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Krispy Kreme Doughnuts, Inc. Message Board

  • josephp162 josephp162 Apr 18, 2005 4:35 PM Flag

    **** Model predictions for Tuesday


    OK -- absent BIG news, here are the model predictions for tomorrow...

    The first number is the total volume and the 2nd number is the predicted closing price.

    500,000: $7.02

    1,000,00: $6.91

    2,000,000: $6.70

    4,000,000: $6.35

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    • I will admit up front that I don't understand and haven't really tried to understand the specifics of Joseph's model for buying interest. In general, given the relative prices of options and shares, I don't see why the big option writers would want to systematically unwind their positions when there is a guaranteed profit to holding on to a fully hedged option position until the end.

      However, it seems to me that Joseph's model is really independent of the nature of the buy-side demand. If you have a small number of large holders who want to unload, and a demand for shares that comes from it-doesn't-matter-where, the sellers will push shares gradually into the market as long as the price doesn't go down much. If small sells make the price go down, they will pull back. If they can get a fair number of shares out, they will sell more.

      Joseph is correct to say that at some point this model will break down. One way, as he says, is that if the volume really builds up and the price goes down more and more, so people see an opportunity to unload their whole position. Another possibility may be in the opposite case. If volume really dries up, prices may go up a little at first, but a continued lack of volume might cause one or more of the holders to panic and unload at the cost of driving the price down.

    • Thank you. It's about time someone explain what very few of us have understood all along. But let's make it my deck and single malt, may I suggest the mcallan 25 I'm sipping right now? And we can discuss this further. As far as the cigars go... Does a cuban monte cristo suit you or a good Ashton? It's just somewhat nice that someone else gets how hedges work. Ahh, I love this game.

    • Joseph,

      Fascinating castle-building � in quicksand.

      For the umpteenth time, I must ask: How do �Goldman, Hunter Hall, Courage, and perhaps a few others)� unwind their positions in an orderly way? We know how OPEC regulates the supply of oil to the world market: they have an elaborate, centralized bureaucracy that dictates how much oil each member country may pump and sell. [Even so, there�s widespread cheating.] Surely you don�t believe that there�s an-hoc co-ordinator appointed by Goldman, Hunter Hall, Courage, and perhaps a few others) dictating how many shares each member of the cabal may sell and when? And without such co-ordination how do you maintain order of any kind? I�ll take any plausible mechanism, however remote.

      Not only that, option writers, those shadowy figures about whom we know little EXCEPT, conveniently, that they, too, practice the astonishing virtue of discipline on, of all places, Wall Street?

      Your model is a thing of beauty and I enjoy beholding it. In some other corner of the universe uncontaminated by the human proclivity toward chaos-making (remember �entropy� from Physics 101?) it might even work.


    • Joseph, I admire the effort. Did you run a regression of volume and price change? Assuming so, what did it tell you? Was that the starting point of your model?

      Other question: Curious point re: Google option writers and the shock and awe unwind (love that term, BTW). But if a bunch of option writers unwound their position suddenly, wouldn't that create a bunch of buy-to-cover orders and drive the option price up? Which would benefit the option holders? So I don't get your point....Thanks, FP

    • Joe,
      Just wanted to say good call re: the Naz cratering @ 2000 a few weeks ago. I know you took a little flack.

    • It seems that everyone else (except for you) understands that this is an educated guess.

      Step up to the plate. What is the stock going to do tomorrow. Let us see if you can come even remotely as close as Joseph has done.. 4 days in a row I might add.

      Your negative posts are unwarranted and juvenile!

    • Let me see if I got ya right, lunatic.

      You say the error appears to be on the order of 10 cents to 20 cents.

      and your forecast was

      250,000: $6.67
      500,000: $6.28
      1,000,000: $6.11
      1,500,000: $6.07
      2,500,000: $5.93
      4,500,000: $5.85

      Put in the errors and you get

      250,000: $6.47 to $6.87
      500,000: $6.08 to $6.48
      1,000,000: $5.91 to $6.31
      1,500,000: $5.87 to $6.27
      2,500,000: $5.73 to $6.13
      4,500,000: $5.65 to $6.05

      So IOW if the price is 5.87 and the volume is 1.5M you will say you done good within the margin of error.

      If the price is 5.87 and the volume is 2.5M you say you done good with the margin of error.

      If the price is 5.87 and the volume is 4.5M you say you done good with the margin of error.

      So lunatic, if the price is 5.87 the volume is 1.5M to 4.5M and you will say you done good with the margin of error. Does any one else see the lunacy in this thing?

      >>So, what I am saying is that about 67% of the time, it will fall within +/- the range between the two closest volume numbers.

      Yeh I see that! RFLMAO, LUNATIC!

      If you use the same brilliant logic for shorting KKD, GOOD LUCK lunatic! RFLMAO!!

    • <<I thought that a bifurcation point would have been reached in the true non-linear system equations and thus caused a modality change that would have invalidated the model by now.>>

      I appreciate your good work and have no intention to belittle things I don't understand. Your projections have been impressive ball-park successes. I must, however, tell you a story.

      About ten years ago a physicist at a prestigious university published a scholarly paper in a renowned social sciences journal. A few weeks passed during which the leading social sciences scholars, as usual, dissected the article, some commending the author, some taking exceptions, all conceding the great gravity of the work. At that point the physicist revealed that the article was cobbled together mechanically using the cliches and catch phrases most frequently found in social sciences journals and the whole article was an arbitrary collection of words arranged to satisfy basic grammatical rules. The article meant absolutely nothing. Full of sound and fury...



    • lets hope your model is on the high side tomorrow.

    • I could do 3 things here:

      1. Calibrate the time constant
      2. Calibrate the threshold setting
      3. Calibrate and balance both variables
      4. Leave it alone


      5. Beat Lunatic_pos...into a pulp....?

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