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Pastimes : KKD - Krispy Kreme -- Ignore unavailable to you. Want to Upgrade?

To: Tony C. who wrote (59)	5/31/2001 7:59:37 AM
From: GVTucker	Read Replies (2) \| Respond to of 214

Tony C, RE: When the P/E is 120 on a food stock, you can't expect it to go THAT much higher, and it has a long way to fall once the momentum traders abandon it (as they will as they do every stock when it stalls out after a meteoric rise). Bottom line, just because a stock is expensive doesn't mean that it can get really, really overvalued, and just because a stock is really, really overvalued doesn't mean it can't get downright absurd. As long as the fundamental story at KKD remains intact (and it still does remain intact), you have to depend to a certain degree upon luck to make money on a short sale. One big reason why KKD has continued to defy gravity over the past month is because the market in general has done so well. Add to that the fact that KKD reported its traditional better-than-expected earnings and you have a recipe for an absurdly priced stock. Make no mistake, KKD is absurdly priced. Most likely, 5 years from now the stock price won't be too different from today, and that is making the assumption that the company does all the right things. Consistently successful short selling requires two things--overvaluation and deteriorating fundmentals. One of those is still missing in KKD.

To: Tony C. who wrote (59)	5/31/2001 4:18:41 PM
From: Dom B.	Read Replies (1) \| Respond to of 214

"...I see KKD at 57 - 62 very soon..." If it's too obvious, it's obviously wrong...or so they say. Good luck shorting...hehehe.

To: Tony C. who wrote (59)	5/31/2001 10:09:24 PM
From: Jon Khymn	Respond to of 214

>>I'm one of those people who shorted this stock WAY too early, and I've lost a lot of $ and sleep over it in the past few months. << I know how it feels, when the stock runs the other way. For shorting, your upside risk is 'potentially' unlimited. I've learned three things from past shorting experience. 1. Not all POS stocks that run up 300% in 3 days will start to tank the next day. $3 penny stock could run to $9 in three days, and then could run to $50 in next two days. 2. Not all high P/E stocks will come down to earth very soon. Sorry to keep mentioning SBUX (BTW, I hate the taste of their coffee), but SBUX's past p/e has been between 60 to over 100 if my memory serves me right. 3. Never short more than 5% of total fund. If 5% of the total fund is not big enough to do any meaningful trade, then I'm not ready to do short sales. Tony, at least you should consider yourself lucky that you didn't short KKD last year at 30s, BEFORE split. I truly think KKD is not a good short material and I've been preaching this since the beginning of KREM's birth. For short term shorting at mid 70s might work for quick bucks but for long term? I wouldn't wrestle with this alligator, the RISK vs REWARD is just not there...