7 Stimulus Trades That No One is Talking About
Michael Shulman, February 28, 2009
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Trade #5:
The ConsumerThe American consumer has lost more than $12 trillion in wealth and buying power. The stimulus package is modest compared to this loss. New tax proposals will hit the most aggressive spenders. And the savings rate -- money under the mattress, not in the mall -- is going through the roof. More and more money is NOT being spent, which is bad for stores and other companies dependent on consumer discretionary spending.
Eventually we may see a third stimulus package but even that will be too little, too late for many companies in this space. Hit travel -- the best play here is Expedia (EXPE) . Business is soft and getting much softer. Also, play the whole segment by betting against the ETF for this space -- the Retail HOLDRs (RTH).
Recommendation: Short the Retail HOLDRs (RTH), the retail ETF. Short Expedia (EXPE).
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