2008 Trades Gone Bad #1: Going long the specialty retailers

Filed under: Wal-Mart (WMT), Newsletters, Sony Corp ADR (SNE), Circuit City Stores (CC), Tiffany and Co (TIF), Sears Holdings (SHLD), Coach Inc (COH), Costco Wholesale (COST), Abercrombie and Fitch (ANF), Under Armour'A' (UA), Nordstrom, Inc (JWN), Urban Outfitters (URBN), Stocks to Sell

If you made a bet on the specialty retailers leading up to the first $600 taxpayer rebate stimulus package, you got hammered.

Talk about a government plan backfiring big time.

That $300 billion in checks that fell out of the sky from government helicopters back in the March to May timeframe didn't find its way to the malls at all.

Instead, people paid down credit card debt, and tuition, medical and other bills, leaving little for spending on non-essentials.

The result was a litany of store closings nationwide, with several old-line, brand-name retailers going out of business.

It's game over for names like Circuit City (OTC: CCTYQ), Cache (NASDAQ: CACH), Talbots (NYSE: TLB), J. Jill, Wickes Furniture, Levitz, Bombay, Linens 'n Things, Movie Gallery, Wilson Leather, KB Toys and The Sharper Image.

Traders that leveraged into darling names, like hedge fund idol Eddie Lampert's Sears Holdings Corp. (NASDAQ: SHLD), got smoked. Shares of SHLD were trading at $105 when the checks when out. Today the stock is around $40.

Even Costco (NASDAQ: COST) -- the obvious slam dunk, aside from Wal-Mart (NYSE: WMT) -- got slammed, falling from $75 to $45 following the so-called stimulus package.

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2008 Trades Gone Bad #1: Going long the specialty retailers originally appeared on BloggingStocks on Mon, 22 Dec 2008 14:00:00 EST. Please see our terms for use of feeds.

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