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.

Non-Tech : RAINFOREST CAFE -- Ignore unavailable to you. Want to Upgrade?

To: megazoo who wrote (3641)	12/19/1997 11:58:00 PM
From: Marshall Teitelbaum	Respond to of 4704

SXB, Lots of questions, but no really great answers. The key is that they fundamentally continue to be quite strong. Issues to keep in mind other than general market conditions are what new openings are to happen, and will the expected ones happen in a timely manner(the biggie is the next disney opening for april-may). They are not totally domestic though, given mexico and uk, with upcoming canada and branching into asia gradually. There are many ways to guess what could happen, as their retail could start to get big as the name catches on, and they could also get more people going in to theme type restaurants if they aren't as willing to spend on weekend vacations, etc. However, they could also have a drop if people decide to stop spending on superfluous things such as going out to dinner and tee-shirts(is this possible, Dennis???). The multiple means little right now, but continued openings and increasing growth do. I would continue to follow the market closely along with RAIN's situation, as things like announcement during this year could affect my stance on them...ie openings, a coo, etc. How's that for an answer which doesn't really give an answer...guess decisions have to be what allow you to sleep well, especially in such a volatile market. Take care, Marshall

To: megazoo who wrote (3641)	12/21/1997 12:28:00 PM
From: Dennis Vail	Read Replies (3) \| Respond to of 4704

Hi SXB, Welcome to the thread !! You pose some very thoughtful questions. While I don't claim to have any answers that's never stopped me from expressing my opinions before so........... 1) During a severe bear market in general small and mid caps will suffer more than largecaps. Growth companies will suffer more than 'value' companies. RAIN's a mid-cap growth issue......... 2) After the bear market runs its course mid-cap growth companies will resume trading at a significantly higher multiple to earnings than 'value' (low growth) companies based on their perceived rate of earnings growth of the ensuing 3-5 years and the historic consistancy and predictability of the earnings growth . So if RAIN's earnings growth stays on track during the bear market then those long-term holders who kept the faith throughout will end up seeing just as much appeciation as if there were no bear market. 3) What causes the bear market will deteremine how RAIN's earnings ( as well as all other companies earnings) are effected. If it's inflation driven by increasing wage pressure then I suspect RAIN will do just fine. Wages go up. Food prices go up. Menu prices go up. We continue to import our retail goods from China where prices are going down due to overproduction. Families stay as busy and as strapped for time as ever. Business at RAIN should remain very good as it will continue to be a great deal in terms of what you get (dining/entertainment for the time/money you pay. And time value is just as big of a facor as money value. At RAIN you entertain the kids, yourself and get a great meal all at the same time and without going out of the way of the movie and shopping you also want to do. hence RAIN has a high time value) Earning stay on track or may be ahead of track long-term 4) However the potentially nastier and more likely cause of a bear market would be deflation pressure leading to a major depression. Briefly stated the Asian countries will have to dump all the goods they've overproduced and are continuing to overproduce at increasingly lower prices as they compete with one another over the decreasing buying power of the area. They then do the same in importing goods to the world and particularly the US since we still have the healthy buying bucks. Off course first our exporting compnaies get their earnings pinched then domestic companies are forced to lower prices where there is competetion from the increasingly desperate Asian exporters. Finally with the unemployment so high US companies are continued to be pressured to raise workers wages and their profit margins are now getting squeezed from both ends while the government is increasingly caving in to corporatepressure to enact protectionist measures........This could be the scenario towards the end of 1998 and its similar in nature to what caused the Great Depression. Of course increasing political instabiklity in Asia w3ill not help matters. If that takes place then its time for all of us to take a defensive position. So if you're still in the stock market at that time stick your head between your legs........... 5) However if it doesn't reach catastrophic proportions but only lowers corporate profits say until the immigration laws are changed, etc. So maybe we have a hard last year and a half of the millenium until the world economy gets back in sync. In this case I think RAIN will emerge stronger and with a bigger market share than before. What will happen is that the weaker restaurant and eatertainment companies ( both financially and in terms of the quality and niche occupied) will go belly up leaving a lot fewer companies to service the same size market. I think RAIN has the balance sheet, the concept, the food, the locations, etc to be one of the last restaurants standing if it comes to that. I would like to see an experienced COO/President named and I expect that to happen by the time earnings are announced. I and I expect many others will be shocked and disappointed if one isn't named by then. Happy Solstice, Dernnis

To: megazoo who wrote (3641)	12/27/1997 11:35:00 PM
From: Roger Nelson	Read Replies (2) \| Respond to of 4704

Folks, I'm a new poster to the Rain Thread, but here is my impression of the Cafe after visiting it in Orlando tonight (about a hour ago). Nice atmosphere and very busy as I expected. The Retail Department was not very busy. A lot of people touching, but few buying. Spoke to a manager and she said they would normally have about 8 people working in the retail section to keep everything going along with 3 managers. Tonight they only had 5 workers and 3 managers. The waiting time was adequate for us, since we were only a couple -- 40 mins or so. However we heard some larger crowd being told that the wait would be 3 hours 10 mins. Quite long, but that can be worked into peoples' schedules as they shop. Facts that the waitress told us! (It may not be that accurate, but I will try to remember) Approximately 50 servers per shift (100 total) Many others serving as bus boys, bartenders, and such. It added up to 96 people, but she summed it up to something like 108 people when she totalled it. I did not get a count on the food preparers. We noticed that the capacity was posted at 575 inside the restaurant, but our waitress said that they serve over 5000 meals a day. That's something like 9 turns at each chair/day. The tables were empty for about 9 mins, between customers (could be faster). In all a very efficient system for keeping track of the open seats. Touch screens for the employees with a timer on each table in use. They can give you a very accurate approximation on waiting times, because of this excellent system. If someone has posted a better break down in the past, I would appreciate the link, since I am on vacation and don't plan to read all the old posts. I would like to do more research later, so if I am helping -- then send me a response so I can ask more intelligent questions. I do not feel that they can miss there earnings as long as they can keep the 5000 meals a day, but the slow retail does concern me a little. Good Investing, Roger