September: Bear Season

Sure you love the crisp air, cooler temperature and brilliant colors. September can be the perfect time of year - especially if you're a bear.

That's because, historically, September is by far the worst month for the S&P 500. It has posted an average decline of 1.3 percent since 1929.

And over that period, it's the only month to drop more than 50 percent of the time. Not too promising for the bulls.

Theories for surly Septembers are abundant. Here are just a handful.

- Investors pay more attention to investments after spending their summer focusing more on their tans than their portfolios.
- No tax refunds or bonuses money to go into the market like in the first half of the year.
- Psychologically, when the leaves turn in the fall there is this kind of negative vibe out there that tends to accentuate any negative events.
- Companies may not meet their earlier earnings guidance an end up revising downward.

It sure seems like a good month to growl and eat honey from a jar.  So what better time to get trades from the most notable bears in the business.

David Rosenberg, Gluskin Chief Economist

Rosenberg tells Fast Money he's bearish because he feels the market is currently overvalued. “I think the S&P is priced for 4% GDP growth but I’d only give that a 10-20% chance of happening. Instead I think GDP will be more like 2%. That’s 840-850 on the S&P.” And he adds we could get there as early as October. “Mister market moves pretty quickly.”

What’s the play?

Although you could go short Fast Money recognizes that retail investors don’t trade that way.

On the long side Gluskin says, ”Right now I’d be inclined to play consumer staples, health care and utilities", he counsels. They should benefit in this environment.

Peter Schiff of Euro Pacific Capital

Schiff is also growling. "I wouldn’t want any part of the US stock market," he tells Fast Money. He thinks the worst of the economic crisis is ahead of us, not behind us. And he’s also concerned about the impact of higher taxes.

Then how should you trade?

“I like the Asian economies,” he says. “You can find technology stocks trading in Asia at much lower multiples. I just think you get better buys abroad. You get more bang for your buck there than here.”

 

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Current DateTime: 01:59:55 10 Feb 2012
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Current DateTime: 01:59:55 10 Feb 2012
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Trader disclosure: On Sept. 1, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (APPL), (BAC), (F), (SBUX); Seymour's Firm Is Short (FXI), (PBR), (RIMM); Terranova Owns (AMZN), (SU), (WFT); Terranova Is Short (SHLD), (TM); Terranova Owns (GS) Puts; Terranova Owns Dec. Gold Futures; Terranova Works For (VRTS); Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian owns (C) Calls; Najarian Owns (HGSI) Call Spread; Najarian Owns  (FCX) Call Spread; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (PALM) Calls; Najarian Owns (TEVA) Calls; Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFc) Put Spread; Najarian Owns (YHOO) Call Spread ; Najarian Owns (MOS) Calls

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