Mutterings of a short to himself:
God this is painful. $49.78 as I write, up over a buck for the day! After yesterday yet. Unbelievable ...
Times 1200 shares is beginning to be real money ... there goes 6 months profit on this piece of nothing. Down the drain And who says it can't go to 100?? .. not me. It could. Do you really believe that? No ... Yes.
But its just a bunch of godammed donut shops hyped by a hillbilly. Books probably cooked. Donuts. Yeah ... and so? Its still bumping 50, heading North.
Financial chicken. Musical chairs. Hold out or cover now?
"The better part of valor ..."
"Live to fight another ..." bull
"He who hesitates..." -- heard that.
"He who sells what isn't his'n...." Don't say it.
And don't forget "limit your losses, let your profits run." Profits ... what profits??
Who ever said shorting was easy? "Only the valiant.." --- valiant or stupid? How about that "1000 deaths" bit? Coward.
Cover you sumbitches, cover. Run. Panic time. Let's get this agony over with. Push it to 100, I'll still be around. Oh yeah, and broke too. Dumb
Hang in there baby.
Now do you feel better?
No. The pain.
Still muttering, a short to himself....
Middle of the night realization that KKD at 100 puts old Diogenes in the
-- Selective perception. The longs/momentum honchos will take this as signal to buy buy buy. Me, I don't want to read it. Save it for later. Stomach already sour.
Earnings coming. Cooked once, cooked twice. Twice-cooked earnings. So what?? The price is what's killing us. Bumping 50. And the split -- means nothing, except to the longs. And to the price. Ouch. What ever happened to "buy on the rumor, sell on the news"?
And why the bounce Thursday/Friday? Shorts covering, sure. But maybe the Barron's article leaked ahead of time?? At least the subject leaked, cover story, taken as a plus no matter the article's conclusion. After all, no price is too high for a fad stock. Maybe 60 next week. Maybe not. Maybe. Will have to read the article.
Yet still at it....
Well now, how is it that some 6 million shares were bought the last three days on the price spike?? Some momentum players, for sure. Some technical traders, certainly. Some idiots, unmindful of valuation, an undying breed. But Short Squeezers putting the hammer to us poor miserable losers?? Not all that likely. Pretty risky, this late in the game. More probably a fair amount of short covering by The Faint of Heart. (Yes, and by those wise enough to cut their losses .... smart bastards)
So that accounts for the buying. But who was doing the selling?? Some short sellers, sure ... still at it, balls of steel. Longs taking their profits ... at some point, enough has to be enough, at least for a growing few among the self-satisfied winners... "hogs get slaughtered."
And what about the remaining Short Squeezers??? This game is pure musical chairs. They know the music will stop and increasingly wonder 'when?. Just don't be the last to jump the merry-go-round. At some point ... Hell, that Barron's article wasn't the hype expected.
.... Grasping at straws in your misery??? .... what else to grab? Is there anything else up there?
Outstanding post. We are hiring you to write the script for the docu drama. For the Boca Raton setting, we are looking for the right starlet to cast. She has to look good in a bikini leaning against the rail at the yacht club (cannot be a donut eater). I'm thinking Gandolfini for some of the New Jersey stuff. Trying to explain to the wife that he mortgaged the house to buy KKD shares. He's read the book by Peter Lynch (ten years ago when she gave it to him for his birthday), you know, buy what you understand. He says, "donuts, I can understand. cost 5 cents to make these things, sell for 69 cents. this is goin to the moon".
... introspection after a good night's sleep:
Wow! Check that Wall Street Journal article dinging KKD. Front page of third section. 10 column inches
.. "ominous .. that the franchisees want to sell..", "new-store sales are slower...", "..hard to see what's exciting"... ".. joint venture program .. little success", " return on capital is low.."
Just what I've been wanting to hear. They sure got that right. Great!!
Wait a second. "Just what you wanted to hear?" A classic case of Selective Perception .... we all have a great tendency to hear and to agree with that which fits our preconception, to dismiss that which we'd rather not hear. Just how did that Journal article originate? Coincidental that it appeared the morning of the earnings release? Facts v opinions? Planted by a Major Short? Likely ... well within the rules of the game. On the otherhand, did I pay much attention to Livengood's morning tout? Fat chance, damned hillbilly snake oil salesman. (if that's what I want to believe.)
Maybe such mind games pretty much cancel out. The longs and the shorts playing with our minds. And with our emotions .. greed, panic, herd instinct, self deception, wishful thinking, ignorance. Consider their motives. And playing with their own minds and emotions, . Could drive a person nuts, if he lets it.
Back to square one. What do we really know?
-- The donuts taste good, to some but not to everybody, but they're not good for you.
-- Business is good so far.
-- Its easy to set up competition.
-- A lot of folks have motive to move the stock, one way or the other.
-- Share trading, price and volume history.
-- Current share price is out of whack with historic norms.
Munch on that. What else? See where it leads you. Forget what you want the answer to be.
