Back To The Complacent Bubble Days

Friday the usual go-go no-sense bubble stocks of 2006-2007 had a field day when their comparable better run competitors traded normally or down. The three stocks I have in mind are CLF, POT, and MOS. The love affair of momentum hedge funds were all up around 5-7% on no news. Now, don't get me wrong, there are a lot of good things about these companies for the long run considering the fall of the dollar and rise of tangible assets. However, it is too early for that and the valuations are pricing in a demise of the dollar this year. That is too early. Besides the fact that the rest of their sectors not going up and them going up on no news is classic. People are falling over themselves to buy these. We know how these stocks did after the bubble burst. That's how they will do again soon. But considering they are the love affairs of go-go people who are bound to lose their shirts, we know they can go far before they burst, so prudent way to short them is using puts.

Another event that reminds us of 2007 is Phillips- Van Heusen (PVH) buying Tommy Hilfiger and its stock going up 4% in premarket. When a company buys another company, it is "polite" for its stock to fall. It is very "rude" for its stock price to rise after taking a disaster company over. People remembering the problems with the Tommy Hilfiger stock will remember what I am talking about. Tommy Hilfiger is a complete disaster both as a company and as a fashion brand. PVH stock to rise on taking it over is beyond ridiculous and points to a bubbling market with a lot of shorting opportunities. Of course in a bubbling market you need to be careful as nothing works out in terms of fundamentals, logic, nor common sense, but by manipulation, hysteria, and greed based on the greater fool theory. One advice is don't be the greatest fool whatever game you are playing out there.