Should I short luxury items like True Religion and Zales?

EthanR answered 9 months ago …

While it is possible that these stocks could go lower in the near future, the time to short luxury item stocks was many months ago. Go to yahoo finance or bigcharts.com and look up the chart of Starbucks (SBUX). Last September the stock was at $27. Today it is at $9.02. The best time to short luxury stocks is when the economy first starts to slip and the talk of recession is in the air. By the middle of a recession, many stocks which have been pummeled will begin to stabilize, and within a few months they may even go higher.

So if you do decide to short luxury item stocks, I would put a tight stop loss in place, just above the most recent highs. If these stocks are already down 50 or 60% from September, I would be very cautious, as the risk of shorting may now be greater than the potential reward.