Cigar's broader appear has peaked?
Just wondering what you think of the Macro Economic
fads of cigars. Cigars become a fad during
"good times" as we've enjoyed the past few years in
Europe and North America. However, this fad is often
offset by a growing health conscious population. I
will not dispute the DD you have done, and the earnings
potential of this company. But consider that the stock
price erosion may have more to do with the eroding fad
of cigar smoking, then anything having to do with HVAR.
Now, it could be argued the Golf has enjoyed rising
popularity, and could be a fad as well. I do believe
however, that Golf is only suffering temporarially from
the SEA economic crisis. It's potential is far greater
as the population ages and lives longer and better from
better medical care, and needs a excersise diversion.
Not to mention the growth of Golf as a spectator sport.
Also consider that cigar's are becoming more mainstream
and cheaper ones are getting better. As cigerette taxes
keep raising the price, cigars are becoming closer in
cost as a nicotine/taste alternative for many consumers.
My neighborhood newstand just put in a large humidor
showcase with dozens of brands featured selling to the
same joe six packs who wait online to buy lottery tickets.
I don't believe that cigars will command the higher
margins and mystic that profit margins must maintain.
Could the current fall off HVAR's popularity also have
more to do with softening relations with Cuba, and the
growing possibility the economic sanctions could be
lifted, then flooding our markets with lot's of cheap
high quality Cuban cigars? Also, economies in South
America are under pressure, and their Cigar exports
may grow cheaper to raise foreign currency. All I'm
saying is that the stock is trying to tell you all
something by the way it has dropped, and does not
seem to move much despite recent press releases.
It's trying to say that this stock ideas appeal
may have come and gone, leaving you holding the
bag no matter how long term you profess to be.
Good luck with this investment. I truely hope
it meets your expectations, and when those earnings
come in, maybe I'll be back to buy in at a higher
price. |
