Jan 27, 2008

My favorite commercial of all time ......




Am I watching SBUX?

Of coarse I am.

Starbucks is the kind of company I dream of owning but never get to buy because of the valuation. The stock has almost been halfed in the last 2 years but I am still not buying shares. My guess is that Frapaccino's are susceptible to the laws of economics just like any other consumer discretionary item and as the recession plays out there will be more pessimism and a better opportunity to buy the stock.

Buy I will enjoy this commercial while I wait.

Jan 23, 2008

CIM – Final Thoughts

To get to this point I have written 4 long posts on CIM covering just about every aspect of this investment and company in great detail. I can probably summarize all this verbiage by simply saying that CIM represents a pool of capital that will be invested by some of the smartest minds in the business at a time where they will be one of the very few buyers in the market and should be able to produce above average returns on invested capital over a 3 to 5 year period.

At this point there is not much to CIM other than cash and the investments the company has made since going public 2 months ago. For this, investors buying the stock today have to pay more than $4 per share premium to book value or 1.3x book value.

While CIM certainly deserves to trade at a premium to book, I think many investors are overlooking the fact that CIM’s earnings are going to be very volatile and in this kind of market environment I believe the stock is going to move hard and fast around these data points.

I think CIM is going to be a long term winner and I will be adding it to the “Best Ideas” portfolio, however at current prices I am only willing to initiate a very small position in the stock.


* DISCLOSURE: I or accounts I manage may be long or short any and/or all stocks mentioned in this post. This is not a recommendation to buy or sell any security. For informational and educational purposes only.

Jan 7, 2008

Abscense from posting ........

I have not concluded my post on CIM as I left on vacation last week without writting out a few posts in advance. I don't plan on writting anything the rest of my vacation and will resume when I get back.

In the meantime here is an example of a fairly common occurance when dealing with small/micro cap stocks -- unrelated and uncommon businesses. Attached below is a business description for EEI, a stock I decided to not research further for a reason I don't remember and a company I looked at for a reason I can't now recall. The highlighted part made me chuckle.......

"Ecology and Environment, Inc., an environmental consulting firm, provides professional services worldwide. The company offers a range of environmental consulting services, including environmental planning, management, and regulatory compliance support. It provides engineering design, and operation and maintenance; environmental emergency management; and environmental sustainability. Ecology and Environment, Inc. offers environmental services encompassing audits and impact assessments, surveys, air and water quality management, environmental engineering, environmental infrastructure planning, and industrial hygiene and occupational health studies. ....................In addition, it produces tilapia fish for markets in the Middle East."

* DISCLOSURE: I or accounts I manage may be long or short any and/or all stocks mentioned in this post. This is not a recommendation to buy or sell any security. For informational and educational purposes only.