Ted “the King Of Close” Truitt / a must see
:-) !!!

Employment Numbers “Can´t Trust It” / Minyanville

The Great Wall Of Money / Economist On Chinese Stock Market

click on "jmf" to visit the blog.

have a nice weekend!

http://tinyurl.com/ywyern

Coca-Cola Agrees to Buy Vitamin Water Maker Glaceau for $4.1B

FYI - the rapper 50 Cent invested money in this company in 2004. The rich keep getting richer. good for him for not squandering his success like many other performers.

Who was it that asked about the relationship of gold prices to interest rates--copying Bill's response from above:

"One other point; longer-term as interest rates rise, gold, for the same underlying reasons, also rallies. In the very short-term, it’s the tightening action by the c.bankers that strengthens the $USD, which pulls down gold. But remember 1980 when gold was soaring to all-time record highs, interest rates in the US were almost 20 pct. The overnight window at the central banks in some countries at that time was effectively closed with 100 pct rates.

So keep the time horizon and the causes in mind when linking rates to gold prices."

I remember 1980, when people thought they were getting good deals financing auto purchases at rates in the high teens. Rates will go up again. In which case I'd rather be holding a few hard assets.

Spicing up the 25% account with some KRY...

Keeping an eye on the IT outsourcing companies:
SAY, WIT, INFY, CTSH all up around 3% today

As a twist of the Cara approach of identifying the best companies and then buying then when their monthly, weekly and daily RSI's get below 30, does anyone know of a tool or screen which can show you all stocks that day where the monthly, weekly and daily RSI's are below 30? This would be an approach that would help identify possible buy opportunities to those of us who don't have the time to pick our own 100 top companies.

Thanks, in advance.

bb:

I signed up for the 2 week free trial of Colin Twig's incrediblecharts.com after Bill mentioned it last week.
The Charting application has a screening tool which lets you search based on indicators like RSI.

KO as a natural resource company......hmmmm.

What about Coca-Cola, Pesi, Bud etc, in China/India where we will no doubt see water resources become so expensive they will be worth worth stealing or fighting over?

Hmmm, how about those existing home sales?

You can fool some of the people some of the time, but not all of the people all of the time.

Bill..wow,
your commentary this morn, quite interesting to me. You poignantly brink up the issue of social backlash by the young. This is rich and forward thinking.

Personally, I find this a fascinating discussion that I want to explore but anxious that I will loose by focus on managing my account. To be brief, I want a well known think tank...and I have a contact with one...to take the lead. If an announcement by one made headline stories, most of us here would loose a lot of money. Are we prepared to get what we ask for. All I can think, have a plan and better early than later for the truth to come out.

And...I appreciate your repetition about the relationship between gold, bonds, usdollar...and time horizon.

In mid March I started buying gold miners that you had reason to speak favorably about...some major, some miner. I tried to have a basket with no single big bets. The basket though is about 20% of the port.

What are others doing with their miners in this dangerously frustrating market: trading or holding? As a holder until a major move up, my plan is to still have a large cash position and be ready to increase ultrashort etf positions to hedge a down draft in the mines. I'm at 5% now.

As Leisa has pointed out the narrow short etfs have awful bid ask spreads. fwiw..here's the group .http://tinyurl.com/2hpls5

Nervous traders and those on margin must be base jumping off the KRY mountain before the long weekend. Picking up some cheap call options right here.

Bill..wow,
your commentary this morn, quite interesting to me. You poignantly brink up the issue of social backlash by the young. This is rich and forward thinking.

Personally, I find this a fascinating discussion that I want to explore but anxious that I will loose by focus on managing my account. To be brief, I want a well known think tank...and I have a contact with one...to take the lead. If an announcement by one made headline stories, most of us here would loose a lot of money. Are we prepared to get what we ask for. All I can think, have a plan and better early than later for the truth to come out.

blocked out this a.m....trying a shorter post

And...I appreciate your repetition about the relationship between gold, bonds, usdollar...and time horizon.

In mid March I started buying gold miners that you had reason to speak favorably about...some major, some miner. I tried to have a basket with no single big bets. The basket though is about 20% of the port.

What are others doing with their miners in this dangerously frustrating market: trading or holding? As a holder until a major move up, my plan is to still have a large cash position and be ready to increase ultrashort etf positions to hedge a down draft in the mines. I'm at 5% now.

As Leisa has pointed out the narrow short etfs have awful bid ask spreads. fwiw..here's the group .
http://tinyurl.com/2hpls5

Dear Bill,

My mom, an amateur trader and all-around smart gal brings a healthy skepticism to the thing when she asks..."Does anybody really think that they're (Crystallex) going to actually get this permit?

Check out Blockbuster Video (BBI) which I think may be getting good.
Chris

last...

Bill's az dz trading plan is an operative one that can be made mechanical...even optimized with differen t variables and back tested. Wealth Pro software at Fidelity can do this if one knows how to use code. I don't. Wish I did. A key advangtage to testing the cara100 is that he has identified a finite universe of stocks. A buy signal can always be tweaked with human judgement but I think it helps to have outcome results in backtesting as a reference. ps...i think fidelity's software is owned by canadians and other non us individuals.

Bill:

"Did you know that almost half the Voisey's Bay mining claims were staked in my name?"

no. and?

"Stuff happens in your life. That's all I can say."

what a teaser, Bill. I do remember reading your story about first meeting Friedland, your poster boy for lessons on stock promotion...I'm imagining that you did not share the $3 billion harvest from the mining claims...

I remember reading Leisa's appropriate response...something like this, with apologies for misquote (as she appears to have no Google search function on her site) "Wipe left eye. Sniff. Dab right eye gently."

