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Green to red, machine head

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March 06, 2008 – Comments (0) | RELATED TICKERS: CAL.DL2 , UAUA.DL , LCC.DL

Okay, machine head has nothing whatever to do with it, but I am going back to red-thumbing because of a revelation I had. (I'm feeling very competitive, so I won't tell you about it.)

So anyway, as I've explained before, picking underperforming stocks is going to be relatively tricky in a secular bear market. (I suppose an ultralong S&P ETF with high expenses is a shoo-in.) I picked some bond ETFs to short based on my belief that anything yielding <4% is just way too overvalued. But rates may go lower and bump those up even higher in the short term, and the S&P could get killed, making a relatively flat bond fund a hero on CAPS.

Then it occurred to me: airlines! No matter what happens, airlines squander the equity of their shareholders, like so many Donalds of the skies. Every time I pick airlines to underperform, in CAPS or elsewhere, I stop to wonder: just who are all these people buying airline stocks?

If any of you, my esteemed reader(s), knows anyone who is long airline stock with real money, please let me know. I would like to hear all about it, as much as you know.

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