Snoopy: I think the moral of the story is: "Be sure that the bull has actually been de-horned before you venture into the arena!"
But I give you full marks for bravery.
Cheers!
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Snoopy: I think the moral of the story is: "Be sure that the bull has actually been de-horned before you venture into the arena!"
But I give you full marks for bravery.
Cheers!
More like "Make sure the Bear has been de-clawed before you enter the pit"!
Volume indicators such as Accumulation/Distribution, Price/Volume Trend and On Balance Volume are all quite similar. Nevertheless I did manage to find a point in RBD history where they were not quite aligned. You can see here that the A/D indicator totally missed the nicely timed 2002 "Sell" step that the other 2 picked up.
http://h1.ripway.com/Phaedrus/RBDstep.gif
Generally speaking, though, these three indicators are so much the same as to render comparisons all but irrelevant. Take a look at this comparative chart and tell me which volume indicator is "superior"!
http://h1.ripway.com/Phaedrus/MFTstep.gif
Given such a high degree of correlation, it would be silly to argue strongly for (or against) any one of these indicators.
No Phaedrus you didn't say, "I wouldn't join the uptrend" in those words However, we both know the process of investment is not tied up in the minuitae of semantics.
For example in what you wrote above you haven't *said* that you would never buy a share at the trendline break without a rising OBV. However, I don't think any reasonable person reading that paragraph would suggest that buying a share on the trendline break *without* a rising OBV would be inside your circle of comfort.Quote:
The concern occasioned by the flat OBV as expressed in this chart proved to be very well founded. In the days following that post, the RBD shareprice fell away, it again broke below the trendline and made a low at 78 cents before reversing, breaking the trendline yet again and moving into the current uptrend. (With, you will notice, a rising OBV).
Now Phaedrus, here is what you wrote six pages back, on a post dated 10th April which you subtitled: "RBD BUY SIGNAL!!!!!! Look Mum, no hindsight!"
Phaedrus wrote
"Dr Who,
For the first time in literally years, RBD has broken above its long-term trendline (blue arrow). It is quite possible that you are not the only one with fundamental concerns though, because this Buy signal remains unconfirmed, so far. Notice the dead flat On Balance Volume indicator (circled). There is precious little volume behind this event. Remember that volume confirms the trend. See how the trendline break was caused by RBD simply tracking sideways, rather than heading off Northward. Technically RBD is still in a downtrend, it is still making lower lows and lower highs.
Nevertheless, if you want some RBD, the time to buy just might be approaching - wait a little longer though. There is no hurry - is there?"
Then yesterday Phaedrus, you wrote
"No, it (the uptrend) is a 'weak' uptrend BECAUSE it isn't confirmed. Volume confirms price, and volume has been falling."
"That's unchanged, Snoopy. No-one is disputing the existence of a new uptrend. We are speculating here on its strength. Two separate issues."
OK, same story but with one key observational difference. The observation that RBD is now in an uptrend, albeit unconfirmed.
Now I'll reprise your conclusion from six pages ago from your post titled "RBD BUY SIGNAL!!!!!! Look Mum, no hindsight!".
Phaedrus wrote:
"Nevertheless, if you want some RBD, the time to buy just might be approaching - wait a little longer though. There is no hurry - is there?"
The above is the phrase I take issue with.
At that point the share price was 84c and when I wrote my post yesterday it was 92c. That may be just a few cents to you, but it amounts to nearly 10% of the company valuation. For those that bought in at the 80c support level at the time the results were announced on 10th April, the increase in share price has been more- 15%. The actual increase in operational EBITDA when the final results were announce was an EBITDA increase of 17.3%. From a fundamentalist perspective you could argue that belatedly, two months later, the market has caught up with the operational position of RBD. By ignoring this opportunity with your "There is no hurry - is there?" attitude you have given away almost all of the arbitrage available between after the result was announced (and the share price hardly moved) and yesterday.
If the OBV on RBD spiked tomorrow, perhaps you would then decide to buy? Perhaps it would be a good move? Only time would tell. But would it be a lower risk move because you are acting on a 'confirmed' uptrend, rather than just a trendline break? I would argue no. That's because ultimately you would be gambling on an *even higher* EBITDA performance or a PE rerating (a sentiment factor that is difficult to forecast ) in the medium term to justify your entry price. IMO, it is much safer to 'risk' your investment money on an existing EBITDA improvement that has already been banked which 'the market' hasn't noticed yet. By claiming there is 'no hurry' to act, you have given away 87% (so far) of the gains available to you on a platter!
SNOOPY
discl: hold RBD, and *did* buy more at 80c while RBD shares were trading around that 80c support point.
