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FirstFed Financial Corp. Message Board

  • squidcake squidcake Jun 20, 2008 9:31 PM Flag

    Where is there still lots of 'meat on the bone'

    Getting late innings for shorting financials, since many of the usual suspects are into single digits. This can't go on forever, eh?

    But, for the time being, I believe WFC still has plenty of meat on the bone, and the XLF, too, perhaps, if we get a real meltdown(not to mention if derivatives start blowing up) seems to go down .50 each and every day, and a BIG position there gives me a good comfort level(with no specific deal risk to worry about).

    Other than those, lots of meat on URBN for those of you who agree that this one little frilly retailer is going to defy recessionary gravity much longer.
    Today, for instance, they announced they're starting some new expensive designer label with some goof-ball name, for sale in Nordies, et al. You know, $250 blouses and the like. They are now drinking their own kool-aid in massive quantities.

    Sorry to digress, but the short financials trade is pretty picked over. Most puts are now more a hold than a screaming buy.

    Maybe the U.S.Bancorps go next, as the contagion starts infecting even the few healthy specimens remaining.

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    • I think the basic premise in shorting URBN is that it has not reflected that there is a recession/depression and ALL retailers, unless they have a value proposition, will lose business. The few high flyers left, like this one, will all very likely crash and burn as the economy worsens/the market gets increasingly nervous about all stocks, or a future/current disappointment about this one.
      It's really that simple.
      What they sell or how cool or uncool it might be to a 14 or 40 year old really is immaterial when fear rules the market.

    • I dunno, sounds like a relatively well run business - even if the founder is a tool.

      He's smart enough to let buyers chose the fashions. More importantly, he encourages them to fail (or at least says he does). From what I remember about teen fashion (and I used to shop at Urban Outfitters in the late 80s), teens want to be conformist, but not too conformist. They may have figured out a good way to guess what teens want.

      I can understand why this company might make a great short. Every retailer aimed at teens/young adults will eventually lose favor. The problem is that unless you are 14, it's pretty hard to figure out if their stores are stocked with overpriced crap, or the coolest stuff ever. I'll wait until my son is a teen to short clothing stores.


      PS- someone was complaining about all the OT posts on this board. There's zero reason to post anything on FED, the end game is soooo obvious- $5 in a month or two, zero by Christmas.

    • He gave $13,000 grand to Santorum!!! I'm shorting more. What a pig.

    • Carlsbad, CA.
      Thanks. I'm a hopeless cynic, which has paid well recently.

      More from the retail grim reaper:

      http://www.gather.com/viewArticle.jsp?articleId=281474977364401

    • Squid-
      You need to be writing 'treatments'. Move to LA!
      (where are you?)

    • Well, Westwood is about as pampered and mainstream-hipster an area as you'll find, so I wouldn't put a whole lot on that one sample.
      And, I assume you're talking about an Urban Outfitters, not an Anthropologie.
      The latter targets more the 30-45 year old who is not on Daddy's credit card anymore.
      Those aspirational folks are the ones getting hit the hardest right now, having to decide between their rent/mortgage, spa day, Smart car, or $90 hemp blouse or $45 faux vintage candle single-stem vazzzz from Anthropologie.

      I'm confident that, like it or not, most of these customers have to go on a budget and such fluff as these guys specialize in is among the first discretionary spending to go. Also, how stale is this kind of ironic/vintage crap anyway? A new wave may sweep in, to reflect the hard times, just like after the Roaring 20s and into the Depression years. Flapperware and accessories went into the dustbin in the dustbowl years.
      These guys are hardly geared to be the pace setters of the 'Get real' next wave.

    • usa_is_a_modern_day_rome usa_is_a_modern_day_rome Jun 23, 2008 4:16 PM Flag

      I agree with your URBN short pick. I've been fighting it for months (kind of like with FED last year). Same thing with NKE and AZO (two other tough shorts that I know will pay off soon) - Actually, AZO is now nicely in the money, but I see that going back to $30 or lower (patience pays)......

