Stock Ticker RICK Does Another Acquisition
Dougster
I bought 2500 share of RICK last week at $8.83 - just for a little fun. Today we got news that they are adding yet another club to their collection. Now even though RickyBoyDugan told me that they are about to go belly up due to debt and that this is a terrible time to do acquisitions they are sure moving confidently and aggressively.
Let's use this thread to see if RickyBoyDugan was right and I made a bad investment here. (My thinking is I'll be okay here. They have a good record lately if growin revenue which should continue as the economy improves. Also their assets should appreciate if commercial real estate comes back this year, and if their stock gets a pop they can use that to do a secondary and use the proceeds to pay down the debt they've wracked up during this growth/acquisition phase.)
Let's use this thread to see if RickyBoyDugan was right and I made a bad investment here. (My thinking is I'll be okay here. They have a good record lately if growin revenue which should continue as the economy improves. Also their assets should appreciate if commercial real estate comes back this year, and if their stock gets a pop they can use that to do a secondary and use the proceeds to pay down the debt they've wracked up during this growth/acquisition phase.)
31 comments
Congrats on getting in at $7!
http://finance.yahoo.com/news/ricks-caba…
I wonder if this news has caused RickyBoy to change his "mind" (see how I put that in quotes) about this stock?
Stock is about flat since I bought it. I'm still confident however since it has been rising on increased volume the last few days.
What does the RickyBoy think? Feeling more positive about this stock yet? :-)
I'll anxiously await the pm now.
Well a Moderator would take care of that! LOL
Now what is really go here, of course, is that alutard is just a little PO'ed at me because I have explained in some very precise detail his mode of operations, his psychological issues, and logical holes in his worldview in other threads. The accuracy obviously bothers him, but all he is able to do to express is anger that the truth about him is out is to take feeble little peble throws at me here.
You're right.
Founder, I volunteer to be moderator. I'll be a good boy, I promise.
Who cares if the stock is rising, does it pay out dividends in any way?
I don't see any dividend payments in their history.
Like I say they announced their intention to spin off a REIT yesterday. Not many details, but shareholders would get a stake in the REIT which would pay dividends.
What do you think RickyBoy? Still think this one is done for or are you gonna change your mind on this one? (Or bob and weave around what you said in the first place?)
Ok, RickyBoy. Duly noted.
I, however, like the rise on volume on a day the market is down fairly big.
Gonna hold.
Let's see what happens...
But for years I was right. It was a volatile stock and if you bought in at the wrong moment, you could have been underwater for a long time. They didn't start getting any liftoff until the Trump years, when economic conditions improved dramatically.
But kudos to RCI for turning the debt trap ship around. Indeed my view changed on the company 7 years after I posted this. I bought shares in April 2020, along with some other stocks I thought were being unfairly punished for a temporary situation. Buying RCI was a real PITA - it was the first time I wasn't allowed to simply click and buy in my brokerage account, but instead had to call in to confirm the order.
I figured the people who have been manipulating the RCI share price since forever wouldn't let it sit at under $13 for too long. I made a tidy profit off of it, maybe far less than I would have if I held onto it for longer, but I was happy with the outcome. RCI is not the type of stock I want to hold onto long term - it is way too volatile and prone to manipulation due to its tiny market cap.
https://apple.news/AwHS4AFe-RMqRI1xUeHUi…
History says inflation could persist for a decade
If you are a retiree, or even near to retirement, you are probably more vulnerable to inflation than most.
Your cost of living is probably rising faster than your income. You’re lucky if any pension or annuities raise their payouts to match rising prices. Social Security does, but only a year in arrears. If you are in your senior years, the stock market turmoil caused by this year’s inflation crisis poses a significant risk. A lost few years in the markets is more dangerous to someone of 70 than someone of 30.
And then there’s the risk to bonds and bond mutual funds, a staple of the typical retirement portfolio. Bonds suffer the most from rising prices, because the future interest payments are fixed. So the higher inflation goes, the less those payments are worth in today’s money. Meanwhile, as governments fight inflation with higher interest rates, bonds sold with the old interest rate become less and less attractive. They fall in value to compensate.
