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  • The Great Beta Hoax: Not An Accurate Measure Of Risk, After All [View article]
    I like the point you're making overall--beta is not a perfect measure, and those who *purely* assess the risk of a stock through its beta/volatility are doing their portfolios a disservice. However, I do think a market cap-weighted beta is one way (of many different ways) to assess overall PORTFOLIO risk.

    At the end of the day, you can see how the stocks in the portfolio (in the aggregate) have responded to market fluctuations over the 3-year, 5-year, etc. period. As an aggressive investor, I personally like my cap-weighted beta somewhere in the 1.5 neighborhood; if I'm investing for a 60 year-old couple who doesn't have the risk tolerance that I do, I'm certainly looking to keep it under 1.

    My point is--the overall beta of a portfolio can give you at least some insight into how "wild" the ride will be, even if it can't tell the story of every stock individually. I think the academics (unintentionally) make risk seem like a negative, when really it's just something that's inherent in equity investing. And often times, such as in my case (as a young investor), taking on a relatively large amount of risk [high equity % and portfolio beta >1] actually makes sense. I actually view the "risk" of being conservative as a greater long-term threat to my portfolio than the "risk" of volatility.
    May 22, 2015. 01:21 PM | 1 Like Like |Link to Comment
  • Chipotle: Strong Sell Recommendation [View article]
    Do I like seeing my stocks decline -7.5% [as of 12:30pm PT] in a single day? Certainly not. Nonetheless, despite one bad day, I'm not crying over spilled milk with the following total returns:

    1-yr return: +24.92%
    2-yr return: +74.87%
    5-yr return: +416.28%
    [I have not owned the stock for 5 years, more like 2-2.5 years. Just pointing out how relatively unimportant today is in the grand scheme of things.]

    It drives me crazy when I hear people say they "saw it coming" with respect to large drops/gains--had I "seen it [a -7.5% day following earnings] coming," I obviously would have sold the stock before earnings and bought it back today. Unfortunately I still can't see the future, no matter how hard I try. However, it's been well-known among CMG investors (and the execs repeat this over and over again on their calls) that comps(comparable store sales growth) in the MID-TEENS is simply not sustainable, and that at some point there was going to be a bit of air sucked out of the stock. They missed their insane growth target by 100-ish bps, so the drop in price is "fair," I'm not arguing it and pointing fingers at analysis like many do in these situations, but I'm not deterred either.

    Delivering double digit comp growth (Q1 '15) ON TOP OF double digit comp growth (in Q1 '14) is literally unprecedented in this business, especially for a company that has been around for so long yet continues to grow like it's a young company. I am happy to withstand some volatility and believe CMG is still fairly valued with plenty of room to grow.

    Long CMG, obviously.
    Apr 22, 2015. 03:40 PM | 1 Like Like |Link to Comment
  • Chipotle: 3 More Reasons You Should Have Shorted Ahead Of Earnings [View article]
    There's only one reason everyone "should have shorted" ahead of earnings--because the stock went down!

    I see a lot of ridiculous article titles on here--"Blackberry: The Analysts are wrong and this is a $30 stock," all sorts of ridiculousness. But this is the worst thing I've ever read--you've literally looked back in time and made an ex-post recommendation! Had you written an article BEFORE earnings with a title like "Why you should short Chipotle ahead of earnings," then you'd be more than justified in slapping this insulting title on an article and rubbing it in everyones faces.

    Since the gift of hindsight is so strong within you, here are 3 more article ideas for you:

    "Why you should have sold Enron in the $80 price range"

    "Why you're crazy for not buying Apple in 2000"

    "Under Armour: If you bought any other apparel brand over the last 5 years, you blew it"
    Apr 22, 2015. 02:08 PM | 1 Like Like |Link to Comment
  • BlackBerry: They Still Don't Know You [View article]
    If you can convince 0.5% of iPhone buyers to do anything, you could make a lot of money.
    Apr 20, 2015. 06:18 PM | 2 Likes Like |Link to Comment
  • BlackBerry's Health Initiatives Might Have Hit A Wall [View article]

    Why is this directed towards me? Words can't express how little I care.

