Posts tagged WFMI
The S&P closed up today despite earnings more disappointing than Congressman Christopher Lee’s online dating skills (because 1. If you’re married, don’t use your real fucking email address and 2. everyone knows the easiest way to an internet girl’s heart is through a cock shot and not some weird ass old man flexing pose, so really just embarrassing for all) led by technology bellwether CSCO who got their bells rung and let technology know that the weather is going to be extremely shitty with a chance of declining margins, an increasing budget deficit as the government stocks up on the rare o.b. tampons in preparation for the heavy period of economic malaise soon to be here, and the outcome of the Free Harry Baals movement coming to an inglorious end (and as a side note, Money McBags thinks the Femen Movement should 100% get behind Harry Baals).
In all, it was a news filled day in the market that in aggregate rounded up to “who fucking cares” as investors ignored rising inflation, shrinking margins, and sputtering jobs growth, by simply rolling up their foreskins and taking hits of hope and delusion. So as always, buy the dip, buy the rip, and if you can, buy the nip, because Bernanke would want it that way.
As for macro news, new claims for unemployment fell to their lowest level in 2.5 years as bad weather knocked down the phone lines and internet connections that people ordinarily use to file new claims as well as apparently knocking down common fucking sense (because, um, if the jobs report was negatively affected by the weather, shouldn’t new claims have you know, also been negatively affected by the fucking weather? This is as confusing to Money McBags as M-theory or why anilingus is spelled with an “i” and not an “a”). New claims dropped 36k (or 32k if using the the number that was reported last week instead of this week’s made up higher number as the “hold the shock and hope for no awe” strategy rears its ugly head) to 383k which was 27k below analyst guesses and 35k below believability. The number dropping below 400k can be taken as a good sign (that is if the number weren’t more bogus than John Travolta’s marriage), though this can be taken as a better sign.
In other macro news, foreclosures fell, or they didn’t, depending on if you want to use a year over year number (which was down 17%), a month over month number (which was up 1%), or a non “lenders were too fucking bogged down in fixing mortgage fraud procedures to increase foreclosures” number (which would have been up a cockriffic percent). James Saccacio, the CEO if RealtyTrac commented “Unfortunately this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.“ This would usually be concerning for the market but as all investors care about is the perception of the numbers and not what is behind those numbers (unless it is Brooklyn Decker who is behind them), the release was more irrelevant than James Garfield’s presidency or Lacey Banghard‘s IQ.
Elsewhere wholesale inventories jumped 1% while sales only rose .4% as businesses build up inventory right before people can stop affording it with the coming stagflation (and of course stagflation is coming not just because Bernanke is making sweet love to the ponzeconomy™, but also because he showed it pictures of Olivia Wilde). The budget deficit grew to $50T as spending picked up with the government busy buying the dip and finally Federal Reserve Board Governor and noted QE2 critic (even though he never had the Thomas Hoenig balls to dissent) Kevin Warsh is stepping down to do what all Americans aspire which is to live a happy life off of his wife’s money. Warsh was the youngest Fed Governor by decades and simply got tired of the constant hazing of having to always erase the whiteboards, bring the doughnuts, and be the one picked to play seven minutes in heaven with Fed Governor Daniel Tarullo. Warsh is most famous for an op-ed he wrote for the WSJ where he said the Fed’s Treasury buying “poses nontrivial risks” such as unexpected movements in risk premiums across asset classes and whatever is a bit worse than stagflation, perhaps “fucking stagflation.”
The big news of the day though was earnings where CSCO reported their Q and dropped ~13% after not connecting with investors who had them as the backbone to their portfolios. The company warned that their margins were under more pressure than Tom Cruise’s colon in the Castro on a Saturday night or Hosni Mubarak’s presidency (who by the way is supposed to be stepping down tonight so the guy exactly fucking like him can take over, so um, great fucking job guys, really. It’s like Andrew Johnson restoring rich white southern confederates to power immediately after the civil war or Pam Anderson getting back with Tommy Lee after he gave her hepatitis). Along with declining margins, CSCO said they are also facing increasing competition as customers in their core network switching business are switching to products from HP and Juniper (and that line was so awful Jay Leno can use it all he wants).
