multitrader

Manufacturing: 'Less Bad' or Not?

"economy is getting worser slower"

As Expected, Big Down Day Arrives

Prescient reply, Carl. Curious... what are you (and others) expecting tomorrow? I am thinking we might run all the way back to the bottom of the wedge formation, retesting at the ~859 level on SPX.

The action today in financials and in real estate was laughable, in my opinion. Components of the IYR are issuing stock like nobody's biz and pushing their stocks up in the process. I would issue my own stock every day of the year if it meant 5%+ upswing in the price every day.


On Apr 21 10:56 AM Carl Spackler wrote:

> Today should be a pause day in the action with the S&P bouncing
> between support at 820 and resistance at 850. We need some news
> to get a move in either direction going. You are right that the
> market has broken its pattern and appears to have brokern a rising
> wedge formation to the downside. These moves usually have a headfake
> up before they resume downward. For a good down move, I would like
> to see some bulls get trapped by a fake rally up to 850. If the market
> breaks 818, however, we could see the downleg early.

Google Q1: First Ever Drop in Revenues, Otherwise Not So Bad

Cretin - where are you? The stock didn't go to the moon despite your incessant posts espousing what an assured winner it would be. Please continue your prolific commentary.

Green Mountain: Good Coffee, Peaking Chart

Couldn't agree with your assessment more. I would point out, however, that despite meaningful EPS growth, management has not turned any of their growth into free cash flow. Margins are declining and debt is increasing as the company continues its pace of debt-financed acquisitions. The balance sheet is levered over 8.0x on a EBITDA-capex basis after its recent Tully's transaction which added over $40 million to the credit facility.

This company could be in danger of needing to do a secondary equity offering to de-lever the balance sheet if they don't turn their sales growth into free cash flow.

For those of you out there like me who hate EPS, note that GMCR is trading at 24x trailing EBITDA, or nearly 93x trailing EBITDA-capex. Truly stunning.

Green Mountain Coffee: Wake Up and Smell the Trend

David, maybe your article marked the top? Nasty tape for GMCR today in an up market.

Green Mountain Coffee: Wake Up and Smell the Trend

Couldn't agree with speeds' comments more. I would add that insider selling has been pretty pronounced over the last 6 months.

Management has proven incapable of turning their sales growth into expanding margins or actual cash flow.

Oil Hits New Record - Is $125 Next, or $100?

The thesis for going long oil at these levels is predicated on two arguments: (i) falling USD and (ii) continued emerging markets growth. Dollar bearish bets could continue to build, but there are few catalysts remaining to support further dollar shorting, unless the US economy materially weakens from here. If further weakening occurs, domestic demand for crude will not fall just 1% YoY as it has already, it will fall much farther and much faster.

But oil bulls posit that emerging markets demand growth will more than compensate for any further US crude demand slackening (basic decoupling argument). While I am a believer in emerging economies being slightly less dependent on US demand than in previous cycles, I still am of the opinion that a material deceleration in US economic activity will have a disproportionate impact on emerging economies, and this impact would adversely impact on their demand for crude.

Who knows the final outcome, but oil bulls should proceed here with caution. Long-term trends can have significant deviations. We have already seen a mild one this year. I am of the opinion that the dollar will strengthen as Euro Zone growth falters, causing a sharp reversal in the dollar. If that happens, I believe there will be a massive and quick unwinding by commercials and, most especially, financial participants in the crude futures market. It will be imperative that you do not have trades vulnerable in a reversal situation of this sort.

I see a return to $100 before a return to $125, and I believe it will coincide with a break down of other inflation ("dollar hedge") trades.