Commercial Real Estate

We’re ticking off the final days of 2008. Good riddance! 

But seriously, I’ll have some good memories from 2008. Most important for me has been Daily Profit. I can’t tell you how much it’s meant to me to be more in touch with you. Your questions and comments have really helped me get a more firm grasp on the issues individual investors are facing. And I’ve learned a lot from you as well. 

The publishing business is facing some serious challenges. But I believe your insights and comments have helped hone Daily Profit into a market leader. And it’s my sincere hope that we all benefit from that. 

The advertisers will return and subscription sales will improve. I’m not worried about that. It’s helping investors and readers like you overcome 2008’s losses and prepare for a more prosperous 2009 that’s on my mind. 

*****I have a holiday schedule for Daily Profit. You’ll get a new issue tomorrow. I won’t be publishing on Christmas Eve (slacker that I am), But I will have "Reader Mail" issue for you the day after Christmas. 

You’ll get Daily Profit on Monday and Tuesday, and then I’ll be out New Year’s Eve and New Year’s Day. 

*****The news is not getting better concerning corporate profit outlooks and unemployment. Walgreen’s missed, Toyota’s going to miss. And GM and Ford aren’t getting a boost from the White House bailout. 

On top of that, economists expect that December will add another 488,000 to the unemployment rolls. 

While there’s still potential for upside through the end of the year, I’m concerned about how stocks kick off 2009. I won’t be surprised to see a sell off to ring in the New Year. 

That’s why I recommended stop losses on the Emergent Biosciences (NYSE:EBS) and Graham Corp. (AMEX:GHM). Of course, I have no problem with taking profits before the prices fall to hit a stop. Now is not the time to be pushing anything. Get in, get out, nobody gets hurt. 

*****Oil prices are weak again, despite massive cuts proposed by OPEC. It seems incredible that prices could fall so far, so fast. But that doesn’t mean it’s time to get back into oil stocks. Patience is absolutely a virtue here. 

Oil prices will rise, and that time may not be too far off. But there’s no reason not to wait for a change in fundamentals before trying to profit from oil stocks. 

*****There’s a terrific article out from the author of Liar’s Poker, Michael Lewis. It gives a great view of how the bundling of sub-prime mortgages brought Wall Street investment banking down. Here’s the link

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom 

*****The stocks from my special report Buy America: Your 5 Stock Portfolio for the Next 4 Years all look poised for a break higher. If you’d like the details please click HERE 

*****China cut its interest rates again. That makes 5 cuts in the last three months. Clearly, China’s desperate. But in a worldwide race to lower rates, it’ll be interesting to see if China’s cuts make a difference. Obviously, China’s export economy is in tatters. And without that, I don’t see interest rates having much of an effect on domestic demand. 

*****First it was residential loans, now commercial loans may be the next to go. A real estate analyst group called Reis Inc. is saying that if commercial rental income drops 5% from current levels, the risk of default for commercial real estate loans will triple. 

Lenders could lose as much as $23 billion. The thing is, you know $23 billion is just the tip of the iceberg. As we saw with the sub-prime fiasco, many shoes had to drop before it was done. And it’s also still probably not done. Like 2008, 2009 is going to be an interesting year.