In other earnings news AKAM was down 15% after reporting a good Q but giving revenue guidance for Q1 a wide margin below analyst guesses as a result of more normal seasonality after last Q’s post-recession big jump in Q1 (and the margin was so wide that it immediately became the most popular member of LargeandLovely.com). And CS missed profit expectations because of debt charges and regulations that keep them from manipulating their numbers as usual.
In positive earnings news, WFMI once again crushed guesses and raised guidance because now that all food costs have skyrocketed, people don’t give a shit about paying the marginal dollar to eat food that has fewer chemicals in it than Charlie Sheen’s stool. Also EBAY was up ~7% after they said that they expect PayPal revenue to double by 2013 as wireless iPads making memberships to the Bangbus more prevalent during bathroom breaks in the office.
Finally, corn reserves are at 15 year low, thus potentially figuratively cornholing part of the country’s food supply, NYSE is in merger talks with Deutsche Borse, Harrah’s, and Las Vegas Sands where they promise to share the VIG with whomever they merge, and WFC’s CFO is walking away with a $27MM retirement package which is but a small pittance for nearly ruining the global economy. Noted analyst Dick Bove (and he is noted for consistently being wrong) said “It is not normal for a CFO to leave a company for personal reasons when major disclosures about to be made,” but then again, it is not normal for a man named Richard to insist on calling himself Dick, so potato-puhtato.
In small cap news RICK announced their quarter after the market closed on Wednesday and somehow shot up 10% at ~3pm on Thursday on heavy volume as someone really wanted to see some tits. Remember, Money McBags recommending buying this stock again a couple of months ago when it was below $8 and now it is at ~$10.50, so we’ve had such a jizztastic ~30% return in that short time frame that Money McBags has decided to go back and finish his first book tentatively called A Sale of Two Titties: How a Small Time Investor Got Rich by Investing in RICK.
That said, the quarter was actually pretty pedestrian so Money McBags is confused by the run up, except for the fact that the stock is just too cheap. Revenue was basically flat at $1.045MM lap dances (and as always, when analyzing RICK Money McBags uses his preferred currency of lap dances where $20 = 1 lap dance) and while their earnings were up ~165% to .0105 lap dances per share, most of that was driven by not paying Vegas cab drivers a cockposterous rate to bring people to the club and thus their marketing expenses were down a full 90k lap dances. Money McBags’ earnings guess for the year is $.044 lap dances per share and this quarter was basically in line with that kind of run rate.
There were some concerning things though as Vegas is still leaking money as losses in that club were 18.5k lap dances which was down from 25k lap dances a year ago but revenue also dropped from 155k lap dances to 55k lap dances and the CEO said they are basically going to take another quarter or so to figure out what the fuck to do with this location with a sale sounding like it will be most likely. Look, Money McBags has been to the Rick’s in Vegas (in fact RICK Director of IR Allan Priaulx hooked him up with a table where he was fortunate enough to be able to buy $300 bottles of vodka instead of sitting with the proletariat and paying $10 a beer, so fuck Money McBags for that), in fact he was there when it was Scores, and that location simply doesn’t work. The club is poorly set up and with the Spearmint Rhyno consistently spanktacular, there is just no reason to go anywhere else. So Money McBags hopes they ditch that shit for $5MM or whatever, realize they made a terrible acquisition, and move on with their lives because eventually you have to stop throwing money at shit that is of no value, like a lap dance from a hot Eastern European chick (and trust Money McBags on this one, they look hot and they talk a good game, but they deliver as poorly as Jessica Blackham).
