Looks like we picked a good week to finally get short with the market down 5 consecutive weeks for the first time in 7 years and the worst 1-day performance since August on continued abysmal economic and employment data. RIMM fell over 12% as analysts are now fighting over each other to lower their price targets and with earnings 2 weeks away, RIMM may still have a few dollars left to shave off. The others in our basket, CSCO, SHLD, and FSLR, all gave away quick pops to finish lower this week. CSCO actually fell below $16 yesterday, SHLD is back below $70, and FSLR lost all of its German anti-nuclear momentum in 2 sessions.
For the first time since its bailout, AIG was punished for issuing more shares. I neglected to mention this loser for our basket last week, but AIG has fallen from the mid $50s to under $28. An excellent article by Bloomberg's Jonathan Weil entitled, Government Prays a Bigger Sucker Is Out There, details AIG's future inability to use past losses to offset tax liabilities. This in essence (similar to homebuilders' clawbacks or banks reducing loan-loss provisions) has been the only thing making AIG appear solvent over the last 2 years. Take this away and the company will bleed money. Another Bloomberg article this week reveals:
“'There seems to be essentially no investor constituency for AIG,' said Paul Howard, director of research at Solstice Investment Research."