First and foremost I am considering an investment in Chipotle as it begins to seem more reasonably priced, so did you and your friends eat at CMG in the past, has that changed since the E Coli scare, and if so do you think you will return to old habits at some point (when).
I used to eat there a lot as did a lot of my friends. Over time, the food quality has decreased though it still fits in that quality fast food at a decent value for what you get… but you can tell that even with their commitment to quality, it suffers a bit at their current scale. You can get much better mexican food almost anywhere. I think of it as mexican inspired american food. Lines used to be out the door during lunch time but since the e coli thing the locations are surprisingly slow and I have not gone into one myself.
I do realize that it’s likely completely safe and that there really have been that many cases given their scale, but it’s a big image problem and there are so many other alternatives out there so people will think twice. I actually got a minor case of food poisoning at a CMG many years ago when it was fairly new. After that I stayed away for a few months, but then went back.
I think its a great company but not yet to a price for a great investment. I’d be surprised to see good earnings and I think it may take a few quarters for this to blow over. I could see getting a small starter position soon, but I think there will be chances to buy under 400. It was too priced for perfection and I think comps will be lower than expected in the near term. For disclosure I have a put butterfly spread on CMG at the moment and may add some put verticals to carry through the next earnings release.
For your questions
Are you in an urban setting or a less populated place?
Urban - New York City
Do you think urban millennials have different home buying outlooks than non-urbans?
Yes, urbans likely are less interested due to the unattainability of buying in a lot of urban locales. I think in non-urban environments it is more possible, but the down payment hurdle is tough. I also think there is a premium for the flexibility of renting and the ability to not have the large chunk of mortgage debt as an obligation that is an argument against home ownership. Young people value that flexibility these days. Kind of like a liquidity premium on your living situation if that makes sense.
Do you live in a “cool” apartment?
No. Quite an old apartment because all the “cool” ones are far too expensive here. But they keep getting built all over and people keep moving in to them. But real estate here is an anomaly. No normal person can afford to buy anything here.
Do you have your own car or do you use public transport and Uber or Zip cars?
No car. Zipcar if I need one, otherwise Uber, cabs, & subway. Mostly subway and walking. Thought it would be weird when I first ditched the car, but no need for it and it’s one less thing to worry about.
Do you think you and your friends will get married sooner, about the same or later than your parent’s generation?
Later. Already too late for sooner. Most people I know buying first homes are late 30s early 40s. I know few people married before 30 and most don’t have kids before mid 30s.
Do you have relatively small living accommodations because you spend a lot of time in public with your friends? (Like Sam Zell indicates)
Yes small living accommodations but mostly because large ones are not affordable here. though I think the spending more time in public places with friends is as much a factor of people living in small spaces that are not conducive to having people over. It’s more correlation that cause-effect either way. However I do see people far less interested in having larger space than needed at home, even if they would like slightly larger space then they have.
Do you and your friends prefer to have a “steady and safe” corporate job or a “riskier but more rewarding” form of employment?
Most prefer the “riskier but more rewarding”, but a lot are still in the “steady and safe.” I’m recovering from the former and part of the latter now. I do know every I know is happier in the more rewarding but riskier, even if it creates some financial stressors.
What future technology excites you and your friends enough to want to buy it?
Great question, and hard to answer. Self driving cars could be one, but not to buy, just to use. Solar tech is exciting, as is new battery technology. Imagine a phone/tablet/laptop that would last longer and be recharged via solar cells. That would be awesome!
While not technology to buy per se, I also think the speculative fringes of medical science and biotech are doing amazing things, though its a very risky area to invest in and cannot be fundamental valued.
Hope that helps