Anyway, in my book, Bill, you are a poster boy of gigantic stature for your generous service to us who read your blog.

Now Bill, unless you're a hard ass, Your appropriate response - as you read your screen - is: "Wipe left eye. Sniff. Dab right eye gently."

Another comment: I appreciated your entry this morning...notably, I will surely benefit from the WMFI and SBUX case share price studies, which you are undertaking.

Regards,

Joey

I think it's likely given things now that KRY will trade at either 4 or 3.75 by monday.

Well, the NAR report on existing sales are out.

http://tinyurl.com/2znpm8

And they came in at 5.99 units at an annual rate. This is much weaker than the 6.13-6.2 the market was expecting.

More telling, inventories rose to 8.4 months, up from 7.2 last month.

The only "bright" spot is that the median price is down a small amount from last year, and up substantially from last month.

This is an almost exact mirror opposite from the b.s. number the census bureau released yesterday on new home sales.

You can interpret this to mean that home builders are taking share from existing home sellers as the latter is less willing and able to reduce their asking price.

I still believe the government lied to us yesterday with that new home data. Virtually every home builder who reported last month admitted that April sales were way down. It simply does not square with what was reported. In addition, a lot of sales are coming out of inventory, much of which is there because of order cancellations. So, unless the government is counting new sales twice, this puts even greater emphasis on the suspicious nature of the new home data.

In any case, the story remains that the housing market is still extremely weak and is showing NO signs of bottoming. It is irresponsible of people like Paulson to claim otherwise.

Yes, I'm short home builders. And yes, I am angry about how shorts got played this week by the liars in government and the media.

For
- A Video interview with HUGH CLELAND of Northern Rivers Capital Managment from May 24th
- A Video interview with PETER HODSON of SPROTT Asset Managment from May 24th

Please click on "Wolf Stone" to visit the blog

Dear Bill,

Could you offer your opinion about how this VZ development may/may not affect KRY's chances?

Chris

Anyone know why Aurelian (ARU) is tanking today?

What sort of put/call options are people buying on KRY (if any)?

What is a good site to track these options?

Are call options similar to warrants? I'm looking at MLY warrants right now... if nickel is stabilizing.

Found this in the mining Journal today

Venezuela seeks to double revenue from mining taxes

Venezuela`s Minister of Basic Industry and Mining, Ivan Hernandez, expects revenue from mining taxes to double by the end of this year as the government seeks to reduce its reliance on oil.

Hecla Mining Co`s unit Minera Hecla Venezolana, Anglo American plc`s Minera Loma de Niquel and other private and state enterprises began meeting with government officials on Friday to present production and investment plans and reserves figures, the ministry said in a statement on its website.

The companies were asked to outline their plans to help the government decide how to increase tax collections, the ministry said.

The presentations will be followed by audits of each mining project, the ministry said.

While Hernandez has talked in the past about raising taxes on mining companies, "it looks like it`s going from a theoretical stage to a get-things-on-the-table stage" Mark Turner, a mining analyst with Hall garten & Co, said in a telephone interview with Arequipa, Peru.

Mining companies being examined include those digging for gold, diamonds, coal and iron, the ministry said.

RE: KRY and Chavez: Does it seem to anyone else that these down days all revolve around areas of obvious stops? Not to be too paranoid, or anything, but put the events of the last few days in context. 1) Some people on Yahoo KRY message boards talk up "something big that's going to happen that will cause the stock to be halted." The stock runs up like crazy, triggering, no doubt, some buy stops, AND garnering short-seller interest. 2) Now that it's a fat and tasty piece of low hanging fruit, the recommendation is to "sell, sell, sell,” ostensibly because Chavez is getting’ all jiggy with the IMF. The stock tanks over the next several days, settling down each day to trade around obvious sell stop levels, AND providing a very nice opportunity for those "friends" of whomever to cover their shorts. Not sayin', just thinking out loud.

Maggie

RE: MU. Report on DJ Newswires' Markettalk this morning of persistant buyout rumors circulating, as well as increased options' activity. Anyone have any more info on this? Long, MU (and KRY).

Maggie

http://ccnmatthews.com/news/releases/home.jsp\

Aurelian comments on rumour.

Fred

Enjoy your long weekends everyone. I may share Ferrari concourse photos if Bill allows on Monday and weather permitting.

Dear Maggie,

This thing (KRY) revolves around obvious rumors, not obvious stops.
The expectation had been that the permit would be issued, perhaps a week or two ago. A gap down proved buyable, because the permit thing was still tangible. Now doubt is increasing about the future of this property, and KRY is falling. I actually think it will probably rally some out of this after it's done dropping, and may be good for one more long move.
Your description "Chavez is getting’ all jiggy with the IMF" is one that will stay with me.
Maybe one of the intangible prices of the IRAQ failure is our inability to enforce the Monroe Doctrine. If we could, that mine would be pumping out gold and Hugo Chavez would be....

Chris

chris/shark -

For perspective, MANY Latin and African countries resent the IMF. Brazil paid off its loan early. Argentina has railed how IMF made their crisis worse. Ecuador has threatened to default (even though oil revenues make repayment easy for them).

One of the harshest critics of the IMF's strict bankerly loan conditions is nobel-prize-winning former World Bank Chief economist Joseph Stiglitz, whose book Globalization and its Discontents is mostly a critique of IMF.

Steve Forbes is equally vehement upon the ways in which IMF "conditionality" causes emerging economies to constrict when they most need to promote growth.

