My thoughts on the day

First of all, I saw no reason for SKX to be up 17% today. I never even have heard of Buckingham research, the analyst that upgraded them.

Second, An insider buying back shares he sold earlier in the year, with a lot of calls placed at $22, and then the recommendation, raising the target price 48% because he liked the styles of shoes, sounds like market manipulation to me. But what do I know.

The Retail market is still weak, the Korean market will still have revenue recognition delayed. The March quarter comparison will still be a catastrophe. Just saying.

On the other hand, all the tech stocks were down a bunch, good, bad, or indifferent. A lot that I like were down four percent or even five percent, or more. When one is down I worry. When they all fall because a computer says: Sell tech stocks!’s an opportunity.

I sold SKX (which you could probably tell I had concerns about already from my Brief Report), and bought tech stocks. I can’t guarantee that it will turn out well at all. The tech stocks could easily keep falling another five percent or more. SKX could keep going up, whether I liked it or not, but that’s what I did.


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Wow, you sold out of SKX completely? I sold a bunch too, just to lock in gains. I’m not as bearish on them as you’ve become for the future, just doubting whether today’s gains will be permanent in the short term. Thought maybe I could buy back a few dollars cheaper later. Or not…I did keep plenty too: It’s still a top 5 position.

My SHOP position grew a little bit…um…oversized, today.



I felt the same and sold some SKX as well. Not all of it, but about 25%. Depending what happens tomorrow, I may trim some more.

I took the opportunity to add a little bit of AMZN and a couple other tech stocks that aren’t really discussed hear.

Nice to hear others thinking similar.


I am right there with you, Saul.

I sold out of Skechers several weeks ago. No regrets though. I just had lost faith in it.

As for tech stocks, I added to several of my tech positions, and am feeling good about that.


This sudden up movement of SKX was pretty unexpected and may retrace some. But a $11M public price buy by the CEO is a very strong signal to hold.

However, my oil stocks I bought the day before the OPEC meeting yesterday all beat this SKX jump today by a mile. With Trump in place for the next four years, that is the investment I am making. Since this topic is not for this board I will not be posting anything further on this though.

Cheers to all who have held on SKX.

Hope we have a future BOFI cheers someday as well.

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Problems that I see for Skechers:

That huge first quarter of 2016 will make a very bad comparison in the March quarter of 2017. (That’s still looming up).

They complained that they had been affected by the bankruptcy of Sports Authority, which flooded the market with going-out-of-business sales. (Another shoe company, Shoe Carnival, reported problems on Tuesday and announced big promotions)

They are changing their Korean business to a joint venture instead of distributors (which delays revenue recognition for the Dec and Mar quarter. (That problem is temporary, but is still looming up)

And they were hurt by foregn exchange as the dollar rose against other currencies where they were selling lots of shoes. (The dollar is even stronger now).

Now do you see any reason for a 17% rise? Because an analyst liked their new styles??? Because the CEO bought back shares he had sold? So I took advantage of what seemed like a huge gift, to buy stocks that seemed on sale. That’s how I was thinking.



I see it slightly differently Saul. The rise is merely a “fix” for the excessive pessimism that occurred after the ER. The stock is probably worth around the $25-$30 range to begin with. I feel that you’re anchored to the $19-$21 price for the stock and thinking that it’s fair value, and thus the “there is no reason” explanation for the 17% rise.

But at the end of the day, at $26, the P/E is 15.25 (which is before the adjustments for FX, factory fire, etc., so true P/E is a little lower) and the Company believes it will grow ~10-15% - compare this to Amazon where the Company is growing 50% but PE is ten times higher at 170 (P/FCF is more reasonable at 40x or so) - this is what makes the market interesting right, you know which horse is the fastest (Amazon) but are you willing to pay more than ten times the amount for its earnings?

The biggest reason to sell imo is that it’s no longer a growth stock, which is what you’re looking for in your portfolio, it’s now a beaten down value stock, where investors that pile in are waiting for mean reversion, not feel good results, which is a completely valid reason to sell. In fact, SKX is down about 1% for the day as we speak.


“That’s how I was thinking”

Your thinking is good Saul.


I also took the SKX “gift” early this morning. Thanks for the follow up reasoning though Saul. Moved some into HUBS at $50 and thinking maybe more TWLO if it hits support at about $30.

Aphalite, I tend to agree with you. The way I would word it is that when a stock is attractively valued, it doesn’t take much of a catalyst to get its stock price moving in the right direction again.

But its also important to note that Saul and I are in completely different situations. I’m still working and able to add money to my portfolio each month. Hence, I can happily hold SKX and still allocate money to other stocks.

If I was in Saul’s situation, where no new money was coming into my portfolio, I would’ve probably done the exact same thing to raise money to buy other companies “on sale”.

Long SKX
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at


Who do you guys think are “on sale”? HUBS? SHOP? PAYC?

I’m not in much of a buying mood lately. I’ve enjoyed a profitable year to date, so I harvested profits over the course of the past few weeks, building a cash position of 16%. Why am I not in a buying mood? I follow the IWM (Russell 2000) ETF as my “canary in the coal mine.” IWM had a great run, but is now declining (logically so, after a steep rise). Here’s a summary chart clip:…

I have my shopping list ready: CBM, ICLR, UBNT, PAYC and EPAM. I harvested good profits in CBM, ICLR and UBNT. Their respective share prices are now lower than my sale prices, but I’m waiting to see how IWM performs. I believe the share prices will trend lower. I initiated a position in PAYC after it went on sale earlier and am looking to buy more. EPAM would be a new position for me if the price is right.

For what it’s worth:

“Analyst Actions: Oppenheimer Initiates Coverage on HubSpot with Outperform Rating
11:01 AM ET, 12/02/2016 - MT Newswires”

I have a 2.5% position with HUBS.

I’m in Aphalite and Matt’s camp, in that I look at SKX as a hold and not looking to take profits at this time, thinking a longer term hold will produce good results.

The issues brought up by Saul, all valid short term issues, should be resolved in 3-6 months, right? I can understand the thought process that these issues may hit the company and reverse the sudden 17% gain so take that profit now, but I certainly can’t predict those types of short term moves, so I will hold to see what happens on a much longer time horizon.

I realize I “trade” much less than most on this board as I tend to hold for much longer time frames, and also have many more stocks than the concentrated portfolios of many here. Definitely not saying my way is better as I haven’t produced anywhere near “Saul returns”. I guess just saying it’s better for me at this time in my life.

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Hope we have a future BOFI cheers someday as well.

I sense there will be short squeeze before the earnings. Shorts need to cover before guidance beat.

I sense there will be short squeeze before the earnings. Shorts need to cover before guidance beat.

We’ve been waiting for that to happen for a year! They keep reporting good quarters and not much happens, it took the Trump bump to get it up to where it is now. There was nothing about BOFI itself, most bank stocks went up.

I don’t think earnings are going to do it, it’s going to take resolution of the potential legal actions and implications of wrong doing against the company for the stock price to go to what it should be without those dark clouds hanging over it.

When/if that happens, I think the stock will have a huge pop with a more than 40% short position currently.

Disclosure: I have a small BOFI position currently.


I pulled a George Costanza on this stock. (Meaning I should have done the exact opposite of what I did.) I sold call options right before the price jump. So now those calls are worth many times the money I got for them, and I might have to sell the stock below market value, depending on what it does until the options expire. Amazing timing!

Hope you’re right foodles,

A huge pop! would be nice. :slight_smile: