This page has been archived and commenting is disabled.
When Chasing The Tape - Please Mind The Lemmings
Submitted by David Stockman via Contra Corner blog,
Prior to today’s open MarketWatch provided a reminder that the lemmings are still rampaging in the casino. With respect to Tiffany’s (TIF) pre-market earnings announcement, it telegraphed the reason why TIF soared by 12% or about $1.5 billion during the course of the trading day:
Tiffany & Co.’s stock climbed 3.5% in premarket trade Wednesday, after the luxury jewelry retailer reported better-than-expected fiscal first-quarter profit and sales, and provided an upbeat earnings outlook for the year.
Well, not exactly. Worldwide sales fell by 5% from $1.01 billion in the April quarter last year to $962 million during the current the quarter. Same store sales dropped even more—-by 7%.
Likewise, net income of $105 million represented a 17% plunge from last year’s $126 million. Not surprisingly, however, this was greeted as rip-roaring good news because the street “consensus” had marked down expected earnings to just $91 million or by 27% from last year’s QI level.
As for the “upbeat” earnings guidance, it amounted to this:
For the full fiscal year, Tiffany said it expects “minimal growth” in earnings per share from the $4.20 earned in fiscal 2014….
Apparently, flat is the new “upbeat”, but even then TIF didn’t actually earn $4.20 in the year ending in January. That’s the ex-items fiction that they use in the casino. TIF actually earned $3.73 per share last year.
So at today’s close of $94.50 the company was actually trading at 25X a net income number that management itself attested will be dead in the water this year; and which is at serious risk of shortfall because TIF is starting 2015 deep in the hole based on these crummy Q1 results.
Actually, upon today’s announcement Tiffany’s LTM net income computes out to $463 million. That happens to be the exact same number as the $464 million it posted for the LTM period ending way back in September 2013.
In short, TIF’s earnings have been dead in the water for several years now, but that’s not the half of it. Tiffany is the very embodiment of a piggyback rider on the worldwide financial bubble fueled by the central banks.
Its earnings have already stalled out due to the crackdown on luxuries in China, but that’s just the tip of the diamond. The real crackdown will come when the third great financial bubble of this century finally bursts and the top 5% ratchet back sharply on their luxury jewelry purchases as they did in 2000-2001 and 2008-2009.
At that point sales will plummet by double digits and TIF will be lucky to earn $2 per share. So the lemmings had a profitable day in the casino. Yes they did—–chasing a stock sitting at the very apex of the global luxury bubble to a valuation that would amount to 50X what the company might actually bring to the bottom line in the post-bubble world ahead.
But don’t say the lemmings are totally undiscriminating. Stampeding in the opposite direction, they marked down the stock of Shake Shack (SHAK) today by fully14%. This happened upon the news that its $50 million per unit hot dog and hamburger stands might not be suitable as “Chicken Shacks”.
But in taking down SHAK’s market cap from $3.0 to $2.7 billion, its not as if the casino experienced an outbreak of old-fashioned price discovery. The stock closed for the day trading at a round 1,333X its $2 million of earnings recorded for the year just ended.
More importantly, the broad market made another chop upward on extremely thin volume and completely phony news about Greece. Accordingly, with each passing session the casino is getting more dangerous, but the lemmings have no clue and the narrative gets ever more specious.
So today the NASDAQ made a new all-time high, and the S&P 500 returned to its nose bleed valuation of 21X reported earnings. Indeed, how else would you describe a PE multiple on earnings that are already down 13% from last year, and which have a long way yet to plunge as the global deflation/recession gathers force.
Needless to say, the Fed’s liquidity saturated casino is not on the level, not in the slightest. Today you had to be gulping down nearly toxic doses of Kool-Aid to believe that Tiffany’s earnings bore any resemblance whatsoever to “upbeat”.
But, then, still another market rip was just a further reminder that the casino remains crowded with rampaging lemmings, and that the dip buyers will keep hitting the “offer” until Wall Street’s fast money gamblers have nothing left to sell.
»
- 17696 reads
- Printer-friendly version
- Send to friend
- advertisements -
How do you seriously deal with fucking idiots who are wringing the dish cloth looking for the least bit of water - that very very last possible drop?