Granted, Chavez is the first to make a global political issue of withdrawing from IMF. Bush has ensured that this stunt will build Chavez' stature in the Americas, and amongst the oil-exporting countries.

Remember, it was a Venezuelan oil minister in the '60s who toured the Middle East promoting the formation of OPEC.

To counter Chavez' shrewd global PR, do we have as Stephen Colbert puts it, "a GREAT President, or the GREATEST President?"

Dear Chris,

Yes, I know about, and agree with you, regarding the rumors. And, since they are just rumors, I often think we may do as much damage by repeating them here, on Bill's site (which seems to be followed very closely regarding KRY and other miners), no matter which side of the argument they fall on. Remember, this is not a closed community, and there may be others out there who read our posts, but who do not have our best interests at heart. In that light, I thought long and hard about posting what I did, but since I wasn't reporting any KRY rumor or any report of a rumor, but simply recounting recent events surrounding those rumors, I decided to go ahead. My point was, the obvious stops are merely convenient locations to count on loading up or reloading. Bill is sooo right when he says this has devolved into a soap opera. I hope and pray Crystallex gets the permit. In the meantime, I just "enjoy" the fact that we are living in interesting times. Long, KRY.

M.-

I Forgot to say, the direct fallout of Chavez' pulling out of IMF would be that many VZ bonds require compliance with IMF.

So, if/when Chavez pulls out, VZ will be in default on such bonds. This creates MANY ways for Bush, HB&B and others to play games. Will the US end up seizing Citgo?

If tensions thus rachet up, I could see KRY shareholders being victims. (As Bill said, it's NOT big money to Chavez, but symbolism of the largest gold find in the world could be useful to him.

Re: Yamana Gold AUY; trades as YRI on the TSE
If nyone is interested at this price, the warrants are a huge bargain, imo, at this moment...no premium!!! leverage; expire nov 30,2008.
YRI.WT.A on the TSE

regards all.

Joey

Aurelian: Stratfor published a short item claiming that Ecuador was proposing a new mining law requiring the government to get around 60-70% of mining revenues. I could not find confirmation of this in Ecuadorian newspapers or government websites. Aurelian issued a NR at 11:17 claiming that it sis not have confirmation and the news was quite unlikely.

Maggie/writersblock -

Yesterday's Jun./Jul. calls @ $12-13 strikes saw huge volumes (well above open interest) picked up at the ask (per second hand report such as optionmonster). Private equity buzz (Blackstone? Pre-IPO) reminds me of AMD's following their CEO's "openness" to going private during their last awful earnings CC.

The only rationale I see would be gutting capex and sacrificing future market share to make financials look good for a quick 9-month in-n-out trip back to IPO.

However, the cynic in me sees such a rumor as very convenient (especially if it gains spec momentum for a few weeks) for whomever wants to place some shorts to arbitrage the recent convertible issuance. (It could be more simple like some PE having absorbed the bulk of the issuance post underwriting).

JML

Chavez IMF Withdrawal May Give Pimco, MFS Windfall
But "It may be forgotten like other things Chavez has said he would do and never did"

http://www.bloomberg.com/apps/news?pid=20601109&sid=aQ50L1tKWwJg&refer=home

John Perkins wrote a book about the world bank..which includes the imf. He, an insider tells all, reports the org is an arm of our national security council. As provocative as this is, i have never seen a statement to refute his observations. Out goes the imf,in goes china and india venture capital????

Getting more bullish, potentially, on KRY, Could go in today in a small way on some strength and signs that the DT has ended. It's early still.

Iran just keeps getting crazier and crazier. First gasoline hikes, now Ahmadinejad is forcing banks to cut interest rates in face of rising inflation.

http://www.guardian.co.uk/iran/story/0,,2087915,00.html

IYR is having another poor day which means. . . SRS is having a good day. IYR bounced this morning, so SRS was underwater (from yesterday).

The bid ask spread this a.m. on SRS was $4.85. I offer this to remind people that it can be easy come/easy go. There have been so many shorts in IYR, I'm presuming that is why it typically opens so strongly after a bad day. I could be wrong, but I just offer this as an observation--and I'm trying to ensure that I'm not overconfident in either the precision of my information or in my ability to synthesize it!

Maggie,

First, I will answer your question from a day or two ago. I check Google's news service for Venzuela each day, and that is where you will find the El Progreso story I mentioned.

Second, I agree that KRY often trades around stops, but those raids tend to take place over an hour instead of days. Additionally, you will see occassional flatline manipulations. Tuesday and Wednesday were about profit taking after it became apparent the permit would likely not come this week. Yesterday was all about Cramer. He's still influential even though his second consecutive sell "recommendation" was emotional. KRY seems to be holding steady today, but watch the hour before close for a glimpse of future direction. Many people will buy in today to position themselves for a permit come Tuesday since the US market is closed Monday. If that permit doesn't show, I feel it will likely move back down toward the stabilization level. ($4.25 CDN -> $3.92 USD)

For my own disclosure, I exited KRY on Wednesday, and am monitoring it as well as SBUX and WFMI for entry points. My primary concern now is that all three could be carried along in the broad market sell off I expect sometime in June. As many traders will go on vacation beginning this weekend, light volumes will result in volatility going into the next week.

Qualitatively, my overriding concern with KRY at this time centers on the copper disposal plan, which was the primary point of contention with the environmental ministry in addition to the end of the Venezuelan legislative session on June 6th. Socially, the environmental plans are important. Mercury and copper contamintaion of local water supplies near other mines has hit the Yanomami hard, and most of KRY's concession is in a reserve. I suspect the project will go ahead for economic reasons; impact on native groups has rarely been a concern in South American mining operations when the powerful have something to gain. Either KRY did not yet address the ministry's concerns, or the Venezuelan government is waiting for the new mining law to be finished.

