Archive for September, 2007
Krispy Kreme On The Rebound
Sep 28th
I wrote about Krispy Kreme Doughnuts back on September 13 and was accumulating at anything below $3.50/share and ended up with an average price per share of about $3.20.
I’m now wishing I had backed up the truck rather than only purchasing a few thousand shares of KKD. In one week the stock has climbed 35% and now trades at $4.70/share. This has moved my gain to over 40% and I have now entered a 5% trailing stop loss on my shares to lock in the gains should the stock suffer a setback.
I still think that Krispy Kreme is supremely undervalued, but this run-up in price seems too steep to sustain itself. I am anticipated getting stopped out next week and re-accumulating on a dip and increasing the position significantly.
Perhaps this is an accumulation preceding a tender offer or just a sustained short squeeze. Either way, the longs are rejoicing this week and the shorts are losing their shirts.
Technorati Tags: krispy kreme, kkd, stocks, investing, shaun carter, profit, stopp loss, buyout, tender offer, short squeeze, doughnut, donut
TEAM & Quixtar Update
Sep 26th
One of Alticor’s corporate blogs has announced some new information regarding the lawsuit filed by TEAM founders in California court and boy is it a doozie.
Don Wilson and Randy Haugen have asked to withdraw from the lawsuit. This is not making things look very promising for the TEAM founders’ lawsuit against Quixtar/Alticor. Perhaps this abandonment is just the first of several or a revelation that the case is weak and facing eventual dismissal. It’s hard to say because of how many curveballs this case keeps throwing.
In another note, it turns out that Orrin Woodward is no longer employed by TEAM and Chris Brady NEVER was. It’s not clear whether they have ownership stakes in the parent company Signature Management Team, LLC and derive their income in the form of dividends rather than salary.
At this point, it is impossible to know where this case is going, but you will get all the updates as they unfold right here at ShaunCarter.com.
Technorati Tags: alticor, amway, quixtar, shaun carter, orrin woodward, chris brady, randy haugen, don wilson, team, team of destiny, signature management team, mlm, network marketing
GM Strike & Why You Need an Emergency Fund
Sep 24th
This morning was welcomed by news that the UAW has called a nationwide strike of all General Motors plants amid an impasse over contract negotiations which seem to center job security for its members in the future. Now, when a strike is called, these workers cease getting paid their average $27/hour pay at the GM plants and will only receive small payments from the union when the strike reaches a certain length.
This means that these striking workers will have to tap their emergency funds to live off of while the strike is underway and they aren’t earning a paycheck. But wait! Many people don’t have emergency funds, including these highly paid striking workers. In a story put out by the AP there is an interview of a woman who is a seven year veteran of GM and is married to a 21 year veteran of the company and she says this about the strike:
“This is horrible, but we’re die-hard union, so we have to,” Ahrens said. “We got a mortgage, two car payments and tons of freaking bills.” The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.
Now I have to wonder why this couple who, if making the company average, is brining in about $110,000/year in gross income (that’s with no overtime) is worried about paying their bills. Experts suggest having six months of living expenses in a savings account or short term CD’s for use in an emergency such as losing your job, medical emergency, unexpected repairs and other unforeseen expenses. Yes, I practice what I preach as well, having over six months of living expenses in a high yielding emergency fund.
I’m saddened that so many people live paycheck to paycheck, even when earning $110,000/year, and they threaten themselves with financial ruin when a small unexpected financial event turns their life upside down. So, go look for ways to fund an emergency savings account today by bringing your lunch from home, driving less, not paying $4 for a latte every morning, eating at home more often, and any other way to squeeze an extra couple hundred dollars into your emergency fund each month. This way, next time you have a financial crisis you won’t have to stress about where to find the money to pay rent and feed your family.
Technorati Tags: gm, general motors, uaw, shaun carter, strike, emergency fund, savings, high yield
Impact of Lower Interest Rates
Sep 23rd
Now that the Fed has lowered the fed funds rate 50 basis points I’ve already noticed the impact on my personal finances. My ING Direct savings account has seen its interest rate drop from 4.5% to 4.3%, this should trickle down through the credit markets and allow for cheaper mortgages, auto loans and credit card as well. With the reduction of the prime rate to 7.75%, several credit cards are now sporting lower interest rates to those with excellent credit.
InstantCredit.cc allows you to search through different credit cards until you find the one right for you, all at no charge. Some credit card categories available include:
Business – Be sure to check out the American Express Gold Rewards Card for business, it is currently offering 25,000 bonus points redeemable for a FREE airline ticket after you make your first purchase. I just got my bonus points credited to my account last week and look forward to using them! Get approved for the card in as little as 60 seconds online!
Technorati Tags: credit cards, instant approval, shaun carter, instant credit, interest rate, federal reserve, loan, mortgage
US Dollar Falls Even With Canada's
Sep 21st
The US Dollar and Canadian Loonie have become virtual equivalents in the currency exchange today. This is the first time in 31 years that such a thing has happened between the two currencies. I remember on my trips to Canada when I was younger that we could get $1.60 in Canadian money for every dollar US. Well, those times are gone.
