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Deckers Outdoor Corp. Message Board

  • punbr punbr Jan 17, 2013 12:10 PM Flag

    On days like this I can't help thinking of the movie "The Princess Bride".

    "Incredible. Inconceivable" And the response, I don't think that word means what you think it means. DECK is all over the place. Makes it very hard to buy due to the fear factor. I would like to load up, but this price action dooms me to playing it safe by limiting my buys and selling covered calls. It is working well, but would like to own a larger position.

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    • My favorite line is Billy Crystal's(Max) about the MLT sandwich(mutton, lettuce, & tomato) lol.

    • At this level I have very little fear. I myself am not even close to being fully invested and I've been investing for over 12 months now.

      But just look at the numbers. 1.3B valuation, 1.4B in revenues, 155M projected 2012 earnings.

      Now sheepskin has been at all-timehighs the last two years 2011,2012. By nature of suply and demand, when prices become too high, demand wanes. As Zohar Ziv mentioned today, we have locked in sheepskin prices at 11% below 2012 prices. So alrready the price has hit a wall and has pulled back. So if all thing remaining the same, sheepskin stays at this level. We are earning 155M even so with innovaqtion on its way to mitigate the costs.

      If it goes down though, it just money in our pocket. The market has discounted the stock to the worst possible case scenario, that sheepskin would keep rising by double digits yoy and that warm weather was here to stay. Well, sheepskin has pulled back already giving DECK time to innovate away from it so it doesn;t hurt us as much as well colder weather this winter. So two things the market got "scared" of(i mean used to rig us down 75% and steal hard earned 5 years worth of investing money from regular people).

      If we go down 50% from here(its always possible of course), I have no doubts Angel will just tap our cash and credit and buy as much as he can. It's called margin of safety and at this point we have reached it.

      Z

 
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