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You Can't Afford To Own These Stocks

By Jeff Clark
Monday, July 10, 2006

Recreational vehicles are an endangered species this year.
 
It's not all that surprising really... with gasoline over $3.00 per gallon, motor homes have been noticeably absent from the highway.
 
I hadn't really thought about it until recently, when I was filling up the gas tank on my wife's SUV. I mumbled to myself something about how ridiculous it was that the gas pump automatically shut off at $75.00, and that wasn't even enough to fill the tank.
 
I must have mumbled a little louder than I thought, because the gentleman on the other side of the pump poked his head around and told me about how he had to use four different credit cards each time he ventured to fill up the gas tank on his vehicle – the Winnebago Journey.
 
He told me about how he purchased his motor home two summers ago when gasoline was “just” $2.20 per gallon.
 
“It was expensive back then,” he said. “But now $300 doesn't even get me to Yosemite.”
 
Not surprisingly, this is a very cyclical industry. Sales of recreational vehicles (RVs) are subject to volatile swings depending upon consumer confidence, interest rates, and of course... gas prices.
 
RV sales are strongest early in the economic cycle, when interest rates are low and consumer confidence is improving. Sales suffer later in the economic cycle as interest rates rise and consumer confidence drops.
 
That's exactly where we are now... so make sure your portfolio is clean of the RV industry. And if you're a trader, this is an attractive industry to look for short sales...
 
Best Regards & Good Trading,
 
Jeff




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Market Notes
Big Pharma breaking out: Merck & Co. hitting new 52-week highs.
 
December 2006 crude oil now trading at $78 a barrel.
 
Investor's Intelligence advisory sentiment: Highest bearish reading since October 2002.
 
Tough times for everything related to housing: Toll Brothers, Home Depot, Pier 1, and Williams-Sonoma scraping new lows.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%