back to Lulu
OK, it's up over 20% in the past 2 days, and trading around $12.50, about 2/3 loss but better than a lot of specialty retailers who are down 75-85%. I'm not sure what's going on, it could be a short squeeze. There's an earnings release next Thurs Dec 11. I think we've seen this kind of movement before a Lulu earnings announce; buy on rumour, sell on news. Unfortunately, the selling has been quite pronounced after every good earnings report. And it's a high beta stock in a bear market! Just as I wrote for JNJ, how do we see the market going forward? Is this market going to grind down for a year or more? If so, we should get out of Lulu and (something else) and get into JNJ. If we see a bear market recovery, we should hang onto Lulu into Mar 2009; their next earnings report, and potentially a good xmas season.
posted by Junk Bonds @ 12/04/2008 01:34:00 PM
1 Comments:
This is where we need some good insider information! I keep saying we're due for a bounce, but it never materializes so I'll stop predicting one. I do think that nothing can stop this debt deflationary cycle once its in motion. We're going to go from one crisis to another. This may have started with housing but soon car loans, credit cards, and commercial real estate will hit the banks again. The layoffs are picking up steam and Canada is only a few months behind. I can see oil now going to $25/barrel, so maybe SLB should be the one to unload to buy back later. Can only hope the KGB pays off some operative to blow up a pipeline in Central Asia, to temporarily boost oil prices, so that our club can exit SLB with less of a loss!? Am I asking for too much? Russia desperately needs the oil revenue!:)
Getting back to LuLu, how much of their growth was suppose to come from the US market? My feeling is that their Cdn sales will hold up much better, given the rapid deterioration in the US economy.
I think we may have been wrong on GS. Their business model of mergers and LBOs with high leverage is dead. I would have been happier getting Buffet's deal of preferred shares with 10% yields! A reason to hold GS here is that I read "an analyst at J.P. Morgan Securities said the fourth quarter will prove to be "ugly" for Goldman". So there you have it. Some smart analyst at MS says that GS is going to report some bad earnings. Sounds like a 20% pop to me! But seriously, I thought we might get a short term bounce in financials with GS and Buffet leading the way. I now think the recovery for banks will be a long time coming.
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