RE: KRY

KRY is a speculative position lets treat it as such.

As a community lets stick to the discussion of facts when they arise. The yahoo boards have plenty of topics on KRY for those who want to talk rumors.

To those who have served or are serving, THANK YOU! And lets hope our troops come home soon!

see you guys next week.

There is one thing that makes me apprehensive about WFMI. While they may sell a great lifestyle, as others have mentioned, they sell an *expensive* lifestyle. That may not matter to many people on here, but allow me to offer some anecdotal evidence. My girlfriend used to shop there all the time. Since she has decided to go back to school and not had money to burn, she's stopped going there for months despite being a regular customer for years - and this is someone who is not careful with money in the least! She jokingly refers to the store as "Whole Paycheck". What do you think will happen with all those other Whole Foods customers when their MEW dries up and the credit cards are maxed out? They'll start defecting to regular and discount grocers in droves. The bottom line is that superficial Americans, when cutting out unnecessary luxuries, will likely start with things like this first, before they (god forbid) trade in that Escalade.

Dear Maggie,

I just read your post which read, in part

....since they are just rumors, I often think we may do as much damage by repeating them here, on Bill's site (which seems to be followed very closely regarding KRY and other miners), no matter which side of the argument they fall on. Remember, this is not a closed community, and there may be others out there who read our posts, but who do not have our best interests at heart.

Let's get a thing or two straight. This is a community of investors and traders. We all like each other well enough, but in the greater universe of traders, no one has anyone elses "best interest at heart", typically this is a negative sum game in which our profit equals someone else's loss, or worse still, the converse. There's something a bit naive and perhaps condescending in your tone, an implication that if somehow "rumors" are repeated then somehow the interest of the originator of them will be better served, which I believe is completely wrong. Info can only be properly weighed when it is generally known and understood. Perhaps you think that people are too dumb too differentiate between different pieces of info. When you are a trader, you are a cowboy with a 6 gun and the other people are actually trying to kill you. It's a war between bulls and bears, not a powderpuff football game. I don't mean to jump all over you but The fact is, the only thing that moves a stock is all the things that are known about it's material condition and it's position relative to the rest of the world. I think that those of us who trade KRY and those who bought and held waiting for the permit are as different as people can be. Buying and holding for a permit isn't trading, it's just a tremendously speculative investment.

Happy M'day.

Chris

I believe GTT is right. SBUX and WFMI are both associated with increasing sense of wealth. Both may suffer further as average people feel less wealthy due to marked increases in energy and food, while the value of their house falls. They may forgo the SBUX and try the new gourmet coffee at MCD, and skip WFMI for the organic goods at the local market.

GTT -

You point out a key risk factor for WFMI. Despite their recent efforts to adjust to traditional grocers' price competition in their organic space, they likely remain very threatened by a sharp substitution effect on the part of the consumer. I would also mention the relatively cheaper direct competition from privately-held (and rapidly expanding) Trader Joe's. Faced with a deteriorating consumer environment, I am more concerned with their torrid expansion pace.

JML

Just a few points on Whole Foods. We have a store in our small town. The parking lot is usually full with Benz, BMW, Jags etc. etc. No shortage of money in this town. People shop there to be seen. I don't believe many would know an organic banana from a Chiquita. I have visited this store with my wife and children. Yes, it looks lovely and has a wonderful array of goodies. However, I would not shop there again. My favourite store has every organic item I would ever need at a much better price. It's family run and they need the business. I believe Whole Foods is far too pricy for the average Joe and if hard times hit in the US look out.

Chris,

When the market is growing because of an inflow of cash we can all win. When the money is pulled out of the market ... look out below. I agree with you that traders and investors can be very different. I am both an investor and trader. Most of us probably are to some extent. It just depends how much "play money" you have. When I buy any stock under $10 with a small float I know that traders are going to play with it and rumours will be part of their game. KRY fits that definition. I want to hear the rumours so that I understand why the stock is bouncing. I'm betting on the permit coming through. So, I've bought and hold KRY as an all or nothing speculation. It's tempting to ride it up and down but, then I'd risk getting shut out when the good news arrives.

Help needed. For the life of me I cannot figure out Western Goldfields. Every bit of due diligence I have done comes up smelling like roses. So why is the stock stuck in neutral?. Is there something I am missing?. Long WGI.

Thanks

Horatio

i agree horatio. most just look for the sticker to say organic, or the USDA Organic symbol at most (these standards, which are probably the lowest "organic" standards out there, are under attack by the way. everyday low prices matter more.) The terms "organic" and "green" are being abused as well and will eventually become meaningless.

You want organic? Rip up your lawn, and start digging. Then learn how to preserve stuff and get a FoodSaver for the winter months. Or come to Jersey by my parents' house - "old country" Italians can grow anything anywhere:)

that said, the trade might still work based on Bill's trading guidelines. As he said, we'll see.

SBUX coffee is far superior to any other chain. Not the fancy drinks, but the straight coffee. I drink it black, just like the CEO does :)

Jasper -

You really can't say the IMF includes the World Bank. They are separate institutions (in each of which the US has the largest share, about 22%).

But the Bank and the Fund have different outlooks: the former promotes "development", the latter "monetary/fiscal responsibility" (except, of course, in the case of the largest shareholder!)

The two fight like cats, as is explained in Stiglitz' book. Tradition has it that the US picks the Bank President, and the Europeans pick the head of the Fund.

