Update of my position in GMCR

The news that Green Mountain Coffee Roasters/GMCR will now sell its Keurig and K-Cups via Wal-Mart/WMT is a game-changer; the result is a fundamental and sudden revaluation of the company, and Wall Street's expectations. So everything ratchets higher, and the stock soars as a result.

I have not, nor will I, sell this opening gap up, which should prove to be an intermediate term breakaway gap, and not an exhaustion gap.

Full Disclosure: Still long the shares of Green Mountain Coffee Roasters/GMCR

-- David M Gordon / The Deipnosophist

Green Mountain/GMCR - brief update

Green Mountain Coffee Roasters/GMCR reported earnings today after the close. The following comments re that earnings report are from Briefing.com...

Reports Q2 (Mar) earnings of $0.50 per share, $0.14 better than the First Call consensus of $0.36; revenues rose 60.0% year/year to $193.4 mln vs the $178.1 mln consensus. Co issues upside guidance for FY09, sees EPS of $1.47-1.53, excluding non-recurring items, vs. $1.31 consensus; sees FY09 revs of $790-805 mln vs. $722.27 mln consensus. Co says its Keurig Single-Cup brewing system drove very strong sales and earnings growth.

On its earnings call, co says:
• This was the 11th consecutive qtr with at least 39% top line growth.
• Wal-Mart will carry Keurig's Elite B40 Single-Cup Brewer and a variety of K-Cups. This significantly expands the company's retail presence.
• Calls in-home coffee brewing a revolution.
• Results were outstanding even following the strong holiday results last qtr.
• Operating margins were much higher due to lower % for SG&A.
• For FY10, co expects to guide on its next earnings call.
• Upside from qtr was from Keurig and K-Cup sales at the retail level. Prospects for Q3 and Q4 remain very positive. Keurig was the only major brand to post such strong growth.
• Expects to expand its K-Cup production from 2 mln per week to 8 mln per week by this fall.
• Has not seen a significant production capacity investment from its key competitors, not expected to happen through the holiday season this year.
•Guidance does include Wal-Mart deal.
• In any given qtr, brewer unit growth can vary due to a number of reasons.
• Making good progress on the grocery store front, as it is currently in 3,800, but the goal is to get to 15,000 locations. This means more grocery stores and more products sold at each location. Tully's is in 5,000 locations already so that's a platform for Keurig to roll out into. Those would be all incremental locations for Keurig.
• Gross margin will not change now that Wal-Mart is a customer.

The shares closed the regular session at $52.81, and the after-hours session at $63.48, +$10.67 (higher)! And right into my projected range, expressed here. Now comes the difficult question of when, and how many shares to sell, if any. But what a great position to be in, all the way around.

So that is how successful swing trading is done, in good or bad markets. Any questions?

Full Disclosure: Long the shares of Green Mountain Coffee Roasters/GMCR.
-- David M Gordon / The Deipnosophist

An inspiring moment

Susan Boyle walked on to the stage of Britain's Got Talent, and startled and wow'ed everyone...

Make that seven minutes of fun, smiles, and an inspiring display of awesome talent.
-- David M Gordon / The Deipnosophist

Get rich quick!

Only in the equity markets can (and do) profits accumulate like this strike of over-night lightning.

Plus ~240% from yesterday's closing trade to today's opening trade? I will take it.
-- David M Gordon / The Deipnosophist

A chart we all can read

Easy to interpret, easy to agree...

[click on chart to enlarge]

-- David M Gordon / The Deipnosophist

Belgians show off!

The central train station in Antwerp, Belgium is a miracle of architectural beauty. But sometimes beauty happens inside its walls, as the video below attests...

"More than 200 dancers performed their version of Do Re Mi in the Central Station of Antwerp."

-- David M Gordon / The Deipnosophist

Wake up and smell the coffee

An investor never really knows for how long a company or its stock will continue to trend -- whether positively or negatively sloped -- but each trend provides many signals that alert of a change of direction. A stock is even more clear than a company (even the parent company of the stock in question), because signals from a stock chart are fairly objective; only their interpretation is subjective.