Other concerns include a lackluster Super Bowl week thanks to non-marquee teams (even though it was the highest rated Super Bowl ever) and that dreaded weather. They thought they could do 100k lap dances of revenue during the week but it turned out to be only 35k and they said things are still in such flux that they are not going to give any guidance for the year as “we’re just not sure.“ Not really words to inspire confidence.
Sure, there is a lot of good going on including .10 lap dance drink Wednesdays and happy hour lunches that bring customers in, help them fall in love with the girls (their words, not Money McBags’), and then come back later with their friends. They are also revamping some clubs, looking at acquisitions, and buying back stock. So in all, the story hasn’t changed, but Money McBags is a bit concerned about this next Q missing expectations.
That said, the stock is still cheap trading at ~12x Money McBags’ guess (assuming this next Q isn’t a bust, unless it is this bust, which would be ok) with nearly .1 lap dance worth of cash on the balance sheet so ~10x minus the cash. The business has held up fine through the recession so there is no reason they can’t trade at 15x Money McBags’ guess (though they are going to need to reenergize revenue) and thus when the stock hits a price of .6 lap dances, we’ll have to reevaluate which is only ~10% up from here. It’s been a good trade but the last thing we want to do is get caught in the champagne room with our pants down so we need to get out before we get so drunk that we run back to the ATM. The magnitude, timing, and volume of the jump today was stranger than the fact that 9.2MM people watched the fucking Puppy Bowl and much stranger than Drew Barrymore’s tits, so lets see what happens tomorrow and be careful not to get too cute.
And yes, Money McBags knows today’s headline sucks worse than Lisa Ann in a MILF Hunter video, but it’s 3 in the fucking morning, so fuck Money McBags (and if you’re Lise Ann, really, fuck Money McBags).
8/4/10 Midevening Report: Market continues moving on up, can now afford eastside deluxe apartment in the sky
The stock market crept up again today as the equity markets and bond markets continue to decouple like Bristol and Levi, Mel Gibson and sanity, or Carrie Prejean and her top. In terms of macro news, the ISM released their report on the services sector and it both beat analyst guesses of 53 by coming in at 54.8 and was above last month’s reading of 53.8 which Money McBags believes is the first time a piece of macro data has done both of those in the same month since crude inventories were up in May of 2007 as a result of the release of Andrew Dice Clay’s “Dice Undisputed” on DVD. The ISM’s employment gauge rose from 49.7 to 50.9 and that rounding error is enough to give economists with shorter sight than Mr. Magoo a modicum of hope.
In other slightly positive relative macro news, ADP said employers added 42k jobs last month which should be a welcome sign for the 16MM to 20MM people who are still unemployed(and yes, that was sarcasm). At this rate, the recession should officially be over sometime around the year 3MM (about when Xenu will come back to the planet Earth to set off some more volcanoes and elevate disciple Laura Prepon to sainthood) as long as the birth rate also slows down due to the increased number of headaches caused by not having any money. Luckily, the number beat analyst guesses of 40k expected new jobs added according to Reuters, or 30k expected new jobs added according to Bloomberg, or a make believe number of new jobs added according to Money McBags.
Internationally, China seems to be getting a bit more concerned with their housing market as prices are rising faster than Sofia Vergara‘s son’s popularity on take your mom to school day. Apparently the Chinese government wants regulators to give banks a new stress test where in the first part regulators will gauge the impact on bank balance sheets of 50% to 60% home price declines in some cities and in the second part, banks will have to run on a treadmill for 10 minutes while listening to Nancy Sinatra songs and having strobed pictures of Lady Gaga flashed at them. With prices already beginning to moderate, Money McBags is glad that the Chinese government is being a bit proactive here, though it was their initial pro-activity by lending money to any Tom, Dick, or Harry Wang that started this whole mess. The point is China has been bubbling for quite a while, but the global economy needs that growth right now more than a keynesian economist needs a deficit or Roger Ebert needs a jaw, so Money McBags is happy to look the other way for a minute or two while China tries to figure shit out.
