Craig Van Pelt

Craig Van Pelt
Contributor since: 2013
BRENT,
GREAT ARTICLE. THE WORLD IS GOING TO HELL! TAKE A LOOK AT THE PUT OPTION PREMIUMS ACROSS THE BOARD...
CRAIG VAN PELT
ALPHA CONTRIBUTOR
Wonderful article and terrific analysis. Thanks
CRAIG VAN PELT
ALPHA CONTRIBUTOR
WYNN is a place that an intermediate to long term investor should be. You make the big money by buying when the blood is flowing in the streets, not when a stock is hitting new highs.
WYNN is the best of breed in the sector. Just the catalysts of the new Macau and Boston opening could put the stock back to $200.
In the meantime, things will improve in Macau and ARE improving. Reports are that there is a lack of hotel rooms available and traffic from the masses keeps building.
Ironically I bought more yesterday before Breams upgrade and kind comments of today with their price target of $174.00. The jump today and real "investor volume" (Not just short covering) could be the start.
Lastly, with a 4.60% dividend that I believe is VERY unlikely to be cut, the risk rewards are excellent. I strongly believe WYNN is a great place to be for those who have the visions and can swallow the volatility.
On the issue of volatility, there's always opportunity to sell covered calls to reduce average price.
Be long WYNN.
Craig Van Pelt
S/A Contributor (Once in a while)
Sir,
A wonderful and logical study. Brilliant and concise language. Glad I read it but very sorry to say I agree with you. Scary stuff.
Thanks.
Craig Van Pelt
S/A Contributor
Rogier,
As usual you produced an incredibly insightful article. Beautiful and concise language born of iron clad logic. I congratulate you!
Best regards
CRAIG VAN PELT
S/A Contributor
Rogier,
WOW.....WOW. Eloquent, as usual. Creative and incorporating some wonderful thoughts.
Personally, I have always been fascinated with the concept of MLM and direct sales. If done correctly, it is the purest form of capitalism and free market. Conceptually, it's perfect. In reality, it's a haven for thieves and scam artists. Sadly, I have an acquaintance that, for the past 25 years, has been a major league recruiter and jumps from deal to deal in 90 day intervals. I've asked him how he can sleep at night and he doesn't even understand.
As you suggest, when someone finds the right product(s) and employees legal and honest direct sales methods, they will rule the world!
Thanks again for your writing.
Craig Van Pelt
S/A Contributor
Thanks for a terrific article. Your hard work on it is much appreciated.
Craig Van Pelt
S/A Contributor
I wanted to comment on the great writing and wonderful insights of Henry Cheung. He bases his analysis on hard facts and his intimate knowledge of the Chinese marketplace as well as Asia. For example, he called the "short" Casino stocks (WYNN & LVS) well before the rest of the world gave any consideration to it. In "Short," WYNN went from around 220 to today's price of 180. A FABULOUS call!
For this call and many others, he deserves awards and kudos.
Craig Van Pelt
S/A Contributor
Stunning. Depressing. So very well written. Congratulations, Christine.
Craig Van Pelt
SA Contributor
Abba,
I feel your pain! Indeed, RIG is the worst trade I have ever done. Yet, there is so much I like about the company including the way the stock trades and the dividend + the management.
Unfortunately, I'm nearing the point where averaging down and selling call options on it aren't helping!
Thanks for you article.
Craig Van Pelt
Alpha Contributor
Great find. Very interesting play.
Craig Van Pelt
Is not the weakness in CLF (as well as X etc) a result of the weakness in China???
Rob,
I enjoyed your analysis and your conclusion that much of the Herbalife business model is based upon "Hope." You are 100% correct. However, while "hope" is an integral part of the HLF success, the Company should be congratulated for offering "hope" ....not castigated.
It's been said that the only difference between a church and a successful MLM company is that the church doesn't pay income tax, but the MLM does. While this concept may appear humorous, it is essential to the MLM model, and few people really understand or appreciate the power of it. The elite in our society are turned off by this concept, just as they are turned off by organized religion.
Folks seeking to lose weight and/or develop a healthier lifestyle succeed when they receive support....not just ingest product. HLF and the like offer a HUGE support system, and it becomes almost evangelical, but it works.
