e-Coops

This sampling of blog posts from Doug Kass was originally published today on Street Insight. It’s being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

Not a Great Fan of Sentiment
1/23/2007 9:27 AM EST

There has been a heck of a lot of complaining over the last few trading days — I presume by invested bulls — after a quite modest drop in equities.

I continue to see the markets differently from those who believe skepticism abounds as manifested by, among other things, high short positions.

I see sentiment differently than the bulls, believing that complacency is copious and disbelief has been suspended, as manifested in record low credit spreads and low volatility measures. Technically, put/call ratios are back to levels of the spring highs.

As I have mentioned in the past, I am not a great fan of sentiment, preferring to see what investors are doing, not what they are saying! To be sure, the AAII survey is bearish, as is this morning’s UBS Investor survey.

And, fundamentally … well you all know where I stand.

Shorted Coach in Premarket
1/23/2007 9:42 AM EST

I shorted Coach (COH) in premarket trading at $45.50. Although earnings beat expectations, I view guidance as uninspiring and I feel the market is overeacting to the upside.

Over the weekend, Michael Santoli penned an interesting column in Barron’s, “Rich America, Poor America.” I think Mike omitted an important point that has not only buoyed the sales for high-end retailers (like Coach) but also raises risks going forward.

Many middle-income consumers have been especially emboldened in recent years by the unprecendeted extraction of capital out of their houses and have moved more upscale in their purchases of such items as apparel, jewelry, high-end appliances, etc.

Companies like Coach, Tiffany (TIF) , Williams-Sonoma (WSM) and Polo Ralph Lauren (RL) have been particularly (and positively) affected at the margin during 2002-06 (just correlated their above-trendline ramp in comp-store sales with a schedule of real estate-refinancing cash-outs).

With mortgage equity withdrawals (MEWs) slowing to a crawl, coupled with the shock of ARM resets, I see a reversal of these marginal revenues from the source of the middle-income consumer, providing a headwind to upscale retailers.

Short COH, TIF, WSM, RL, RTH

Explaining the Fluctuations
1/23/2007 10:23 AM EST

Everyone seems to have a need to explain daily fluctuations of stocks/industries. Case in point: the brokerage stocks.

Yesterday, another Street Insight commentator felt the market could move higher because the brokerage stocks had spiked and held their gains despite a weak tape.

From my perch, tells — like financial stocks in general, and brokerage stocks in particular — are but part of a larger investment mosaic. Nothing more, nothing less.

Perhaps the best explanation of today’s weakness was that there is profit-taking from yesterday’s strength! Most every twist and turn in price is noise, and should probably be analyzed as such.

Again, nothing more and nothing less.

Starting to Cover Coach
1/23/2007 10:42 AM EST

Coach (COH) has now reversed $3 lower from premarket trading. I have begun to cover a portion of the short.

Position: Short COH

This entry was posted on Thursday, February 15th, 2007 at 1:22 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

This sampling of blog posts from Doug Kass was originally published today on Street Insight. It’s being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

Not a Great Fan of Sentiment
1/23/2007 9:27 AM EST

There has been a heck of a lot of complaining over the last few trading days — I presume by invested bulls — after a quite modest drop in equities.

I continue to see the markets differently from those who believe skepticism abounds as manifested by, among other things, high short positions.

I see sentiment differently than the bulls, believing that complacency is copious and disbelief has been suspended, as manifested in record low credit spreads and low volatility measures. Technically, put/call ratios are back to levels of the spring highs.

As I have mentioned in the past, I am not a great fan of sentiment, preferring to see what investors are doing, not what they are saying! To be sure, the AAII survey is bearish, as is this morning’s UBS Investor survey.

And, fundamentally … well you all know where I stand.

Shorted Coach in Premarket
1/23/2007 9:42 AM EST

I shorted Coach (COH) in premarket trading at $45.50. Although earnings beat expectations, I view guidance as uninspiring and I feel the market is overeacting to the upside.

Over the weekend, Michael Santoli penned an interesting column in Barron’s, “Rich America, Poor America.” I think Mike omitted an important point that has not only buoyed the sales for high-end retailers (like Coach) but also raises risks going forward.

Many middle-income consumers have been especially emboldened in recent years by the unprecendeted extraction of capital out of their houses and have moved more upscale in their purchases of such items as apparel, jewelry, high-end appliances, etc.