Consider, for example, Green Mountain Coffee/GMCR. The company's Keurig remains the leading single cup coffee system -- and still in the early stages of development (of its opportunity). Estimates for the brewer and K-Cup growth remain conservative despite the difficult consumer environment. The general theme among the single cup coffee companies -- Keurig, Tassimo, and Senseo (which is the maker I own, for the opportunity to obtain Douwe Egberts coffee in the US) -- is that single-cup coffee represents a value alternative to coffee shop fare. An arguable point, for sure, because no one really wants to become an at-home barrista. Keurig's strength has been a bright spot for its retail partners in the present terrible economy, so the company's biggest opportunity is not solely via increasing distribution but through a greater presence in existing retailers (such as Costco), which helps make the Keurig and the K-Cups easy to find and purchase. Too, the variety of blends (K-Cups) help drive return store visits and re-inforces the razor/razorblade model of organic growth, which in turn makes everyone happy; store, company, consumer, and shareholder.

Reuters states that, "Green Mountain Coffee Roasters is engaged in the specialty coffee industry. The Company sells over 100 whole bean and ground coffee selections, hot cocoa, teas and coffees in K-Cup portion packs, Keurig single-cup brewers and other accessories. The Company manages its operations through two business segments, Green Mountain Coffee (GMC) and Keurig, Incorporated (Keurig)..."

Growth at the company has been tremendous, even torrid, as it builds rapidly toward a solid second place position (behind Starbucks) among coffee-roasters/sellers. One crucial difference, though, between Starbucks and Green Mountain, is that Green Mountain currently is in the process of rapid growth, whereas Starbucks retrenches. The stock chart for GMCR reflects the company's success...

[click on charts to enlarge]

Likely the first item to catch your eye in the chart above is the continuing major and primary up trend from $1 in 1999 to $53 ten years later (today). The second item that might catch your notice is that the stock has risen, or at least not declined, during primary bear markets (e.g., 2000-2002, 2007-2009), which qualifies the stock, and company, as a market leader. The third item you might notice are the lengthy bases (2001-2006, 2007-2009) that interrupt, but do not impede, the stock's continuing primary up trend. The fourth item that likely escapes your notice is that trading volume increases, despite the ever-higher share price; decidedly bullish price and volume action.

Big Base Breakout
The past 18 months (see chart below) show another big base, or high level consolidation, for Green Mountain/GMCR... until the shares broke out and up last month (March); right now all trends -- short, intermediate, and long term -- are in gear to the up side.

With increasing sales, revenues, and profits, a rising stock price, and the opportunity to purchase comepetitors with appreciated stock, the sky seemingly is the limit for Green Mountain/GMCR. No tree grows to the sky, however; for example, my initial intermediate term objective of $60-65 nears.

As always, the onus remains upon the investor to watch for a change in trend for a company and its stock. My next post will discuss this topic.

Full Disclosure: Long Green Mountain CoffeeRoasters/GMCR
-- David M Gordon / The Deipnosophist

Dying Inside

DYING INSIDE, the magisterial novel by Robert Silverberg, has resided for the life of this blog on the "Recommended reading" list (sidebar) with the banal, "Especial merit" to seduce you to read this astounding, exceptional novel.

Now I do not have to imagine a better blandishment; Michael Dirda, the fine book reviewer at the Washington Post has done it for me. And exceptionally well...

Paradoxically, his easy awareness of people's inner lives has left him isolated and alone. "Without it I might have been a happy nobody instead of a dismal one." Only when he probes deeply into a person, down past the surface personality into the unconscious, does Selig find that his power brings him an experience of nirvana-like, oceanic oneness. Yet now his special gift has grown temperamental, as variable as the weather. But what can he do? "Powers decay. Time leaches the colors from the best of visions. The world becomes grayer. Entropy beats us down. Everything fades. Everything goes. Everything dies."

and...

