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GM's Batteries Running Low


40 miles to a charge nothing to write home about.


Hello from New York where, in the interest of full disclosure, I'm celebrating my one day vacation from television by doing a whole lotta nothing. Specifically, I'm trolling for a trade or two, watching Braveheart and hoping it warms up enough to go swimming. Sometimes a little distance can give a man insight. Other times it makes your brain turn to mush and you spend your days watching Mel Gibson movies without any irony.

Here's what's running through my mind at the moment. I'll let those with a perspective outside my head be the judge of my "Insight" vs. "Gibson Loving Brain Mush" condition:

  • Yup, the retailers are ripping, led by JC Penney (JCP) and Kohl's (KSS); two names I specifically said I wanted no part of, long or short. Sure, I'd love to be long the names today and I wish I'd told you all to buy, but only because of the outcome. In my experience, playing the trading game of "getting long ahead of lousy results because it's 'in the stock'" has roughly the same expected long-term payout as Three-Card Monte. Buying stocks up 10% after they guide lower has the same payout as lighting your money on fire.

  • Hansen Natural Soda (HANS) is giving a bit back today after curiously spiking 4 points on huge volume yesterday ahead of the post-close announcement that Nelsen Peltz has taken a large stake. Two thoughts for those thinking about jumping on-board: 1) Peltz sold Starbucks (SBUX) to buy his Hansen. 2) T. Boone Picken's got mercilessly beaten getting long Yahoo (YHOO) to play alongside Carl Icahn and those guys are actually friends. It's smart to keep one eye on what the Big Fish are playing. It's silly to use their moves as your entire investment thesis.

  • One Hanson play I do like: Buying the defunct boy band (and the rights to MMMBop) and spinning off the oldest and youngest brothers. Then I take the good looking Hanson on the road to be a warm up act for the the Disney (DIS)-owned Jonas Bros. The sales and warm-up gig will both earn me enough to pay down the interest on my purchase and give the Jonas boys a chilling glimpse into their horrible future. Win–Win (by which I mean "I win twice").

  • I'll have Goldman Sachs (GS) advise me on the deal. Normally I'd assume the snootiest of banks would want no part of my obviously illegal and immoral purchase of a boy band but, judging by the estimate cuts and GS chart, I think now is a decent time to let them bid for my business. If nothing else it'll give the company something to do other than plotting the downfall of those who dare downgrade its stock and grooming executives to control most branches of the government (the latter being SOP at Goldman).

  • To those who would criticize my Braveheart decision I offer one defense: "Freedom!"

  • Speaking of picking a fight with forces much larger than I: the Ag plays (Potash (POT), Mosaic (MOS) et al) are being routed like the English at Stirling Bridge today and I still regard the Fertilizer, Coal and Crude triumvirate of momentum as dead. You can yell about it and call me names all you want but that will do nothing to fix the broken charts.

  • Sticking with the easy trades, I'm still rather enjoying being long the US Dollar via the UUP ETF. On the downside, like many ETFs, it's futures-based and imperfect in many ways. On the upside, it's a sexy chart and the position allows me to make patriotic sounding speeches on television. Yes, my dollar trade may not work. The chart may fail here at the resistance of the February highs. But sons and daughters of Minyanville I promise you this: they may take my capital gains or trounce my dignity but they shall never take my Freedom!

  • I've been turning the idea of a long General Motors (GM) short Toyota (TM) trade in my mind. I still like the latter half as an investment. What troubles me on the long GM part is that management finally "accelerating their turnaround plan" by dumping Hummer and betting everything on a car that it brags "can go 40 miles between charges" (presumably with a straight face though I have no idea how) seems to have marked an at least intermediate-term top in crude oil. Take a hard truth from a proven patriot (see: Long UUP): if crude goes back under $100 and gas follows toward $3, the idea that Americans would prefer driving glorified golf carts over SUVs will be forgotten faster than the two Hanson brothers I'm going to spin-off.
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Position in DIS, UUP, TM

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