My Short-list for Potential Short Positions

Here's what the situation looked like back in 2000, courtesy of ComStock funds:
the S&P 500 traded at more than 50% higher than at any prior market peak valuation. The NASDAQ traded at 245 times earnings, 16 times the average NASDAQ P/E from 1971 to 1991. Also, almost every Initial Public Offering (IPO) rose to 3 to 5 times the IPO price, topping all other significant financial manias by a long shot. A large number of these IPOs had no earnings, while others were merely start-ups with no sales.
Things are not so much different today, and as usual, history repeats itself and market participants are stroke by amnesia.

Here's my short-list for potential short positions:
  • Baidu — most probably a scam in my opinion, and fake earnings (see previous posts on the company)
  • Groupon — another company that exists only to go public. No earnings to show, and prospects extremely bleak (see my previous posts on the company).
  • LinkedIn — Extremely small profit, no real growth prospect (company has already been around for 10 years) and although down 40% from the peak, it's still trading at a PE of close to 1,000.
  • Zynga — Extremely high valuation (PE close to 120) for a company which futures growth I cannot understand.
  • Pandora — Another company that has been around for quite a long time now, and which business model is still a mystery to me. No earnings, no growth, down already 40% from the peak, yet valued $2 billion.
  • Starbucks — At a new all time high, and given the market collapse that is in the deck, I wouldn't be surprised to see another remake of the 2008 bust, when the share dropped 70% in a few months.
  • Amazon — Great company, I do most of my online shopping with them. But a PER of 100? Come on.
  • SalesForce.com — Good idea but poor realisation. Small profits for a company trading at 7,000 times their earnings while only down about 50% from their all time highs.
Any comments? Any other stock you would like to see on this list?


Tiho said...

All you talk about is shorting stuff. The shorts just lost out dude. The bear market is over for awhile.

Now bulls are in charge for awhile. You seriously need to learn market cycles and business cycles. But like I always say: if you keep staying bearish in 2009, 10, 11 and 12, eventually you will be right.

Even a broken clock is right twice a day!

pej said...

The short-list here is intended to monitor the best possible candidate for shorting. It doesn't mean that I am short.

Love that expression about the broken clock dude!

Tiho said...

That is the same way you missed the rally fromOctober 04th of 1075 to 1320.

You are too busy wasting time talking shorts, talking Puts and talking crap. Instead you should have bought when I said so back in middle of August as we had a crash panic and if you held a 6 month option until today you would have CLEANED UP!

But you are too busy shorting... we all know how that worked out!

pej said...

Actually, it's not entirely true, but you wouldn't know, as I didn't have much time, so I didn't post some of my trades.

I went long some single stocks in the Eurozone, and I was up 50% in one month as of this morning — before the market declined a bit.

That was such a dramatic and fast move that I think it's about time to close that trade.