Abercrombie Looking Less Than Ripped
Preppy icon losing its cool.
Hello from New York, where I've got the day off from TV, a relatively flat book and every excuse in the world to do almost any self-indulgent thing you can imagine. So, what am I doing? I'm watching the horror show that is the stock market and marveling at the drops in stock prices of names like Wells Fargo (WFC) and Ford (F). The only excuses I have for my behavior are A) we are living through historic times and it makes for good theater B) when it comes right down to it, I got no where else to go, Drill Sergeant.
Here's what I'm doing while adamantly refusing to give my DOI:
- Morgan Stanley's (MS) getting battered, pummeled, pole-axed and otherwise drubbed. CEO John "No Relation" Mack keeps insisting all is well. Mitsubishi (MTU) continues to insist it will go through with its announced plan to pillage and dilute MS shareholders later this week. The "Evil Shorts" are mum, near as I know. Regardless, MS is down over 15% today and a stunning 75% YTD.
- General Motors (GM), which I fairly recently considered getting long as a hedge of my now-gone Toyota (TM) short, is down more than 10% today and 45% in the last month. [This space left blank while the author shudders uncontrollably at an alternative life in which he is long General Motors.]
- Hank Paulson and the White House are coming across the wires, rather ominously announcing that they are willing and able to "do anything" to support the markets. While I'm sure they intend the statement to be reassuring, if they asked me to help with PR, I'd point the government to Morgan Stanley's chart and suggest that there's a time for talkin' and a time for just letting the situation ride itself out for a bit. This is the latter.
- While there's no quote or public market for the Oracle of Omaha's "Perpetual Preferred" shares, the common stocks of Goldman Sachs (GS) and General Electric (GE) are down 10 and 20%, respectively, since Buffett announced his investments. Those paying close attention will notice that Mr. Buffett is not feeling compelled to hold press conferences, assuring jittery Berkshire Hathaway (BRK/A) investors that BRK is going to get its 10% yield. There's a reason he's the richest man in the world.
- For what it's worth, and for those who asked, I stand behind my assertion that this week's first ever globally unified rate cut was, in fact, a "surprise" event illustrative of a market very hard to get long or stay short. To be honest, calling it an unexpected occurrence didn't strike me as a controversial statement then or now. Bear markets make grouches of us all.
- You want a comment on September Same Store Sales? "Looks like Abercrombie & Fitch (ANF) shorts are finally getting paid." ANF's catalog models make me feel creepy but the stock itself, down 60% for the year and sporting a sub 6x P/E, is a good example of two Golden Rules of retail: 1) Given enough time, every specialty retail stock will break your heart 2) No matter how cheap it looks, the stock can always find a way to go lower.
- Don't believe me? Grab a wooden chair next to a hippie loitering in front of his i-Mac, working on a never-to-be-published novel, and pull up a Venti chart of Starbucks (SBUX).
- To end on a positive note prior to donning my dress uniform, taking my motorcycle over to the factory and whisking Mrs. Jeffmacke out of there because I finally understand the tough love this market has meted out has made me into the man I've always pretended to be, McDonald's (MCD) and Burlington Northern (BNI) are having good days. Regarding the latter, the aforementioned Oracle has sold a dumptruck full of December 80 puts, according the GuruFocus.com. Yup, Mr. "Derivatives are weapons of financial mass destruction" is whipping 'em around like my hyper Armenian friend, Najarian. I tell you, I simply love both of those guys (albeit for totally different reasons).
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