Now widely regarded as Robert Silverberg's masterpiece, "Dying Inside," ... is hardly what most people think of as science fiction. As a character, Selig has more in common with Philip Roth's Portnoy than with the more typical superwarriors of, say, Robert Heinlein's "Starship Troopers." Instead, Silverberg's novel offers an eerily evocative picture of New York life in the late 1950s and '60s: a time of bisexual professors, swinging singles, Black Power, psychedelic drugs and all-round social and political upheaval. Given Selig's bookishness, the novel is also suffused with buried quotations from T.S. Eliot, James Joyce, Samuel Beckett, Lewis Carroll, Shakespeare and many other literary eminences. Above all, though, "Dying Inside" is a pleasure to read, full of that dry humor so common to melancholic intellectuals. Selig's taste in music, we learn, runs to "pretty austere stuff, thorny, inaccessible: Schoenberg, late Beethoven, Mahler, Berg, the Bartok quartets, Bach passacaglias. Nothing that you'd be likely to whistle after one hearing." At one time he contemplates writing a novel about -- what else? -- alienation in modern life... It's insane that "Dying Inside" should be subtly dismissed as merely a genre classic. This is a superb novel about a common human sorrow, that great shock of middle age -- the recognition that we are all dying inside and that all of us must face the eventual disappearance of the person we have been. More and more, as time goes by, our bodies break down, our minds start to lose their quickness, and, suddenly, inconceivably, our best work is behind us.

Read Michael Dirda's entire review (below) of DYING INSIDE, and see whether he does not convince you to read the best science fiction novel yet written, and, arguably, one of literature's all-time great works of art. (btw, Michael's online book discussion also is worthy of your time as is his recent book, Classics for Pleasure.)
-- David M Gordon / The Deipnosophist
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Super Powers, Super Decay
By Michael Dirda
Washington Post, C12;
Thursday, April 9, 2009

David Selig is in his early 40s, with his youthful promise long behind him. A lonely child and a smart aleck in elementary school, he grew up feeling isolated from the rest of the world, happiest with his books. Even at the age of 10, he seemed so maladjusted that his hardworking parents sacrificed to send him to a psychiatrist, to no good purpose. He and his adopted sister have cordially hated each other their whole lives.

At Columbia in the mid-1950s, Selig did reasonably well in his literature classes, and after graduation he went to work briefly in a stock brokerage firm. Over the years he fell seriously in love twice, and both affairs ended disastrously. Most recently, he has been eking out a living by ghost-writing term papers for the Columbia students of the 1970s. He lives by his wits, just above the poverty line, and he is going bald.

He is also losing his ability to read people's minds -- and with it his entire past life, his very sense of self.

In the course of "Dying Inside," Selig meets one other person who can read minds, with whom he forms an uneasy friendship. Neither can transmit thoughts, only receive them. But whereas Tom Nyquist uses his power to make easy money on Wall Street, perceive the secret desires of any woman he fancies and generally enjoy a sybaritic lifestyle, Selig is utterly miserable. He has hidden his extraordinary talent from almost everyone. More often than not, to use it makes him feel a scummy, perverted voyeur.

Paradoxically, his easy awareness of people's inner lives has left him isolated and alone. "Without it I might have been a happy nobody instead of a dismal one." Only when he probes deeply into a person, down past the surface personality into the unconscious, does Selig find that his power brings him an experience of nirvana-like, oceanic oneness. Yet now his special gift has grown temperamental, as variable as the weather. But what can he do? "Powers decay. Time leaches the colors from the best of visions. The world becomes grayer. Entropy beats us down. Everything fades. Everything goes. Everything dies."

