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Dryships, Las Vegas Sands Two to Watch


Shippers, casinos, miners looking good - for now.


Greetings from New York where, finally, it's game on for 2009! The kids are back in school, the traders are in their turrets and the volumes are marginally trustworthy, if not robust. After nearly a month and a half of semi-sloth it's time to get back in the game on a more active basis. In the grand spirit of Spring Training and Ali slapping around Jerry Quarry, I'm shaking off the ring rust gently as opposed to going for the title immediately.

Fresh eyes, heart full of desire and a ton of 2009 in front of us. A clean slate, Minyans. Here's what I'm watching as I ponder ways to fake a hormone imbalance in order to get that prescription for ground-up silverback-ape pituitary gland I want to boost my testosterone:

  • As Todd-O mentioned, Dryships (DRYS) is ripping, as are all the shippers, the casinos (Las Vegas Sands (LVS) up 20%) and a slew of miners. What do they have in common? "Beaten-down global growth," my friends. Nature abhors a vacuum, and traders love themes. I'm playing lightly via MGM (MGM), with all the conviction of a guy hitting on 16 against a dealer's face card.

  • Speaking of global giddy-up, I remain long Toyota (TM). I still have a $60 stop and I'm a skeptical thinker, but as a wise man once told me, "You gotta play the market you have, not the one you think you should have."

    I've taken some heat about flipping from the short side to the long on Toyota - despite the trade actually working. One of the odd things about semi-public life is how much you can tick people off by changing your mind, no matter how many times you tell people you believe it to be a "trader's market". We like mental flexibility in concept but regard it as "waffling" when we actually see it.

  • Another curiosity of the masses: Scared people don't spend money. You can give them 0% rates, tax cuts and cash; they won't spend. We can debate the implications of that fact, but not the reality of it. It's impossible to stimulate confidence. Deal with it.

  • I took Mrs. Jeffmacke to Marley and Me over the weekend. Two Line Review: 1) The writers worked backwards from "we can make people cry if we spend 20 minutes killing a dog" and 2) you can't make a good dog if you're afraid to hit it when it's naughty. I simply couldn't get over those 2 thoughts to the point I could enjoy the film.

  • I maintain that General Motors (GM) and Ford (F) are worth nothing, give or take a couple pennies, on the equity side - but there's simply nothing "shockingly bad" for them to report. Which, along with a devaluing Yen, is more or less the long thesis for Toyota.

  • Lotta buzz lately on the nature of compounding math as it applies to levered ETFs. It's certainly a point worth noting (or it was a couple of weeks ago, when Adam Warner noted it), but it's not a "gotcha" any more than the fact that the S&P 500 needs to double from the lows to recover its 50% loss is.

    For that matter, my MGM needs to go up 5 fold to get back to its 52-week high - even though it's "only" off 80%. Comebacks are a killer, which is why we sought to avoid the sell-off in the first place - a fact to keep in mind as we get back in the swing.

With that, I'm off to look for a new Mac as I try to hold off my purchase until we see if Apple (AAPL) is going to announce anything worth waiting for at MacWorld.

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Positions in TM, MGM

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