In the market today, WFMI sold off like a carton of spoiled soy milk despite beating analyst guesses on revenues and having inline eps while maintaining full year guidance. Revenue was up 13%, eps was up 50%, and same store sales growth was up 8.4%, all respectable fucking numbers, but apparently same store sales growth over the second two months of the quarter was worse than the first month and so far in Q3 it has been only 7.7% so investors are taking that as a sign of deceleration. Well, that and the fact that they lowered the high end of their same store sales growth rates for the rest of the year and lowballed forecasts like forecasts were the ground and they were Abe Vigoda‘s nutsac.
WFMI’s preliminary guidance for 2011 is 4.5% to 6.5% same store sales growth, 10% to 13% overall topline growth, and $1.59 to $1.64 eps which is almost 20% growth on the high end. Money McBags doesn’t follow this stock closely and he fully understands that people hate paying for expensive shit they can get cheaper, that competition is continuing to come in to the market, and that the “organic food” craze may be more full of shit than a constipated rhinoceros with elephantitis of the large intestine, but that said, WFMI is the market leader in the space and eating healthier and better is one way people can still feel like they are treating themselves when they can no longer afford to go on vacations. The stock is now trading at ~22x-23x 2011 guidance which isn’t really cheap for an 11% top line grower but for a market leader in a still emerging market with brand equity and plenty of fucking yoga moms and tofu eaters who need their free range turkeys and chlorine free tampons, it’s not terribly expensive. Money McBags would start doing more research here as the sell off could be a nice buying opportunity.
In other market news, Toyota earned a $2.2B profit thanks to strong sales in emerging markets, cost cutting, and people with short term memories (perhaps caused by receiving concussions from crashing their Toyotas when the brakes gave out). Priceline shot up over 20% on a 72% increase in earnings as european travel came back much stronger than expected despite the volcano in Iceland having spread more ash around the continent than Keith Richards did during he Rolling Stones 1978 European tour. The company guided to eps of $4.78 to $4.98 for this upcoming Q which was well above the $4.18 guessed at by analysts but just enough to win a room at an airport Hilton in Detroit and save enough money to have the scabies taken care of afterwards. Money McBags has never understood Priceline as he likes actually picking the places he will stay, times he will fly, and service providers he will use, but if one views cleanliness, time, and comfort as a commodity, then Money McBags guesses PCLN is for you.
In small cap news, CRTX which Money McBags has written about several times as a name more speculative than Paris Hilton‘s vagina or Greece shot up 9% after it announced it has licensed worldwide rights to its nicotinic-receptor based patents to Targacept which could yield up to $75MM in payments over the next few years which will likely be enough for CRTX to actually buy a strategy. CRTX has been acquiring respiratory type drugs over the past few years so it is a bit odd that they are now in the business of licensing their own portfolio, but Money McBags can only guess the rights they sold were seen as tertiary to their respiratory strategy and won’t choke off longterm growth.
In other small cap news, one of Money McBags’ favorite little companies which had just become too expensive, SMCI, put up another disappointing Q in what is beginning to be a worse trend than flannel shirts or full muffs. Last Q, Money McBags thought they were about fairly priced but asked readers to “figure out is what the fuck is going to drive sales for SMCI next year” because everything pointed to them being at the end of their cycle with INTC having already launched nehalem. Well this Q they once again missed earnings guesses by $.01 while putting up inline-ish revenue up 6.5% sequentially but 63% y/y.
The big issues with this company right now seem to be:
1. Decling margins: Gross margins continue to tick down from the high-teens to the mid-teens and continuing to go to the lower teens would make R Kelly happy enough to pee himself (or someone else), but not investors. About 85% of the Q&A on the call was around this issue and the answers weren’t just difficult to understand because the CEO’s english is worse than Amy Winehouse‘s hygiene but because they gave about 1000 different reasons for the drop. From what Money McBags could understand, margins fell as a result of a mix shift, a shortage of components (perhaps caused by the components jumping into ice cold water), a shift in sales channels to more distributors and resellers, and a terrible case of vertigo. The point is, management didn’t do a great job in giving guidance for where margins will go in the future so investors are left to speculate if 15% is the new 18%.