Take a look at trannies...they are down 10% on the year while all other indices have made new highs. SO, either the trannies are bottoming and we are about to scream higher bc Greece doesn't matter and gold hits sub $1000 OR its going to be a very rough summer for equity bulls. Calling tops is like banging a hooker without a condom - it usually doesn't work out but sometimes you get lucky!
Take the short position today and profit tomorrow.
I thought I was choking on a chicken bone when the BDX gains yesterday were reported as upbeat. The fucking BDX is so far down the hole, a few tick,"dead rat bounce", would look like a tidal wave on some charts. LMFAO
Deflation is nonsense at a consumer level; if the entire thing folds, the currency fold as well and the wheel-barrow becomes worth more than the currency it is filled with. That is hypersonic-inflation.
wait a minute, this just in on cnbc homepage today:
"History shows investors should buy even more Chinese shares trading on U.S. exchanges after big selloffs such as this one".
Oh my... It surprises me not that the leopard, incapable of changing it's spots, occupying valuable spectrum yet useful as nipples on a boar hog, remains "Bubblevision" to this day. I got over the sheer numbness of nonsense from them sometime back, yet I gather a laugh or two when entering my Scottrade branch to see them on the Big Screen. It makes me want to grit my fingernails on their nice glass door, but I digress.
CNBC - Chinese Nation Being Communists
I'm sure a few other acronym authors can better that. :)
There's at least one wind turbine manufacturer who turned me off to Chinese stocks as a whole. The middle finger of enlightenment was spared and I've licked my wounds and gone on. Frankly, the settlement was extremely wimpy, but my tax man has that figured out nevertheless.
''
'
I thought yee was shitting me, but nope!
Ripped from the Onion, I would have said…
China stocks crash, now what? Buyhttp://www.cnbc.com/id/102714182
•?•
V-V
Trannies making a 7 month low here are pointing to 8000, down 4% more, or worse, to a 13 month bear market lower low way downhill at 7500, and the broad indices will be hopping aboard for the ride down:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=djta&insttype=&freq=1&show=&time=9
I've been saying this market is going to crash too. Hasn't worked out very well. Betting against the guys who print the money and control the money supply is never a great idea. Just ask Kyle Bass how that Japan trade is working out.
It shall.. Be patient, Grasshopper.
It is but a matter of WHEN. Your gut instinct serves you well. No reason to second-guess what ain't broke. My gut instinct serves my large gut and I see the obvious too.
There will be that point where the money printing cannot serve the companies who thrive off it. Then the Market will rebel in a huge way and the Government, always too late to do the right things because the $$ speaks too loudly, finally wisens up and takes away the punch bowl.
Japan is a basket case of it's own. Cracks have been showing on that egg for a long time, but it too shall cave in and pretty much the same reasoning applies.
The question going forth will be "but those precious derivatives! Say it isn't so!!" yet there is no real means all that paper garbage won't suffer at the minimum, a massive haircut. The numbers are so extremely against that being made whole again. At this point, I reluctantly agree with Bill Holter of JSMineset fame among his latest posts that there won't be a Debt Jubilee. Those with the Phyzz and can hang on past the revaluation will be in the driver's seat, provided Congress doesn't put in another "holding tax" (read UNCONSTITUTIONAL into this, yet JFK himself allowed this nonsense) on PM's.
China = world's largest lemming population, and fully characteristic of that mentality
America = world's largest lemming population, and fully characteristic of that mentality
Holland= all the lemmings live below sea level
The breakout has already been confirmed today.
Should I circle it? I think it is quite obvious.
2200+ is now a given.
You think today's trading is confirmation we move higher on this wedge, even with money flow and volume decreasing throughout this wedge's pattern?
So now ameritrade charts posted on 4chan are "quite obvious" indicators of what markets will do tomorrow. This is like the 21st century shoe shine boy.
Higher highs or new highs on lower volume is NOT a good sign. Nor thw wedge that has developed on S&P & DJIA on lower volumes. In both caes those are usually a sign of a TOPPING market. But then, I guess thats it is different this tme so none of that means shit, eh? I mean just look at how Wednesday erased Tuesday. Now THAT was a sure sign of more new highs, eh? Check volume Tuesday vs Wed. Good luck dood.
While another new high in the Dow cqan not be ruled out (a close below 17600 will do that) the odds seem unlikely at this juncture...
http://www.globaldeflationnews.com/dow-jones-industrial-averageelliott-w...
Repost that chart with x-axis volume, please. Without the volume it is like reading a map without the key.