Snoopy, you are still being very naughty and continue to wilfully misquote me. Here's what I REALLY wrote on April 10th (Post #978, page 66) :- "RBD BUY SIGNAL!!!!!! Look Mum, no hindsight! RBD has been in a downtrend for 3 years, but this morning broke above its longterm confirmed trendline, giving a Buy signal (marked by the green arrow). The red dots mark where fundamental analysts bought, mainly on the basis that the shareprice at that point was well below RBD's theoretical "value". As circumstances changed, these valuations were progressively reduced, but the market price was always below RBD's calculated "worth", so the buying continued - all the way down. A simpleton with a chart, pencil and ruler would have done better. Wouldn't it make you spit?." That's it - the full text.
My next post was two weeks later on 23/4/08 (#997, page 67) by which time RBD had made a bearish double top formation and the OBV had demonstrably failed to rise. The breakout was not looking so good by then. That's why I advised those that were still wanting to buy RBD to wait a little longer. Good advice as it turned out, because RBD continued to drop right back to 78 cents, with the OBV falling quite sharply.
The "key observational difference" stems from the fact that this comment came 5 weeks after I had stated that RBD was "still in a downtrend" - by then the trend HAD changed.
Snoopy, here is a chronology of when and why people may have got into RBD on technical grounds :-
10/4/08 Trendline break. Entry at 84 cents. (Signal posted on ST before the Close)
18/4/08 Trendline break (2). Entry at 84 cents.
12/5/08. Trendline break (3). Entry at 81 cents.
14/5/08. Volume spike and rising OBV. Entry at 85 cents.
23/5/08. RBD now in uptrend. Entry at 86 cents.
27/5/08. OBV now in confirmed uptrend. Entry at 87 cents.
You need to compare these technical entry points with those based on fundamentals such as "EBITDA performance or PE rerating based valuations". Fundamentally derived "value" based entry points have given abysmal results with this stock. Here, for example, are some 2005 quotes from Snoopy's RBD posts, from a thread with the unfortunate title "RBD - Bad Sales numbers" :-
"Even at $1.65, the shares are still cheap IMO, which perhaps explains why I bought a few more RBD shares in the market today at $1.60."
"I'm picking $1.65 as below the bottom of the fair value range".
"My latest RBD purchase locked in a very attractive equivalent bond coupon rate of 9.3% (gross) on those new shares. I'll get that return on those funds whatever Mr Market does or does not do!"
"I'm not worried by a drifting share price." (I had been helpfully pointing out the fact that Snoopy was buying into a downtrend.)
"If the share price ever falls back towards $1.35, *that* will be the time to buy." (It did, and he did!)
Phaedrus, I wasn't willfully misquoting you. Those charts on successive pages (66 and 67) are effectively the same. Even you hadn't taken off the red spot purchase dots from p66 when you reposted the chart on p67 with OBV added. Nor had you removed the 'Average Capital Loss 25%, Dividend Yield 7%' graphics. Nor I would suggest should you have removed these things. Interchange the comments you made on p66 and p67 with the respective graphics and your main points still make sense. The only difference is that the p66 chart showed the first trendline break at 83c, and the p67 chart with the addition of a tiny squiggle (representing the time period from the first chart posted on 10th April and the second on 23rd April) shows a second trendline break at 82c. These tiny differences are real, but they make no difference to *my* F/A argument or what *I* was trying to say.
Yes, I never meant to suggest you changed your mind for no good reason Phaedrus. I only ever meant to suggest that the data had changed with time and you changed your observation accordinglyQuote:
The "key observational difference" stems from the fact that this comment came 5 weeks after I had stated that RBD was "still in a downtrend" - by then the trend HAD changed.
Yes you do, but not for the reasons you think Phaedrus. I introduced the 'EBITDA Performance Improvement' and 'PE Re-ratings' as possible reasons for the share price turning. These are not 'alternative' entry points I have dreamed up to be compared with yours. I know that you T/A exponents do not need to understand the reason behind stock movements. But as an F/A exponent, I *do* have to understand what is going on, or at least try to explain it as I see it.Quote:
Snoopy, here is a chronology of when and why people may have got into RBD on technical grounds :-
10/4/08 Trendline break. Entry at 84 cents. (Signal posted on ST before the Close)
18/4/08 Trendline break (2). Entry at 84 cents.
12/5/08. Trendline break (3). Entry at 81 cents.
14/5/08. Volume spike and rising OBV. Entry at 85 cents.
23/5/08. RBD now in uptrend. Entry at 86 cents.
27/5/08. OBV now in confirmed uptrend. Entry at 87 cents.
You need to compare these technical entry points with those based on fundamentals such as "EBITDA performance or PE rerating based valuations".
