We had a few unsucessful forays into pawn shops in latter 2008 and earlier in 2009 as I tried to think of sectors that would benefit from the bad economy.  Unfortunately, legislation running through government [Mar 1, 2009: Payday Lenders get Obama'd] against the cash advance side of the business (these businesses are part pawn shop and part cash advance service) caused a huge overhang and we were unsuccessful making any money in the sector.  However, as I scroll through charts to see what is in the mix of stocks working (a real hodge podge) it is curious to see both EZCORP (EZPW) and First Cash Financial Services (FCFS) suddenly blasting off.  Cash America (CSH) is the largest player in this group, and not doing as well, but this one is less exposed to the pawn side of the business, and more focused on cash advance services.  Perhaps some of the legislation has been averted... not sure why we are seeing such strong moves, although the valuations are (and were) favorable... i.e. EZPW has been under 10x 2009 earnings for much of the year.  But being cheap wasn't helping the stock prior to November... hmm.

Hmmm, if the recovery is going so well, I wonder why the pawn shops are taking off....

Oh well, when in doubt about the veracity of recovery, I listen to government reports.  ;)

The array of stocks doing well right now is mind numbing outside of the typical growth mutual fund favorites: healthcare, MLPs (yield), defense, utilities (yield), solar stocks, chinese small caps, and some Boeing (BA) related suppliers (end of delays for new jet).

[Jun 12, 2009: Economy So Bad, Even Pawn Shops Start to Suffer]

No position