CAKE

Goldman Sachs downgraded CAKE for the 2nd time this month. Earlier this month, they downgraded the entire upscale casual restraunt group. Today, they lowered their price target to $14. This sent the already beaten down stock down almost 8% to $10.80. It is now trading at 8 year lows.

I think the stock has been unfairly punished.

Oil is down big. It closed at less then $80 a barrel today (it was at $147 in July). Gas is getting cheaper and has dropped $.35 in the past 2 weeks- the fastest drop on record.

CAKE was punished as oil rose up in price. The market thought people could not afford to go out to eat as the price of gas was eating into their disposable income. CAKE has not seen any advance as the price of gas has come down. It has been discounted on the rise of oil/gas but has not been rewarded in the decline of oil/gas.

PE 11.48
Book Value per share $7.875 (Price/ Book Value 1.49)
Price/ Cash Flow 5.30

Currently I own shares at @ $24. OUCH

I think this could be a play over the next 2 months. Good for a $2-$3 pop.

Market Rally

+ 936 points.

-Biggest point gain in The Dow ever.
-Dow gain of 11%, 5th biggest ever.
-best rally since 1933.

This brings us back to where the market was Wednesday October 8.

Oh and GE was down.

Investment Clock

Time to buy growth stocks? If we've turned the corner from a economic slowdown to a recession the answer is yes.

Changes announced at work

Radical cost cutting measures have began at work.

Today, when I got my coffee, there was a sign on the coffee machine- "Effective October 21, there will be no more KCups". "We are going back to the old drip coffee". yummmm. One of the pleasures of work is the good coffee. Not anymore.

The hand soap dispensers have been ripped off all the break rooms so I can assume no more soap to wash our hands. I noticed this a few days ago and thought it was an angry employee. I don't think that's the case anymore.

Finally, we also learned that the company will no longer be putting oderizers in the bathrooms. I guess since the economy stinks, so will the employees.

Groundhog Day and more carnage

I feel like we are in the movie Ground Hog Day. Repeat performance of every other day this month. 6th straight triple digit loss in the DOW.


I left for lunch today with the market being down 50 points or so. I get back and it is down over 600 points. It closed down 679. I felt physically ill.

Highlights (or lowlights):
GM lost 31% to close at $4.76- the lowest level since 1950.
FAF down almost 8! 27% loss in one day.
LFG down 37% to close at $12.85

All my positions- destroyed.

My Etrade account has to be down over 50%.

The carnage-
EGLRX $14.36
JSVAX $10.80
HFCGX $8.47
IGLIX $12.42
CAKE $10.90
SHLD $67.31
FAF $21.52
RAD $.52!!!!
C $12.93 (and they gave up on their bid to Wachovia- Wells is taking it)


GE $19.06 (and they announce 3rd quarter earnings tomorrow)

I have not checked my 401k. I do not want to get sick.

I went to the track after work and ran myself into the ground.

At least I have my health

Global Rate Cut, Market Still Tumbles

As rumored, The Fed cut rates by .5%.

Also, in an unprecedented coordinated move, central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank also cut rates.

The market still closed down close to 200 points.

1600 points chopped off the past 6 days.

All of the talk in the media is of the market crisis. "Historic...unprecedented...First time ever..major recession". Such hyperbole.

Watch for a big market rally tomorrow. IBM announced earnings a week early tonight- they beat Wall Street's forecast by 4 cents.

Free Fall

Market continued to plunge dropping 508 points today after dropping 370 points yesterday.

Market closed at 9,447 and has dropped a little over 1400 points the last 5 days.

The S&P 500's 15 percent retreat since Sept. 30 is the third-steepest five-day drop on record.

So far this year, the S&P has tumbled 32 percent in the market's worst yearly slump since 1937.

``We've approached the edge of the cliff,'' Leon Cooperman, 65, who manages $6 billion at hedge fund Omega Advisors Inc., said at the Value Investing Congress in New York. ``Do we go over the cliff or begin to recede? History says we recede, but there's no guarantee. This is the most difficult financial environment I've lived through.''

There is hints that the FED may be cutting interest rates soon. The market ignored these hints as panic and selling continued.


In other news- had a good workout at the track. Ran 10 TEMPOs at 70-80%.

Bailout passes

Congress passed th $700 Billion bailout yesterday. Surprisingly, the market quickly dropped 450 points ending the day with a loss of 157.

Thank god this week is over.

The DOW opened this week at 11,431 and closed on Friday at 10,325. UGLY

C lost 18.44% (-$4.15) as Wells Fargo announced they are buying Wachovia thus bumping C's takeover attempt off the table.

Bottoms?

BBY - down 5% today. 52 week low of $34.40. In 2 plus years of watching this stock, I have never seen it this low. This is a well run, good company. PE of 10.8. Forward PE of 9.7.

I sold on 8/11 at $45.85. Its is down 25% since then.

Could the market be predicting a very poor Christmas thus severly pounding the stock?

This is a BUY. BTW- tmmrw is Ex Dividend date.


MOS- down 41.27% today! Closed at $39.65. This stock was $160 in June.

MOS makes fertilizer and credit concerns (especially in Latin America) along with a slow down in the global economy are crushing this stock.

MOS widely missed Wall Street expectations and an analyst downgraded the shares.

For the period ending Aug. 31, Mosaic earned $1.18 billion, or $2.65 per share on revenue of $4.32 billion. Analysts expected a higher profit of $2.94 per share on revenue of $4.11 billion.

PE of 8.5. Forward PE of 2.35!


AAPL- closed at $100.10. Down $9 today- about 8%.

Apple was trading in the $170's in August!

PE of 19.5. Forward PE of 16.85

Is this entering value play territory?

I will revist these in the future.

Market Update

Another disaster in the market. Dow down 348 (3.22%) to close at 10,482. S&P was down 4.03%. NASDAQ down 4.48%. The market is down or up triple digits everyday. Mostly down.

FAF got hammered- off 10% to close at $27.25 (down over $3).

GE got pounded also- off 9.5% to close at 5 1/2 yr low. GE sold $3 Billion worth of preferred stock to Warren Buffett on Wednesday at a price of $22.25 per share. Today, they announced a secondary offering of $9 billion worth of shares at a discounted price of $22.25 (same price given to Buffett yesterday). GE closed at $24.50 yesterday. The market quickly reacted to the secondary discounted offering bringing the shares down to close at $22.15. Way to go management! Way to think of the shareholders! horrible.


Congress votes tommorrow on the $700 Billion bailout bill tommorrow. It is expected to pass this time.


Some interesting quotes I read from Warren Buffett today describing the state of the economy:

"This really is an economic Pearl Harbor," Buffett said. "That sounds melodramatic, but I've never used that phrase before. And this really is one."

"In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now."

He's hoping for the Bailout to be passed tommorrow-

If Congress doesn't approve the bailout plan soon, then "I will have done some dumb things."


In good news, I closed a $4500 deal today at work. Loan Modification company.