The Bad News Victims of 2008 are the
New Victors of 2009
Michael Shulman, January 5, 2009
Free Trading Guides
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The Bad News Victims—
Profits from Selling Short
RestaurantsThe money from the short side began to flow in the third quarter of 2007 and lasted throughout this year. Restaurant outings are arguably the first area of discretionary spending given up by consumers when times get tough.
Ruby Tuesday (RT) is down 83% this year, The Cheesecake Factory (CAKE) is off 63% and the other victims here are too long to list. Customers trade down before they decide to stay at home and some companies benefit from this phenomenon.
On the short side for 2009, take a look at Sysco (SYY) , the largest supplier to all restaurants, which is bound to be hurt more by a reduction in overall spending. The company is almost an ETF for restaurants.
The restaurants still have a ways to go to hit bottom. Continue to look at Sysco (SYY), Yum Brands (YUM) and Starbucks (SBUX) as short opportunities.
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