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alstry (36.24)

The World Continues to Shut Down

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January 21, 2009 – Comments (5)

Despite the nonsense you hear on CNBS and on these message boards....here are some FACTS:

[WSM] Williams-Sonoma to cut 1,400 jobs, or 18% of work force

[PVH] Phillips-Van Heusen to downsize retail operations

Seagate swings to big quarterly loss

Coach to cut store openings as profit drops 14%

[INTC] Intel consolidation to affect 5,000 to 6,000 jobs worldwide

Disney to offer buyouts to 600 parks execs

Portugal sees sovereign credit rating cut

Airline Stocks: American, United see more demand decline in '09

If you think we are near the bottom....you may want to think again...........

5 Comments – Post Your Own

#1) On January 21, 2009 at 5:56 PM, alstry (36.24) wrote:

I guess this is what the Gold nuts call inflation??????

From CalculatedRisk:

The South Coast Home Furnishings Centre in Costa Mesa — conceived as a one-stop outlet for home remodelers — has lost customers, tenants and finally ended up in receivership after rents failed to cover loan payments and operating expenses.

The mall was almost 100% leased when it was sold to an investor in August 2007 for $98 million. Now almost half the tenants are gone:

The Home Furnishings Centre had 32 tenants, filling almost all of the available space, when it sold ... in August 2007. [The buyer] put $18 million down and borrowed $84 million to cover the balance of the purchase price.

As of December this year, tenants had fled, including the anchor: bankrupt Wickes Furniture. According to court records, just 18 tenants remained and 34% of the space was vacant.

The receiver just accepted a $35 million offer for the 300,000-square-foot center - a price decline of 64% in about 18 months.

Last year it took about $100 million to buy the center, this year it is only $35 million......these stories are occuring all over the nation.....CRE will only get cheaper as more and more tenants shut down and vacate.  If the premise is to buy gold as a hedge against inflation, I simply can't see any inflation for years to come.

Alstrynomics lives in the real world and applies real world facts to extrapolate projects, the gold nuts live in the past and have not yet learned how to count money in the digital age.  Do you think the gold nuts still use scales to determine their net worths???

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#2) On January 21, 2009 at 6:09 PM, cmoney85 (< 20) wrote:

Hey Alstry,

I'm a new pup to fool, but I love it here, and enjoy reading your posts.  

You always say prepare, and you always say we wont see inflation for a long while.  You also say we are not near the bottom yet.  All of which I agree to for the most part.

However I was wondering, as of today, where do you think the bottom is?  for the SP we'll say?  

What are your top 5 things we need to do to prepare?  ( I already own a few guns, plenty of ammo, and my freezer is packed full of food)  I also sold a good portion of my portfolio in spring of 2008, as I noticed things were not looking good.

What are the best stocks (buy or sell) for deflation? 

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#3) On January 21, 2009 at 6:18 PM, alstry (36.24) wrote:

I don't follow the guns and ammo crowd.  If things get that bad, no gun will have enough bullets ala I am Legend.  As far as a full freezer, that is a good policy in case you get unexpected guests.

Regarding any bottom on the S&P, I think we have at least another 50% to go maybe more.......

Preparaton is simple:

1.  Deleverage

2.  Keep 12-36 months of living expenses in liquid investments...preferably in dollars but swiss francs are fine.

3.  Any stock that has no leverage and strong margins or one that has lots of leverage respectively for your last question.

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#4) On January 21, 2009 at 6:58 PM, MikeMark (29.52) wrote:

Right on!

However, I disagree about gold. Gold is money. As can be any other hard asset that people consider to be scarce and valuable. Like cigarettes or food. "Will work for food": that's a basic monetary exchange. A couple of reasons to use paper or digital money as a substitute for other forms of money is because of the ease of carrying larger sums and dividing into smaller sums.

My guess is that gold will track the US dollar within about 10 - 20% for up to a couple of years. After that, it is possible that monetary printing may cause inflation which may exhibit itself in rising price of gold in $.

I also believe that gold could drop in price significantly in the coming months or years. Strictly a definite maybe. Very hazy in the short term. Long term appears good for gold.

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#5) On January 22, 2009 at 8:18 AM, cmoney85 (< 20) wrote:

Alstry,

 LOL ~ Guns are typically a good investment, as they more times than not go up in value if you take care of them.  Plus I think there is a chance as small as it maybe that we'll see the day again when a man has to hunt for his food again.

 Anyways, thanks for the tips, I am working on/doing tips 1-3, so looks like I'm on track.

Thanks again! 

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