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sancho panza

The Big Short Thread

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Hi all

SP, saw you commenting on another thread about short of itv.

I would be very very careful of shorting itv right now. There are very few large audience ad slots that everyone watches anymore, and the world cup will have given several. Advertisers now pay a lot more than normal for those fleeting opportunities to advertise to the whole nation in 1 spot, so expect they will have done very well this summer. 

Domino's looks bubbly from the chart, but when recession and spending squeezes hit, people trade down from restaurants to pizza at home. They are also the strongest brand for online ordering, with by far the strongest brand in at home pizza and some strong TV sponsorships... Shorting that stock when the bubble doesn't look broken yet would be very dangerous. 

 

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16 hours ago, ForeverBlowingBubbles said:

Hi all

SP, saw you commenting on another thread about short of itv.

I would be very very careful of shorting itv right now. There are very few large audience ad slots that everyone watches anymore, and the world cup will have given several. Advertisers now pay a lot more than normal for those fleeting opportunities to advertise to the whole nation in 1 spot, so expect they will have done very well this summer. 

Domino's looks bubbly from the chart, but when recession and spending squeezes hit, people trade down from restaurants to pizza at home. They are also the strongest brand for online ordering, with by far the strongest brand in at home pizza and some strong TV sponsorships... Shorting that stock when the bubble doesn't look broken yet would be very dangerous. 

 

ref ITV,it's the chart I'm shorting.It's also a business in an inudstry that's facing structural decline.This is a two year punt for me-on and off.I'm not emotional,if it moves against me,it gets shut down.Also,it's part of a wide shorting strategy and going to be one of many.

I look at my own TV usage and my wifes and the people we know.Increasingly people are streaming TV.SKY/Amazon/etc.I haven't sat through a normal TV show in years,let alone the adverts.

Ref dominoes,I'm not short yet as the chart hasn't rolled over.Like you, I need to see what looks like the top behind me in the rear view.You can always be wrong but I look at Reckit(where I also have a short posn) and I think it's decade peak is in.As for the home ordering etc,it's the overvaluation I'm targetting not theri revenue.

Shorting is hard work but my first short of the campaign got stopped out this mroning for a decent 50 point plug (BDEV) but I ddin't have much on as I'm warming up.

As I was saying to barnsey the other day.I think the big smack up bust will be next year.There are a few punts I'm liking the look of but only some of the early warning stocks are flagging danger,the wider market is still getting bought.

 

As ever, DYOR.Just my views.

Edited by sancho panza

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4 hours ago, sancho panza said:

ref ITV,it's the chart I'm shorting.It's also a business in an inudstry that's facing structural decline.This is a two year punt for me-on and off.I'm not emotional,if it moves against me,it gets shut down.Also,it's part of a wide shorting strategy and going to be one of many.

I look at my own TV usage and my wifes and the people we know.Increasingly people are streaming TV.SKY/Amazon/etc.I haven't sat through a normal TV show in years,let alone the adverts.

Ref dominoes,I'm not short yet as the chart hasn't rolled over.Like you, I need to see what looks like the top behind me in the rear view.You can always be wrong but I look at Reckit(where I also have a short posn) and I think it's decade peak is in.As for the home ordering etc,it's the overvaluation I'm targetting not theri revenue.

Shorting is hard work but my first short of the campaign got stopped out this mroning for a decent 50 point plug (BDEV) but I ddin't have much on as I'm warming up.

As I was saying to barnsey the other day.I think the big smack up bust will be next year.There are a few punts I'm liking the look of but only some of the early warning stocks are flagging danger,the wider market is still getting bought.

 

As ever, DYOR.Just my views.

Next year seems a long way off, do you think we'll revisit the early 2018 highs for the Dow and S&P. There is the QT and rate hikes that must start having a downward effect soon, especially when QT is 50Bill a month in October

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3 hours ago, sancho panza said:

Worth adding that 4 of my other 5 open posns are losing at the mo,so guru I am not.