There have been no changes in the ownership or control of the two since their founding just after WW2! Given the rise of India and China, that now seems at least quaint!

VZ ALERT...CHAVEZ PULLS TV LICENSE FROM OLDEST PRIVATE TELEVISION STATION IN VZ!!!!!!!!!!!!KRY TRADES TONS OF SHARES

Permit me to copy another of Bill's comments from this morning:

"Crisis equals opportunity. I believe an ounce of gold is worth more than a ton of paper (well maybe a half ton, but you get my point). Is an ounce of gold in Venezuela less than an ounce of gold further down the Guiana Shield in Guyana, a couple hundred miles away? Do you really believe that Chavez will not permit foreigners to mine there and repatriate profits and pay bills, and so forth? If you do, that’s fine. Trade something else, but then forget the issue of KRY and GRZ etc. If you want to mouth off any further, then you are an advocate, and not a trader. Traders are always seeking opportunity. They like to see crises. When desperate or misled people throw away good assets like ounces of gold, traders step in to buy."

I don't think anyone knows how far KRY/GRZ can go. Somewhere in the New Testament faith is defined as the certainty of things unseen. Fast forward a couple of years in your mind, and allow yourself to play with the possibility of high interest rates, inflation, new conflicts in the Middle East, and a global shift from paper assets to hard assets. If Chavez allows the company to begin production and gold rockets higher, KRY could be a ten-bagger and all the anxiety in 2007 is history. Keep a little stashed away..

...and with the tar sands industry at full throttle what's going to happen to BMD->bought out and vertically integrated into a major player...there really is no opportunity without risk, and you have to listen to yourself...otherwise you talked out of it all...

correction: "otherwise you allow yourself to get talked out of it all..."

Aaa... yahoo message board post above! :)

Here is an interesting post on WFMI and a discussion with its CEO... don't watch the video if you want to keep eating meat.

http://epicurious-wanderer.blogspot.com/2007/02/uc-berkeleys-past-present-future-of.html

What I didn't realize was that they provide loans to farm producers (albeit a small portion of their total revenue)

Note that they price match Trader Joe's. Whole Foods in Toronto is located in one of the higher-end malls in Canada in Yorkville, next to the Ferrari Maserati dealership.

rob d: Peet's Coffee French Roast ground down to a "0" is the best hands down...you cannot get a better cup of "straight" coffee...

Forget Venezuela. If you want real excitement invest in Ecuador. Aurelian was the play today. It is a good example of the effect that country risk and misinformation can have on a stock's price. Punters are betting this afternoon that Aurelian is not at risk of a rumoured new Ecuador mining tax policy. The big question is, "How can you tell what the truth is?". The Ecuador government will be available to provide clarity on Monday. It's a holiday in Ecuador today.

A bit more muted than usual due to light volume, I guess. Yet, Dow tacked on 13 pts (20% of day gains) advance in last hour (most of it in last ten minutes). S&P +1 pts NAZ flat. Long into the weekend, again.

JML

Chris, Sorry you took my comments as condescending. They weren't meant that way. As brianr put it so well, KRY is speculative, and we should stick to the facts. Maggie

I'm contemplating positions in SDS and DXD for the next month. Would love to know if anyone else feels the attraction.

ron paul fans: go to www.reason.com

lots of good articles/posts about him and the campaign.

just signed up for their RSS feed and 6 of the last 10 mention him.

If we are going to look at various co's, it should be those we know and use, otherwise we can just read the standard stuff and buy our research off the rack.

In short, the average joe is not who we are looking at with WFMI or SBUX. If you are a regular Joe or a new student, then you aren't one of these co's customers and your view, while interesting, isn't germaine to the discussion on those co's prospects. We need to know your views on MCD, Dunkin Donuts in the States and Tim Hortons in the lovely Canuckadorland.
For students we need to know your instant noodle and beenie weenie input. Students shop at the Salvation Army, wear old sneakers and eat catsup tomato soup, they don't eat WFMI foods, drink SBUX or use Costco or Nordstroms.

Trader Joe's might be a good partial comparison, but trader joe shoppers tend to be there for novel items, not organic food, and of course two buck chuck, which is pretty good if you drink the Cabernet. Their cars will also be seen in the parking lots of the above establishments, and be shiny, new and cost many thousands of dollars most of us also won't be spending. Are we going to compare Zales to Tiffany? Ford to BMW? Of course not.
Tiffany customers wouldn't be caught dead at Zales and the same is true of a Starbucks or Whole Foods customers.

If we are going to compare same store sales or like customers then WFMI will need to compare to COST, Nordstrom, and the upper end retailers.
They do not have low end cohorts that make easy compares for those who aren't customers.

If you walk in and then say you wont be back, you aren't their customer and never were meant to be, anymore than I'm going to drive to my local BMW dealer and plop down $40,000 for a car.

Here's the deal. I KNOW the BMW is BETTER than my Ford. It doesn't mean we should sell BMW or that BMW will tank. It means I have decided I cannot afford a BMW. My judgement of BMW will be insane if I use Ford mentality to judge it.

Finally, this is not to say WFMI or SBUX won't have slowing sales, they *might*. But the logic presented here can't accurately predict that anymore than I can anecdotally predict BMW sales.

Regarding the wfmi case study. I bought a small position on the 23rd @40.56. I'm watching sbux, and may very well buy a small position if/when a buy signal is generated.

I roast my own coffee.

All other coffee, including Peet's, Starbucks, Batdorf and Bronson, Deitrich, Seattle's Best, Tully's, etc. are old, stale or getting there, especially if you buy it at the grocery store, no doubt preground. Blah.

