my current thoughts are the same as they were a couple of weeks ago, and will likely be the same 2 weeks hence. i am still short (and bleeding) the same names i have always high-lighted. i don't use puts, as i don't make market-timing or event-based calls (as a general rule). the fact that Ann Taylor, Linens&Things and my other favorites earn a return on capital that is less than their cost of capital will not change (unless they get new management) and i will just patiently sit here short until they trade at tangible book, which they will at some point. i am very patient and boring, and if only one of my names gets kicked off the island every month (as opposed to the much more satisfying pace of 1 a week on the Survivor TV show) that's fine with me.
other faves on this board, stuff like Williams Sonoma, Best Buy, Bed Bath, Kohls, Panera, PF Changs I actually LIKE but I wouldn't touch the stocks today (long or short) with a ten-foot pole. i will likely never short them, as their capital returns vastly exceed their cost of capital, and i will buy these when they trade at 8-12x cash flow, and they will, they always do at some point. in the last two-three years i have bought exceptionally good, high return companies like Outback Steakhouse, Dollar Tree, Family Dollar, Pier 1, AutoZone, Children's Place, and Papa John's at these sort of prices (8-12x cash from operations, not to be confused with EBITDA, which is a pretend number), and made good money on all of them (am out of all except PZZA, which was a recent purchase around $26).
cheers |