A 10% improvement in operating performance means the market will generally mark up the share price by 10%. If the market is very efficient you cannot make any profit out of this because the share price will have gone up 10% already, in anticipation of the result being 10% better. But the market isn't always efficient, because as in this case that share price rise took two months to happen. Thus the shrewd F/A operator had a value arbitrage play with RBD just sitting there for some weeks and no careful timing or use of T/A required. The use of T/A in this instance simply got you in at a higher price for the same reward, and thus a lower return. T/A was not helpful, *in this instance*.
Your argument that over the longer term timing your entry using T/A would have been better than simply buying an equal number of shares or dollar value at the 'red dot points' is fair enough. But as far as I am concerned that is a straw man argument, because that is not what I advocated doing and not what I did.
SNOOPY
Even Subway is going the way of the pizza chains and canabilising stores thru competition...
Subway franchisee faces bankruptcy
A Christchurch Subway store owner is accusing the multi-national sandwich chain of flooding the city with too many stores, bringing her to the brink of bankruptcy.
You post a link about Starbucks closing restaurants in the USA 'funguspudding'. Dare I suggest that this is a truffle pessimistic. The chain is planning to close a net 400 stores out of 16000, a total of 2.5%. And most of those that are to be closed have been opened in the last three years. This isn't actually that many stores, as a percentage.
RBD operate 44 Starbucks stores across NZ. Last year they closed 3 stores, which represented 6.4% of the NZ total. So the cutbacks in NZ have already been far more drastic than those which are proposed in the US, in percentage terms. What is more EBITDA profitability improved from $3.6m to $3.8m in NZ, despite those store closures.
You could argue RBD are ahead of the overseas trend already. I don't believe your implied forecast of a further 'retreat' for Starbucks in NZ is justified.
I am not sold on RBD's involvement in Starbucks myself. That's because I believe that after corporate costs are taken into account, Starbucks in NZ is loss making and has been since FY2005. This isn't the fault of the Starbucks 'concept' as such. It is IMO a result of Starbucks being 'top heavy' in management in New Zealand, and the holding company carrying too much debt for the Starbucks sub concept to be profitable. I think RBD has already streamlined some KFC and Pizza Hut head office management. Perhaps they should do the same with Starbucks? Or perhaps Starbucks can not inherently generate sufficient profits to have a third party corporate (RBD) clipping the ticket on the way through?
I am bemused by the Starbucks strategy myself. In Christchurch the three central city stores are all within five minutes walking distance of each other. That surely must result in sales cannibalisation. Yet all three stores seems to have a steady trade of customers each time I pass them. And this is exactly the kind of store distribution that 'works' in large overseas cities, which have a Starbucks on each corner.
SNOOPY
I don't wish to make a big deal out of this. But your question in the header was:
"Sign of things to come?"
My concise Oxford (1) Definition of the word forecast is: 'conjecture beforehand'. That is exactly what your header is - a forecast by definition! Granted you did not say whether you 'agreed' or 'disagreed' that the retreat of Starbucks in the USA will flow through to N.Z.. But consider this:
1/ You posted a link that makes a point and raise the conjecture "Sign of things to come?"
2/ You make no further written qualification on your referenced listed link.
I think 99% of people would assume you agree with the facts in the linked article and you believe the decline of Starbucks in the USA is directly relevant to a future decline of Starbucks in N.Z., especially given you posted on this RBD thread.
*I* certainly thought that was what you meant.
Bricks titled his reply post "Nothing To Do With Nz.. " so he obviously thought your reference was posted because you thought it relevant to N.Z..
Deev8 titled his reply "How bad will it be for Central Ohio?"
Then said in his post
"Details on how the closures will affect Central Ohio, which has more than 90 shops and kiosks, weren't available." *We will be on the edge of our seats awaiting those details.*
That highlighted piece between the asterisks indicated sarcastically that whatever happens in Central Ohio is likely to be of little relevance to N.Z. (so Deev8 thought you were thinking of your article as a portent to what could happen in N.Z.)
Go back to your post 'funguspudding' and see if it could have been interpreted in *any other way* than the way myself, Bricks and Deev8 interpreted it.
If you were trying to present any alternative interpretation you would have to have presented your linked message in a more different way. I don't think my own comprehension skills have failed me in this instance.
SNOOPY
I have a bone to pick with you Bricks (or should that be a stone?)
WILL YOU PLEASE QUIT BUYING RBD SHARES!
I am waiting for the price to go lower into my buy zone, willing it down, down, down and it never does get there. So just quit buying will you!
Funnily enough for all the flack we have taken over the years Bricks, over the last two years RBD shareholders have done quite well as the rest of the retail market has melted down around them. Who would have thought two years ago that RBD would turn into the best (NZX) retail investment of all!
