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Home Depot, for example, won't benefit from a lower-than-predicted major storm year because there's no rebuilding.
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Greetings from New York where we’re grateful to Colorado State University for remembering my birthday. The esteemed University is best known for two things: 1) giving the upper-crust hippies at the University of Colorado a gritty, leather-jacketed natural rival and 2) the eponymous Hurricane Forecast which came out yesterday. This year the good, smart, climate-studying types at CSU are predicting 15 named tropical storms with eight becoming hurricanes and four major hurricanes. This compares with historical averages of 10 named, six hurricanes, and two major hurricanes.
What made the CSU forecast a personal gift to me? Because it gave me the chance to publicly bet the under for the fifth consecutive year. I only sort of understand CSU’s extended logic for their prediction. Something about el ninos. Honestly, I could pretend to know what they were saying; I used to do television where you never, ever, admit you’re making stuff up. But I’m not a meteorologist. I just know CSU’s prediction has been too high just about every year since Katrina. Now CSU is calling for 50% to 100% more storm activity than has been the norm for the last 60 years. I say no way. They’ve got PhDs and computers. I’ve got a knack for odds. Game on, CSU.
On the topic of experts extrapolating scant evidence and making rash or foolish predictions, the idea of man-made global climate change is crap. I’m calling balderdash on the entire industry of climate change. We might as well be funding the society of alchemy. Humans have no idea why or how the climate on Earth changes. The climate simply always changes. It always has. Considered over five- or six-century time frames; sometimes Europe is a groovy place to swing. Sometimes Europe is 100 feet under ice. Greenland is sometimes covered in ice. Like it sort of is now. But not all that long ago Greenland was covered by farming Vikings. You can be assured that the Vikings weren’t running about farming, pillaging, and whatnot on a sheet of ice. The climate was different then. It may be changing now. It’s folly to think we both know why the climate is changing and how we can change it. Earth is Earth; we’re just killing time and, maybe, ourselves for a few thousand years. Earth: Big and Confusing. People: Insignificant and Not Bright.
So, what I’m saying is I’ve got the under on 15 named storms and Global Warming -- or Cooling -- at the hands of man is a myth. Clean the air so we can breath but don’t lie to me about the Bogeyman. And don’t flee the Atlantic Coast for fear of storms or the water level rising 20”. I hope we’re clear.
Here’s what I’m looking at instead of futilely trying to change the world:
- Retail sales were insanely huge. We’ve been talking about that for weeks (see What, and Who, Can Move the Markets). The American consumer is a consuming machine. It’s like Jaws only with a credit card. American consumers eat, shop, and create baby consumers. As long as the unemployment rate isn’t rising, retail comps are going to be strong. Don’t short good comps and consider Nordstrom (JWN), which I’m long and Target (TGT), which I’m not.
- How would you trade a Bullish bet on retail, mixed with a hedged bet that Jeff Macke is right on global warming being a scam? How about you buy good retailers and short Home Depot (HD)? Home Depot won’t benefit from a lower-than-predicted major storm year. No rebuilding. You could also get long a little Ryder (R). If sea levels do shoot up 5” there’s going to be a lot of people moving. Also, Ryder is a pretty good company anyway. I’m not advising anyone to make these trades. I’m just saying they’re some ideas for those who think I’m right but want to be hedged.
- I’m being a little bossy, crotchety, whiny, and arrogant today, huh? This must be how it gets when you get to your mid-40s (I’m 41 now). If bossy, crotchety, whiny, and arrogant just proves to be a natural part of aging I may owe about 80 million Baby Boomers an apology (see Social Security Is a Drag on Economy). If I do I’ll put one in the comments section of these things.
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