The best coffee starts with the best green beans, fresh roasted, allowed to cool and off-gas, ground and enjoyed fresh.

That will be the best coffee. The grind will match the brewing method, which if you are drinking the best will be an impeccably clean vaccuum, french press, pour-over drip or the only ECBC (European Coffee Brewing Centre) approved coffee maker, the Technivorm, because coffee brewing requires specific temperatures that most coffee makers simply can't achieve.

I used to think I was drinking the best coffee until I did it myself. I drink Starbucks mochas on the road because they are blended and their roast stands up to milk and flavors, which is why they (and Peets') roast that way. I won't drink regular brewed coffee from these places unless I'm forced to.

If coffee is your thing and you want to know more, try SweetMarias.com

re: the great coffee debate...

last fall, Canadian Business magazine published the results of a survey of four coffee professionals who ranked the coffee of McDonald's, Coke (a new product), Tim Horton's, and Starbucks...

The results:

http://www.canadianbusiness.com/after_hours/lifestyle_products/article.jsp?content=20060926_105646_1532

(sry...not yet a member of the TINYURL Tribe)

regards,

joey

Craig
I agree with your views on two scores.
First, with regard to WFMI and SBUX, your customer analysis is exactly right as are the comments here this week by those that pointed out that these are not a 'grocery' and a 'coffee shop', but lifestyle marketeers. I believe that hard times are coming and so have not yet taken a position in either (except for a very profitable trade in WFMI a while back), expecting that there might be better entries in the future, but I am sure I am going to own these companies when I feel the time is right.
Great companies like these will quickly respond to the economic times. It will be intersting to see how effectively they both do it, but they will both be burning the midnite oil to come up with product introductions that suite the times.
That's what great companies do.
As for coffee, I am also a roaster. I have this little machine that uses hot air. I can watch the little coffee beans flying about turning from green to a beautiful, dark, oily brown.
There is a coffee roaster in town (Carrabassett Coffee Roasters) from whom I buy my beans, and I do believe I roast 'em better than they do... but I would, wouldn't I?
Only problem is the smell when I am roasting. My partner, Gigi, has a very sensitive nose (she used to be a professional chef). As a result, since I live in Maine, I can only roast in the summer on the screened porch.

"Great companies" will adapt. I agree. whole foods is one to watch for where to buy in. This ceo is very impressive. He is the gates of food and lifestyle.

NYgrad,
Thanks for the comment. I served during the Vietnam "crisis" in 1970-72. But I was in Germany. That is because everyone with last names beginning A-C went to Nam and the rest went to Germany. I drove a big truck. Sometimes only a case of toilet paper from Munich to Frankfurt. That is the US Army;FTA. stk

Rigdon,
If you have the same machine as I do, the iRoast (is everything now isomething?) you can hook it up to a 3" exhaust, or a vented cook hood.

I just open the kitchen window and run the vent outside. Keeps the smoke outside on dark roasts.

Jasper: He also hired some of the top people in the field which speaks to his expertise and vision of the future. As an example, lets look down the road to their original idea of buying blocks of renewable power. These days wind costs 4.7 cents (USD) KWH. What might nuclear, NG, coal, oil or LNG cost in the future?

As I'm a coffee fanatic (can you tell?) I picked up a LB(14 ounces?) of Batdorf and Bronson the other day because it said they are using 100% renewable power and there is some sort of certification for it. It made me curious. If they use gas fired drum roasters I don't know how they get renewable gas, but I know they buy blocks of wind power and have solar panels on the roof of their big headquarters. None of this existed before WFMI did it.

THIS is the wave of the future, and co's like WFMI and SBUX are at the forefront of this movement, whether it's coffee co-ops that benefit poor farmers or funding and advising organic farmers, certifying seafood and procurement methods, or buying organic cotton. All of these practices change the status quo, play to the "whole" customer, and change the practices of industries on a much wider basis.

Look at seafood. Before WFMI we didn't have approved catches based on sustainable fisheries.
Now everyone is doing it. Some better than others, but when those differences are made known, where will the customer go? To the original they trust. Incidently, the same will be true of organic labels. Who will you trust when chocolate milk has an "organic" label on it? Don't laugh, I saw it. You know they will go to WFMI when they learn the difference and they know WFMI really cares and the USDA is a bunch of lying crooks. The organic label right now is like the blue skys initiative. You know the intent is to dilute and obviscate, like everything else this administration has done. A bigger group of liars has not existed since.....the roaring 20's.

Or organic cotton. Big deal you say! Look into cotton farming. Cotton farming uses a lot of water and cotton is grown where it's hot so there's all kinds of salt build up from fertilizers. The central valley of California is one of the most productive and polluted. WFMI (along with co's like Levi Straus) is changing the industry and the way cotton is grown. If you had any idea how powerful the biggest cotton growers are it would impress you even more.

And power. Did anyone notice how quickly WalMart moved to increase efficiency in it's truck fleet and how big a deal they made of it after WFMI announced (via my friend Michael Besancon) they were going to use green power? Suddenly it was all the rage. I also think that those co's that are ahead of the carbon game and using localized renewable power will be more profitable in the future than those that wait or resist. Energy of all types is going higher, of that there can be no doubt.

I think in times like this that relationships with honest people is money in the bank and not only is it true for us it's true for the customers and employees of these co's. Look at how the employees of thes co's are treated.
Then look at WalMart. Who's making more money, growing faster and missing all that expensive PR nonsense?