Companies like Coach, Tiffany (TIF) , Williams-Sonoma (WSM) and Polo Ralph Lauren (RL) have been particularly (and positively) affected at the margin during 2002-06 (just correlated their above-trendline ramp in comp-store sales with a schedule of real estate-refinancing cash-outs).

With mortgage equity withdrawals (MEWs) slowing to a crawl, coupled with the shock of ARM resets, I see a reversal of these marginal revenues from the source of the middle-income consumer, providing a headwind to upscale retailers.

Short COH, TIF, WSM, RL, RTH

Explaining the Fluctuations
1/23/2007 10:23 AM EST

Everyone seems to have a need to explain daily fluctuations of stocks/industries. Case in point: the brokerage stocks.

Yesterday, another Street Insight commentator felt the market could move higher because the brokerage stocks had spiked and held their gains despite a weak tape.

From my perch, tells — like financial stocks in general, and brokerage stocks in particular — are but part of a larger investment mosaic. Nothing more, nothing less.

Perhaps the best explanation of today’s weakness was that there is profit-taking from yesterday’s strength! Most every twist and turn in price is noise, and should probably be analyzed as such.

Again, nothing more and nothing less.

Starting to Cover Coach
1/23/2007 10:42 AM EST

Coach (COH) has now reversed $3 lower from premarket trading. I have begun to cover a portion of the short.

Position: Short COH

This entry was posted on Saturday, February 10th, 2007 at 10:42 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

This sampling of blog posts from Doug Kass was originally published today on Street Insight. It’s being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

Not a Great Fan of Sentiment
1/23/2007 9:27 AM EST

There has been a heck of a lot of complaining over the last few trading days — I presume by invested bulls — after a quite modest drop in equities.

I continue to see the markets differently from those who believe skepticism abounds as manifested by, among other things, high short positions.

I see sentiment differently than the bulls, believing that complacency is copious and disbelief has been suspended, as manifested in record low credit spreads and low volatility measures. Technically, put/call ratios are back to levels of the spring highs.

As I have mentioned in the past, I am not a great fan of sentiment, preferring to see what investors are doing, not what they are saying! To be sure, the AAII survey is bearish, as is this morning’s UBS Investor survey.

And, fundamentally … well you all know where I stand.

Shorted Coach in Premarket
1/23/2007 9:42 AM EST

I shorted Coach (COH) in premarket trading at $45.50. Although earnings beat expectations, I view guidance as uninspiring and I feel the market is overeacting to the upside.

Over the weekend, Michael Santoli penned an interesting column in Barron’s, “Rich America, Poor America.” I think Mike omitted an important point that has not only buoyed the sales for high-end retailers (like Coach) but also raises risks going forward.

Many middle-income consumers have been especially emboldened in recent years by the unprecendeted extraction of capital out of their houses and have moved more upscale in their purchases of such items as apparel, jewelry, high-end appliances, etc.

Companies like Coach, Tiffany (TIF) , Williams-Sonoma (WSM) and Polo Ralph Lauren (RL) have been particularly (and positively) affected at the margin during 2002-06 (just correlated their above-trendline ramp in comp-store sales with a schedule of real estate-refinancing cash-outs).

With mortgage equity withdrawals (MEWs) slowing to a crawl, coupled with the shock of ARM resets, I see a reversal of these marginal revenues from the source of the middle-income consumer, providing a headwind to upscale retailers.

Short COH, TIF, WSM, RL, RTH

Explaining the Fluctuations
1/23/2007 10:23 AM EST

Everyone seems to have a need to explain daily fluctuations of stocks/industries. Case in point: the brokerage stocks.

Yesterday, another Street Insight commentator felt the market could move higher because the brokerage stocks had spiked and held their gains despite a weak tape.

From my perch, tells — like financial stocks in general, and brokerage stocks in particular — are but part of a larger investment mosaic. Nothing more, nothing less.

Perhaps the best explanation of today’s weakness was that there is profit-taking from yesterday’s strength! Most every twist and turn in price is noise, and should probably be analyzed as such.

Again, nothing more and nothing less.

Starting to Cover Coach
1/23/2007 10:42 AM EST

Coach (COH) has now reversed $3 lower from premarket trading. I have begun to cover a portion of the short.

Position: Short COH

This entry was posted on Thursday, February 8th, 2007 at 10:53 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.