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Time to Bet on MGM Mirage?


Casino names moving ten percent a day.


Greetings from the NASDAQ market site where the best thing I can say about doing two shows a day is that it's kept me surly enough to stop me from trying to get long any financials over the last 7 trading days. No reason to pile into the Bear Lair: The other MV professors around here have done a better spectacular job detailing the downside carnage. Judging by the way Lehman (LEH) is trading, the gub'ment is going to wish it had some of that dry powder it spent over the last month sitting around sooner rather than later.

Here's what else I'm thinking while trying not to openly snort at the notion that a 1% rally in crude is impacting the equity market in any meaningful way:

  • I sold all my Costco (COST) at the open this morning. No "Stop the presses!" logic behind the move. I had a gain on the trade, I see nothing good happening with the consumer and there's nary a positive catalyst I can see to change the latter.

  • Keep an eye on the casino names as MGM Mirage (MGM), Las Vegas Sands (LVS) and -- let's just leave it at "all of them" -- trade lower because A) They've had a decent run, B) The above consumer observations and C) There's murmuring about China limiting travel to Macau. Any group moving 10% a day is worth at least keeping a trading eye on, if not something I'd consider for a casual trade.

  • Target (TGT) and Home Depot (HD) were both predictably "blah" today with decent execution in a lousy space. As I said about Costco on the tee-vee earlier, being a best of breed retailer is akin to being the least corrupt gymnastics judge. It's nice but of limited economic value.

  • Just a thought, but if a sport involves tarting up women who seem to be 9 or 10 years old and being a 9- or 10-year-old girl actually offers a competitive advantage, as are both the case with gymnastics, it might be time to consider some rule changes. And, yes, this is from a guy who watched a shocking amount of synchronized diving this Olympics.

  • I can't think of anything Fannie (FNM) or Freddie (FRE) could do to make me have any interest at all in the common stock. As an "investment" they are both simply non-starters. As trades, they have an unknowable number of outside factors on which I am beyond edgeless. This isn't a screed and certainly not advice: Just a couple ready-made ways to say no to any broker who would try to convince you these GSE's "can't go lower."
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No positions in stocks mentioned.

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