Yeah, fair enough on the Amazon point… And don't get me wrong, I agree with your analysis. I don't know what the landscape will look like over the very long term, but things are not very dire here at all while the talking heads are going crazy… From time to time these opportunities come up, GMCR in the 20s, AAPL sub 400, and while you buy countless people are ready to tell you how wrong and naive you are… we shall see...
Yeah BS, if PEP happens to be at the table they could #$%$ that down easily… It is an 800M market cap. How much could the factory cost?
I don't know if I follow you on this. Fundamentals remain intact but profitability is in question? Profitability generally goes hand in had with fundamentals. Although I think this is really just an issue of semantics. I also thought your usage of "operating leverage" was odd below. Operating leverage refers to the extent of margin expansion or contraction with revenue growth or decline.
Regardless, I agree with you the trading has been massive overreactions. Have had a few good trades on these swings, but got burned pretty badly by the pre announce. Have to shrug it off in the long run though. GMCR management put shareholders through way more pain than was necessary too, but for anybody who had the liquidity it was an opportunity of a lifetime. I have been a long time supported of GMCR, but it looks expensive to me now. Soda looks cheap. It is like when GMCR fell 25% on SBUX announcing the Verismo… People are getting twisted into knots over nothing. When the model actually breaks I will be the first to admit it. GMCR and KO have their work cut out for them way more than the market seems to be acknowledging.
And a different week and a completely different outlook? I It is getting way too easy to trade the manic ups and downs… which means I should probably stop because I am pushing my luck… But to the original point, people have a way of reading way too much into the day to day
I think you are basically making my point. Stocks sell off, so we should seriously consider the possibility we are heading for a recession? That much does not change in a matter of weeks. Sentiment was way too one sided at year end, now we are seeing a swing the other way. Nothing to get all twisted up about. I have had some concern about whether data would keep improving, and chinese economy is a concern, but still doesn't spell a 2% selloff on ISM data… it is a swing in sentiment plain and simple. I do not know what the future will be, but today's trading action doesn't provide an indicator.
Meh, all pretty arbitrary. This move is way overdone. Funny how people start to say, oh the market is really selling off, this must mean there is really something wrong! Selling sometimes just begets more selling… A joke really. Nothing is different from two weeks ago and the S&P is off 5%… Way more interested in what happens to the data over the next six months, not how many traders are wetting themselves over momentum and a data point or two...
For some reason people on these boards always seem to complain about misses where they don't get pre warnings, but I say that is bunk. If this had come out on an earnings day I would have been appropriately hedged and not terribly minded... as it is, it was nearly the worst possible timing for me. I did learn a lesson in general though, I need to spread out the expiration of my hedges across my portfolio. I have way too many that are coming up this friday... not enough juice left to protect me against moves like todays... I have been anxiously waiting expiry when I should have been rolling many of these forward... oh well. Next time.
In the meantime, expectations are much more reasonable here now. Seems cheap at under 16x earnings, but I was way off in interpreting this one so do not trust my own thinking on it...
I have been meaning to pick up divergent, the book sales make for a compelling story (pun intended), but yes, chaos walking should be the number 1 seller!!!
Hard to call bottoms, but this is starting to feel a lot like GMCR last year (although there is very little negative news to speak of, and GMCR had a couple of terrible quarters in that mix...). But the pessimism and unrelenting sell of is familiar. Sure, if this story unfolds similarly there is a way to go, but if you can call it right you can make 4x type gains here too... hard to resist. I am looking for a bounce here, will hold through earnings if we don't get a good run into them. We'll see
Nice, thats is exactly the right way to get long here. I covered the calls I wrote back when we were at 54.50... couldn't help it even though there was a fair amount of juice in them. Also picked up some 52 calls for the last series in January for 1.05 and 0.95 doses....Very hard to call bottoms, but been scaling in here and had to take advantage of a crazy move. Looking for these to double or triple in the next week or two.
Picked up some shares and some calls today. Still have not covered the calls against my existing shares. Even though I think the timing is right to, at the same time why bother? Have plenty of long exposure and those calls will only get cheaper as long as this stays low. We'll see, worst case those shares are called away and I make boatloads on those and the rest of my long position... If this selling is really due to gmcr it is misguided. The story could certainly go further, and an actual launch would hurt, but this Q report is more important so people should stop trading off that story soon. I was there when Verisimo supposedly killed gmcr... People have a hard time seperating the short run from the long run.
Yeah, that was fortunate, you stick with them through the weekend? Crazy trading with up 10% weeks and down 10% weeks, plenty of ways to win... I'm pretty comfortable either way, but kind of hoping we stay low or a little lower even in the coming weeks and try to rewrite something juicier before the ER. Plenty of time to work with, but could quickly lose the chance to make a move if we find ourselves back at 55 next week..
Just a quick update, what a crazy rollercoaster we have seen the past two weeks. I did wind up getting allocated the shares on Friday at 55, the close was 54.5. I wrtoe 55 calls against them first thing monday for $5 a piece (i think they were an april strike, but now not 100% sure of that). At this point that makes my effective cost basis about $46. Down another dollar or two in the coming weeks and I will cover the calls and try to rewrite higher... or assess other options, but at this point there is still too much juice in them even with a $4 decline...