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Last night, though I’d already eaten dinner hours earlier, I just had to warm up and eat one of the delicious tamales that my family has been given lately. In New Mexico, it’s tradition around this time of year for Mexican grandmothers to make and give away the most delicious tamales you can dream of. My favorite are the most traditional with the red chile pork wrapped in masa. I’ve had home-made tamales every day for lunch and/or dinner for the last week and I probably will continue doing so for the next few weeks.
Our Revolution Investing Deep Thought of the Day is this — why can’t we buy home-made tamales at the corner bodega as easily as we can buy a horrible fake processed meat and cheese product frozen burrito that is guaranteed to make you sick and die an early death? What does it say about our nation’s food regulators and the laws they supposedly enforce that you simply can’t buy decent frozen practically home-made food at most grocery stores?
Unfortunately, most people just don’t care about what they eat and while that trend is changing and was the basis for our recent “Healthy Eating Revolution” pair trade, it doesn’t mean I’ve got my timing right. Sonic, the stock I chose to use as a short paired trade to match my Whole Foods long position, has been steadily climbing since I put it on a few weeks ago. We’re now down more than 15% and the stock’s relentless climb has me crying uncle. I still very much believe that we’ll see a much lower price for Sonic and most fast food grease chains at some point in coming years, but I don’t want to let this short position create too much pain for me in the meantime. So I’m covering my Sonic short today and keeping it very much on the radar along with McDonald’s, Wendy’s and YUM brands as potential shorts. But I’ll let the markets play out in these stocks for now and will be ready to jump on them with either short common or buying long-term puts on them in coming weeks and months.
I’m also going to go ahead and cover our long-held Apollo short. We nailed the entire collapse of the “for-profit” colleges back a few years ago when we put this one on and highlighted the coming collapse in it along with CECO and COCO and the rest of them. But this entire business is built upon the idea that government-backed student loans will keep poor students coming in the admission doors at these places and apparently the RepublicanDemocratRegime is being won over by “for-profit” education lobbyists once again. I fully expect that we’ll see APOL go absolutely bankrupt some day when the shell game of privatized profits backed by socialized losses on the nearly worthless education provided at these places finally collapses on itself. But that might be a few years off now as the pendulum from government largesse looks to be swinging back in their favor for now.
As for the the markets today, we see stocks showing resolve once again, making bulls and bears alike wait for a “real” pullback once again. Lots of the hardest hit high-beta stocks yesterday are bouncing back big today. I’ve not been as active a trader of late as I am sometimes, but I’m not going to force anything. That said, I’m likely to put on some new trades and a couple new positions this week and next. Slowly scaling into them, starting with a 1/3 or so tranche in each when I do. Playbooks matter. Have one. And stay tuned for the new positions as I’ll start putting some cash back to work soon.