Black is back in fashion - and that's bad news for consumer stocks.
Widespread adoption of the color black suggests self-denial, and an end of the rampant consumerism that dominated the 1980s, according to Williams Inference Service.
Now, investors can play that theme and others developed by Williams, a Longmeadow, Mass., research firm that tries to pick out major socioeconomic themes. Williams has teamed up with GiroCredit Bank AG of Vienna to provide baskets of stock warrants that take advantage of trends identified in Williams' reports.
Among Williams' 86 investor subscribers are some of the biggest pension funds and money managers in the world: Fidelity Investments, California Public Employees' Retirement System, College Retirement Equities Fund, Alliance Capital Management L.P. and Baring Asset Management Ltd.
For its black theme, the basket goes long on heavy industry stocks, such as Weyerhaeuser Co. and Vulcan Industrial and Mining Corp., while it shorts a basket of consumer stocks, including K mart Corp., Neiman-Marcus Group and Nordstrom Inc.
With GiroCredit, which underwrites the baskets, Williams also has developed warrants playing on a China theme and one going long on gold stocks and short on bank stocks. Warrants typically expire in about two years. The warrants are listed on the Vienna Stock Exchange and traded on Bloomberg and Reuters systems.
So far, interest is thin. Managers are unsure how to fit the warrants into their portfolios, said John Trudgian, a product development manager for GiroCredit. Since the warrants became available March 3, only 23,000 black warrants, 15,000 China warrants and 35,000 gold-over-black warrants have been purchased, and no secondary trading had occurred as of March 14.