stabilising at last?

I've noticed a shift in the perception of Myer in the last couple of weeks.

The talk about Myer's business model being archaic and an inevitable slide to bankruptcy seems to have abated and there is more shoulder shrugging indifference and people talking about retail just being 'out of favour at the moment'.

From being hated and despised the stock is now ignored and overlooked, a big improvement. Example: If you mention at a dinner party that some Australian companies are now at ridiculous yields, everyone tells you that yes, Westpac is paying a 7% fully franked dividend. If you then tell them that Myer recently declared what is now a 12% fully franked dividend they seem mildly surprised, but make no move to call their broker. There is no positive buzz around them. For the moment they are stable...boring.

In my opinion the shorters are starting to grow tired of Myer and Bluescope, like a cat grows tired of playing with a wounded mouse, and are looking for companies with more meat left to carve off. They switched to ERA for a while and had some fun there. Without the relentless shorting Myer is just a very oversold retailer on a double digit yield and will soon attract buy recommendations again.

The shorters seem to have lost control of Billabong too, as the yield there was similar to Myer. The shorters can ride the fear for a long way, but when these companies reaffirm their dividend and the yield becomes absurd, eventually the game is up and no more blood can be squeezed out. BBG have recovered a lot more than Myer in the last few days, but of course BBG fell a lot further in the first place. MYR lost a mere half of its market cap!

For those of us stuck holding Myer for the next few years, those double digit returns if it stays at current levels will certainly make the wait less painful.