The one trade on the short side that continues to work are commercial real estate names - I guess we'll know we are near the end of this bull move when speculators start to run up this sector. They've run everything else up. Macerich (MAC) has provided massive gains both as a trade and "short and hold" - I am going to take most of the gains off the table and keep a 0.5% position here with sales just under $6. Now this is a $6.00 stock so if we get to $5.10 or so I will be forced to reshort for the simple reason I cannot short below $5.00 so it will be the last chance to hope on board. And I don't want to miss any potential death spiral ala General Growth Properties (GGP) or Developers Diversified (DDP)
I've been shorting commercial REITs since fall 2007 (thru SRS ETF)... I was early since at that point the market was at all time highs and the financial situation was but a "hiccup" - recession? only in a few people's eyes. But the glory days still lie ahead even as the Federal Reserve is rushing to include commercial mortgage backed securities (another terribly unsafe collateral) on their (taxpayer) balance sheet. [TALF] The Wall Street Journal had a front page story on the danger in REITs, and George Soros said prices will drop 30% from here yesterday - I'll do a separate piece on these. We have an overbuild society full of office building and retail stores in a country headed for 10%+ unemployment no matter what Kool Aid people are drinking today. Vacancies will skyrocket, and rents of those who are still in the game will be pressured downward. It's a very simple story that one could figure out a long time ag... if one did not believe White House speak in mid 2008 that there was no recession and Federal Reserve speak that we'd be back to rip roaring growth by latter 2008.
Again specific to MAC, I have a big gain I don't want to give away in case this market goes bonkers to the upside again so I am locking this one in while keeping my 3 other names in the CRE basket (and still looking for new candidates - SL Green (SLG) might be one since the NYC office market will crumble over the next year). If however it starts to approach $5, I will buy back in. I'd prefer to buy back north of $7 however.
Short Macerich in fund; no personal position
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