Peter Lynch popularized the idea if using observations as a consumer for investment ideas. I find it works for me as a contrarian indicator.
If I find a restaurant I like, they generally close down within a few months. Restaurants where I find the atmosphere noisy and annoying and the food bland and unremarkable have lines out the door and stocks making new highs.
Take Panera Bread (PNRA) Or Olive Garden (Darden Restaurants,DRI). I hate those places, but they are packed with customers and both companies report no drop off in business even with the often forcasted drop in consumer spending. Both stocks have been weak lately, along with the market averages.
Do your own due dilligence. Restaurants are never a buy and hold investment. They must be monitored for continued healthy earnings and same store sales numbers.
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Comments: 16
During the Katrina fuel spike, he sold the top the day a customer came in and said, "Next week, gas will be $5 a gallon." It wasn't. It fell from there.
He bought HANS @ $20 because he stocks the cold drink slots and Monster Energy outsold other energy drinks by a handy margin. 1000% the kid got in that one.
So, hey, if you can do it... bank on it!
I am seeing a short opportunity here.
I am waiting for next week before I start holding anything overnight, but its on my watch list.
Long term, there is a lot of room for this company to grow. May not matter much until the market stops taking a dump tho...
The kid says HANS will blow out earnings and raise guidance. This on the back of the Bud distribution deal and the expansion into Mexico with the Cadbury-Schweppes deal. He's planning to sell half his position when it reaches 100 again.
Seems awful optomistic to me... but then I have to remember I was one of the guys thinking that when it traded at 50 for the first time!
The recent split has increased the supply of stock to a point that I do not believe the upward momentym can be sustained, no matter what the fundamentals are.
Of course I may be totally wrong here (as I was on the restraurant thesis that began this thread).
The problem is that often companies are able to hide shortfalls--they can take a charge on this or that, or change their "own this building" to a "rental' or flat out like and move earnings like fannie mae was doing. So using your "nose" to notice things won't always work. Doesn't mean that I don't keep my eyes opened, but it isn't always a great indicator.
As for HANS, it looks to me like a short if it would pull up here just a bit to provide an opportunity to get in. Time is probably almost right, but I'd wait for it to level off after the last two days of dumping.
I made some change shorting HANS last week, and closed my poistion on Friday.
Depending on how the market and the stock behave, I will be looking for an entry point today or tomarrow to take a new short position. There has not been a high volume sell off in this stock, so I would not call it broken yet. It does not have the strength to buck the market trend, so I would not go long anticipating a bounce.
Since
(I don't own any position in HD, it was just a comment on the state of personal observation. Most of my plays the last year...make that 2 years have been energy related.)
My stategies tend to be trend following, so what was working for me last year and earlier this year won't work now.
Another trend: Avoid the sox!
I agree that the semis are not the place to be, and the carnage in that group is not over yet. I like the medical area, and I have som UNH and GENZ. I have been looking at AZN, but since I missed the reversal last week I want to wait for a pull back.
I also like the gaming (casino, not electronic) group, but they have not held up so great so far in this downtrend. I a few gaming names on my watch list.