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Mailbag and Friday Frivolity


"Billy 'Don Denkinger' Meehan seems to have gotten off pretty easy for calling his boss 'Safe'!"


Minyan "Hot" Rod writes,

Jeff, it's the minyan from Alabama who happens to be an auburn fan again. I saw and listened to you in OJAI [editor's note: pronounced: "Out-E"] but didn't get to introduce myself personally which was my mistake. I was tagging along with Steve Shobin so I'll blame it on him.

My question about NetFlix (NFLX) is, what do you think about it from a near-to-intermediate term timeframe? I talked with a friend today who's in the industry and he's bearish on it. I'm not looking for advice but I know you have invested/traded this stock and do a great job on the retail group.

Sorry for the long inquiry, Minyan Rod.


You need not apologize for either the length of your note or your support of Auburn. The thing about Shobin hogging your time in Ojai, at my personal social and professional expense it would seem, is more "troubling."

I don't blame you. You made the right choice. I would rather actually hang with (and learn from) Shobin than myself. Had I been faced with your choice I would have done same. Shobin is "The Man" and I am "occasionally on basic cable television." But his Shobin-ness doesn't mean Mr. Shobin hasn't made the Enemy of Macke list I keep under my desk blotter.

On to NetFlix.... I frankly don't have much of an opinion on the stock at this price. It's hung in there pretty well since I sold it (mocking me... NetFlix: on the List) while the NASDAQ has given up some ground.

To me, that suggests one of two things: 1. Either it's a sign of a underlying bid in NetFlix, which would be bullish or 2. Fund managers are hiding in silly Mo-Mo names like NetFlix, which would be horrifying and suggest loading up on puts.

If I loved NetFlix as a company, I'd probably consider getting long and buying some puts (December 15's for 50-cents? Hmmm....). As it is, I was largely long NetFlix because there were a whole buncha shorts in the name and, in my opinion, the only way the short of NFLX works is if Blockbuster (BBI) gets their act together.

I don't think Blockbuster ever gets their act together but that's less of a secret now than it was last year, when I started babbling about them. I think the NetFlix move from the teens to twenties was the market realizing that Blockbuster is not, in fact, much of a threat to NetFlix.

By that thinking, my catalyst for the trade has been used up so it's time for me to leave the stock until I have another good reason to be involved.

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