 

Probably caught out by firms bust on paper, borrowing money to do share buy backs to stop a declining share price!

The madness must end one day.

 

Edited by Democorruptcy

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4 hours ago, Talking Monkey said:

Next year seems a long way off, do you think we'll revisit the early 2018 highs for the Dow and S&P. There is the QT and rate hikes that must start having a downward effect soon, especially when QT is 50Bill a month in October

Personally,I think the tops are in BUT and it's a big BUT, I reserve the right to be wrong.Especially with the price weighted nature of the Dow,you're playing with fire making a definitve index trade on it.I don't do that at the minute.

S&P is a different beast as it's market cap weighted.However my rule of thumb is that the more times a resistance level gets tested,the less likely it is to be broken.So far in 2018 there have been four attempts at the 2800 level.....DYOR just my view...like I said though,I don't trade the indices

In terms of the stocks I'm short,I believe 100% the tops are in.but then I would say that wouldn't I:ph34r:?

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3 hours ago, Democorruptcy said:

Probably caught out by firms bust on paper, borrowing money to do share buy backs to stop a declining share price!

The madness must end one day.

 

I shoudl really check that given the RM figures No Duff quoted.They are ITV,Reckitt,Travis Perkins and a second Taylor Wimpey punt.Only Reckitt is getting pummelled.The others are by a nose.

 

Trust me,I'm waiting for Rightmove   .........:Old:

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12 hours ago, sancho panza said:

ref ITV,it's the chart I'm shorting.It's also a business in an inudstry that's facing structural decline.This is a two year punt for me-on and off.I'm not emotional,if it moves against me,it gets shut down.Also,it's part of a wide shorting strategy and going to be one of many.

I look at my own TV usage and my wifes and the people we know.Increasingly people are streaming TV.SKY/Amazon/etc.I haven't sat through a normal TV show in years,let alone the adverts.

Ref dominoes,I'm not short yet as the chart hasn't rolled over.Like you, I need to see what looks like the top behind me in the rear view.You can always be wrong but I look at Reckit(where I also have a short posn) and I think it's decade peak is in.As for the home ordering etc,it's the overvaluation I'm targetting not theri revenue.

Shorting is hard work but my first short of the campaign got stopped out this mroning for a decent 50 point plug (BDEV) but I ddin't have much on as I'm warming up.

As I was saying to barnsey the other day.I think the big smack up bust will be next year.There are a few punts I'm liking the look of but only some of the early warning stocks are flagging danger,the wider market is still getting bought.

 

As ever, DYOR.Just my views.

Completely agree regarding the structural decline of traditional TV advertising. I myself don't consume non time-shifted TV, other than the odd bit of sport. Mostly netflix and YouTube. My thought was purely based on current quarter itv revenue surprising to the upside, because of the success of the England team, and a few enormous revenue ad spots this will have added for them

As you say, domino's hasn't rolled over yet and it does look over valued on pe. It's being valued as a tech stock, and the pe is around that of just eat. It does have an interesting business model - franchise business, royalty on all sales but no real estate (that's for the franchisee to worry about), owning the strongest .com destination for pizza, franchisees buy ingredients from them, potential to innovate on delivery tech due to global scale (almost no other high street pizza place can do this, and so for the smaller players, their reliance on deliveroo and just eat for online scale and delivery innovation will drag their profitability as commission increases)... Its certainly richly valued on pe for an older business. Doubled revenue and earnings over last 5 years, but growing much more slowly than just eat. 

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On 04/07/2018 at 14:17, InLikeFlynn said:

Tesla seems to defy all rules of logic. I don't doubt for one minute that the future is electric vehicles, however I can't make the numbers add up for Tesla.  Some people think the Elon Musk is the new Messiah, however the same was said of Fred "the shred" Goodwin (probably...).

