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Major Trends I’m Looking To Play; Recent Trades: AAPL, GLD, VNO, SPG, M, SPLS

28 January 2009 No Comment

This week has been a busy week for me in my investing/trading account. We have had 4 straight days of up days in the markets, and as such, I’ve made some moves. In this post I will talk about some of the major economic trends I’m looking to play as well as some of my recent trades.

Major Move Up In Gold

Gold has had a huge run in recent weeks, so I decided to take a little profit in GLD. I am still a long term gold bug, but after a few days in a row of major gains, I figure a pull back is due. I will be adding to my gold positions on any weakness. As our country continues its spending spree to pull out of this recession, gold should continue to rise.

Deteriorating Economy / Rising Unemployment

2008 was the collapse of the housing market as well as the financial / credit crisis. 2009 will be the down turn of our real economy. I believe that unemployment could easily hit 10% this year. GDP should contract significantly, maybe 3-4%. The reason I believe this is that in recent years, GDP has been approximately 70% consumer spending. This was driven by home equity debt and credit card debt; both of these sources are now dried up. Couple this with rising unemployment and consumer spending will plummet; thus, the GDP will contract significantly.

As such, I took the opportunity to unload some Apple stock (AAPL) after a big bounce upwards today. I also decided to short two commercial real estate companies: VNO and SPG. SPG is very tied to retail. Lastly, I decided to short Macy’s (M) and Staples, Inc. (SPLS). Both have heavy debt and should see their business contract significantly in this economy.

As you can tell, I’m bearish on our economy. People are broke and more people are losing their jobs each day. Caterpiller’s 20,000 job cut is very indicative of a global economic downturn. Expect more news like this in the coming weeks and months. And the so-called “stimulus” is not going to do much at all except drive inflation in the coming years.

Track My Trading

You can follow all of my trades and holdings through Covestor. Check out the new page on the site labeled My Portfolio.

For some reason, Covestor is having some technical difficulties and my latest trades are not showing up. I have been told it will be fixed in the next few days though. When it is fixed, you will see the trades I’ve made detailed above.

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