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 ZippoZ
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 best stocks or sectors to short should there be a double dip recession? 
#11473909 - 11/17/09 03:37 PM (3 years, 6 months ago) |
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so, if there were to be a double dip recession, what would be the best industries or stocks to short?
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 zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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meams
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11473997 - 11/17/09 03:49 PM (3 years, 6 months ago) |
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Well, the main issue with this recession was the credit markets freezing up. With all the QE and special loan programs the Fed and treasury have put up - I don't really expect us to dip back down.
But then again, if unemployment numbers keep rising and consumer confidence tanks again - it certainly wouldn't be surprising.
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ZippoZ
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Re: best stocks or sectors to short should there be a double dip recession? [Re: meams]
#11474024 - 11/17/09 03:53 PM (3 years, 6 months ago) |
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i just want a decent hedge against the world going to shit again, i mean, i know if it is a double dip that there will be a very broad fall in most all sectors, but what would be hit the hardest...
also at the same time, what are some dividend earning stocks that would survive?
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PEACE
zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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 NoOneKnowsHowToAct
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11474146 - 11/17/09 04:10 PM (3 years, 6 months ago) |
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High end retail would take a hit like it did in the last dip. Energy would probably take the shortest dip. I don't think we'll see another dip though, or if we do it'll be very short and a small dip. Ever since the end of March the market has picked up and is doing well. Black Friday will be a good indicator. I can't speculate on dividend earning stocks. If you haven't been making a killing since March though you need to re-examine either the markets or your market examination strategy.
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ArmFromTheAbyss
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11477121 - 11/18/09 09:58 AM (3 years, 6 months ago) |
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The recession is over? You must be employed.
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LayYouIn
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ArmFromTheAbyss]
#11477156 - 11/18/09 10:08 AM (3 years, 6 months ago) |
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Yeah, im unemployed also, but ive heard that high unemployment is common towards the end of recessions.
I would assume consumer would drop with unemployment rising, I would expect it to get worse and hard to get out of.
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ArmFromTheAbyss
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Re: best stocks or sectors to short should there be a double dip recession? [Re: LayYouIn]
#11477219 - 11/18/09 10:27 AM (3 years, 6 months ago) |
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Typically recessions are caused by the business cycle and inventory pile ups. This recession is a result of too much credit, it won't end until the debt is reduced.
To the OP, you should short the financials, transports, and materials. This is another asset bubble, so when liquidity dries up and prices fall, you have to have cash so you can buy when the time is right.
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Shins
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ArmFromTheAbyss]
#11479263 - 11/18/09 05:23 PM (3 years, 6 months ago) |
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banks...
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MrBump
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11481362 - 11/18/09 10:03 PM (3 years, 6 months ago) |
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Quote:
Capatalistc nomad said:
also at the same time, what are some dividend earning stocks that would survive?
If I had money in March of 09, and if I were hunting dividends, I would have bought Kimberly Clark and Simon Property Group.
Both have rebounded well since then so if there is another dip I will strongly consider buying them.
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zorbman
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11484564 - 11/19/09 12:27 PM (3 years, 6 months ago) |
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Quote:
Capatalistc nomad said:
so, if there were to be a double dip recession, what would be the best industries or stocks to short?
The type of stock you want to short are known as "cyclicals"- they are the ones most sensitive to changes in the economy. Here is a pretty good summary:
"When the market senses bad times coming in the economy, it will move toward non-cyclical or defensive stocks and away from cyclical issues.
The stock prices of cyclical and non-cyclical stocks relate to how the business cycle changes. Cyclical stocks move more dramatically, both up and down, with the cycle, while non-cyclical stocks show little movement relative to the cycle.
The Big Picture
The idea behind cyclical and non-cyclical stocks is simple. When money is tight, what can you do without or put off, and what do you really need?
You may want a new car, but if your budget is very tight, it may have to wait. However, toothpastes, toilet paper, and electricity can’t wait.
Cyclical stocks represent those items and services for consumers and businesses that they buy when confidence in the economy is high.
Non-cyclical stocks represent those items and services for consumers and businesses that they can’t put off no matter what the state of the economy."
http://stocks.about.com/od/understandingstocks/a/CNCstocks.htm
You might look at the stocks traded in the Morgan Stanley Cyclical Index for a list of prominent cyclical stocks.
Here you go:
http://finance.yahoo.com/q/cp?s=^CYC
(Include the ^CYC at the end- for some reason the shroomery won't include it as part of the address).
So you would short stocks like Alcoa and Caterpillar.