Shorts were piled up on Tesla a few years ago - 2013/14, maybe a little earlier. It was quite public and probably heavy losses on those as the share rocketed up (helped in ho small measure by the shorts being forced to close). Hence there's probably still some nervousness on the sell side. Quite understandable really because whatever his faults Musk has launched a dealership operation like no other against all the other car manufacturer's and unions in the US and managed to drag the rest  of the market almost single handedly into taking all electric seriously and on the hop in terms of developing competing product. What he's struggled with with setting up huge scale manufacturing, something the big car manufacturers have done over decades. Risk is he could pull another rabbit out of the hat. I believe he could. Look at the profession in cars, he's on record that he basically wants to kill the rest of the car market. You have Model S, X class, now model 3. What if he came out with a  super cheap runaround design, acted as main source for drive components/tech/, created/marketed a sub brand and just licensed that to manufacturers/subcontract it all over the world. Think Smart - Mercedes Benz type situation. Could call it the Model T :D. He's got lots of options if plan A is suffering a bit, the power wall tech could if batteries get cheap enough could come into play as well - sunny countries, zero running costs. For all his failings he's a visionary and there's much safer companies to bet against.

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3 hours ago, ForeverBlowingBubbles said:

Completely agree regarding the structural decline of traditional TV advertising. I myself don't consume non time-shifted TV, other than the odd bit of sport. Mostly netflix and YouTube. My thought was purely based on current quarter itv revenue surprising to the upside, because of the success of the England team, and a few enormous revenue ad spots this will have added for them

As you say, domino's hasn't rolled over yet and it does look over valued on pe. It's being valued as a tech stock, and the pe is around that of just eat. It does have an interesting business model - franchise business, royalty on all sales but no real estate (that's for the franchisee to worry about), owning the strongest .com destination for pizza, franchisees buy ingredients from them, potential to innovate on delivery tech due to global scale (almost no other high street pizza place can do this, and so for the smaller players, their reliance on deliveroo and just eat for online scale and delivery innovation will drag their profitability as commission increases)... Its certainly richly valued on pe for an older business. Doubled revenue and earnings over last 5 years, but growing much more slowly than just eat. 

Domino’s prices are insane if you don’t have a voucher. £20 for a pizza? Crazy. I’d expect them to be hurt in a downturn by the fact that the local pizza joint at half the price is on Just Eat.

Anyhow as a longer term investment I’d personally rather buy DP Eurasia (they have the Domino’s licence in Turkey, Georgia and Russia).

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On 23/06/2018 at 23:07, sancho panza said:

It's the timing that makes it hard re Tesla,it's hard to discertain the roll over point

Nice idea on Starbucks

1) Mundane product-easily replicated-tick

2) saturated market for said mundane product-tick

3) stocks got a bubble like quality to it's chart-tick

image.png.cca8d5c51b7f5e8fb8befd1b285f012d.png

 

7 hours ago, ForeverBlowingBubbles said:

Completely agree regarding the structural decline of traditional TV advertising. I myself don't consume non time-shifted TV, other than the odd bit of sport. Mostly netflix and YouTube. My thought was purely based on current quarter itv revenue surprising to the upside, because of the success of the England team, and a few enormous revenue ad spots this will have added for them

As you say, domino's hasn't rolled over yet and it does look over valued on pe. It's being valued as a tech stock, and the pe is around that of just eat. It does have an interesting business model - franchise business, royalty on all sales but no real estate (that's for the franchisee to worry about), owning the strongest .com destination for pizza, franchisees buy ingredients from them, potential to innovate on delivery tech due to global scale (almost no other high street pizza place can do this, and so for the smaller players, their reliance on deliveroo and just eat for online scale and delivery innovation will drag their profitability as commission increases)... Its certainly richly valued on pe for an older business. Doubled revenue and earnings over last 5 years, but growing much more slowly than just eat. 

Can I refer you to a post from the first page which sets out my philosophy.Our discussion has made me realise there's two main themes to my short work 1) as per starbucks 2) is an industry in structural decline.