    I was just replying to the comment about the shorts "hearing" something.
    Apr 18, 2015. 07:13 PM | 1 Like Like |Link to Comment
  • BlackBerry: They Still Don't Know You [View article]
    @John Kastanes--you'll have to forgive me, I'm a layman in the technology sector. As an investor in an award-winning company, how are you compensated for awards? Do you get a little dividend payment for each one that the rest of us don't know about? I read so much from BBRY cheerleaders constantly referencing BBRY's "award-winning" phones, but by my math the stock has tanked on a total return basis.

    I'll do the "without awards" returns, and I'll let you fill in the "with awards" returns, because I'd like to see what I'm missing. I mean for all I know you BBRY longs could be printing money owning the stock, and here I'm thinking you're hemorrhaging money with a smile on your face, so needless to say I'm confused.

    BBRY total return as of 04/17/15 (without awards):

    2-yr: -27.46%
    3-yr: -23.24%
    5-yr: -86.26%

    Very curious to see the "with awards" returns. Please enlighten. Thank you.
    Apr 17, 2015. 03:23 PM | 6 Likes Like |Link to Comment
  • BlackBerry's Health Initiatives Might Have Hit A Wall [View article]
    Well stated @bwsf
    Apr 17, 2015. 02:59 PM | 4 Likes Like |Link to Comment
  • BlackBerry's Health Initiatives Might Have Hit A Wall [View article]
    Anyone who closed out a short position on BBRY in the past 2 months (almost certainly) did so at a profit.

    So did they "bail [out]" or "cash out?" I guess your interpretation of this event depends on what you talk yourself into believing.....
    Apr 17, 2015. 02:57 PM | 3 Likes Like |Link to Comment
  • Chipotle: Strong Sell Recommendation [View article]
    Cheese.....sour cream.......
    Apr 16, 2015. 06:48 PM | 2 Likes Like |Link to Comment
  • BlackBerry: They Still Don't Know You [View article]
    @JohnKastanes--you should do stand-up comedy, because this is phenomenal material.
    Apr 16, 2015. 06:41 PM | 2 Likes Like |Link to Comment
  • BlackBerry's Health Initiatives Might Have Hit A Wall [View article]
    I don't know the first thing about healthcare and to what extent BBRY has (or hasn't) moved too slowly in this space, but I know that VCs and PE investors absolutely HATE hearing--"Well, if I can just control a small percentage of a [however many billion] dollar market," that drives them insane.

    And it sounds like that's what BBRY is banking on.......not what investors want to hear.
    Apr 16, 2015. 06:33 PM | 4 Likes Like |Link to Comment
  • BlackBerry: They Still Don't Know You [View article]
    I'm always amused by the notion that short-sellers are walking on the edge of a cliff, while long investors are safe and sound. Especially with a company like BBRY--that's just hilarious actually.

    (1) "Every one of those shares has to be bought back." Why can't a short-seller continue to maintain his/her short position indefinitely, just like a long investor can? That's like saying "every one of those (long) shares has to be sold." No (you know what) sherlock.

    (2) The notion of a "floor" on the price caused by short sellers is among the dumbest things I've read on this site. On what planet does short selling create a "floor" at the current price? Are you telling me if some news comes out tomorrow that creates selling pressure--I know, I know, there will never be any bad news about BBRY, but let's just assume for one minute this is possible (see: last 5 years)--you're telling me the price simply can't go any lower? If you believe that to be true, you're high.

    I will give you this--when the short % of float is higher than usual, unexpected good news would cause a more pronounced short squeeze than it would for a stock with a lower short %. And as a long you would benefit more than if you were long, for example, Chipotle or another stock that has basically done the opposite of what BBRY has done over the last 5 years.

    Blackberry hasn't exactly been the "good news shop" over the past few years. Unless of course you ignore reality and only listen to the words of John Chen. And I'm not short the stock, I don't even dislike the stock, I dislike comments that propagate non-truths.