All in all a dismal outlook, and even worse than that currently faced by the young and those in early middle age.
Last week’s news that October’s official inflation figure had come in below fears has sent stocks and bonds booming. And is causing some to hope that the inflation crisis may soon be over. Maybe inflation has peaked and will start heading back down. Are happy days here again?
Not so fast, warns legendary financial guru Rob Arnott, the chairman of money management firm Research Affiliates.
He’s run the numbers on all the big inflation surges in developed economies going all the way back to 1970. (There were over 50, remarkably.) His conclusion? We will be very lucky indeed if this inflation crisis ends quickly.
Lucky, as in he gives it no more than a 20% chance.
The likelier scenario is that even if it starts to come back down, inflation may persist higher for longer than the markets, money managers, or the Federal Reserve thinks.
That’s because, in effect, inflation has reached the kind of critical mass or momentum this year that makes it much harder to control.
“An inflation jump to 4% is often temporary, but when inflation crosses 8%, it proceeds to higher levels over 70% of the time,” write Arnott and his co-author, analyst Omid Shakernia.
This means us. The official U.S. inflation rate broke above 8% in March and stayed there till September, peaking at 9.1% in June. (And that’s the annual rate, meaning the change in prices from 12 months earlier. The month-over-month change in prices, while much more volatile than the annual figure, has actually shown even faster inflation at points this year—and actually just rose, rather than fell, in October).
“Reverting to 3% inflation, which we view as the upper bound for benign sustained inflation, is easy from 4%, hard from 6%, and very hard from 8% or more,” warn Arnott and Shakernia.
Once inflation breaks above 8%, they find, “reverting to 3% usually takes 6 to 20 years, with a median of over 10 years.”
Ten years?
There are a couple of important caveats. The first is that the past is no guarantee of the future. Just because these things happened in previous instances of 8% inflation over the past 50 years doesn’t mean they will happen this way this time. (If “this time is different” are the four most dangerous words in finance, as Sir John Templeton once said, “this time is the same” are among the most dangerous five.)
After all, it could work out. The authors write that they are simply handicapping possible outcomes, not making a prediction. “Those who expect inflation to fall rapidly in the coming year may well be correct.” But, they warn, “history suggests that’s a “best quintile” outcome. Few acknowledge the “worst quintile” possibility, in which inflation remains elevated for a decade. Our work suggests that both tails are equally likely, at about 20% odds for each.”
Actually, they add, if U.S. inflation really has just peaked and is on the way down, we should count ourselves pretty lucky. Only 30% of the time in the past 52 years has inflation peaked between 8% and 10% and then gone back down. In the other 70% of the time, once it’s made it over 8% it had risen above 10%.
But what is remarkable about this is that the markets—and the Fed—are currently making this lucky outcome their central forecast. It’s one thing to hope for sunshine when there is an 80% chance of rain. It is another to go on a very long walk without a raincoat or umbrella.
Yet the Federal Reserve is currently (at least publicly) saying it expects inflation to plunge very quickly, averaging 3.5% or less next year and 2.6% or less in 2024.
The bond markets are just as optimistic, and currently bet that inflation will average 2.4% over the next five years.
If they are right, it will all work out. But if they aren’t? Watch out for those bonds and bond funds. Even today, after this year’s surge in yields, the 10 Year Treasury is yielding less than 4% in an environment where prices are rising faster than that. BBB-rated corporate bonds, mean the “riskiest” bonds that still count as investment grade, will pay you 6%. Better, but still not great if inflation doesn’t come down.
Incidentally, a number to watch is the monthly inflation figure. How much did prices rise between last month and the month before? What does that work out to as an annualized figure?
According to the U.S. Labor Department, this has been rising, not falling. It was 0% in July and August. (You may remember the administration boasting about 0% inflation. This is what they meant.) But this figure jumped to 2.5% in September and nearly doubled to 4.9% last month.