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Posts Tagged ‘ Amazon ’

Jan 05

Chipotle vs McDonalds vs Amazon vs Apple vs Google

Filed under Stocks

As we lightened our shorts on Amazon (down to 1/4 of shorts) we are slowly building up our short position in Chipotle. Read their latest quarterly report in the plane last week and am convinced the higher it goes the greater the opportunity is. As always, risk management is key as the top is never easy to pick. I recall our first post on shorting Amazon at ~$145, then $180, then $220. Boy were we “wrong” with timing, but over the last 6 months Amazon has dropped by over 30%. As usual, the blogs are now bearish on Amazon. We were also trying to short Netflix along its way up (unfortunately our broker had borrowing restrictions against short selling hence we were unable to open any shorts) as sentiment was invincibly bullish. As it fell to $67 (80% discount) we became buyers in this fantastic business, whilst the blogs were full of bearish analysis citing how bad management is. My only criticism with management’s decisions were NOT with trying to separate the DVD and streaming business, but the fact that they were doing buy backs at such inflated prices! (and now requiring to raise capital). Thats just stupid capital management. Even financial illiterate doctors such as ourselves can manage that better.

Back to Chipotle. As you know, fundamentals aside, the laws of gravity and mean reversion always applies to finance. No matter how great and bad your business is, charts do not usually go up or down in a straight line. Chipotle’s rocketing share price over the last 5 years have made it TOO EASY for the dumb money to get rich. And you bet there are alot of “dumb money” (now smart) riding it. As a rule, making money is never easy.

If one were to invest 10k in Chipotle

1. 1 YEAR AGO - Total value now = $16,000

Chipotle versus McDonalds versus Amazon versus Apple
Chipotle versus McDonalds versus Amazon versus Apple


All entries filed under this archive

Chipotle vs Amazon vs Apple vs Google Chart Comparison and Analysis
no responses - Posted 12.22.11
Points: 1. Investing in Google (Brown line) over the last 5 years have been a (relatively) very bad investment 2. Gap between Apple and Amazon finally converge. We are still riding our 350 shares in Amazon short from $239. Plan to close another 200 shares at $160 +/- $10. We may not ...continue
Amazon: Cashing In
no responses - Posted 11.25.11
We covered a third of our short Amazon at 182 - closed 150/500 shares from $239. Profit of $8545 after brokerage. We have an order to cover another 200 shares at $160. continue
Agriculture Play
no responses - Posted 10.27.11
We have been accumulating a stock recently as part of our agriculture play. It is a solid business with a monopoly with good cash flow and leverages on the agriculture sector in Australia. Because it is so illiquid and we are still in the process of accumulation, we will not ...continue
Amazon: Payday
no responses - Posted 10.26.11
Amazon extended after hours trading is down 12% as we type this, about $198. We shorted 500 Amazon shares on 12 October 2011 at $239 ($119,500 holding) - and will continue to hold until our initial target of $180-190 is reached. We will look at the technicals to decide on ...continue
Amazon Roadmap
1 response - Posted 10.12.11
Foreword: Shorting individual stocks is a very dangerous game - DOWNSIDE = infinite With the warning out of the way, we are going to short 500 Amazon shares $239. Double top at $244 would mean a $2500 loss, which we can take. No stops. We have no doubt the valuation of ...continue
Bezos Impersonation of Jobs
no responses - Posted 09.28.11
Was Bezos expecting an applause at 0:37 after announcing the price of Amazon's latest product? I must say I am curious and would not mind owning a Kindle Fire (I do not own an Ipad yet). The major turn off though, is it does not have 3GS (what doesnt have ...continue

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