You can see how cyclicals tanked last year when the economic crisis became evident to the general public:
Edited by zorbman (11/20/09 09:00 PM)
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geokills
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 Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11495039 - 11/20/09 08:52 PM (3 years, 6 months ago) |
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Good question, and well timed! I am not very active in the markets right now due to the relative disconnect between Wall st. and Main st. It's just too hard for me to reconcile at this point, we've come so far so fast thanks to the Fed keeping their rates so low that they have effectively put a curse on cash and forced money managers to seek higher yields through riskier asset classes such as stocks. However, the party cannot continue like this forever...
If you expect the markets to take a "double dip", I would suggest setting up shorts in the following sectors:
- Retail
- Asset Managers
- Cyclical Industrials
Another interesting short idea would be DELL. They reported a terrible quarter today and should continue to lose market share through 2010. I would wait for a partial retracement of today's 10% drop and initiate a short at around $15 a share.
I would not short major banks such as Bank of America (BAC) and JPMorgan (JPM). Quite the contrary, I would be buying them on weakness as their outlook remains positive after they do another equity offering and rid themselves of TARP money, which will allow their normalized earnings power to be realized. The artificially low Fed rates are essentially allowing them to coin money for themselves, they've been getting money for nothing and buying treasuries and pocketing the difference - they sure aren't taking on much risk lending right now, and you know they're giving shit for savings account and CD interest rates. On any sustainable uptick in the economy, it will be too late to get in on these guys. I will be buying more BAC if it falls back down to $15.
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ArmFromTheAbyss
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Re: best stocks or sectors to short should there be a double dip recession? [Re: geokills]
#11497470 - 11/21/09 09:52 AM (3 years, 6 months ago) |
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Quote:
geokills said:
they have effectively put a curse on cash and forced money managers to seek higher yields through riskier asset classes such as stocks.
Sure, interest rates are low so holding cash won't give you any nominal return, but those same dollars probably have a higher purchasing power.
Say you opened a savings account 2 years ago earning lousy interest. You earn only a tiny bit but you can buy more with that money today. If you have cash nowadays, you can buy a 30ft boat for the price of a 20ft boat 2 years ago. You can buy 1 BAC share for $16 today not $50.
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geokills
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ArmFromTheAbyss]
#11505178 - 11/22/09 05:57 PM (3 years, 6 months ago) |
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While there are certain assets (housing for example) that have been in "bubble mode" with an inflated price tag, the dollar in and of itself is in fact declining in its aggregate purchasing power. Here is a 5 year chart of the US Dollar index, indicating this phenomena.
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ArmFromTheAbyss
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Re: best stocks or sectors to short should there be a double dip recession? [Re: geokills]
#11509470 - 11/23/09 10:52 AM (3 years, 6 months ago) |
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Does the exchange rate measure purchasing power? Only of imports.
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Mr.Al
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ArmFromTheAbyss]
#11554115 - 11/30/09 11:53 AM (3 years, 6 months ago) |
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I think that the price of gold shows how weak the dollar is.
Do you recall that 20 dollars before the "federal" reserve hijacked the money supply used to be exchangeable for one ounce of gold?
How did this benefit the American people, exactly?
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ZippoZ
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Re: best stocks or sectors to short should there be a double dip recession? [Re: Mr.Al]
#11554549 - 11/30/09 01:43 PM (3 years, 6 months ago) |
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the price of gold was actually fixed at $35/Oz there buddy
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PEACE
zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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Mr.Al
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Re: best stocks or sectors to short should there be a double dip recession? [Re: ZippoZ]
#11561145 - 12/01/09 11:31 AM (3 years, 6 months ago) |
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Quote:
ZippoZ said:
the price of gold was actually fixed at $35/Oz there buddy
35/oz. in 1934.
http://www.nma.org/pdf/gold/his_gold_prices.pdf
I think current gold prices show a lack of confidence in the dollar.
I still do not know what the exact indications I should be looking for when attempting to figure out when hyperinflation occurs in the economy.
Obviously, it happens when all confidence in the fiat is lost. Question is: What exactly triggers that?!?
Edited by Mr.Al (12/01/09 11:33 AM)
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Trance104
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Re: best stocks or sectors to short should there be a double dip recession? [Re: Mr.Al]
#11576378 - 12/03/09 02:05 PM (3 years, 6 months ago) |
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Macys (M) is sure to soar here in jan/feb. Also look into every Dow 30 company. Most financial institutions. I work for a bank and upped my percentage from my check back in jan 09 and my money has more than doubled. Financial institutions can be crazy. Dividends are hot too. Fuck shorting. Learn to invest.
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