Bottom Tier Burger Joint, $SONC, Acquired for $2.3b; $SHAK is a Buy

Inspire Brands just acquired piece of shit burger chain, Sonic, for $2.3b, which amounts of ~3x sales.

Here is the revenue run on SONC.

Now at about 5.2x sales, SHAK is doing this.

Both companies do $116m per qt in sales, but one is growing at 30% per annum and the other shrinking by 15%. You tell me what SHAK is worth if SONC deserves a multiple of 3x?

Long SHAK.

You cannot stop the cannabis farmers from making ‘medicinal marijuana’ and profiting off the degeneracy of Canadians. That, my friends, is an bottomless pit that can never be understood nor fully examined.

Early going TLRY is +20%, CGC +3%, NBEV +18%, and CRON +4%.

In Exodus, I even created a new industry for it, loaded with data.

Presently, I only own BLRX, as my sole cannabis play, but am willing to trade anything for a brief period. This post is literally insane since the one prior just said I wanted to get back to trading real stocks and the one before that declared the cannabis trade to be over — bitcoin’d to death.

That is all.

Some people argue that China is taking advantage of the US and are manipulating government officials to favor them. Why wouldn’t they? Their interests are Chinese, not American. There’s a lot of blame going around these days, but not a lot of people willing to accept responsibility. Americans forged these trade agreements with China and were very comfortable with them for a long time. Both democrats and republicans enjoyed having China manufacture our stuff for cheap, which translated into cheap prices at TGT and WMT, and every retailer in the country. In comes Trump, describing how evil China is and how they’re ripping us off, and voila, just like that half the country wants to declare war on China.

Are you people fucking nuts?

In response to the recent friction with the US, Chinese released a 71 page document describing American as a global monster interrupting trade detente.

“Rather, it has brazenly preached unilateralism, protectionism and economic hegemony, making false accusations against many countries and regions, particularly China, intimidating other countries through economic measures such as imposing tariffs, and attempting to impose its own interests on China through extreme pressure,” according to the white paper.

The white paper stressed China has responded from the perspective of the common interests of both parties as well as the world trade order, observing the principle of resolving disputes through dialogue and consultation, and answering the U.S. concerns with the greatest level of patience and good faith.

The Chinese side has been dealing with these differences with an attitude of seeking common ground while shelving divergence, the white paper said. “It has overcome many difficulties and made enormous efforts to stabilize China-U.S. economic and trade relations by holding rounds of discussions with the U.S. side and proposing practical solutions.”

However, the U.S. side has been contradicting itself and constantly challenging China, the white paper said.

“As a result, trade and economic friction between the two sides has escalated quickly over a short period of time, causing serious damage to the economic and trade relations which have developed over the years through the collective work of the two governments and the two peoples, and posing a grave threat to the multilateral trading system and the principle of free trade.”

It’s very convenient, thanks to our ‘democratic system’, to simply blame the previous administration for all of this countries woes. Think about every President in your lifetime and try to remember their rhetoric. It’s a cheap parlor trick that will last forever; but the truth is plain. The policies passed and supported by American government are deliberate and not just supported by a D or an R; they are American — promoted and succored by permanent government officials and think tanks and ‘policy experts.’

Don’t believe the bullshit. It’s not worth your effort.

As for the market, looks good. Even TLRY is higher, naturally after I declared cannabis dead. But I think I’ll get back to SAAS and allocating into real companies.

You cannot relive the glory of yesterday; instead you will endure and pain through the maladies of tomorrow.

I saw several undistinguished gents parlaying their hard earned coin into TLRY today, hoping to recapture greatness and to endure the filter of time and become immortal — legendary trader on par with Gordon Gekko. Why, movies and books will be written about these cannabis speculators, men clothed in hemp garments and adorned with long beards, drenched in perfumed oils.

As the sandlawood incense burns hot and the beads from the living transom hangs and swings to the melodies of Bob Marley — you will lose all of you money bottom fishing in TLRY.

Today’s winner XON was up on news that Randall Fucking Kirk was experimenting with pot drugs. Don’t get it twisted; this is a sector under immense selling pressure — canniFAGS trapped at higher levels, on margin, dying for any respite to sell their shares to you.

While I do believe the cannabis industry will one day elevate into the blue skies like a plume of smoke emanating out from a glass bong, now is not the time to bet on such an occasion.

I stepped in and bought TEAM, HUBS, ZEN, and SHAK — because I love them and want to get long on this small pullback.

Since the Rosenstein meeting is scheduled for Thursday, I’m guessing markets do the opposite of what makes sense and barrels highs. How does something or someone ‘barrel higher’?

Who gives a fuck.

I’m not in a rush to get back in, but am actively looking to construct a new swing trading portfolio.

Everything is turning into hell. The President is about to fire the man in charge of the very honorable and quiet Mueller, which should plunge the orange one directly into impeachment hearings. These hearings will be beautiful, a pastiche of cartoonish figures genuflecting to the constitution they demure on a daily basis. A great man once said ‘no one cares’, and that’s the motto I live by.

Markets are tumbling because it’s the season to do it. Quit over analyzing this shit and buy some YANG. We’re on the verge of creating a cataclysm for China and there’s nothing they can do about it.

The Dow is sharply lower by 170, and the Nasdaq is little changed, off by 17. Lots of strength found in oil and select software name, as well as retail. This is not a distribution day, just a plain old vanilla sell off.

The title was clickbait AF too.

Not really bearish, but starting to think this downside has legs. At a minimum, China is fucked. I sold my JG position and raised cash to 80% and then I turned around and bought YANG — 3x inverse ETF — because China sucks and this chart does not lie.

