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(B)(N) The Fastest Food In America

February 4, 2014
Stop & Chops

The Wall Street Chop & Chops

Drama. After patiently bidding up the fast food companies by $50 billion and +24% all last year, and collecting $5.5 billion in dividends, the market decided that it was time for … a haircut? And promptly trimmed $11 billion and 5% off the aggregate market value with presumably discretionary cuts on assorted others – some of whom were “scalped”. Please see Exhibit 1 below.

The way the market works, of course, is that somebody bought at the top what somebody else was selling, and those who did are probably now wondering if they did the right thing or should they have bought their own lunch instead of everybody else’s? And despite 100,000 books and memoirs to the contrary, nobody knows how the market really works or what it’s working on now (CNBC, February 4, 2014, ‘Hot money’ ride could be getting put on ice).

Exhibit 1: The Fastest Food In America – Fundamentals – February 2014

The Fastest Food In America - Fundamentals - February 2014

The Fastest Food In America – Fundamentals – February 2014

The Cheapest Fastest Food In America - Risk Price Chart

The Cheapest Fastest Food In America – Risk Price Chart

But America doesn’t travel on an empty stomach – and it’s travelling now – and we like food and we like these stocks and, as usual, we buy them all – if warranted and with the usual safeguards – because if we’re not eating at one, we will be eating at the other.

All seventeen of them but for Darden Restaurants (please see Exhibit 3 below) are in the Perpetual Bond™ now and that portfolio returned +54% last year, plus our share of the dividends. Please see Exhibit 2 below and click on the link “The Fastest Food In America – Portfolio & Cash Flow Summary” for more details.

Exhibit 2: (B)(N) The Fastest Food In America – Prices & Portfolio – February 2014

The Fastest Food In America - Prices & Portfolio - February 2014

The Fastest Food In America – Prices & Portfolio – February 2014

It’s because of our studied ignorance of how the market really works that we only buy and hold those stocks for which there is a demonstrated excess of demand over supply – that is, they are trading at or above the price of risk.

Exhibit 3: (B)(N) DRI Darden Restaurants Incorporated – Risk Price Chart

(B)(N) DRI Darden Restaurants Incorporated

(B)(N) DRI Darden Restaurants Incorporated

Darden Restaurants has been walking close to the line, that is, the price of risk which is calculated as the Risk Price (SF) (Black line), for several years and it was an easier buy and hold in 2010 through 2012 but has fallen through now.

The indicated Stop/Loss prices are indicative only and need to be adjusted according to our sensitivity to a loss – and we always expect to lose but are often proven wrong.

(Please Click on the Chart to make it larger if required.)

For more information on the chart elements and additional references to the theory, please see our Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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