ISM numbers were horrendous, so stocks sold off–now everyone is worried about The Fiscal Cliff again. I swear the market wanted to roar this morning, when the futures were +7.
I’m getting lit in VHC and SWHC, but nothing too serious. They both trade weird and have longer term stories to the names, so the short term aberrations need to be taken with a grain of salt. With VHC, I cannot think of a reason why any short seller would want to have exposure to the stock ahead of the court date with Judge Davis and AAPL. Many believe some sort of settlement will be hammered out by then, effectively opening the floodgates to future licensing deals with a wide array of players. If that happens, shorts will regret the day they were born.
SWHC is a play on the 2nd amendment, which many feel could be at risk in two years. Because of that fear, people are stockpiling guns. Go look at the data, it screams of panic-impulse buying. Like any retail stock that has a product that is in heavy demand, SWHC and RGR should reap the rewards through superb quarterly reports.
YELP is ripping again. I kind of regret not buying it at $17. The risk with the stock lies with its valuation, trading 9x sales. It is priced as if someone is going to acquire them, which makes sense for a number of players out there. However, can the company ramp up earnings before that happens, to support this valuation? That is a the billion dollar question.
Lastly, I am long EXK because during the debt ceiling crisis, gold and silver ramped. It’s my belief that the same will happen once we dive off the fiscal cliff.
NOTE: I am still 30% cash.