Here is why January 2009 could bring more holiday cheer for the gaming bulls than 2008:
• Short interest is sky high now (2nd chart)
• Investors are much more bearish this time per the BBI (2nd chart)
• Consumer discretionary looks good technically
• Low gas prices bring some optimism
• Real interest rates near zero
• Fire sale valuations
Gaming stocks have had a decent run lately but are still down 70-80% on the year. The industry faces a myriad of issues in 2009 but bearishness is unprecedented, valuations are low, and some markets appear to be stabilizing. The macro croupier may have dealt the pessimists a bad hand, if only temporarily, through the unprecedented use of short term monetary (near zero interest rates) and fiscal stimuli.
A January rally may indeed be in the cards. What a difference a year makes.