Make the Best Profits Out of the Worst Companies

by Michael Shulman

During these trying market conditions, ChangeWave Shorts subscribers are among the small group of happy investors.

The short side is the place to be because a good deal of “dumb” money on Wall Street has not yet been flushed out of housing, consumer stocks, retailers and lenders. The housing segment recently broke through its seventh bottom since February 2007, Citigroup (C) keeps sinking further and further from the "rock-solid" floor of $30 and many retailers are at all-time or multiyear lows.

As long as that dumb money continues to think consumer spending will become robust again, housing will bottom this year or the mortgage market is going to rebound -- neither of which will happen until 2010 -- we are going to make money, lots of money, here on the short side.

But, as the profits pour in from playing the short-side of stocks, premiums will expand and the market will become even more volatile, which makes managing positions more difficult. This simply means the ChangeWave Alliance survey research I relay on will become increasingly valuable in the months to come.

Ever wonder what we're actually looking at when wealk about ChangeWave surveys?

Let’s look at a recent example. I originally recommended a short-side play for Ruby Tuesday (RT) on Oct. 25, which my subscribers got into for $1.05 and it made us a 100% gain.

We then pocketed the profit and redirected the original investment dollars into a new position on Nov. 27, which returned 176%. Again, we “rolled” that into the RT July 7.50 Puts (RTSU), which we sold on Jan. 11 for a 246% profit. That’s three winners based on one very valuable piece of market intelligence.

And who can we thank for this great fortune? Dr. Paul Carton, Executive Director of the ChangeWave Alliance and survey man extraordinaire.

I first recommended shorting RT after I digested a great many data points on consumer spending -- including an Alliance Consumer Spending survey that produced the following result:



After better than six years of benchmarking and analyzing ChangeWave Alliance Survey data, I saw this as compelling evidence of a big downturn in restaurant spending. So that’s how a doubler, based on a variety of data and my judgment, became a “three-peat” winner for us. It’s a perfect tribute to what we at ChangeWave call “the wisdom of crowds.”

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If you want to start profiting from Michael Shulman's picks, click here to become a member of ChangeWave Shorts and gain access to the full portfolio of Michael's short-side plays that make the most out of the worst names on the market.

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