Disclosure: long WFMI, no SBUX at this time and no COST at this time. I am waiting for entries into SBUX and would own COST on a pullback to the low 50's. I spotted SBUX in the early 90's and kick myself knowing what I knew then, and I've had a Costco card since 1989.

Peter Grandich was at a point in time a stock guru. Bigger than life back in the 70's. He missed the entire bull market of the 80's +. Although I live at this site, I have wondered if we are seeing the economic trading environment through his smoked glass. Maybe we are climbing a horrific wall of worry. I for one am to petrified to jump in with both feet. Just day trade for tinnies and get out at the end of the day hopefully with a few bucks. stk

Craig -

I generally agree with your appraisal of these "upper-scale" retailer's core clientele and their socio-economic conditions. Yet, I strongly suspect that WFMI, JWN, COH et al. (maybe even TIF) have enjoyed upside profits in recent years because of their MEW-fueled, aspirational clientele. As their economic underpinning seems truly anchored on wealth effect, it is a fair debate to question their stickiness and loyalty and eventual line of retreat (on the grocery side: TJ's, COST KR, or WMT; on the apparel side: FD, KSS/JCP, TGT, ROST or WMT). My view of retail may be less stratified: each caters to their core constituency but strives when it captures the swing clientele captured between the limitations of their income, the effects of their perceived wealth and the aspirations of their social yearnings.

SBUX remains, in my view, a more complex animal to figure out. Beyond their "small luxury" status and new lifestyle salesmanship, they have become a sort of public space away from home. H. Schultz's e-mail re: the commodization of their experience points to their knowledge of the worst pitfall in their growth: becoming McDonald's where you go to eat and drink, maybe, a superior coffee, but you would rather drive through than spend your afternoon there. As for now, it is evident that their traffic suffers from my recent stops-by (shorter lines, single item orders, no overwhelming demand of their blended drinks or novelties). In short, I keep trying to figure them out.

As a matter of investing/entry points, we are still some levels away from attractive bargains here for both WFMI & SBUX. Maybe some trader's opportunities, but no longer-term value investing.

JML

Re SBUX & WFMI,

I agree that they are lifestyle retailers and that they understand their markets. I've never been in a Whole Foods Market as they are not in our city. However, every time the family would take a trip for a weekend in Minneapolis we would always include a visit to Byerley's. I wonder if it is still there on France Ave.....? There was something cool about hearing the grand piano when you entered, and walking the carpeted isles of a food store that knew what selection and good food was all about. My take on this is that when things get nasty we will want to feel good doing simple things that are pleasurable and cost little. An upscale coffee or groceries excursion is within the wallet of most people.

I am having a brain freeze. I am thinking about a different individual, not Grandich. Now I can't remember his name. stk

RE: SDS and DXD

Skrymir: I hold both right now. Been slowly scaling into my positions since the beginning of the year. Seems like you get one good week and then kicked in the teeth for 4 weeks. My only investing criteria is "will it be worth more or less a year from now?" I feel strongly that both of them will be worth quite a bit more. Don't know that I'd make a short-term play on these unless you're a true "nimble trader."

RE:WMFI

I posted my opinion on this yesterday. If the US goes into recession, WMFI better be able to compete with Walmart's prices. I don't see that happening. They have a great business model for a booming economy, but not so hot for a bust period.

As you can probably guess, my stance on the market is a bit bearish at this point. I could be wrong.

I agree with AZ_cowboy. I went to my local equivalent of Whole Foods and saw that asparagus (forgot how to spell it!) was $8 per bunch (less than one pound) and other vegetables were priced similarly. Now I enjoy parking my SAAB next to the BMWs and Lexi, but I decided that next time I shop for vegetables it will be at the local hoi-poloi mart and non-organic. I asked the manager why the vegetables were so expensive and he said that it was due to transportation costs. What a scam! Producers use inflation as an excuse to stick it to the customer and that's about all there is to it.

I agree with AZ_cowboy. I went to my local equivalent of Whole Foods and saw that asparagus (forgot how to spell it!) was $8 per bunch (less than one pound) and other vegetables were priced similarly. Now I enjoy parking my SAAB next to the BMWs and Lexi, but I decided that next time I shop for vegetables it will be at the local hoi-poloi mart and non-organic. I asked the manager why the vegetables were so expensive and he said that it was due to transportation costs. What a scam! Producers use inflation as an excuse to stick it to the customer and that's about all there is to it.

Anyone know why Aurelian (ARU) is tanking today?

Fred. Today was a wild day for Aurelian 5.7 million shares from 33.50 down to 26.40 and back to 31.40. I don't think I could ever go back to
WMFI after trading ARU for over a year!
Regards
Brian

I am a big coffee drinker too, well one or two a day now. I can purchase a big tub of Folgers at Wal-Mart for around $6 and brew it on my little B&D 5 cup maker. Dee-licious!

5 cups? I'm through that much by 5:30 AM PDT.
We make three twelve cup pots a day.

And roasting my own costs about the same to me as folgers at Walmart.

Brian,

I'm not sure that the Aurelian (ARU) volatility is over yet. Also, have a look at Dynasty Metals (DMM). They got their mining permit in Ecuador about a week ago and have been like a yoyo since, mostly up. They're also spinning off some of their territory in an interesting partnership with Skin Biology (SBI.H). I watched both companies all week and put in many bids but wasn't able to catch a tide to get in.

Fred

stktrader -- Peter Grandich? Perhaps you're thinking of Joe Granville?

Speaking of coffee, I'm ticked that the company which bought MJB from Sara Lee changed the blend on their "Colombian" brand to a darker roast. I'm sure they figure that with cheaper beans and a darker roast, the customers won't notice the difference... I'm accumulating all the old 3# cans (HA! remember those?) I can.

