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!!!!!!


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