2. Revenue is starting to slow down or flatten sequentially: Guidance is for flat to 5% up revenue for next Q when last year revenue grew 20% between fiscal Q4 and Q1 so one can’t blame the deceleration between Qs on seasonality (though one could blame it on Erin Andrews‘ red carpet appearances keeping buyers glued to their computer screens). The company was no help with this guidance as they kept referring to their past 30%+ growth rates and those past growth rates are good enough to buy you a cup of soup and maybe some strawberry shortcake for dessert, but that is it.
So how do we value this company when we have no feel for revenues which seem to be decelerating at best and margins that have fallen for any one of about 17 different reasons? Forecasting this company with what we currently know is a more difficult task than keeping ones pants on during a very NSFW european shark attack.
SMCI earned ~$720MM in revenue last fiscal year with the midpoint of guidance for ~$205MM in Q1 this year. With sequential growth slowing and no new INTC chips coming out of which Money McBags is aware, we’ll call revenue ~ $820MM for this upcoming fiscal year, up ~14% which is way short of their historic growth rate, but the law of large numbers and the top of the cycle have to eventually catch up. We’ll give them the benefit of the doubt that margins are at least stable and call gross margin 15.5%, push their operating expenses up ~8% to $80MM, tax them at 32%, and we get ~$30MM GAAP eps or ~$.76 per share. Now there is typically a $.02 to $.03 quarterly discrepancy between GAAP and non-GAAP eps due to stock-based comp so adding that back gets us to ~$.85 eps for next year. The company is now trading at ~12x that but has almost $2 in cash on the balance sheet.
So the point is, we can go through a mental masturbation exercise like we just did because we have no fucking idea how to forecast this company and say it looks reasonably priced based on guesses we pulled completely out of our ass (or what the sell side would call, detailed industry research), or we can wait for trends to get better and not worse. Money McBags likes this company but it will always be a cyclical buy and we are on one of those down cycles now so you can afford to wait on this name unless you can figure out from where growth is going to come and how they are going to get margins back up.
2/17/10 Midevening Report: Fed hints at reversing stimulus, starts by canceling Bernanke’s Playboy subscription
The market was up today like a hooker’s skirt in Tiger Wood’s SUV. The rally was driven by earnings, earnings, earnings and some macro data. Apparently people are still building houses as housing starts hit their 6-month high, rising 2.8% to an annual rate of 591k. This marginally beat expectations and should be a good sign for the economy, even if half of the houses were built from legos and the other half have already been forelcosed on. In other macro news, the Fed announced that industrial output grew .9% which also beat expectations with capacity utilization coming in at 72%, 8% below the average from the last 37 years. So there is still room for the economy to rebound and thus produce more of those delightful “For Sale” signs to go in front yards, printers to print out resumes, and muzzles to put over Lady Gaga’s face. Also, import prices rose by 1.4% signalling inflation may be on the way (and for those of you who need a less subtle signal: INFLATION IS COMING!! And Ben Bernanke is going to have to make inflation think long and hard about baseball for him to try to stop it from coming). Many analysts were unphased by the rise in import prices claiming oil and natural gas drove up prices, so I guess it’s good we don’t rely on those fuels at all or else we might have to worry a bit more about the dollar. Phew.
