Idiot me. Remember the list from a couple of days ago:
US Steel (X) down 63% for the year.
AK Steel (AKS) down 56%
Freeport McMoran (FCX) down 62%
Caterpillar (CAT) down 23%
Cummins (CMI) down 31%
Joy Global (JOY) down 66%
Console Energy (CNX) down 76%
Criss Natural down 62%
Alcoa down 48%
Deere (DE) down 16%
Archer Daniels (ADM) down 26%
Mosaic (MOS) down 28%
Potash (POT) down 42%
Intrepid Potash (IPI) down 74%
Macys (M) down 41%
Nordstrom (JWN) down 25%
Chicos (CHS) down 25%
Bed Bath and Beyond down 30%
Urban Outfitters (URBN) down 40%
Gap (GPS) down 40%
Whole Foods (WFM) 40%
Walmart (WMT) down 33%
Kinder Morgan (KMI) down 43%
Marathon (MRO) down 37%
Range Resources (RRC) down 35%
Ultra Petroleum (UPL) down 62%
Southwestern Energy (SWN) down 57%
Why hadn’t I sold many of these short? I knew that things were bad for these companies and I’d avoided them like the plague. But I hadn’t shorted them. Why?
Investing is not only about picking stocks that go up, but also picking stocks that go down.
The good news:
1. There are still huge forces disrupting our economy.
2. The forces work their disruption very quickly.
The downturn in commodities, in metals, in oil came so quickly. And interestingly, doesn’t look as though that stuff is going to bounce back any time soon.
There are new forces of disruption. They include:
+ Banking/lending money. It’s going online and new providers are being funded and are coming out of the woodwork, e.g. SoFi, Upstart and Funding Circle.
+ Cord cutting. Cell phones destroyed landlines. Now online video (e.g. Netflix) is destroying cable TV.
+ Bricks and mortar retailing. It’s called showrooming. We all do it. We pick our product at Best Buy. Then we buy it cheaper from Amazon.
+ Energy. Coal is dead. The world is awash in oil and natural gas. Solar is almost competitive. Some parts of America are already awash with electricity and some electric utilities are giving it away for free. Texas gets something like a quarter of its energy already from wind and doesn’t know what to with the electricity the windmills produce — especially at night when the wind blows strongest in Texas. 35 to 50 million American homes will one day have solar panels on their roofs, effectively cutting their electric supplier off. Another form of cord cutting. Utilities are running scared.
+ Nobody will drive a gas car 20 years from now. It’s much cheaper to fill your car up at night with free electricity from wind.
+ Insurance. Skip your broker. Buy online. I bet there’s already a Priceline for buying and comparing insurance.
And a graphic on disruption:
You got to identify the winners and loser fast and move fast. And be prepared to cut your losses FAST if you find you messed up.
In fact, getting out quickly may be the prime thing you need to be a successful investor.
This morning I had a meeting of the board that runs our apartment building co-operative. We’re re-doing the lobby (don’t ask how much). The board is freaked out by the next blackout in New York — perhaps as a result of terrorism. And we’re looking at a big generator to run the elevator, lights, heating and water.
Want to be totally freaked out, read Ted Koppel’s latest book, “Lights Out.”
Wisdom from a great man.
Markets do what they do the best — screw the maximum number of people — Jamie Dimon.
Gotta love the French. Sign posted on the window of a National Health office in France:
Translated:
“Our offices will be closed from 11:45 to 13:15 in order to participate in the minute of silence.”
France remains true to its priorities.
Homesick snowbird
In Destin, Florida the other day, there was a bumper sticker on a parked car that read: “I miss Chicago”
Someone broke the window, stole the radio, shot out all four of the tires, added an Obama bumper sticker and left a note that read,
“Hope this helps.”
Harry Newton, who’s a bit rushed this morning. What with the board meeting and investing in some neat residential and commercial real estate syndications that have just popped up. I love apartments renting for $800 to $1100 a month in fast-growing southern parts of the U.S. — Florida, Georgia, Texas, etc. We need affordable rents, a nice debt coverage ratio of around 2.0, and lots of schools, shopping centers and hospitals. Did I mention hospitals? That’s one business you can’t outsource. And nobody is getting healthier. Everyone’s getting old, senile, grumpy and can’t hear. I’m training Susan to speak more loudly.
http://i2.wp.com/www.powerlineblog.com/ed-assets/2015/10/Bills-Girls-copy.jpg
Harry,
So you’re into shorting and day trading now, at last report only had about 12-15% of your money in the market…you don’t have a clue do you? No, you do not. Did you buy the Square IPO like I urged you to?
Harry-
As a long time telecom worker I enjoyed your graphic on slamming the receiver on the rotary phone. That was back when phones were actually made of METAL by Western Electric and Automatic Electric not mostly of plastic like they are today. I would definitely not do that with my desk phone today.
Your point about energy under Disruptions is interesting. I think that solar and wind are going to be more prominent than fossil fuels in the future. It would be great to just plug the vehicle in at night and charge up than having to schlep to the fueling station and fill up. I am hoping to get solar and wind going at my own place in the near future.
Thanks for a great column every day; I look forward to seeing it every day! I still miss Teleconnect and Call Center magazines!
Steve H.