Merideth Whitney Video (31Jul08). & The Coming Hotel Bust
Meredith Whiney aka
“The $360 billion dollar analyst” was on Bloomberg video (31 Jul 08) for a 10 minute interview. She is always worth a listen, since she appears to have a moral compass, and a brain which puts her above 98% of all “stock analysts”.
FYI – “Ms Whitney's report caused Citibank to lose more than $15 billion of market capitalisation, with its stock plunging more than 7 per cent in the first half hour of trading. In her report, Ms Whitney said Citigroup would need to cut its dividend or sell assets to avert what she said was a $30 billion capital shortfall. It was the biggest stumble for Citibank’s shares since September 2002.”
“No one had the moxie to put in print what I put in print,” Ms Whitney said. (rer TimesOnline Nov 07)
He who does not bellow out the truth when he knows the truth makes himself the accomplice of liars and forgers.” Charles Peguy
When everyone is lying, telling the truth becomes heroic endeavor. Such is the case in today’s financial market. Meredith is married to John Charles Layfield, a professional wrestler and former World Wrestling Entertainment champion. Mr Layfield, whose wrestling persona is based on JR Ewing, the oil tycoon from the 1980s television series
Dallas, had just written his book Have More Money Now: A Common Sense Approach to Financial Management.” I guess her “moxie” might have come from having a professional wrestler as a husband? (ref Times Online, November 2, 07) Wrestling is a tough business, look what happens if you ask for a chair: Wrestlers need a chair and fans deliver The Coming Hotel Bust
Another blog that is worth reading is Calculated Risk
From the NYT:
Terrible Timing for a Hotel Boom
“A record number of hotels are opening this year, and the timing could not be worse.
... Until recently, the industry was in the midst of a major boom, and it was during those good times that the hotel companies made plans to build many of the new rooms. ... Nationwide, hotel occupancy levels have been hovering around 65 percent, down about 5 percentage points from last year, according to Smith Travel Research. ... The industry now has about 6,000 new hotels, with nearly 800,000 rooms, under development, a 27 percent increase from last year, according to Lodging Econometrics ...” MY COMMENT
If you need some underperforms, all hotels are a decent target. I am maxed out with my 200 picks. Hopefully, some FOOLS will take the time to find the hotels with the most debt, leverage and American exposure. I suggest anything in Las Vegas, that has not been totally crushed, yet. It is very tough to determine which stocks will win the race to the bottom. With liquidity, credit drying up, and Americans no longer having their home equity ATM machines, hotels are easy targets.
Fire at will!
The rest of the comments and article are worth reading at Calculated Risk
FYI - Calculated Risk also has the Meredith Whitney video posted at the bottom of their blog. I guess others also like truth tellers too.