It looked like I would be stopped out of my last bit of Chipotle’s this morning. It was upsetting for sure because I have owned it from day one and been blogging about it pre-IPO. There must be 100 posts where I have mentioned it . With it’s close back above $104 I will keep it and use today’s low as a final stop.
It has been such a great ride and I have even traded the beast well, chronicling it along the way. One of my biggest winners where I just could see and feel the stock higher.
It’s a perfect case study for a growth and momentum stock . The growth is still early, but the momentum is gone. You need to separate that or you give back all your profits.
If the growth continues, I think it will, the momentum will return. In the meantime, the market’s mood will have to get better and the market stronger to carry the multiple it carries for a restaurant stock. Not that complicated.
PS – This was such a good Wallstrip. Looking forward to seeing Lindsay back sometime soon on her new web show for CBS Moblogic.tv
Today I wanted to outline my thoughts on what/who won’t work in 2008…hopefully in an effort to stop you from bottomfishing.
1. Blockbuster and Blu-Ray are both lame. The few times I actually have to go to Blockbuster every year should not be made even more confusing with Blu-Ray. What a horrid idea for all parties involved. Why do I really need to see ‘Die Hard with A Vengeance in even ‘better’ quality. It just sucks in a better picture and louder. Blockbuster stores give you ‘coodies’ by the way.
2. Facebook will go backwards in valuation. I don’t buy into the biggest demographic being 35 plus. I don’t believe CNN polls either. Though I was a fan at $1 billion, I get almost zero utility from really trying to figure it out. I totally get why college kids like it though and Facebook is not going away.
3. Sushi will slow down. We are way oversushi’d. I still love Sushi but it’s boring and I am cutting way back. That’s good news for Chipotle’s (CMG). Burrito’s are the new Hand Roll. I have been long Chipotle’s since the IPO and have sold it down way too fast. It’s not even a top 10 position of mine, but remains my favorite growth idea outside Apple.
4. This TV Network audience chart will actually begin to accelerate:
5. Writers will continue to lose very badly in their strike. Right or wrong they are so screwed. Teaming with venture capitalists like ‘Funny or Die’ did, won’t work (unless you are Will Ferrell). Not yet anyways.
6. No one will solve the video advertising problem in 2008. It has never been cheaper to make or distribute video, but never harder to get an audience despite the chart in Number 4. There are a lot of bets being made in this space because the rewards are so high. Alley Insider is writing about the problem almost daily .
7. U.S Financial stocks (save exchange stocks) will continue to underperform, way underperform.
8. The US dollar will still not work. Our government likes it that way.
I think this ONE deal may mean we are truly near an All-Time ‘Stoned’ in global markets.
Please SELL something to ward off the evil market spirits that this Chinese IPO will bring upon all our portolios (or it could just be the Chinee Chipotle’s).
I am selling…..some Google.
Seriously.
Thanks Eddy for bringing this to my attention. Such a great blog.
Disclosure – Absolutely Love Peking Duck – the dish, not the IPO (Pearlman…you know it), long Google and seriously selling some shares, long Chipotle’s.
Posted on November 1st, 2007 | Category: China, Chipotles, Google | Comments Off
I know I would do very well. I would like to do better. This has been one hell of a bullish blog for two straight years, but I have been a very nervous bull of late.
I have been a net seller the last few days and have been posting my sells. Tonight I got an email from Cole at Blackstar reminding me of all the solar stock earnings coming in November (long FSLR), and that China, Chipotles and Solar stocks may just be the beginning. I love getting these reminders from Cole whose fund is set up to follow and not think. The deep thinking has long been done and most work goes into tweaking.
My Chipotle’s sells have been dead wrong so far. I should be doing the opposite. Tonight they blew away numbers and announced their intentions to ‘burritofy’ Canada starting with Toronto. I could swear this Company is operating on massive growth steroids. They have shrunk global growth time in the restaurant business.
The market has been good to me and my partners this year but alas, I have only 30 percent dedicated to equities (on margin of late though).
With all the breakouts I have been thinking about raising more money to increase my allocation to equities. It would be easy right now.
Obviously there will be a ‘pop’ after this boom, but say it comes from the FXI at $200, The Nasdaq at 3,500 ( it would still down 30 percent from all-time highs) and The Dow at 20,000.
Would you miss it? Are you in the right frame of mind to take advantage of it? Worse, would you fight it all the way up and get mad?
Most of the investing public is underinvested in stocks. They are licking the wounds from the housing slam. The Nasdaq bubble is too fresh in all our minds, especially the media.
With the global wealth boom and a weak US dollar, you could get an explosion in US equities as our creditors use cheap dollars to invest in US equities. If the dollar reverses course for just 6-12 months, you could get a US stock market/dollar carry trade. The US dollar could rally 20 percent and not break the downtrend. Combined with just a small 10-15 percent market run from here, the trade could be staggeringly profitable for big institutions. The Chinese governement could squeeze the bears and shorts to complete death right now by buying US dollars and just gunning stocks higher. Basically, the Chinese could corner our equity markets. They could do it for fun. Maybe that is already in process.
With ‘SpankMe’ Bernacke at the helm who is already the market’s whipping boy, more rate cuts could just intensify the trade short term.That’s just one upside scenario.
I am not saying that you should blindly buy stocks. I won’t. I am just reminding you (and by writing this…me) that we need to think about the possibility that the markets could melt UP and how that would affect us.
So Tim Horton’s (THI) finally gets some Wallstrip love.
Tim Horton’s is probably one of the biggest North American Fast Fod chains you have never heard of. You will.
Tim Horton’s proves that donuts are still big money and the whole anti carb craze is hooey. They also prove that management matters. Krispy Kreme (KKD) hit another all-time low yesterday.
Tim Horton’s is a sense of national pride for us Canadians. They are everywhere north of the border.
I am sticking with Chipotle’s and Starbucks as my exposure to restaurants in my portfolio’s, but Tim Horton’s is an interesting growth opportunity. We are not so different here in the US from Canada. Obviously, a revived Dunkin’ Donuts will make for tougher sledding south of the border for little Timmy.
Here is an important point in trend investing…context is important. If you are convinced that Tim Horton’s can make it in the United States, the potential is unbelievable and the growth story very much intact. I don’t have a feel for their product and the American landscape is cluttered with big players. I will stick to a story I have a better context for growth. I can’t own every great leader.
I am plotting out all the Chipotles on my new Garmin wrist device so that I can eat at each one around the United States.
Some people want to go to different ballparks….not ME.
Chipotles will eventually be in every ballpark and airport, bit first they need a few thousand more stores around the country.
In the meantime, they execute flawlessly. Check out the freaking numbers they just posted. Obviously helped by my pigout last night with Rachel.
Oh and Navteq just blew away the numbers too.
CHICAGO (AP) — Navteq Corp. lifted its full-year guidance above analysts’ expectations Tuesday, as the provider of digital map data benefits from surging demand growth for portable-device maps. I like the word SURGE when I am long.
Both stocks up 5-10 percent after hours.
Ugly day, but a few gems nonetheless.
Tomorrow – Starbucks. I am long and worried about my little coffee dynasty. They have issues. I have not had a coffee in 30 days and don’t feel alone in that.
PS – I really love my portfolio these days despite the market being shellacked. Strength has held for now.
With all the internet merger and advertising news this morning, don’t forget to watch the IPO of Interactive Brokers (IBKR).
I am buying.
All great Public Companies start out as IPO’s. I will have to pay up big, but from I have see nd heard from trusted sources that use their service, this is a winner.
