Harry Rady Online – San Diego, CA

05/01/2011
Louis Rukeyser’s Wall Street
Rady, Harry

Comments & Outlook
The economy is healing, but the market hasn’t acknowledged the pleth¬ora of risks related to uncertainty in the Middle east, Japan or even the US budget deficit. The Federal reserve’s second round of quantitative easing will likely end soon, but investors are playing the momentum game, hoping to buy high and sell higher. That’s a myopic and dangerous strategy. It’s time to be cautious.

Recommended Strategies
If investors believe it’s time to be cautious and protect their portfolio, there’s nothing better than the VIX [S&P 500 Volatility Index]. During last year’s Flash Crash and the european sovereign debt crisis, the broad market declined by 14 percent from March to May, while the VIX gained 181 per¬cent. There are many ways to play the VIX, but we focus on two exchange-traded notes, iPath S&P 500 Short
Term Futures ETN (NYSe:VXX) and VelocityShares Daily 2X VIX Short Term ETN (NYSe: TVIX).

As contrarian investors, we like drug and biotech stocks. Many of these stocks trade at single-digit price¬to-earnings ratios because of uncer¬tainty surrounding President Obama’s health care reform. Their balance sheets are clean and people will take their medication no matter what hap¬pens in the economy.

What to Buy Now
Research In Motion (NSDQ: rIMM) shares trades at 8 times earnings and 70 percent of the firm’s revenue is garnered overseas. Overseas revenue has grown by 70 percent. Investors have focused on the firm’s domestic sales, which have slumped 12 to 15 percent. The company’s Blackberry line of com-munication devices is getting its lunch eaten by Apple’s (NSDQ: APPL) iPhone on the high end.

But the real opportunity for research in Motion is in the emerging markets and the low end. We see at least 50 per¬cent upside to the stock, and it could be an acquisition target.

Flir Systems (NSDQ: FLIr) has a virtual monopoly on the thermal and infrared imaging technologies used by the US military. Although defense bud-get cuts loom, the US military won’t cut back on its ability to see at night, espe¬cially because Flir’s products aren’t very expensive.

The vast majority of the firm’s sales come from the US defense industry. But the real opportunity for Flir is in the commercial and residential security space. Two years ago, Flir’s cheapest products sold for about $25,000 to $30,000. Those same products today cost about $1,500 to $3,000. The com¬mercial and residential market could be 10 times the size of their defense busi-ness—that’s a strong secular tailwind. Flir is also a likely takeover target for one of the large defense companies.

Original Article – http://us.vocuspr.com/ViewAttachment.aspx?EID=jvsz0F%2fGPcZfUMS8rGkojcUs1eeK9ocYFu6%2bjRKL6Fs%3d

In an interview conducted by Maria Bartiromo on CNBC,  Harry Rady, of Rady Asset Management responded to questions concerning the new approach theObama administration is now taking to health care reform.

The news in mid-August seemed to signal that health care reform in the United States was going to be more of an “evolution” rather than the originally hoped for (by President Obama) “revolution.” In response to this apparent change the health care sector of the stock market experienced a broad rally.

Harry Rady commented that he, along with Rady Asset Management tries to asses an economic climate outside the influence of government forces, which are unpredictable and unreliable. Rady therefore looks to investments which are dependable no matter what the government decides to do.

In light of the Obama administration’s apparent backing down from the sweeping reforms it originally proposed to a more moderate health care reform package Maria Bartiromo of CNBC asked Harry Rady of Rady Asset Management and Barbara Ryan of Deutsche Bank Securities to respond. Listen to the video below for the full discussion.

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As the dollar strengthens the prices of commodities, oil and other materials are heading downward. According to Harry Rady of Rady Asset Management, the recent surge in stocks has been too fast compared to the poor state of the economy.

“The market just seems to keep driving the car into the wall and then wonders why it can’t keep driving,” Rady said.

After deep drops in prices of stocks in Europe and Asia in response to the strengthening dollar, prices of commodities and other materials declined.

An additional blow came when the index of manufacturing in New York showed that demand was also faltered in the months of May and June.

Appearing on CNBC ‘s Tuesday’s Task Force with Brian Belski of Oppenheimer & Co., Harry Rady, CEO of Rady Asset Management on June 23, 2009, stated his belief that if the U.S. government continues issueing debt to the tune of trillions of dollars, even if it is at the same time buying back some debt, that the equity market will continue to be vulnerable.

Harry Rady continued to explain that as these second and third tier companies (junk companies) continue to rally he sees excellent chances to short and build cash, perhaps as never before.

In an appearance in the CNBC Video “Making Sense of the Markets” Harry Rady of Rady Asset Management, along with two other guests, give their analysis of recent market trends and advice on how to best product assets in the future economic uncertainty we are facing.

Harry Rady, CEO of Rady Asset Management, says that the investment approach used by long/short managers must change. “The days of the highly levered, hyper-trading, black box models are over.”

Rady says that often fund managers see a stock trading near its 52-week high, and then they jump in, instead of waiting for it to come down and even be undervalued.

Read more in EuroMoney’s article here.

MarketWatch.com reports on the general markets and the developments affecting  the shares and share prices. There was much debate about General Motors Corp. whose shares climbed 2% as to whether the government should take action to prevent the automaker from possible bankruptcy.

” The free market should determine who makes the best cars, and the consumers should determine who survives,” said Harry Rady, CEO of Rady Asset Management.
Read more at our page on this article.

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