think you may be a tad bit emotional as well, which may affect your decision making. You are easily the most bombastic commenter on this site, despite practically never sharing any real research or hard ideas. As I said, you are always welcome, but you have to be polite and professional, and preferably (although its not mandatory) productive in contributing to research and viewpoints.

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  • Comment Link jarret Monday, 01 June 2009 20:10 posted by jarret

    I have been long ags/oil/gold miners and done very well with it though my hedges have taken away a lot of the gains. The sectors that keep surprising me are retail and REIT.....I can see some manipulation (actually alot) in the REITs but the run up in retail doesnt make any sense.

    4 that stand out to me as golden shorts are AMZN, CENT, SHLD and JC Penny's. Would be curious to get the opposite opinion as to where I am off base.

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  • Comment Link phirang Monday, 01 June 2009 18:04 posted by phirang

    you're basically giving your money away, since they're subsidized by the entire Treasury-purchasing world (how many billion people?) and anyone with a deposit at a bank.

    Reggie, you are now so desperate to disparage me you allude to CNBS to impeach my trade? I'm GIVING your readers a chance with that stock to recover some of their losses from such gems as shorting Government Sachs, which has a death-grip on the brokerage industry and will do well this year.

    You still refuse to respect the Fed. Hubris will be your undoing.

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  • Comment Link ezrasfund Monday, 01 June 2009 17:59 posted by ezrasfund

    Have to agree that agriculture is my biggest play in this market, beyond some long shot biotechs (big day today at ASCO).

    Those of us that have been skeptical on the fundamentals have been taught the old lesson again. The market can stay irrational longer than you can stay solvent.

    History does repeat itself, and the place to look is Japan when their real estate market blew up. While it may seem that the US will learn from Japan's mistakes, a more likely scenario is that Japan's mistakes (and the rest of the story) will be repeated here, because the same factors will compel us here. Banks are the weak point, but now we are in the Japanese phase of "propping them up". The US was not going to have "zombie banks", but here we go. Likewise the dollar will continue to weaken (remember yen @133/dollar.)

    IMO this is why the bank and real estate shorts that seem to make so much sense are not working, although they will again.

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  • Comment Link Rumi Monday, 01 June 2009 17:14 posted by Rumi

    /here are few companies out there that look interesting on the long side. some of the video game companies like ATVI could see some huge margin expansion should OnLive take off./

    I don't know if I've already posted this before, but other than the Agriculture sector, the best play on the long side that I see is probably oil service (RIG and SLB in particular)

    But I think we're on opposite ends of the coin on this one--I think that oil is going to soar, and if I recall you thought it should stay low.

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  • Comment Link Reggie Middleton Monday, 01 June 2009 16:53 posted by Reggie Middleton

    Gold is a crowded trade paraded in the pop media (ex. Cnbc, et. al.). I, personally, don't believe in its prospects, particularly at this time. To each their own, though.

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  • Comment Link Reggie Middleton Monday, 01 June 2009 16:52 posted by Reggie Middleton

    Nearly all stocks have run up. This run up has very little to do with individual, or even entire sectors' actual profit prospects.

    As for GGP, I don't share Ackman's enthusiasm. The best way to extract value from GGP is to cherry pick the best assets at firesale prices. The large, big box retail mall has seen it peak (driven by equity extraction from overpriced real estate and a credit card/credit bubble) that will problably not be seen again for decades.

    Ackman may be able to extract value, but from a risk reward basis, it is not worth it to me. Ditto with his Target venture. He did a damn good job with the monolines, though.

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  • Comment Link NDbadger Monday, 01 June 2009 16:38 posted by NDbadger

    Just wanted to let you know that I really appreciate the update on Sears. I am still bearish on it despite its run up. Given the retail environment, and competition w/ WMT, TGT, HD, & LOW, it's easy to see this one struggling for some time. I expect it to pay off, probably sometime in the summer.

    Just curious, I notice you've been quite on GGP. Ackman thinks he can extract $10-$30 per share in value for the shareholders. Just wondering if you agree (or maybe you just think it is too uncertain to commit much capital to). It would be fun to make it both on the way up and down.

    Best,

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  • Comment Link phirang Monday, 01 June 2009 15:42 posted by phirang

    given this news:

    http://www.ethiopianreview.com/news/2009/06/un-denies-eritrean-support-for-al-shabab-in-somalia/

    Good, cheap levered play on Gold/copper.

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  • Comment Link shaunsnoll Monday, 01 June 2009 15:40 posted by shaunsnoll

    will be interested to see where you see value on the long side, outside of small/micro caps and Master Limited Partnerships there are few companies out there that look interesting on the long side. some of the video game companies like ATVI could see some huge margin expansion should OnLive take off.

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  • Comment Link phirang Monday, 01 June 2009 15:27 posted by phirang

    Then I'll short it. :D

    :D:D

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