This presents some tremendous opportunities for investors who take advantage of the falling dollar. Warren Buffett made his bets against the dollar quite some time ago when nobody thought it would pan out. The falling dollar will bring more money from Canadian consumers along the border into the US. This currency valuation will also benefit manufacturers deriving large percentages of their income from overseas markets and realize the currency gains when those profits are reported by the US based companies.
Some companies that have significant overseas presences:
Coca-Cola (KO)
Merck & Co. (MRK)
Altria Group (MO)
Colgate-Palmolive (CL)
Technorati Tags: investing, canada, us, loonie, dollar, currency, valuation, shaun carter, united states, coca cola, merck, altria, colgate, palmolive
Nutrisystem Inc Update
Sep 20th
Citigroup recently changed its price target for Nutrisystem Inc (NTRI) from $90/share to $81. They cite lower than expected sales because of the new diet drug Alli, which I touched on in a previous post about Alli vs. Nutrisystem. This n.ews prompted a quick selloff and a 10% drop in price. However, I think the news is overblown and ironically timed to coincide with the option expirations this Friday and successfully pushed the price below 50/share (a highly traded option strike price both on the call and put side).
This is a perfect opportunity to jump in and pick up shares under 50 while the price is being manipulated to the downside. After option expiration Friday the price should begin moving up back into the 50′s pending earnings, which should be good as I think the success of the Dan Marino ad campaign is being understated by the Citigroup analysts.
Technorati Tags: citigroup, nutrisystem, alli, glaxosmithkline, shaun carter, dan marino, investing, stocks
Federal Reserve Cuts Key Interest Rate 1/2%
Sep 18th
In a very dramatic turn of events, Ben Bernanke and the Federal Reserve have lowered the federal funds rate 50 basis points. I, for one, am quite shocked that the cut was this large. As predicted, the stock market soared immediately following the announcement with the Dow Jones Industrial Average up almost 200 points within minutes. This is the first cut in four years and will probably be followed by more rate cuts in the future should the credit crisis continue into the fourth quarter of 2007.
Technorati Tags: federal reserve, federal funds, rate, interest, 50, basis points, shaun carter, ben bernanke, alan greenspan, dow jones, stock market, investing, rate cut
Britian Bank Crisis Coming?
Sep 17th
Northern Rock PLC is Britain’s 5th largest mortgage lender and is suffering from a run on its bank branches by thousands of Britons as they rush to withdraw their money citing insolvency concerns. On Friday, the Bank of England made an emergency loan to Northern Rock to help them satisfy the billion in cash withdrawals its customers were requesting.
Alan Greenspan is one influential economist who has been predicting a housing slowdown in Britain similar to the one being experienced in the US and this theory is hitting the spotlight today as his book, “The Age of Turbulence” is being released. Many Britons have adjustable rate mortgages that could rise significantly in costs and mimic the mortgage meltdown here.
Meanwhile, trading has been suspended in the shares of Northern Rock as it plummeted 30% today after a previous 30% drop last Friday. Shares in the bank are now trading near $6/share and are considered ripe for a buyout offer from a strong, reputable bank that could swoop in and salvage the reputation of the bank and instill confidence in the system.
Technorati Tags: Britain, britons, northern rock, age of turbulence, alan greenspan, bank of england, emergency, suspended, buyout, shaun carter, mortgage, interest, bank, lending
The Age of Turbulence – Alan Greenspan Book Release
Sep 17th
Today marks the release of former Federal Reserve Chairman Alan Greenspan’s book, “The Age of Turbulence: Adventures in a New World.” This book was begun by Greenspan the day his replacement, Ben Bernanke, took office. It is being released today and I should be receiving my pre-order in the mail either today or tomorrow. I’m sure I’ll have it finished quickly as the pre-release reviews sound very interesting, and at 544 pages it is sure to pack a wealth of knowledge from a man who stood at the helm of the Federal Reserve for 18 years. I’ll be giving updates of my progress with the book here at ShaunCarter.com.
For those of you that have not yet purchased a copy of the book, Amazon has one of the lowest prices around:
Technorati Tags: alan greenspan, ben bernanke, age of turbulence, federal reserve, amazon, shaun carter, interest rates, book, best seller
Upcoming Fed Decision
Sep 16th
Tuesday is the big Fed rate decision that has been playing havoc on the markets for the past few weeks. The market has pretty much priced in a 25 basis point reduction in the fed funds rate, but more and more people are thinking a 50 point reduction is possible. I’m really torn on whether Bernanke and Co. will lower rates at all, considering the economy itself is functioning at a satisfactory level and inflation is under control. The only reason to lower rates would be to provide some relief to the mortgage and credit industries to potentially save thousands of homeowners from losing their homes when their mortgage rates reset this fall. One company sure to benefit from a 50 point cut would be Countrywide Financial (CFC), which has been using more and more of its lines of credit in recent weeks in order to continue operating.
On the other hand, no cut of the rate at all could prove disastrous to the market as most everyone is expecting something. But I have to wonder why is it the Fed’s job to bail out consumers who didn’t read the fine print and mortgage companies that marketed very questionable loan products? There was a terrific commentary published in BusinessWeek recently which asks, “Dude, Where’s My Bailout?”
Technorati Tags: federal reserve, ben bernanke, shaun carter, bailout, stock market, interest rate, mortgage, loan, lending, business week, countrywide, housing
