Pawn it, Babe! (CSH)

Pawn it, Babe! (CSH)

The energy in the country these days is phenomenal.  On the one hand, you have the excitement that generally accompanies a presidential election year.  On the other, there’s something akin to a hyperactive, child-like tantrum that’s both uncontrollable and undirected.  And it’s everywhere.  And unpredictable.


You’ve seen it.  And likely felt it, too.  It’s covered daily in the traditional press as well as the blogosphere where a million and one individuals simultaneously discuss it, add to it, and, in their own small way, try to shape it.

Girl with gun

Well, Janie, the truth is no one can be sure.  What we can say is that the climax, if you will, of all this action will be white hot and fiery and will remake our way of life entirely – of that we’re thoroughly convinced.  And perhaps the greatest change of all will be a general population shift, one that started decades ago, but that has increased in momentum of late and will reach a fever-like pitch before all is said and done.


And it is – that in the end, cities will not exist.


Oh, come on!


Sorry to have to say it, but there you go; it’s out.


Cities are a product of human hubris and a symbol of man’s inhumanity to man.  While ostensibly holding themselves forth as repositories of culture and sociability, in practice they operate as bastions of cold, anti-social and bureaucratic relationships.  Cities are anonymous and are designed to reduce their inhabitants to obedient cells.  On a personal level, interactions are devoid of sincerity.  Everything is politics, everything the ‘art of the possible’ – a constant ‘what can I get from you…’


Rural life, though far from ideal, is the opposite.  In the country, one can’t afford to be anonymous or anti-social.  There, life itself depends upon genuine relationships and a social fabric that’s far more durable, even if it appears at times to be more solitary and rough hewn.


The 21st century city is increasingly homeless, while the watchword of rural life is unchanging; it is, and always has been rootedness.


The move away from cities is accelerating, friends, and the quicker you climb aboard that train, the better.  It’s the difference between health and illness.  Freedom and slavery.


There will be many who disagree with us and take our remarks to be the rantings of a third rate, back-to-the-land, cement-head scribbler.  But it’s not true.


We’re patently first rate in all we do.


And furthermore…


This will all have a salutary effect on markets – in the near term.  Because energy, however it arrives, pushes markets higher.  Markets fall from a lack of energy, a lack of national passion and will.  And that’s precisely the opposite of our current mood.


We’ve dedicated a great deal of ink to what has underpinned the bull market’s rise to date and what we believe is still providing fuel for the coming surge, so we won’t get into it again.


But know it well: all this enthusiasm – if you can call it such – will move things much faster and higher than anyone imagines.  The indexes will spiral skyward in one, final asymptotic spasm that completely depletes us of gas.


And then the bear will commence.


We expect that to occur sometime around spring of next year, after which a great fizzling will be heard, a fog will envelop the land, and the rain will start falling.


You Heard it Here First


So, in preparation for that ill moment, we’re encouraging you to follow us in our efforts toward accumulating more and more wealth, that we might better deal with the aftermath with a sturdy umbrella.


Here’s a trade for ya!


There’s not a lot of fanfare surrounding the dollar store and pawn shop businesses, even among those corporate giants that span the Americas.  But they’re extraordinarily profitable businesses, particularly during and after financial crises.


If your average mom and pop junk store can make a healthy living during the best of times, they outright thrive when folks have their backs against a wall and are looking for cash wherever they can find it.


Listed companies in the dollar/pawn space are few.  Most are familiar with bigger outlets like Family Dollar (NYSE:FDO), Dollar General (NYSE:DG) and Dollar Tree (NASDAQ:DLTR), all have which have performed reasonably throughout the bull market.


But a number of lesser known companies have also performed admirably.


We’re going to focus on just one of them today, and considering the era we’re heading into, with a deteriorating economy existing alongside a rip-roaring market, we believe there may not be a better place to park funds than the pawn shops.


A Very Big Pawn Shop


The company is called Cash America International (NYSE:CSH).  It has a market cap of just under a billion dollars, pays a nominal dividend (0.82% annually) and has outperformed both its peers and the broad indexes handily over the last few years.


Have a look here –

steady outperformance

As you can see, CSH left Dollar General and the Dow in the dust going back to the beginning of 2014.


But perhaps more impressive is the stock’s performance since the beginning of the year, a period in which the Dow barely eked out a gain.  In that same time frame, CSH climbed 30% and also became the leading operator of retail pawn shops in the U.S. and Latin America via its merger with First Cash Financial Services (NASDAQ:FCFS) two weeks ago.


CSH should continue to outperform the broad retail and financial sectors over the intermediate term, despite the fact that Google has just decided to ban all advertisers from the so-called ‘payday’ lending industry on its sites.


And we’re trading it as follows –


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Options Trader Elite recommends you consider buying the CSH December 40 CALL for $4.40 and selling the December 40 PUT for $4.30.  Total debit on the trade is $0.10 per pair.


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Options Trader Elite recommends you consider buying the CSH December 40 CALL for $4.40 and selling the December 40 PUT for $4.30.  Total debit on the trade is $0.10 per pair.





Many happy returns,


Matt McAbby

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