There was one piece of macro news which caused a brief sell-off before the market put back on its pearl necklace and returned to the ball (and yes, all of those were very bad puns). The minutes came out today from the last FOMC meeting and the head of the Kansas City branch of the Fed, Thomas Hoenig (known at the Fed as T-Ho), was the one dissenting vote on interest rates. T-Ho got all up in Benny B’s grill and axed him why they needed to say the fed funds rate would remain low for an “extended period,” preferring to change the language to say the fed funds rate would remain low for “some time, and shit.” The minutes also revealed that the Fed is starting to look at downsizing their balance sheet and selling into the market the toxic assets, I mean mortgages, they previously bought. The key message here being that further stimulus to help the economy may be less likely than Brooklyn Decker dumping Andy Roddick for the first guy eliminated from next season’s The Biggest Loser. The Fed might actually be doing something smart here by looking to get in front of a bubble and stopping it before it happens rather than pulling an Alan Greenspan and blowing hot air into it like it was Andrea Mitchell’s rectum.
In earnings news, Deere’s profit climbed 19% and they raised forecasts thanks to strength in “large ag equipment”, or what’s more commonly known as: “Rosie O’Donnell’s dildos.” Also, WFMI not only had a kashi-tastic quarter as Money McBags predicted yesterday, but is was double fiber kashi-tastic. WFMI same store sales were up 3.5% and they gave total revenue guidance for 10.5% growth in 2010 while raising full year earnings guidance to $1.20 to $1.25 per share, about 10% above current estimates. Yeah, it was a good Q but they are now trading at around 25x 2011 earnings which wouldn’t be so bad if they were growing by more than 10%. Of course, EBITDA was up 25% and they raised EBITDA guidance by about 5% to $635MM-$685MM for 2010 which means they’re trading at around 7x to 7.5x 2010 EV/EBITDA which actually isn’t all that unreasonable. Money McBag’s guess is that there was a whole lot of short covering today and in the next couple of weeks WFMI will come down a bit, but it is still trendier than Jessica Biel giving free blow jobs to bloggers (and trust me, that is going to be a huge trend).
In small cap news, RICK reported yesterday and they managed to not only shit the bed, but then they announced they were going to buy VCGH and shit all over their bed too (though to be fair, VCGH’s bed was plenty shitty to begin with). Money McBags never thought he would be unhappy getting fucked by someone at RICK, and RICK not only fucked him, but they sent the 40 year old C-section showing, needle marks in the arm having, 2pm shift D-team dancer to do the job. Jeesh. Could they at least kiss me next time before they fuck me? Actually, scratch that. I mean I love the lovely ladies at Rick’s who express themselves through dance to pay their college tuition, but they probably have more lip herpes than Richard Simmons has anal warts, so they can hold off on the kissing. Anyway, RICK reported the quarter that Money McBags had feared since they bought their Las Vegas club. You see, in order to win business in Vegas, Rick’s pays the fuck out of cab drivers to bring patrons to their club. It is labeled as marketing costs, but it is payment of cash to cab drivers as clubs compete for traffic. All of the clubs kind of collude to keep that price to around $20, but to gain business and to slap their cocks on the table and let other club owners know they are serious, RICK had been occasionally upping the ante to as much as $100. Well it looks like in this quarter that occasional upped ante was both not occasional and was so far up that it gave itself a cerebral edema from hypobaropathy. Rick’s marketing costs soared by $1.7MM to $2.9MM and treated their earnings like an Alabama professor after learning she wouldn’t be tenured. Now on the call they said the marketing increase was related to more than just the Vegas club and that the Vegas club turned a profit in January and should be profitable for this Q, so that makes Money McBags feel a bit better, like how Jessica Simpson felt when she learned stupidity wasn’t contagious, but it is a huge red flag. Their earnings missed the high end by $.08 which is actually slightly less than the uptick in marketing costs. Revenue was up a healthy 16.5% but it was achieved in the most unhealthy way, by paying people/cab drivers to show up. To Money McBags it is a huge concern and kept him out of the stock until a few months ago. Now on top of their shittastic performance, they announced a $45MM cash and stock acquisition of VCGH which will make them the largest strip club operator in the world. While Money McBags is a firm believer in bigger is better (such as the