The Cubs suck, ditto on the White Sox. Their basketball and football squads are no better. The Bulls Basketball team performed this past year about as well as the market Bulls are lately (lukewarm to say the least), and the Bears…well, much like their baseball and basketball brethren, they couldn’t break the .500 mark. The only good thing in Chicago these days is the NHL Champion Blackhawks.
And thanks to a phantom goal, the Blackhawks will be giving Chicago-ans something to cheer about. The Lord Stanley Cup once again resides in Chiacgo, and there will be a heckuva BlackHawk parade to celebrate its return. The Bulls (not the Chicago BasketBulls) thought they had a reason to celebrate early on in yesterdays trading but the Bears, (no, not Lovie Smith's Football Bears) quickly rained on that parade with a late day selling binge that turned a 125 point intra-day gain into a 40 point loss. The Market Bears would not let the Tuesday rally turn into a two day trend Wednesday, and it is looking more and more clear that 10,000 is the new top.Don’t Believe the BLS HYPE
Again today the Jobless Claims will come out and there will be some creative accounting from the Bureau of Labor Statistics will tell us how great the job picture looks. Beware the BLS in May and June, as pointed out by John Crudele in the NY Post, the BLS in the summer months uses what is called the Birth Death model which adds phantom jobs. The Government hypothesizes that because it is summer and it's nice out, there will be a whole bunch of seasonal small businesses born, which will employ a whole bunch of people. Problem is that there is no proof, there’s no way to quantify it, it’s just a big fat guess. Last years guess was grossly revised downward and regardless of what the stats say today, remember what Public Enemy said
A real LULU
As I looked over the most requested stocks on the plate for today’s Bears, an oldie but a goodie popped on the radar. And this stock is a LULU literally. LuluLemon Athletica is a stock that the shorts have had some serious success with in the past.
LULU is in the business of manufacturing yoga related apparel products. You know the stuff all of us have, fitness pants (huh), shorts, and jackets for healthy lifestyle activities. Oh man, this sounds great. NOT. Their products, which are mostly geared towards women, are made with unusual materials, including bamboo, silver, charcoal, coconut and soybeans. Mmmm, coconut and soybean fitness pants. Now, I have heard of edible undies, but coconut pants and shirts sound a little odd. One of its lines is called VitaSea, and the company says it is made with seaweed. The fabric, according to product tags, “releases marine amino acids, minerals and vitamins into the skin upon contact with moisture.
There’s one problem with the Seaweed line: a couple years back the NY Times commissioned a test to search for these vitamins and minerals supposedly woven into the fabric, and the test found nothing. Zippo. The LuLu of a CEO, a former snowboard and skateboard merchandiser, did not dispute the tests. The Times ultimately reported that a short seller commissioned the test to prove the company was overvalued, and it worked. Upon the revelation that the CEO was a LULU and the mineral enhanced fabric was another LULU of a story, the stock hit the skids. In 2007, I spoke about LULU on Fox Business and pointed out that the stock was a fad stock and it was overvalued. The Bears listened and bet against the trendy stock, and the market cooperated; LULU lost its luster, much like Ed Norton lost his pet dog Lulu. The stock sleep walked its way from $40 -$5. Then, after some management changes and a bunch of stimulus (which jump started retail buying) LULU came back to life, and today is approaching its all time highs. To the shorts I am talking to, it seems the fad is fading. The retail spending sector is fading faster than the fad, and the market for women’s clothes (with or without vitamins and minerals) is shrinking even faster than both. It looks like LULU is poised for another return to the teens, and it doesn’t seem that there’s a long term strategy that can sustain the current market valuation. The strategy of buying this stock at these levels looks like a LU-LOSER. The Hot Shorts
The other day my brother Todd and my intern Brandon found a provocative picture to put beside the HOT SHORTS section, and it did get quite a good review from our male readership. So my crack idea team has decided that we should incentivize our readers to send their favorite photos of HOT SHORTS. So, we are officially going to start the HOT SHORTS Submission contest, all you have to do is submit us a photo of some clean- yet interesting HOT SHORTS. All appropriate submissions will be posted to the HOT SHORT CONTEST PAGE, and a weekly winner will be chosen. The winner will get a brand spanking new DAILY SHORT REPORT T-Shirt, or Shorts. We encourage you to make as many submissions as you wish. You can send them to contests@thedailyshortreport.comNow, a nice cheeky hot shorts photo is of course interesting, but the actual Hot Shorts that are being sought by short sellers is a lot more interesting to the trading community. I gave a detailed overview of the reasons I’ve heard LULU is a hot short, but for the rest I will give you a lead, you figure out the rest….FYI yesterdays markets were down .04%, and the DSR Hot Shorts were down .81%, outperforming the markets by 20 times.
RIG AIG FSII GAP GRMN FBC
Word on the street is that Goldman may settle the case against them for a whopping $5B.
Stumbling block is the regulators want them to admit the fraud, and they want the traditional cover of not-admitting or denying. Supposedly, GS says they will pay any amount, but an admission is a deal breaker. Will keep you posted.
Happy Trading.
Posts
No comments:
Post a Comment