The "one-on-one" personalized system of distribution, while foreign to execs of traditional fortune 500 companies (And Wall Street Hedge Fund Managers) is pure, powerful and it works. When HLF began business many years ago their distributors roamed the streets and malls with a button with the simple phrase: "Lose Weight Now...Ask Me How." Sales went from ground zero to multi-millions and moved the HLF warehouse from the trunk of Mark Hugh's car to more respectable facilities. Why did it work? Because of the offer of personalized attention, the need of folks to be part of something and their belief that the products work. (which they do)
Concerning your comments about the products being overpriced: of course, the products are overpriced compared to what can be found in the supermarket or drug stores. So what??? Built into the SRP of the products is the margin for distributors, the support they offer to customers, delivery to customers, and a hefty profit for HLF. All companies (MLM's included) have the absolute right to set their prices and we see it everyday in virtually every sector of the market. I consider it to be a necessary and rather brilliant business model.
Concerning the dismal success ratio as a business opportunity, it should be no surprise to anybody! Unfortunately, most people do not have the abilities, discipline etc to make a success of the HLF opportunity (Or ANY business opportunity). How many kids dream of becoming a professional football or baseball player....and how many succeed? How many young MBA's dream of becoming CEO's of major public companies, and how many reach that goal??? I suspect, if a statistical analysis was done, we'd find those stats to be even more dismal than the HLF/MLM sector.
Our free enterprise, capitalistic system is in large part based upon hope and dreams. The guys at HLF have found a legitimate way to put it into a bottle so-to-speak and make it work.
This whole attack upon HLF has become as much political as it is business. Folks are doing what they want based upon their own free choice. The HLF experience has positively affected millions of people worldwide.....Unfortun... guys like Ackerman and others who don't (or can't) understand the essence of the business model
somehow believe that it's their right and obligation to "police" a free market enterprise along with the government and tell folks what they can, or cannot do.
Lastly, your criticism of HLF's policy of not allowing products to be sold in retail stores is off base. That policy was established to protect distributors and maintain the integrity of the unique business model. Why not just accept that fact instead of considering it to be evil or an admission of guilt?
HLF has demonstrated a long history of success and growth. It's a huge money-maker, and will continue to grow and prosper and the stock will continue to appreciate. The shorts will get crushed.
Thanks again for your article and the time you spent on putting it together. Regards. Craig
CRAIG VAN PELT
S/A Contributor
Thanks for a clear & well written article. It paints the true picture, and concisely explains the stocks trend.
Regards
CRAIG VAN PELTS/A Contributor
getreal1000.
Brilliant! You are 100% correct. It is the media's responsibility to investigate and report the truth. They enabled Obama and his crowd at the expense of truth and the best interest of the country. All of them, with few exceptions, should be punished.
CRAIG VAN PELT
SA CONTRIBUTOR
Don,
While you are obviously are a great financial writer....you now have demonstrated unique talent as a literary critic. Extraordinarily well written. Thanks
CRAIG VAN PELT
SA Contributor
Wonderful analysis and great article. Thanks. I agree 100%.
CRAIG VAN PELT
Alpha Contributor
Mr. Shaefer,
Great article and terrific analysis. I trade POT, and was not familiar with SQM.
Thanks for your efforts in bringing SQM to the forefront.
CRAIG VAN PELT
Alpha Contributor
Mr. Mier,
Congratulations on a very well done and researched article about the woes of Puerto Rico. I lived in PR for some 18 years and find the current state of affairs quite depressing.
One issue that you failed to mention is the extraordinary crime problem on the island brought about by drugs. As you know, it's not unusual for as many as 100 murders to occur over a weekend.
This overwhelming crime problem accounts for a large % of the people leaving the island. I have friends on the island that hire personal body guards just to go out to dinner. Until this issue is resolved, in my opinion, nothing in the economic sector will work.
Thanks for the article. Craig Van Pelt/Alpha Contributor
Hi Kevin,
I liked your comments. Sorry to hear you're still underwater.
I agree with you that POT is a very well company. Their financials are solid and their investments around the word are very valuable.
I'm a shareholder of POT, but I also trade around my position on a weekly basis.
Have a great day.
CRAIG VAN PELT
ALPHA CONTRIBUTOR
Sir,
An interesting, and VERY Democratic analysis of our debt problem. Instead of comparing and touting interest expense as % of GDP, why not compare apples with apples, and compare government tax receipts to its spending? I believe a new and "scary" picture will appear.