Well two years ago I knew that it would turn out like that eventually, but I didn't know when and I didn't expect it to be 'number one' so soon. It is nice to be enjoying the payoff from all of those (now) increasing dividends at long last!
I went into my 'local' last week to cash in my shareholder freebie burger voucher. I thought I would try some 'wicked wings' as a side but was told they had sold out! Looking around there didn't seem to be a shortage of customers although come Sunday night there was no free newspaper to read (do KFC still have those?). The menu seems to have got simpler since the last time I went to KFC. There is no sign of the "twisters", for example, and there was only one kind of chicken on offer (I see that RBD have reintroduced the option of bonesless fillets this week). All good news in terms of streamlining the ship. Was it my imagination or were they turning the customers around faster?
But in more bad news for my buying program, RBD was up another 2c today. Arrrgh!
SNOOPY
discl: hold RBD
According to the 'Sharechat' charts the price two years ago was $1.10.
Actually you are right Macdunk. I was looking at the one year chart where the share price was 80c a year ago. It is now 86c and add to that the 6.5c of dividends received over the last 12 months makes a total of 92.5c. That is a 15.6% return after tax. Not too shabby at all, and it beats you Australian cash holdings which is of course the main thing :-).
Come to think of it though, even though I was looking at the wrong chart, the two year return is still -7.5% per year. I think I might still be right! Is there any NZX retail share out there that has performed 'better' over the most recent two year period?
SNOOPY
Sorry to say SNOOPY you should learn to read charts. If you go to direct broking site, get into super charts look up rbd over a two year period from today it starts at $1-25. You might be interested to know that MHI is about where it was two years ago, which is still a dead loss in the uptrending market we had during that time. Take into account some of us more than doubled our money in that period with the more astute investors taking their money to Australia, and sitting on a 13% exchange gain in that period. I have told you for years now that you will end up losing the lot on this dog of a company. The straw that broke the camels back was when they sold the kennels to go on that overseas trip, leaving them paying rent in this the bad times. Incidently i am sitting out the market this year, after predicting the market would downtrend leading up to a crash. Know when to play the game SNOOPY, and know when to stand aside, learn a sell system or you will go under bleating about how right last years fundamentals are. Macdunk
Hmmm, you seem to be right. I am too though. The sharechat two year chart definitely shows $1.10
OK, so one retailer has outperformed RBD. Good on ol' MikeQuote:
You might be interested to know that MHI is about where it was two years ago,
Are those the same astute investors, that after doubling their money in the first year, then invested in PEM which subseqently declined from over $3 to just 67c as of yesterday in just twelve months? A near 80% decline?Quote:
Take into account some of us more than doubled our money in that period with the more astute investors taking their money to Australia, and sitting on a 13% exchange gain in that period.
That would give a two year return on capital of: 2 x 0.2 = 0.4
IOW a net result of losing 60% of your investment capital in just two years. Perhaps Macdunk you are referring to a new meaning of 'astuteness' with which I am unfamiliar?
And IIRC these same astute investors got their original seed capital by selling out of PGW on the NZX, which over the comparable two year period produced a return of +80%?
Oh it hasn't been an easy market. I have made some big losses and some big gains this year. Overall though my NZX investments are about even. I haven't seen losses anywhere near those that most investors on this forum seem to have suffered. And meanwhile those dividends just keep rolling in! I think I have a good chance of outperforming Aussie cash over the next 18 months by just sticking to my NZX knitting.Quote:
Incidently i am sitting out the market this year, after predicting the market would downtrend leading up to a crash. Know when to play the game SNOOPY, and know when to stand aside.
SNOOPY
discl: hold CEN, LPC, NZS, PGW, RBD, SCT, SKC, TEL, TUA
DOUBT the price will go below .83 cents that's my bench mark if it does Great BUY,,
At Rotorua has two stores KFC one Palm Springs has been done over and full of Happy faces,
Well in the main town is indeed of a need for a work over a lot of money has passed over the counter there but always full Japs and things as the stores are out for three months this store may be down the List..
AS for Mac Duck the quicker he finds out a "DOG" is what humans take for a walk so they can mess up the place and nothing to do with RBD..
SNOOPY, Thats why the more astute investors have stop loss systems to save them from themselves when they buy a stock that goes the wrong way. look at the ammount of money you have lost riding RBD down over the years bleating about dividends buying more and more, which is worth less and less. Nobody ever gets it 100% right all the time at the buy time, the idea is to take the small loss admit your mistake to yourself and dump the company. The market is now starting to crash you would be well advised to change your methods before its to late. Macdunk