On "Grade the Trade" we test the trading prowess of some of the most promising business students in the nation. This week they’re from University of Maryland, University of Richmond and Villanova.
Get ready – school’s in session.
Our business school students have been given the questions in advance, and have 30 seconds to answer.
Grad #1: Bill from the Robert H. Smith School of Business at the University of Maryland
Here’s the scenario: After a pause today, surging food prices and a too-hot China economy reignite inflation fears and the 10-year Treasury Yield jumps to 6%. What are you buying, what are you selling as this scenario unfolds?
Bill says he would short the REITs – in particular, Vornado (VNO) and Boston Properties (BXP) because they have had such big runs and would be vulnerable. He’d put his money in large-cap high-dividend paying stocks like Altria (MO), Citigroup (C) and General Electric (GE) to play it safe. And finally, he would stay long hedge funds and financials like Fortress (FIG) and Goldman Sachs (GS).
Tim Seymour likes the idea of getting rid of the real estate holdings. He’s giving Bill an “A.”