Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (46100)	1/5/2012 8:32:42 AM
From: robert b furman	Respond to of 78740

Hi CB, There also is a huge bootleg copying business on their products. Bob

To: Spekulatius who wrote (46100)	1/5/2012 10:31:41 AM
From: Sergio H	Respond to of 78740

COH <I like to establish a consumer centric short based on my assumption that the reduction in savings rates that has fueled consumption despite stagnating income cannot continue. > Zach's has a similar view: <Coach sells products that are discretionary in nature. Its customers remain sensitive to macroeconomic factors including interest rate hikes, increases in fuel and energy costs, credit availability, unemployment levels and high household debt levels, which may negatively impact their discretionary spending, and in turn the company’s growth and profitability. Therefore, we remain concerned about erratic consumer behavior and sluggish recovery in the economy.> Opposing argument (brief): Its true that margins have declined, but they have been gaining market share. Secondly, COH is initiating a new product line aimed at the male market. coach.com

To: Spekulatius who wrote (46100)	1/5/2012 11:41:53 AM
From: Paul Senior	1 Recommendation Respond to of 78740

OT: COH. I remain long a few shares. Net profit margins holding up well. Relatively little d/e. As a premium clothing-related status symbol, company could be an acquisition target for the likes of LVMH or other high-end company. Not a concern if someone is long -- It's something though that always has to be kept in mind if shorting a stock, since acquirers sometimes base buys on presumed strategic value of a company, not just the targets's short-term outlook. As long as desire for product is there, I'll bet enough women will find a way to acquire it. Maybe it's less of something else, or less expensive something else (less expensive dresses/coats). With the splurge for the purse. ====== For a clothing short, I was going to suggest The Gap, GPS. That's down today though. I view Gap opposite from COH in terms of quality of merchandise: COH high quality, GAP poor quality. I shorted a few shares when they said they were closing many USA stores and opening up more in China. I don't see how that would necessarily give them improving profits. (For tax reason, I didn't want to carry the position over into 2012, so I bought back shares too early. I may reconsider re-shorting in about a month (to avoid USA tax wash-sale rule.)) Shorting COH could work as a trade to scalp a few points as market moves around and reports circulate on how consumers will stop or have stopped consuming. Longer-term though, I wonder. ----- From Jake Straw: COH mentioned: Message 27641468

To: Spekulatius who wrote (46100)	1/5/2012 1:40:51 PM
From: Jurgis Bekepuris	2 Recommendations Read Replies (1) \| Respond to of 78740

I don't short. But if I did, I'd short horrible businesses in terminal decline. Like EK. Or airlines anytime they persuade the public that they are doing well. Or newspapers. Or booksellers like BKS. Or Chinese RTOs ;). Or NOK and RIMM :P (I am long NOK ;)). IMHO, it's not a good risk/reward to short a vastly profitable, high-ROE, high-brand-name company just because it is overvalued. I understand that you also believe that it faces headwinds, so it's a bit like Einhorn's GMCR short. Still, COH (and GMCR) could just be bought out, taken private, etc. It also can find new outlets for their stores/products. It can establish new product lines on top of existing ones. So I'd say - no short. Obviously, if there is another 2009-confidence-crash-Chinese-meltdown, COH stock can fall a lot too. :)

To: Spekulatius who wrote (46100)	1/5/2012 8:14:33 PM
From: Shane M	Read Replies (2) \| Respond to of 78740

Clownbuck, I'm trying to learn to short right now, but it seems most shorts are very selective about catalysts and technicals- waiting for stock to show characteristics of "breaking down". I mention the technical perspective only because all of your bullets are more fundamental in nature and it seems shorts bring the supply/demand equation for a stock into play at some point when making a short decision - looking for stocks that are ready to "roll over". fwiw - and I certainly am still learning. good luck

To: Spekulatius who wrote (46100)	1/5/2012 9:59:59 PM
From: Mr.Gogo	Read Replies (2) \| Respond to of 78740

From what I learned from my short experience in shorting I have mostly been right about my thesis for the short, but very wrong with timing. From my bad experience of shorting Netflix at 240 I learned that you have to expect a clear event that would unleash the crush in price. Do not short the leader of an industry. People can be extremely optimistic and generous. The only shorts I have had success in are the ones I have followed James Chanos. I don't understand why you would go short at this moment when there are so many companies with low valuations which have a lot higher probability to double and triple. I can understand shorting only if you cannot find bargains.