 

Dominos is a Starbucks type trade to me.Competitors will eat them alive in a price war as their price competitiveness will be set by the capital base of their frnachisees.These franchise models haven't really been tested in a downturn.A local kebab shop owner looked a t Subway and told me how much they wanted you jsut couldn't make a wage,so he didn't bother.Someone else came and put a subway near him and went bust.His kebab shop is till there after 30 years.

So when you back Dominoes,you're not jsut punting them,you're punting the financial health of their franchisees which i suspect isn't that strong.

Certainly a doubling in revenue(I haven't checked so I'm relying on your figures) doesn't really jsutify their stock moving from $50 (already overvalued imho) to $279

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6 hours ago, onlyme said:

Shorts were piled up on Tesla a few years ago - 2013/14, maybe a little earlier. It was quite public and probably heavy losses on those as the share rocketed up (helped in ho small measure by the shorts being forced to close). Hence there's probably still some nervousness on the sell side. Quite understandable really because whatever his faults Musk has launched a dealership operation like no other against all the other car manufacturer's and unions in the US and managed to drag the rest  of the market almost single handedly into taking all electric seriously and on the hop in terms of developing competing product. What he's struggled with with setting up huge scale manufacturing, something the big car manufacturers have done over decades. Risk is he could pull another rabbit out of the hat. I believe he could. Look at the profession in cars, he's on record that he basically wants to kill the rest of the car market. You have Model S, X class, now model 3. What if he came out with a  super cheap runaround design, acted as main source for drive components/tech/, created/marketed a sub brand and just licensed that to manufacturers/subcontract it all over the world. Think Smart - Mercedes Benz type situation. Could call it the Model T :D. He's got lots of options if plan A is suffering a bit, the power wall tech could if batteries get cheap enough could come into play as well - sunny countries, zero running costs. For all his failings he's a visionary and there's much safer companies to bet against.

Shorts get burned on a regular basis.I posted in the Deflation thread that M&S had record shorts the other day,now the stock is up 10%.Huge shorts are normally a sign to exit the trade.

When you're right though,it pays out.

I think tesla is a very difficult chart to read and the volatility is way out of my league.Dangerous game shorting it unless you have very, and I mean very, deep pockets.

 

personally,I think the VW's of this world will produce better cars than him over the long run.He should sell while it's worth a lot imho.

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4 hours ago, Castlevania said:

Domino’s prices are insane if you don’t have a voucher. £20 for a pizza? Crazy. I’d expect them to be hurt in a downturn by the fact that the local pizza joint at half the price is on Just Eat.

Anyhow as a longer term investment I’d personally rather buy DP Eurasia (they have the Domino’s licence in Turkey, Georgia and Russia).

Pizza is easy to replicate.Just Eat is a real threat as is general online competition.

My kids love Aldi pizza(you know the posh £3-50 ones) they love the cheap ones too but I like to show off when I';m in Aldi.It's about the only place I can....well there and Leicester Market.

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2 minutes ago, sancho panza said:

Pizza is easy to replicate.Just Eat is a real threat as is general online competition.

My kids love Aldi pizza(you know the posh £3-50 ones) they love the cheap ones too but I like to show off when I';m in Aldi.It's about the only place I can....well there and Leicester Market.

Yeah. Profit margins on pizza are insane. 

I only buy the frozen Sainsbury’s ones which are £1.25 or so. I then add a load more topping myself before bunging in the oven.

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On 13/07/2018 at 13:24, sancho panza said:

 

Can I refer you to a post from the first page which sets out my philosophy.Our discussion has made me realise there's two main themes to my short work 1) as per starbucks 2) is an industry in structural decline.

 

Dominos is a Starbucks type trade to me.Competitors will eat them alive in a price war as their price competitiveness will be set by the capital base of their frnachisees.These franchise models haven't really been tested in a downturn.A local kebab shop owner looked a t Subway and told me how much they wanted you jsut couldn't make a wage,so he didn't bother.Someone else came and put a subway near him and went bust.His kebab shop is till there after 30 years.

