SubscribeCrocs - Riding the Rollercoaster
August 6, 2007
I am starting to think I am a Croc’s (CROX) hater or something. Actually, that is not at all true, I am only looking to assess the landscape to see if there is an opportunity to profit on the move of a stock. These days this is the one that has caught my eye with great interest. Many are not happy with me. That is okay. In fact, the more comments and replies that are linked to my rants, analysis and posts, the more I think that there are many shareholders whose engines are revving to high about this.
And for Pete’s sake, it is a stock, not a child or spouse or a parent. DO NOT FALL IN LOVE. That is one of the most important rules out there. Sure, I have been stubborn and negative on this through a nice rally. During that time, shorting into the peaks (as opposed to buying on the dips). The eventual covering has turned out to be generally profitable. Would a buy and hold have been MORE profitable?… YES YES YES.
But, I am still inclined to believe that this stock is running on fumes even with the tremendous quarter they just had. There is a great deal of “love and lust” that had been moving this stock recently. Just look at the real action of the shares after the earnings announcement.
As many predicted, the shares shot up after the earnings came out. If you look closely, the stock initially traded towards $62 that night. That was for a brief moment though. From there, Read more
CNBC Cheerleader Poll
August 6, 2007
This morning (Monday 8/6), three guests on CNBC, Farell, Santoli and Barbera talked openly about the credit markets and that the markets may go through a rapid adjustment of the credit markets and ultimately the equity markets. All the time, Joe Kernen was giving the contra view and continually injecting that the markets could move up. He was almost searching for a positive spin no matter what was said. Siss-Boom-Bah, Go Markets Go Markets Rah-Rah-Rah!
In the TDI Podcast 21, one of our guests told us that his firm has “outlawed” CNBC in the office.
My only other observation on this is one of regarding the morning comments on market futures. It seemed that as the futures were up ad moving higher, the pre-market morning host would give updates quite often. As they moved sharply lower throughout the morning, the updates were discussed less and less. Now, don’t let me sway you, tell us what you think….
How do you feel about CNBC? Are they reporting the news or market cheerleaders?
[poll=4]
Unrestrained Optimism - What could go wrong?
July 29, 2007
What could go wrong? That has been the question I have been trying to answer for some time now. The markets have been set up for a bull run and there has been nothing stopping it from going straight north, or is there?
In TDI Podcast 11, (May 27th) we looked at The TOP 10 MISTAKES made when investing. In that show, we explored how this was a key part of the investing process and discussed why they should be avoided at all cost. If nothing else, every once in a while we need to force ourselves to remember these 10 points. It is meant purely as a way to keep us grounded on the road towards successful investing.
Realize that very so often we have a confluence of occurrences that take the market by storm. It may occur in the stock market, but it can just as easily be the real estate markets or perhaps even the commodity markets. In fact, if we look back at the recent run up in the markets, we can see that the global concern over material shortages, coupled with the fact that liquidity entered the markets was a recipe for a swift rise. Add to that the idea that investors needed to find another opportunity after shying away from real estate investments and the stage was set.
Liquidity, did he say liquidity? Yes sir! The forces at play have been amazing. Corporations have been stockpiling cash over the past several years. This was due to profits rising and the cutting of expenses. With so much money sitting in cash (at the beginning of 2007, cash levels of the S&P was at 6.5% total market cap), companies were continuing to buy back their own stock at a blistering pace. Of course this has a significant effect on earnings (see post on buyback problem)
The dollar being weak helps as well. Foreign investment has been rising after all but dried up after 9/11. The increase had been prompted by the belief that investing in the US is safe and the fact that it is cheap. According to the NY Times article by Floyd Norris’s Off the Charts column on surge in foreign investment of US bonds and stocks; says US Treasury Department reported this week that foreign investors put $68.6 billion in American corporate bonds in May and $42.5 billion in American stocks; notes figures are largest ever for one month; says China, which has huge amounts of dollars to invest, has been growing investor in American corporate bonds, but has not yet shown much appetite for American stocks; holds Japan, which was heavy buyer of American stocks when prices were low in 2002, has become net seller of shares this years.
Is it any coincidence that the dollar (versus the Euro as an example) and the S&P 500 are positively correlated these days? Under most circumstances we may be able to put that aside and pay little attention to this. Yet, now is a bit different. I would go so far as to say that the Read more
Share Buybacks…Party Now - Hangover Later
July 24, 2007
How much bullshit are we supposed to take? What is going on with the media and with corporate America? First, we are shoveled a pile of fast-talking, brain-frying commentary from Jimbo “BooYaa” Cramer that it could even make a grown bull cry. Then we have television shows talking about finance like it was last night’s sporting event. They MUST think this is a game.
What happened to reporting? For years now, we have been watching the evolution of facts being mixed with opinion and a blurring of the two. Sure, blogs, podcasts and the ability to pay-your-way-to be-a journalist has fueled this phenomena, but we need to take a step back here and look at what is going on a broader scale.
As an example, for years I have been perplexed about the lack of reporting that has been given to the excessive amount of corporate buybacks. The mainstream media is all but silent on this subject. Here is the rub: As corporations continue to buyback their own company’s stock with an insatiable appetite, little has been said about the potential long-term effects. Since the act of buying stock will pull shares off the market, earnings per share will naturally (albeit artificially) increase.
To illustrate, Company ABC has 1 millions shares outstanding with $1 million profit. The EPS equation shows a simple division of Read more
Update - Don’t get caught with your Crocs Down
July 20, 2007
I have been monitoring the message boards, blog posts, news and any other source for information I can get on this company (CROX). For the most part, I have only come across emotional rants from people that love to wear the shoes. As an example, in response to an article on Blogging Stocks discussing the company, here is the comments:
It think your shoes are too tight!! I love Crocs. They have come out
with a new sheik wedge croc that is awesome. Get someone to resize
your shoes so your toes stop hurting and making write your croc of
Posted at 6:40PM on Jul 12th 2007 by debargie
Yes, they are hideous. Do not knock them until you try them.I wear my Crocs to aerobics class, sure beats my expensive athletic shoes. They do not fall off and I do not use the straps either.
Posted at 7:26PM on Jul 14th 2007 by laurie
There is a clear disconnect here. Maybe it is the fact that feet are the furthest part of the body from the brain. While they are comfortable, that is not a good enough reason to buy the stock. If it was, why not load up on Levitz Furniture, they make some of the most comfortable furniture. (Wait, didn’t they declare bankruptcy or?)
Anyway, the fact remains that Croc’s is an interesting fad and even if the fad lasts for some time, the stock is not one for the long haul. Just look once again at the recent action when the bulls are Read more
