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Thread: Anyone shorting retailers and commercial real estate?

  1. #1

    Anyone shorting retailers and commercial real estate?

    I am currently shorting RTL, RLX and Sears. Anyone else doing the same?



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  3. #2
    I'm short retailers except Circuit City(CC), I think in the short term it is underpriced, and I could see it staging a small rebound from its low.

  4. #3
    Be careful with retail shorting. My business is a retail business and we are up over last year for the month of October. (I have 16 locations spread from Florida to Texas to North Dakota and Montana)

  5. #4
    I think retail markets will rebound some as we move into the 'holiday season'. Because as George Carlin so eloquently put it:

    it's the new national pastime... The only true lasting American value that's left—buying things... People spending money they don't have on things they don't need...so they can max out their credit cards and spend the rest of their lives paying 18 percent interest on something that cost $12.50. And they didn't like it when they got home anyway.
    But soon after the begining of 2009 I think they'll realize that sales wern't as good as they were hoping, and they'll start to tank again as people continue to tighten their belts.

  6. #5
    Yes, and people need to understand deficit spending is worse than raising taxes to pay for the welfare/warfare upfront.
    1. You are sending your children and grandchildren the bill.
    2. They are going to pay a whole lot more for the crap they didn't recieve because of interest on the debt.
    rewritten history with armies of their crooks - invented memories, did burn all the books... Mark Knopfler

  7. #6
    For the people who are shorting I certainly think its smart to use your stops and limits to their fullest potentials to protect yourself from large moves that are not in your favor.

    I have all my shorts set to cover at certain levels.

  8. #7
    According to IBD they like McDonalds, the Dollar store concepts, Wallmart and other low cost retailers.

    People still have to buy food at the corner grocery, so investing in REITS that own the small strip malls are still relatively safe.

    Public Storage company owns most of its land and they have the profits from the business to boot.

  9. #8
    Major discount stores may see increases in the short to mid term. I would be hesitant to do anything involving strip malls, they tend to have alot of restaurants and specialty stores that I think will hurt as people cut back on non-essential spending.

    I still think we are going to see a short term bounce back upward for retail sales before 2009, they are offering big discounts now to get people in and the holiday season is coming.



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  11. #9
    Quote Originally Posted by Scribbles View Post
    I'm short retailers except Circuit City(CC), I think in the short term it is underpriced, and I could see it staging a small rebound from its low.

    I don't think CC can make it to the holidays. And even if it does, it won't have the ability to fight Walmart, Best Buy, or Amazon for holiday sales. It could drop 80% more, even at the current price.

  12. #10
    I think CC will make it past the fourth quarter, I'm not convinced that alot of retailers will go under at least until 2009(and 4th quarter earnings are out), after that its a toss up for everyone as each quarter comes along.

    At its current low price(Popping up and down Between 0.36 and 0.41 atm) I can imagine a jump 50% in a day on some good news(dollar wise that's only 20 cents a share).

    Remember that a month ago it had a solid floor of around 1.50 . I don't think its going their again in the near future but people are illogical, and a moderately large pop up in anything could trigger covers also.

    At its current price it seems a little too dangerous for me to short. Even if it did so for only a day, on a bad day a large jump could force me into margin call if I had too many of its shares shorted.

    I don't like shorting low dollar value stocks, and I still think CC is a bad short(its not a very good long either); there is too much upward room for it to bounce.

    --
    For comparison I'll show you what I mean:
    For CC the September 15th low was 1.57, today a month later the price is 0.37 that's a drop of nearly 77%

    For Best Buy(BBY) the September 15th low was 43.20, today at close the price is 24.58 it's drop is just about 44% over the same period.

    I think BBY is a better short in the same category; it may be able to fall just as much and possibly more than CC ( in %); And I feel there is less risk of a violent(if irrational) upward bounce, and if there is one in BBY by my reasoning it is likely to be less percentage wise than what might be possible in CC, or any other stock that is valued so low after that much percentage loss.

    Of course this is my strategy, I advise people to do their own research and use their own reasoning to decide what investment are best for them.
    Last edited by Scribbles; 10-15-2008 at 07:52 PM.



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