So when you back Dominoes,you're not jsut punting them,you're punting the financial health of their franchisees which i suspect isn't that strong.

Certainly a doubling in revenue(I haven't checked so I'm relying on your figures) doesn't really jsutify their stock moving from $50 (already overvalued imho) to $279

We have a Pappa Johns and a Dominoes.

ALL the youth now use Pappa Johns as it is half the price.

 

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1 hour ago, Cunning Plan said:

We have a Pappa Johns and a Dominoes.

ALL the youth now use Pappa Johns as it is half the price.

 

But Pappa John is a massive racist. I thought with their righteous right on views they’d be boycotting it.

https://news.sky.com/story/amp/papa-johns-founder-john-schnatter-resigns-as-chairman-after-using-n-word-11434013

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1 minute ago, Castlevania said:

But Pappa John is a massive racist. I thought with their righteous right on views they’d be boycotting it.

https://news.sky.com/story/amp/papa-johns-founder-john-schnatter-resigns-as-chairman-after-using-n-word-11434013

Not my lads and his friends - they are slightly to the right of Genghis Khan.

Not all the young have swallowed the narrative. They are kicking back.

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Interesting moves in Netflix over the last couple of days. Presumably their subscriber numbers in the US have topped out. And with so many other streaming services now available, including Amazon Prime, where else is there for Netflix to go?

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On 13/07/2018 at 13:35, Castlevania said:

Yeah. Profit margins on pizza are insane. 

I only buy the frozen Sainsbury’s ones which are £1.25 or so. I then add a load more topping myself before bunging in the oven.

I don't eat pizza any more (dieting) but it's a handy meal needing little effort. Open freezer, remove from box, bung in oven, eat. My favourite the Doctor Oetker Margharita but only when they are on offer at 1.50 not full price.

I thought about it over and over but WHY do people order from Domino's or whoever. Surely it's actually more trouble for more money. Also you have to wait for 45 minutes or so and worry about whether to tip the delivery person and how much.  Although I never actually ate a Domino pizza are they nicer than supermarket frozen?  
 

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21 hours ago, Funn3r said:

 Domino pizza are they nicer than supermarket frozen?  
 

Yes but they are full of salt and or msg.  personally i feel ill after eating one the following morning.

Edited by Banned

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On 16/07/2018 at 12:53, Cunning Plan said:

We have a Pappa Johns and a Dominoes.

ALL the youth now use Pappa Johns as it is half the price.

 

My kids wont touch Pap Johns.

Nothing to do with Adolf CEO, all to do with the dont like the taste.

They prefer Dominoes by a mile.

In the UK Papa Johns fracnhies  all appear to be owned by subcontinentals, who employ illegal migrants.

Ditto subway.

 

 

 

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https://www.wsj.com/articles/tesla-asks-suppliers-for-cash-back-to-help-turn-a-profit-1532301091

Tesla asking suppliers for a 'rebate' in order to help turn a profit. This is for parts already ordered/supplied/paid for! Doesn't bode well.

Twin this with the fact that Tesla will soon pass the 200,000 units sold mark in the USA, meaning the 7,500 us government rebate will half and then disappear, and surely the end for this crazy stock is high. Would surely explain Musk's recent 'erratic' behaviour.

 

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11 hours ago, azzuri82 said:

https://www.wsj.com/articles/tesla-asks-suppliers-for-cash-back-to-help-turn-a-profit-1532301091

Tesla asking suppliers for a 'rebate' in order to help turn a profit. This is for parts already ordered/supplied/paid for! Doesn't bode well.

Twin this with the fact that Tesla will soon pass the 200,000 units sold mark in the USA, meaning the 7,500 us government rebate will half and then disappear, and surely the end for this crazy stock is high. Would surely explain Musk's recent 'erratic' behaviour.

 

What does that rebate pertain to Azzuri?

image.png.8432f071dc2687c4bf5f42078808eaab.png

Edited by sancho panza

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