You know mine (short retailers, long oil, long gold, and everything else 5% cash). Let's hear your best plays for not only how to stay afloat, but to make some $$ during the meltdown.
Here's one HP'er's suggestion, so help a brother out. I'm looking for ideas myself:
Anonymous said...
Can someone start a blog site to help us "hper's" making some mad money... like which homebuilders to short, mortgage lenders, etc.... i think this is a great site... but i want make some mad money off the fools of these obese americans... driving suvs
July 30, 2006
HP'ers - let's hear your best plays for making some $$$ off of this epic financial meltdown
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24 comments:
I've been doing quite well by melting down SUV's and then turning them into For Sale signs, which I then sell to the local real estate agents...
How about cash? Just watch it rise in value as the deflation takes hold.
WCI
WCI Communities...a Florida 'luxury' high rise condo developer. Sales down 85% in a recent company press release. Earnings in early August.
Was $25..now $16..soon sub $10. Buy puts. On it's way to $2/share in my opinion in the next 2 years. what a mess!
I would be careful with naked shorts and puts. You may be right in the end, but the timing is hard to work out. I have been burned in the past by being right on the trend, but lousy on the timing.
Then there was the time I bought Apple puts when they cancelled their OEM contracts, and then released the iMac a month later ;-(
If you think the general market will take a fall and don't want to bother with the details (and unlimited risk) of short sales:
BEARX
Eh. I know there's alot of money in the short term stuff, but with my limited understanding, I find it easier to look at long term plays.
So... look at well priced companies that benefit from demographic trends such as aging boomers. If they weren't so overpriced, biotech and pharma. Perhaps give a look to asian/indian global companies not covered by US analysts such as Ranbaxy (RBXLF).
Ok, that's it for free ideas. Remember you get what you pay for Keith.
There was a pretty good piece in the WSJ last Tuesday about the shakiness of the suicide loans originated by Countrywide compared to those originated by WaMu. The delinquency rates in the CW portfolios were much much higher than those of the WaMu portfolios. I would short whomever holds those mortgage backed securities. The lenders generally try to package and sell them as soon as possible.
Osman said: "Perhaps give a look to asian/indian global companies not covered by US analysts such as Ranbaxy (RBXLF)."
Osman you are the last person that I would take financial advise from. India's stock market will have a significant "correction" soon, I would stay away from Indian stocks. Take a look at the link that I've provided below. The BSESN went from about 5000 to over 12000 in about a year and a half. That sort of reminds me of the Nasdaq during the late 90's. India had a mild crash recently, but something tells me that their pain is not over. Good luck.
http://in.finance.yahoo.com/q/bc?s=%5EBSESN&t=2y
The vehicles with the GM quiet steel technology work best. That way, when we screw up and don't remove the occupants first, nobody can hear the screams...
I posted that for a laugh, but on the serious side think about this?
There's over a million more homes for sale nationwide than there was last year. Where the hell did all those For Sale signs come from?
Can you honestly tell me the folks selling signs to the real estate industry aren't making a killing?
Where do you store all those signs?
When is the last time you saw a "Sold" sign?
Anon Wrote, "India's stock market will have a significant "correction" soon. India had a mild crash recently, but something tells me that their pain is not over"(edited)
So something is telling you that India's market is about to crash. Well, long term demographic trends plus India's ability to delivery high quality, high knowledge products at low cost is what's telling me that select Indian companies have a serious competitive advantage. The ones which currently have global reach, rapidly increasing revenue growth, and are targeting a demographic trend could prove to be long term winners. Ranbaxy is one company worth looking at, although by no means is that a BUY opinion. It's a "check it out" opinion.
Many Chinese companies have the same advantages but as a repressive Communist regime their political stability is less clear.
Anon wrote, "Osman you are the last person that I would take financial advise from. "
Good, don't take advice from me. I'm not your investment advisor nor have I told you to run out and buy/sell anything.
One more thing. If you've done your due dilligence and identified a strong long term play, you should welcome a market drop. That's your opportunity to buy.
I have been through this before and make money selling shovels to miners and panning in the rich stream. I can’t tell you where to pan for you will squat next to me and shadow my claim.
It all hinges on the change of the guard. If we go Elepahnt for 4 to 8 more we'll fix her with inflation, if we go Donkey we'll fix it with budget ballance and cut back.
cash is king. 'nuff said.
Walk around your town and see who is financing all those condos. . .then short those banks. . .here is SD, I would have to short ALL the banks. . .can they all be THAT stupid??. . .
I think Countrywide MTG is a great short. I would have took a short position last week, except my investing money is in a 401K and therefore I cannot short. Too bad because the market seems to be propped up by the PPT and the lemmings are still being sucked into the fevor. The greed factor has sheeple still trying to win going long on the market.
I read that their main income stream is now "servicing" mortgages. There are some blog sites out there that people are reporting the abuse that rains on the poor FB after Countrywide buys their mortgage on the market and then "services" the poor FB.
http://finance.yahoo.com/q/bc?s=CFC&t=5d
That being said I am saving physical cash and buying physical gold on dips, my 401k is in money market and short term T bills. And I have gotten completely out of debt. I think assets will be cheaper as long as the dollar isn't devalued faster than the assets are, or hyper inflation takes hold.
One very good blog on economics is Mish over at:
http://globaleconomicanalysis.blogspot.com/
I lurk on a really well informed (or well staged) stock message board. There are a bunch of traders there (or posing as successful traders) that play the market up and down. their sentiment is generally bearish and they lament how the market is reacting in very strange ways to reality. A few think the fed is playing with the TOMO to manipulate the market.
Who would go long on a HB stock in this climate? Only a trader with very fast reflexes.
Bubbleshanker,
I am a different anon and I agree with you too - DEFLATION
Mish is a deflationist also.
All you deflationist Nazis will go to hell soon
Look at currency and international plays.
Right now, most experts agree that the dollar is overvalued by some 30%. You can purchase foreign currency CDs through Everbank and there's also FXE, which tracks the Euro, on the general market.
Likewise, I think going long on international is a good idea, but not emerging markets (that's another bubble). Look at Solid economies with a positive trade balance, those will hold up well against the dollar. Even if the foreign markets tank 20%, but the US dollar depreciates 30%, you're still up 10%!!
Finally, health care. our population is getting fatter and older, so there is growing demand.
How about 2008 puts on LEND. Accredited Home Lenders focuses on the subprime market and is still flying high at $45.
I am surprised no one has mentioned alternative energy investments yet.Solar power is probably how homes of the future are going to get their energy. Utility companies will be dinosaurs as buying power from them will be too expensive.
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