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Greetings from picturesque New York, where the snow has managed to stay bright white for two full days -- as New York snow normally morphs into hideous, mucus-colored, grim slush at the exact instant it hits the sidewalk. Obviously a huge portion of the slime is going to all but leap from the walk to your pant leg, creating a feeling best described as nauseating. Even for a guy who was in a fraternity.
Who do you play when winter is harsher than expected? How about some Toro (TTC)? For you sun creatures, Toro makes snowblowers and lawnmowers. Not one but two businesses fully reliant on weather being “normal." If it’s too warm to snow Toro is jammed with snowblower inventory. If it’s then a rain-free summer they have to stuff the mowers on top of the snowblowers, creating a vicious EPS every so often.
All that said, everything’s coming up roses for Toro and Mr. Plow this year. I’m mulling a position on the long side on a pullback to $38.
While we’re mulling...
- Book update. I’m back in the SDS ETF, long McDonald's (MCD), long Nordies (JWN) and Disney (DIS) and Apple (AAPL). So, between shorts and the SDS I’m more or less exposure neutral but long one of the only mega-cap stocks capable of dropping or gaining 10% in a day fairly regularly. Two lessons: One, don’t be embarrassed if your book is messed up at the moment. It’s that kind of market. Two, apply some sense to how you get out of the position. In other words...
- Peyton and “Farver-ah” were right: If you wanna be The Man you throw those balls. With that in mind, I’m going more directional this morning, though the futures being low gives me pause for shorting. All for what it’s worth from a guy who’s hedged worse than Toro.
- If only because I’m not really a Bad Guy let’s go positive. Walt Disney under Bob Iger is a long-term value builder in a world of drama. And let’s just say every CEO who comes through McDonald's is absolutely as tasty and uniform as a Quarter Pounder with Cheese with no pickles or onions anywhere in the world (NB: Except France where the sandwich is known as a Royal with Cheese). Metric system.
- Adding my two cents to the excellent Electronic Arts (ERTS) coverage elsewhere on the Ville, I’d say the company is a wreck. ERTS got crushed by Activision Blizzard (ATVI) in the long-over console wars. And how bad is the Tiger Woods Golf franchise looking right about now? There’s a superstition that players appearing on video game covers are doomed. Tiger brought the game cover jinx to a whole new level. There’s no clarity on the next console, if there are consoles, and the software it will use. ATVI and Blizzard are fairly well positioned for a game maker but that’s not good enough to get long the space from where I’m sitting.
- With that I’m off to root for an open to fade rather than an opening dip, which will likely be better to buy.
Position in JWN, MCD, SDS, DIS, AAPL
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