Wish I had a copy of Yale Hirsch's "Stock Traders Almanac". IIRC, the day before Memorial day weekend is almost always a guaranteed rally, as is the day before Thanksgiving. Given the light volume and the action on Thurs, Tues ought to be an interesting day...

Read some of your posts re: VZ trying to double revenue on mining taxes. They can quintuple it by granting crystallex final permit on las cristinas, since right now they only can tax the Tomi mine region.

also here are the block trades for Friday in relation to the time and price action. Doesnt it look like the broker/dealers are playing frisbee with the stock in the morning?
http://i16.tinypic.com/6763yc8.jpg

as someone said, the permit will come when it comes. i just use these days to lower my cost basis on my call options.

Speaking of coffee.....why are the whole beans now more expensive on a per lb basis than ground coffee? Almost not quite 2x the difference.

I bought for the first time..."Chock Full of Nuts"--wonderful coffee. Because of its name, I've never bought it before. I finally read the can and decided to give it a try. REally love it. I prefer the ground beans, but the chintzy person in me says not to pay 2x for something that is merely going to pass through the system in less than an hour!

Craig, thanks for the coffee information re: SweetMaria.com.

I love coffee, I'm not finding what I want, and maybe the only answer is...roasting my own.

Re: WFMI

I'm long and I shop there too. It is more expensive than a nearby Trader Joe's -- much more, in fact -- BUT overall quality is much better at WFMI. Now I cherry pick, buying certain items (like olive oil and condiments) at TJ while I stick with WFMI for meats (pasture-fed), fish (wild-caught), and fresh fruit and vegetables (organic, otherwise I shop at a different grocery store where I pay less).

I suspect one way to view WFMI is that it falls into the luxury/lifestyle category. There will always be a market for that category including within retail, food, apparel, etc., etc. During slow and/or bad times, the luxury sellers must be more inventive and aggressive -- and the best usually are -- but they tend to ride out the bad times better than discounters that must scramble for every penny given their target markets.

I attended the WFMI shareholders meeting a few months ago. CEO John Mackey is inventive and creative in the organic food space. It's a passion for him. Some of the planned initiatives for WFMI will help transform the way food is grown in the U.S. and, ultimately, beyond.

Omphalos,
You got it! It WAS Joe Granville I was thinking about.

WFMI & SBUX:
SBUX sell a drug. People stuck on their coffee will budget somewhere else to get their fix. They may make their own Starbucks at home if they have time in the morning.
If you caught the piece on tv about the fact that 70% of all fish sold in the USA comes from China, one might consider never buying fish that comes from there. The fish they raise are fed antibiotics so that they can handle the polluted water that they swim in. That alone makes WFMI a place to buy ones fish. stk

Friday nights and weekends usually have a few comments about wine. Now it’s coffee. Is this a sign of market change? No, just a sign of our caffeine tastes instigated by SBUX discussion as it approaches the AZ. I also await it to come to us.

My one memorable, great tasting cup of coffee wasn’t at CBOU, SBUX, Tully’s, Dunn’s, Dunkin’s, Peet’s, Au bain Pan, Horton’s Marshall Field’s, Café Victoria in the North End (great after dinner), wherever.

It was early morning along the coast at a café in Guancaste Province, Costa Rica. Now that was fresh, rich aroma. Alas, one was there only temporarily, so I settle for the best of the available which is usually one of the first four listed above. On the other hand, have you ever had one that reminds you of the oil sands? Or with just a touch of caffeine in dark hot water (7-eleven)?

Craig wrote: “5 cups? I'm through that much by 5:30 AM PDT. We make three twelve cup pots a day.” You do seem wired some days. LOL. Appreciate the posts. Disclosure: I usually stop at three large cups and it‘s usually after 5:30 a.m.

Shop WFMI for seafood when not on the coasts. There will be more opportunity to buy in, but let's see if this will be a recession.

With the price of feed grains increasing, looks like there is a threat of food inflation. I think meat producers will be able to past these costs on and increase profits. I’m watching to see if SFD reports disappointing quarter to scale in, but I think the institutionals are on top of this already.

Re: Byerlys

TerryC,

I haven't been to the Byerlys on France but they are great throughout the twin cities. They and their sister store, Lunds, have been offering delivery or pick up for a small charge and the service is awesome (also helps that they include $20 off coupons). If you make it back to the twin cities you should also check out Kowalski's for groceries. I moved to the St. Paul from New York City (awful, awful groceries and forget the nasty seafood) almost two years ago and was amazed at the wonderful produce, bursting with color and flavor. Great organic beef too.

I never bought into Whole Foods. The hipster kids love working there but the prices were always a turnoff.

Jasper I am holding FXY to hedge; sold my juniors when Gold failed "again" around $ 690 going into shoulder season. I will look to re-enter MRB per a test of $ 630 however NEM is "feeling" oversold at support mind-you I have not looked at it's RSI but the big boyz like GG have got no lov'in what so ever. I have a few clients I would like to put into an energy trade (note XTO has been in my IRA for years) for the Summer run per storm hype, etc... Bill perhaps your chap Colin can weigh-in here but my Nat. Gas charts look like they are setting-up for a run to $ 9+ to be dumped as usual in Sept.

Number 2 your still early to short housing, look at the absurd numbers Commerce posted last Thursday. We are still in the early innings here.

Granville's still in the bear "crash" camp, though his calls on gold and miners have been pretty darned good over the last couple years. He's been bearish on that since Apr 24th, though, and in his last letter recommended buying puts on Coeur D'Alene.