Cannabis stocks are being destroyed. While this is a joke of a sector to begin with, a lot of hot traderFAG money is wrapped up in it. Bear that in mind and the ripple effects it might have.

MU caught a downgrade — king cock of the semis.

Micron (MU) had its target lowered to $80 from $100 at Needham this morning as they feel it may take 3-4 quarters to resolve the gross margin issue raised by Chinese tariffs. Firm still likes the stock long term, reiterating their Strong Buy, as they believe in the structural changes occurring in the memory industry and are encouraged by MU’s net cash and de-leveraging campaign.

And high growth SAAS company NTNX just caught a vicious downgrade. Before you panic about the sector, read the note.

A rough month just got a little rougher for enterprise cloud computing company Nutanix (NTX) as the stock is trading lower this morning following a downgrade to Negative from Neutral at Susquehanna. The downgrade comes on the heels of a report last week from “The Information” which stated that Google is considering expanding into the private customer data center market. In fact, the tech giant is said to have already launched new software called Kubernetes which enterprises can use to manage large sets of data and applications and their data centers.

To understand why this might be a concern for NTNX, it probably helps to understand its business in more detail. So, here some background:

NTNX is a developer of computer storage technology which makes it easier and more cost-effective for companies to run servers. The technology it uses is called “hyperconverged”, a cloud platform that converges traditional silos of servers, virtualization, and storage into one integrated system. NTNX’s platform is comprised of two software product families: Acropolis and Prism.

Acropolis is software that delivers distributed storage, application mobility capability, and a built-in “hypervisor”, which is software that allows multiple operating systems to share a single hardware host. While Prism provides integrated virtualization and infrastructure management, operational analytics, and administrative capabilities.

NTNX states that its platform is much more agile that traditional data storage systems since it converges silos, virtualization, and storage infrastructure into one system. To put that benefit into some context, an IDC study indicated that customers can deploy its technology in up to 85% less time than traditional infrastructure. Additionally, with NTNX’s application, infrastructure can be provisioned in minutes with one click by a single IT administrator.

Now, with Google reportedly providing enterprises with systems that combine servers, storage, and networking abilities, it’s easy to see why this could be of concern for NTNX investors. It is worth noting, though, that after this story hit, multiple firms came out in defense of NTNX. For instance, Needham stated that Google’s entrance into this market is unlikely because of the formal partnership it has with NTNX, which was just announced last June. The companies have agreed to work together to support customers looking for hybrid cloud environments.

So, at this point, there seems to be some conflicting information on whether Google is indeed planning to focus on this market.

But, to rewind a little further, back on August 30, NTNX issued downside guidance for 1Q19 in its fourth quarter report, which is what sparked this recent dive lower in the stock. Specifically, it guided for revenue of $295-$310 million versus the $308.8 million consensus, billings of $370-$390 million, and EPS of ($0.28)-($0.26) versus the ($0.23) consensus.

The revenue and EPS guidance caused the disappointment, but it’s important to note that one of the main reasons why NTNX didn’t provide a stronger revenue outlook is because it is now expecting pass-through hardware revenue of 5-6% of billings, rather than its original expectation of 7%. Those familiar with NTNX will recall that the company is currently transitioning away from hardware in order to become more software-centric, with the goal of driving stronger margins and profitability. The lower hardware sales outlook negatively impacted revenue by $4-$8 million and, consequently, negatively impacted earnings projections as well. To put this another way, NTNX’s downside guidance may not be as week as feared as the transition to a software-centric model is progressing faster than it had expected.

Also on the positive side, on September 11 the company announced the largest deal in its history — a deal worth more than $20 million with an agency in the U.S. Dept. of Defense. The news provided a momentary pause in the weakness, but ultimately was not enough to reverse this downward trend the stock is mired in.

To conclude, NTNX has been taking multiple hits over the past few weeks, hitting shares to the tune of 30% since its Q4 earnings report. The dive has made shares more attractive from a valuation standpoint, now trading with a 1-year forward P/S of about 4.4x. For the time being, though, sentiment is clearly skewing on the bearish side and shares will first need to show signs of stabilizing before a traders can expect a meaningful rebound.

Being 75% cash, I consider myself infinitely smarter than you.

75% cash heading into today’s session. I make the lot of you look like banana-less chimps, swinging from vines with small cocks.

I need to hop on the road for a quick sojourn and will be chiming in whenever possible. In the meantime, and I know most of you chat inside Exodus now, feel free to drop by the free blog and leave a fucking comment every once in a while. Any strangers bopping into the site must think this is some sort of fucking graveyard, you ungrateful pricks.

It’s all bullshit, really. Futures are getting banged around and I’m 75% cash, but I don’t feel smart or even lucky. As a matter of fact, I’m pretty sure markets will end up higher regardless and all of this trade war talk will end up being nothing more than a footnote in a market built for higher prices.

“Following President Trump’s threat of further escalation, we now think the probability that all imports from China will ultimately be subject to tariffs has risen to 60 percent,” the bank’s analysts wrote in a research note.

I do not speak out of hubris, or confidence, a self-assurance that my decisions are correct — as a result of decades of experience in markets. I’m more programmed by recent events to conclude that to bet against progress is to ruin oneself with hateful thoughts. Moreover, to harbor hateful thoughts is a waste of labor and spirit. I’ve always harangued myself with one hatred after the next, not knowing it was simply a reflection of my own unhappiness. My life could be better, naturally, as it could be much worse. I’m content with my place and my role, ebbing and flowing through markets and the internets — gaining new experience and laughing at the weak and the fat and the ugly.

Futures are lower, but everything is fine. Sleep well knowing by the time you awaken they will be higher.