    I can't wait to hear the inevitable line about how if you go long BBRY you can only lose your $9/share, but if you short it you're exposed to a loss of $10/share, $20/share....heck, why not $300/share? And as dumb as that argument is, at least it's TRUE (even if it's a 0% probability event).
    Apr 9, 2015. 09:10 PM | 3 Likes Like |Link to Comment
  • Chipotle: Strong Sell Recommendation [View article]
    This is a fine article--it's not amazing, but it's certainly not terrible by any means. I think lambasting the author for petty things like failing to include Kentucky locations on the map, or some other nuance of the presentation, is unnecessary.

    Clearly effort was put into this article; I would agree that Chipotle wouldn't be at the top of my buy list, but I don't think you've presented enough evidence to support a sell recommendation. Although, like @Marvin Schwartz said--I've owned the stock all the way from $200 (late 2012) to today and the short thesis has remained the same throughout: the earnings multiple.

    Again, if I weren't already long the stock would I buy it today? Probably not. And don't get me wrong--I appreciate a good DCF analysis as much as the next guy. But comparing Chipotle to McDonalds is comparing apples to oranges, or perhaps even comparing apples to cauliflower!

    McDonalds is a mature, declining company. Chipotle is still growing like fungus--they posted comps in the MID-TEENS last year. That's literally unheard of in the history of the fast-casual dining segment. And it's the same argument over and over again--the P/E ratio. Guess what? If analysis were as simple as--MCD has a P/E of 20 and CMG, a "comparable" company, has a P/E of 40, obviously MCD is the better pick--then why would there even be a discussion? It's just's not that simple.

    Even more important than P/E is the PEG (P/E over Growth). You can sell high P/E stocks and buy low P/E stocks all day, good luck with that. I'm happy to pay 2X more for each dollar of earnings if I expect it to be supported by 2X the growth!

    (From Yahoo Finance:)
    P/E: 38.01
    Expected growth rate (next 5 years): 21.34% per annum. ((1) These are analyst estimates, so don't shoot the messenger. And (2) they posted 26.34% per annum over the last 5 years, so this would actually be a decline in growth.)

    P/E: 19.65 (sexy, huh?)
    Expected growth rate (next 5 years): 6.06% per annum. (Last 5 years was 3.76% annually so they're actually expecting things to improve).

    PEG Ratios:
    CMG: 1.78
    MCD: 3.24
    (Like P/E, a lower PEG indicates a less expensive stock)

    Granted these figures are dependent on analyst projections, and analysts aren't always right. But the same way that the P/E indicates CMG is "too expensive" compared to McDonalds, the PEG (a far more relevant/important ratio) indicates just the opposite. It's not just about the P/E--it's about the growth. Again, I probably wouldn't go long today at this valuation, but I personally believe you'd have to be crazy to bet against Chipotle the way they're growing.

    And as far as commodity price pressure--Chipotle has seen no dropoff in sales when they've raised prices. They don't want to raise prices, obviously, but that's certainly a tool available to them if input costs start to weigh too heavily on their margins. I'd love to see McDonalds try to raise their prices.........
    Apr 9, 2015. 08:50 PM | 2 Likes Like |Link to Comment
  • Chipotle: Strong Sell Recommendation [View article]
    So you've prognosticated a 60% collapse in CMG and AAPL going up......with literally zero support or evidence to support such claims.

    Thank you for adding zero value to anyone's life.
    Apr 9, 2015. 08:25 PM | 4 Likes Like |Link to Comment
  • BlackBerry: They Still Don't Know You [View article]
    Right--blame the shorts, blame the hedge funds. They don't invest their millions carefully--going long when they see opportunity and going short when they smell blood in the water--no, instead they waste their time and capital "controlling" the business superpowers of the world like BBRY.

    There are plenty of reasonable points to make for why you think BBRY stock should/will appreciate over the near- to medium-term. In fact, if you want to see this in action, read this article. There are some pretty decent points made.

    When you blame shorts and hedge funds, who are literally just trying to make money and taking the position they think will accomplish that goal, you just sound like a sourpuss baby.
    Apr 9, 2015. 04:02 PM | 5 Likes Like |Link to Comment