The Sane Investor

May 19th, 2009

So I had moved out of the double long S&P, and in to a double short financials, with the expectation that if we were heading down, financials were going to be leading us there.  Financials led the way alright.  All the way up.  The expectation on my part was also that a lot of the commercial debt, and credit card debt out there is a ticking time bomb.  By this, what I mean is that although things aren’t getting worse as fast as they were before, the longer they go without getting better, the more likely defaults from businesses and individual consumers.

I still don’t understand how housing starts are up, but then again I’m not in that industry.  Maybe the expectation is that now things are going to rally, and if that’s the case then now’s a great time to start building.  But just last night, we were watching the news and they were talking about how many ghost town-like suburbs are popping up in southern California.  If that’s the case, why on earth would you be building? (more…)

November 13th, 2008
If you were working at Circuit City, chances are you knew that something was going to happen when Blockbuster announced it had made an unsolicited $1 billion bid for the company in mid April 2008.  That still probably didn´t help soften the blow when the company declared bankruptcy on Monday.  Today the company announced that Bank of America would be providing a $1.1 billion credit line for the company, which Bloomberg cited Circuit City as saying would ¨…help pay for its emergence from bankruptcy next year¨.  But this brings up the larger thematic issue: is this an isolated event or the telling of more events to come? (more…)