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"GAAP-uccino" - David Einhorn's Full Short Green Mountain Coffee Presentation
For those who have been asking for it, even though it doesn't really say much that has not been said already many times before and is now just a question of beta and overall market timing, here is the full David Einhorn presentation on shorting GMCR: "GAAP-uchino."
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value investing ='s vulture create your own storm to short! LOL!!
a bottom feeder is a bottom fedder is a bottom feeder.
Maybe I'm reading it wrong but it seems that they don't take into account that once lower-cost private brand K-cups are available, it will broaden the market of people able to justify using them. The cost per cup is the primary barrier. Then you offer a cheaper brewer that you get better margin on instead of the same razor/razorblade model.
keurig anyone @ 52 cents a cup.....mmmmm mmmmm
Been shorting GMCR over and over for a few months now. :)
Hard to imagine there used to be a time when short sellers and "who me?" used to go hand in glove. No one will ever convince me that insofar as money is a morality tale shorting is stealing. Not that it doesn't make you a fortune. Just ask JFK's dad. When you adjust for inflation you could probably argue that index never recovered. Of course you'd be the poorer for it if you invested with such a thesis...even if it is true.
If you are talking about the Dow check out Dshort.com
He does alot on inflation adjustment and by his calcs it didn't recover until 1984 when adjusted for inflation. Stealth tax fo sho!
Good analysis. Couple thoughts on this;
1) I wonder how much robust valuation analysis is discounted by the herd mentality / correlated equities markets. I suspect GMCR is an exception as one of those breakout stocks.
2) GMCR is not AAPL. That is, they are not really breaking new ground with new products. In the end, it's still about drinking cups of joe. Pushing innovation is the antidote to substitutability, which is how AAPL has left everyone in the dust. You don't do that with coffee - you just segment the market between drip-made, Keurig single-shots, espresso, etc.
3) The cash flow insights are key. "Reinvesting" in future successes works until it doesn't. And then you find out what the real, intrinsic value of the business and its ingenuity really is.
My two cents. Great company, but this analysis handicaps it by reality pretty well.
This company's misunderstood. That "mysterious" CapEx is funding the construction of a remote lair beneath an active volcano, from which a well-caffeinated army of half-man/half-fish creatures will emerge and enslave us all.
Bullish. Go long.
More hash and rehash...this company is expert in accounting...It is now a fully loaded short squezze. With everyone in the pile.....be careful and wait for one more hype short squezze to be your clue to sell short...that 20 point down move....took all the gravy off the table..
I once owned GMCR.
I sold it all for a nice double. Thought I did great!
If I had held? It would have been an 80-bagger. I shit you not.
My life would be very different today. Oh, well.
I still can't believe the stock shot up like it did. Everytime I see somebody drinking GMCR coffee, or see a Keurig commercial on TV, I cringe and feel a bit of sorrow.
Now? I hope it crashes to penny-stock land.
That was one of the very few stocks Robot Trader was pushing long ago that actually would have given you a nice return.. oh well
Interesting.
It seems a lot of these momentum stocks are incapable of generating meaningful amounts of free cash flow, yet the market is happy to pay P/Es of 50 and more for them.
It's incredible that a company with this "pedigree" can keep up the show!!! Just shows how pathetic the general investing public is.
What pisses me off is a company that was found to use questionable accounting tactics has been rewarded with a 300% gain in its stock snce last year.
Now the banks are openly using tricks to blow out earnings and go up 9%.
Can someone please figure out what the hell is going on with Orsus Excelent Technology. The owners of the company in China have no clue as to why the stock of the company seems to swing 70% or more on a weekly basis.
My guess is the stock has become an algo capital holding vehicle.
Went massively long 10 minutes ago for a day trade. Will close at EOD no matter what. EUR was starting to strenghen again, proably another rumor due any minute, took my own advice and went very very long for today only. We'll see how the stars align tomorrow.
Thesis: ALGO's will now uptick every fucking bid and shorts will continue to cream their pants.
I always steer clear of "valuation" shorts. They always seem to be a recommendation to short a popular momentum stock, and the momentum traders can drive these thing through the roof before reality sets in.
That said, I think the anaylsis is spot on! But it is still a dangerous short.
Do you really think Joe and Mary America will be able to afford a new Kerig when they move to a new K-cup? During a depression and hyper inflation? Short this pig!
I absolutely hate scribd. Can someone just post a link to the frigging pdf?
trading near a 100x earnings should scare anyone. This thing hit the ceiling at $113 this time.
Feels like time for a cup of coffee.