Why long should be careful?

AGA7d

There are several sectors that are facing difficulties in the coming year:

1. Retail
If the holiday sales are down 2.9% on the low 2008 number, retailers will have a difficult time. There will be more consolidations - big guys are OK, but there will be a wave of closure of small shops.

2. Commercial real estate (CRE)
Prices, rents are down, vacancies are up. Shopping centers, office buildings, apartments - weakness across the board. More defaults ahead.

3. Financials
Credit card defaults may have peaked, but defaults at residential housing, CRE continue to rise. Loan defaults at small business also are expected to climb. With M&A, IPOs down, lendings down, where can the banks make up the slack? Trading? How many fools are there keep losing money on trading?

4. Construction
Too many houses and building already

5. Manufacturing
The continuing job loss in the sector tells us the bottom is not in yet.

Techs may be doing OK, but if the consumer spending is down - how high can it go? AAPL/AMZN/GOOG/MSFT etc already at high or near high.

Overall, I'd buy big names and short small ones like IWM.

源济

MTLYBZB

weigoodone01

coexist

all priced in

registered

AGA7d

Priced in? Depends on whom you ask. Some would say priced in a rosy recovery.

The earnings are generally decent except for a few hard-hit sectors. However, do not mistake the bottom line with top line. Companies are cutting and cutting to protect the bottom line - but where is the top line growth? That pretty depends on the gov stimulus down the road.

To me, seems there will be a long-time of no organic growth (growth in the health industry is not organic growth). There is a danger that the gov stimulus got lost in the consumer cutting back.

ut1984

yifan

THANK  YOU!

abaqus

netfire

7# AGA7d

quix

ding, good article, thanks for writing