Hell, I should have done that before I went short.
Yes, but its never too late to think.
O.K. I'll think. For myself.
...self-satisfied short, chortling to himself, whistling:
Happy Days! Man, you sure nailed that right ... "stabilizing on higher volume and then overshoot to the downside well into the 30"s." Great call. Home free.
Wait a second, that's not what you said.
Well that's what I meant. More sellers than buyers at 50.
Didn't say it very clearly. Besides maybe you were just lucky. And said no more than the obvious.
Obvious to whom?
To the sellers at 50.
Besides its only the second down day.
... ruminations on the events of the day, re Krispy Kreme:
.. Should I share the experience? .. No, sample of one means nothing, and who knows maybe you're just another self-serving basher.
But just your conclusions, and keep them short.
... KK's are likely exposed in many sites where they shouldn't be. Costly.
... Donuts have little appeal in off-hours, hot weather.
... KK's are obviously unhealthy, but there are plenty of fatties who will scarf them down.
... Cold KK's are not all that appealing.
... Packaged cold KK's are just another donut against broad competition: other donuts, other breakfast breads.
... Off-site retail program is not a 70-multiplier business, perhaps not profitable on a broad scale.
... Remember the short-lived fad for Cinnamon Roll kiosks.
You forgot one thing?
It's not about the donuts. Its about the stock.
Yeah, was forgetting that.
Well don't, wise guy.
... feathers ruffled, soto voce ...
What is this, some kind of an academic debate?
... One man's 'long term' is 5 days, the next's is five years. If they had to chose, my guess is most on this board would rather be right the stock than right the donuts. And wrong the stock is what's hurting today. Screw the donuts.
... But don't go starting a pissing match. He's probably a 30- to 40-something, will likely think differently when he's pushing 80-something. Be kind.
... little comfort in being right in the long run if your dead in the short.
... Sounds familiar. Hasn't that been said before?
And don't wear out your .. dot dot ... button.
I'm sure you're right. Largely a matter of time frame. No argument here.
To add fuel to your donut fire, was at a high end coffee shop today. Busy, but no line out the door. Offers 10 kinds of coffee, latte's, cappochino, tea, etc. hot and iced, plus Bagels, Danish, Cinnamon Rolls, Muffins, Croissant, Scones, Layer Cake, Cheese Cake, Sandwiches and Cookies.
But not a Donut, KK or otherwise, not a Cake Donut, not a yeast Donut, not a Donut.
The dog wasn't barking.
... well now, if you're going to think, don't think like a schmuck. Think about what the Big Boys are thinking. They're the ones who really move the stock, the herd will follow.
Misery loves company? Think about what the Big Longs are thinking -- Gilder Gagnon Howe holding 5.2 million shares of BPT at last report. Taking an 8 figure haircut this morning. So far. BAMCO not far behind with 4 million shares. Nervous? What are they thinking and what might they do?
And the Big Shorts. Don't know who they are, but likely holding maybe 5 million (or more?) of the 11 million total short position. And if our friends BAMCO are not above being nailed by the SEC for stock manipulation, are the shorts likely to be more Boy Scoutish? Or more likely less so? What are they thinking, and thinking of doing, and what have they already done?
What do they think of donuts? Other than laugh?
Winding down of a Tulip Craze is a Process, not an Event. Time for patience.
... thinking about what Big Short might be thinking, and what he might be doing....
"Well know, lets put the Fear of the Devil into Gilder Gagnon and Bamco and the 180-odd other big block holders who are long this nonsense. Feet to the fire. Much focus to date on the silliness of donuts -- you either buy this or you don't -- and on the ridiculousness of the 70 P/E -- you either buy this or you don't -- but a central issue has been largely overlooked:
<<Quality of Earnings>>
"Its one thing to accept as given the 'earnings' as reported by KKD, unaudited in the interim, and as forecasted. But are these numbers what they seem? Suppose, just suppose, a more objective accounting should reveal that earnings might just as easily be half of those reported -- the P/E then becomes not 70, but 140. Or suppose there are no earnings at all under more realistic accounting standards. -- capitalization of expenses, deferral of expenses, recording of revenues, goodwill, reserves, timing issues, etc. on and on.
"There are plenty of reasons to suspect the books .. incentive, opportunity, human nature. And the Gilder Gagnon's and the Bamco's know this and have their fingers crossed. So that's where we'll hit 'em. Hard. Run a fine-toothed audit best we can. Hard facts and suspicions. Slip the report privately to the Big Longs, feed details to the press over time. The SEC? A drumbeat of fact and if we play by Wall Street rules, of innuendo."
Dirty pool or just the way the game is played?"
And if we were KKD's auditors we'd be thinking along these lines, remembering where Anderson is today.
And if we were Big Long, we'd understand all this. And the vulnerability. ...
... diversu was posting good stuff along these lines. Aught to keep it up. Most valuable. Sic 'em.