Long or Short Capital

Slightly over a year ago, we debated chicken little cries of Peak 2007 and, in retrospect, the world would have been better had we been 100% correct and 2007 was as limitless as we had hoped. Well we are back in the chrono-markets, with what we think is a true free lunch. Long 2009. It’s going to be a great year.

In 2008, investment banks ceased to exist, the real estate market was the worst ever, the stock market plunged more than it has since the world was depressed, The Hills continued, unemployment soared and every measure of economic health broke. So on a relative basis, 2009 looks like it is has a full year of easy comps thanks to the way in which God has cooked the books with some kitchen sink accounting.

Our current forecast for 2009:

1. The stock market’s annual performance will be better than a 35% decline
2. Consumer sentiment will improve
3. The first black President ever will be in office
4. The Hills, and all involved, will try to comically reenact the Jonestown massacre, but their white night will go tragically wrong when their illiteracy causes them to mistakenly add actual cyandide to their flavor aid rather than faux cyanide.
5. The US will keep kicking the rest of the world’s ass, especially China’s.

Recommendation: Long those who killed it in 2008 (down less than 35%) and plan to kill it in 2009 (down incrementally less than 35%).

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