      I'm slso short WFC. Many of these financial stocks are going to ZERO, so there is still plenty of downside left IMO.

      I'm also building short and put positions in AAPL, GOOG, IBM, RIMM, QCOM, CSCO and several other bloated tech stocks.

      I've also aggressively shorted DELL on this insane pop it's recently had. That company has destroyed it's balance sheet just like Gateway did a while back (before the stock fell from 80 to 2). DELL is a $5 stock tops!

      Tech is going to get CRUSHED when the oblivious Wall Street Clowns running Quant funds realize Tech isn't recession proof. I think the Nasdaq goes under 1000 by late 2009 and STAYS THERE FOR YEARS!!!

      • 1 Reply to usa_is_a_modern_day_rome
      • Long term, I think RIMM puts will do well, but I am going to wait until after earnings come out on Wednesday. Anything before that is a pure gamble. LT puts are expensive, but RIMM will face stiffer competition from Apple, as well as from the other big cell phone makers.

        I agree that the home furniture companies (Ethan Allen, Thomasville, Williams-Sonoma) will get hammered. As foreclosures continue, some of this stuff will be available in garage sales for pennies on the dollar. The only trouble with these stocks is that there are no long term puts. Even a dog like FED can take a lot longer to drop than rational analysis would indicate. I experienced enough pain in the dot.com era being right, but early, and losing $.

        The trouble with SHLD is that while the stores are dogs, I can't quantify the value of the real estate. Lampert has some trick up his sleeve, I'm sure, and the brands (Craftsman, Kenmore, etc.) are still worth something, even if the stores all closed tomorrow.

        I like the DRI short, but there are no long term puts. They're getting squeezed in both directions: 30% of their restaurants are in FL, CA, OH, PA, and MI, so their customers are taking a hit. Plus, their costs are going up. Going with a straight short exposes one to paying the dividend.

      • 1 Reply to r0h1tp
      • The story is too long to be posted in its entirety, but here's the link and the highlight.

        Shorting mall owners & operators is looking like a good idea.

        http://online.wsj.com/article/SB121401142593693967.html



        Steve & Barry's Faces Cash Crunch
        Fast-Growing Chain
        Seeks $30 Million;
        Chapter 11 May Loom

        ...

        But some of the forces pushing Steve & Barry's growth were not tied to end-consumer demand, but the needs of mall owners in a softening commercial-real-estate market. Much of the company's earnings came in the form of one-time, up-front payments from mall owners. Those payments were designed to lure the retailer to take over vacated sites, say several people familiar with the company.

        Without these payments, the stores are barely profitable, if at all, people familiar with the company's finances say. In recent weeks, the retailer has been seeking at least $30 million to fund operations through 2008. It has approached a number of financing sources, say these people.

    • Yeah, handing the beloved a Nile Blue box is a whole different dynamic than a Tiffany Blue one, right?
      But, that said, after the proposal, women probably will learn to love NILE since a diamond in any box is a girl's best friend, and a retailer that makes the guys feel like buying more such trinkets is a retailer that women will come to love.

      I'd be a little careful here.
      NILE is kind of the trade-down alternative, like WalMart and Costco and Ross, that might do good through a recession as they grab market share.
      Diamond engagement rings are recession-resistant, oddly enough.

    • 25 stores in CA....one very near me. I'll check out agani, but I went in their for a cheap backpac last year and they had nothing cheap. I'm wondering how much of their sales are online. Also, how many and which analysts follow? I would see their chances of returning to $15 as much better than their seeing $40

      • 2 Replies to laguy888
      • A big part of Urban Outfitters is the Anthropologie stores (they should apologize for the prices there!).
        A downturn in conspicuous consumer consumption, which is certain, will hurt that division enough all by itself to cause the parent stock to be cut in half.
        Problems at the Outfitter stores, in selling, for instance, overpriced Levis jeans that can be bought cheaper elsewhere, will be icing on the cake.

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