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Short Auto Dealers, Long-Dated Treasurys: Asset Manager

In these uncertain times, investors should short auto dealers and longdated Treasury bonds, Harry Rady, chief executive of Rady Asset Management, told CNBC Friday.

"Depending on our politicians to make business-friendly decisions in a timely manner is certainly not a formula for success," he commented.

He would start the selling with AutoNation, trading at 20 times earnings. "With used car prices rising, it makes it difficult to build inventory," he said, "and with the consumer confidence decline, new car sales are going to hiccup. So margins are going to get squeezed on both the demand side and the supply side."

As for the Treasurys, he said that "while it could be volatile in the short term, over the next six months we don’t see yields going lower and we see the potential for them to go much higher."

He said he would own stocks such as Teva Pharmaceuticals , which is trading at nine times earnings and has a 2 percent dividend yield.

He would also buy Warner Chilcott and Mosaic, stocks that he said are "not economically sensitive."

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Disclosures:

Disclosure information was not available for Harry Rady or his company.

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