fine backsides of Carmen Kinsley and Alexis Texas), this deal has a ton of dilution as Rick is going to have to issue somwhere around 2.5MM shares and thus increase their share count by 25%. Rick’s maintins that they will benefit from synergies such as corporate overhead, regional management, and shared thongs, and thinks EBITDA will be $25MM for the combined company. They also reaffirmed guidance for 2010 without VCGH of $.90 to $1.05 per share, so they are still fairly cheap on a p/e basis. The biggest problem is that Money McBags can’t really analyze this deal because VCGH stopped filing financials months ago so there is no way to understand if their clubs are even remotely profitable. So you have a shitty quarter, a questionable deal, and a stock that has been on the move but is still cheap if you believe the marketing uptick was a one-time offense (and Money McBags has no idea about that). If you own RICK, it might not be a bad idea to trim a bit here, and if you’re at Rick’s, it might not be a bad idea to see some trim there. Alot of questions remain after this call such as will decreasing marketing costs hurt top line, what does Rick’s new cap structure look like, and can a brother get a table dance? Unfortunately, after this quarter there will be no sex in Money McBags’ champagne room and for those RICK’s owners, you should really due some more work. Money McBags is holding for now, but leaning towards selling some as it’s unclear how RICK will still hit their guidance for the year after missing this Q and how they will grow if they lower marketing costs, since if lower marketing costs were to allow them to grow, why wouldn’t they have been lower this Q? Damn you logic.
2/16/10 Midnight Report: Commodities rise as NBC giving out medals to anyone who will watch the Winter Olympics
Money McBags is on the road this week like Jack Kerouac (though without the gay sex, pot smoking, acid dropping, and melodious run on sentences). As a result of Money McBags’ travels, daily updates may be shorter and sparser than Vern Troyer at a Mensa convention or blow jobs to a married man as the years go by. That said, the markets are still open and even though this is a short week (and Money McBags poured some out yesterday for all the dead presidents, except for Andrew Johnson, he can eat a shit sandwich with an extra helping of “fuck you”), we still need to make profits, so while the updates may be more sporadic than a bulimic’s bowel movements, they will be here, so continue to check in during the day for updates. And if any of you have any ideas you’d like Money McBags to analyze, put them in the comments section and they will be tended to with the utmost care and proficiency.
As for the markets, the US was off on Monday but the rest of the world was open for business and markets were largely up led by commodities and Asia which has been rallying like Burt Reynolds in the 1980s (you know, when he was banging a still hot Loni Anderson and drawing the fuck out of some charades on Win, Lose or Draw). Asia was up for the 5th time in 6 days likely causing Jim Chanos’ erection to point due North as he can now short China at higher prices. Australian companies continued to put up good earnings as their second biggest lender, Westpac (unrelated to their second biggest rear ender, Fudgepac), saw a drop in defaults while profits rose by 33%. Australia’s economy continues to be healthier than an organic sprout sandwich with a side of extra bland at a Whole Foods or Carmen Kinsley’s ample backside.
And speaking of Whole Foods, they report today and the big question is what their organic growth will be like (bad and easy pun completely intended). Money McBags loves him some quality ingredients, but do people really need to pay a 50% premium for organic green beans? More to the point could those people even tell you what the difference between organic and regular food is other than Oprah said it’s better? Money McBags is willing to bet his high functioning sigmoid colon that the average WFMI shopper couldn’t tell you the difference between Carrot Top and a carrot top (the key difference being a carrot top is green, and funnier) and remains largely skeptical of most things organic, wondering how long WFMI can ride this trend especially as unemployment stays high and people get poor. That said, Money McBags would not be surprised by WFMI putting up a Kashi-tastic quarter even with reduced traffic due to all of the Prius recalls because the organic trend is still stronger than Tom Arnold’s breath after he went down on Roseanne in the late 1980s to get his career started or Money McBags’ feelings for that Heidi Montag train wreck’s new boobs. That said, unless WFMI raises estimates for 2010 to $1.70, Money McBags is going to stay away because there is no need for this company to trade at greater than 18x.