Now widely regarded as Robert Silverberg's masterpiece, "Dying Inside," first published in 1972, has just been reissued in a handsome trade paperback with a new preface by its author, one of science fiction's most distinguished writers. Yet this book is hardly what most people think of as science fiction. As a character, Selig has more in common with Philip Roth's Portnoy than with the more typical superwarriors of, say, Robert Heinlein's "Starship Troopers." Instead, Silverberg's novel offers an eerily evocative picture of New York life in the late 1950s and '60s: a time of bisexual professors, swinging singles, Black Power, psychedelic drugs and all-round social and political upheaval. Given Selig's bookishness, the novel is also suffused with buried quotations from T.S. Eliot, James Joyce, Samuel Beckett, Lewis Carroll, Shakespeare and many other literary eminences.

Above all, though, "Dying Inside" is a pleasure to read, full of that dry humor so common to melancholic intellectuals. Selig's taste in music, we learn, runs to "pretty austere stuff, thorny, inaccessible: Schoenberg, late Beethoven, Mahler, Berg, the Bartok quartets, Bach passacaglias. Nothing that you'd be likely to whistle after one hearing." At one time he contemplates writing a novel about -- what else? -- alienation in modern life.

Most of the time David Selig addresses the reader in a self-pitying first-person voice, though some sections seamlessly switch to third-person narration. Silverberg is a master of multiple verbal registers, catching perfectly the tone of a term paper on Kafka, the period jive talk of a black basketball player, the flirtatious chatter of cocktail parties, the back-and-forth snapping of a brother and sister, the Yiddish idioms of Selig's parents, the earnest fogyness of a Columbia dean, even the stream of consciousness itself.

Some characters, like Selig's promiscuous sister, Judith, and a racist basketball player, are especially vivid creations. Or take the hip French professor Claude Guermantes:

"He is about 40, just under six feet tall, muscular, athletic; he wears his elegant sandy hair done in swirling baroque waves, and his short goatee is impeccably clipped. His clothing is so advanced in style that I lack the vocabulary to describe it, being unaware of fashion myself: a kind of mantle of coarse green and gold fabric (linen? muslin?), a scarlet sash, flaring satin trousers, turned-up pointed-toed medieval boots. His dandyish appearance and mannered posture suggest that he might be gay, but he gives off a powerful aura of heterosexuality. . . . His voice is soft, purring." Selig ultimately judges Guermantes to be monstrous, and yet many of the man's characteristics -- the carefully tended goatee, the dandyism, the voice -- are clearly borrowed from Silverberg himself.

It's insane that "Dying Inside" should be subtly dismissed as merely a genre classic. This is a superb novel about a common human sorrow, that great shock of middle age -- the recognition that we are all dying inside and that all of us must face the eventual disappearance of the person we have been. More and more, as time goes by, our bodies break down, our minds start to lose their quickness, and, suddenly, inconceivably, our best work is behind us.

Early science fiction was frequently hopeful, celebrating eye-popping technology or the acquisition of special mental powers. But by the late 1950s and early '60s such naivete was a thing of the past. Philip K. Dick described a future where everything was rusty or broken, and Daniel Keyes left us in tears at the end of "Flowers for Algernon." Since then, flawed or wounded superheroes have become the norm: From Batman to the Watchmen, they are usually all too human, or even less than human.

As his power leaves him, Selig writes: "I make lists now of the things I once could do that I can no longer. Inventories of the shrinkage. Like a dying man confined to his bed, paralyzed but observant, watching his relatives pilfer his goods. This day the television set has gone, and this day the Thackeray first editions . . . and tomorrow it will be the pots and pans, the Venetian blinds, my neckties." In the end, as Shakespeare said long ago, we are left "sans teeth, sans eyes, sans taste, sans everything."

Nassim Taleb gives 'em hell

It was "Rob Taft" who brought to our attention nigh 10 years ago the then-unknown, Nassim Taleb (author of The Black Swan); Nassim has since picked up a good bit of renown since that long-ago day.

The interview below is from CNBC...

Interesting, no? (Thanks again, "Rob"!)
-- David M Gordon / The Deipnosophist