Interesting perspective, BUT I found some of you rhetoric confusing and contradictory. In your opening paragraph you state "tapering" would lead to a bond rally....Wouldn't the opposite be true (or did you mean "rally" in terms if rising interest rates?)
Then, further down in your article you suggest that the market is a poor leading indicator, noting that "Every U.S. recession bar one over the past century has followed a downturn in stock markets. A lead indicator for stock markets, the economy is not." Would not this suggest that the market was, indeed, an indicator. Just doesn't make sense to me and it's irritating to read such contradictions in english language!
CRAIG VAN PELT
Mr. Roche,
When world powers (like they're beginning to do now), eliminate the USD as a Reserve Currency, the game will be over. Movements are now afoot in China, Korea, Russia and the Middle East to move away from the USD as the "Oil Currency."
When the status of USD as a Reserve Currency changes it will be the most catastrophic event in our history. Add to that the rising interest rates, the government will reach the point where not even interest payments could be satisfied....yet our leaders continue the deficit spending binge to the extent of around $200,000,000 DAILY.
As the author suggests, by having printing presses it is impossible for the government to "run out of money." That's not the point....the point is that it won't be worth the paper and ink used to produce it.
In many respects, I'm glad I'm not a young man.
CRAIG VAN PELT
S/A Author
Great analysis. Confirms my thought that POT is greatly undervalued. Agree??? Thanks
Could Obama's anti-Israel stance be a motivating factor with respect to his decision to attack Syria?...I hope not, but I wouldn't put it past him. A sad state of affairs.
While the Syrian issue is horrible and criminal, I can't see any reason for our intervention. Intervention is a guaranteed lose-lose when when understands all of the various factions and independent "armies" that are operating there.
The Brits have it right.
Terrific analysis and really added to my misunderstanding/under... of the Syrian issue. Thanks. Craig
Steven,
A GREAT article. What's scary is not that your futuristic projections will come to pass, but that the idiots in Washington won't react to it. As you pointed out, it will change society. We all should be buying farms and gold. Another thought is that bartering may become the new way to do business.
Also, imagine the potential effect upon commercial real estate....why have millions of square feet of retail space and tens of millions of square feet of warehouse space.
Thanks for the article.
CRAIG VAN PELT
Alpha Contributor
Dante,
You wrote a really terrific article. Extremely compelling, and unfortunately right on target for the buying public. I'm a bit older than you and I remember all too vividly October 19, 1987....for funzies check the stats of 1987.
At that time I was an RIA and trading OEX options in relatively large qtys. On the 18 and 19th of October we were VERY long puts...interesting that the call option premiums were NEGATIVE. I knew several guys trading on CBOE that were actually short puts. Never heard from them again.
MANY friends of mine on the street were devastated and worse than that, folks on main street went through a painful life changing experience when the phones for margin calls started ringing.
Thanks for you insight and guts to take the position you've taken.
Regards. Craig Van Pelt
Author - SA
jaguar2005
Thanks for you comments....you are right on target, and I think we'll see a significant short squeeze.
Best regards. Craig Van Pelt
Manxbuilder,
Thanks for you comments.
You point about payment of dividends is an excellent point and I should have referenced that in my article.
If and when Ackman must start buying, it will be a circus.
This situation has the makings of the greatest short squeeze ever.
Thanks again for you input. Best regards. CRAIG
feedtheworld
Thanks for your input and comments.
My reference to the HLF "business model" being dynamic and profitable was meant to be from the Company's perspective. In other words, for the Company, it's very profitable.
Concerning distributor profits (or discounts on personal consumption) there is the upside potential to earn significant income when volumes are generated, and that has been proven since there are many distributors world-wide making significant income. The stats are posted in HLF's due diligence pages.
With reference to your example, I don't quite understand the math.
Here would be my take on it:
At a 25% discount with free shipping your landed cost would be $27.12. The shipping cost of $5.42 and the sales tax would be passed on to the customer. Correct? So, in this case the customer would pay $36.15 + $5.42 + $2.16 = $43.73
If this were the case, the profit would be $9.03 + the freight cost if passed on.
Many retailers would be pleased with this margin. Obviously, in order to make a business out of it, one would have to have more than a single customer.
Thanks again and best regards. Craig
Hi dguo1
Thanks for your comments and input. I sincerely believe you'll be VERY happy with your significant stock position in HLF.
The numbers speak for themselves. It's a great company, with terrific
fundamentals.
Best regards. CRAIG VAN PELT