Poor Amanda Drury. Back from a week in lovely Secaucus replacing Erin, now stuck somewhere on the Outback, craving a Venti Double Shot Inverse Carmel Macchiato. She may be out of luck.Starbucks will close more than two-thirds of its 84 stores in Australia by the end of the week under a cost-cutting plan announced Tuesday that will put almost 700 people out of work.
The surprise announcement came a few weeks after the global coffee shop franchise that has become ubiquitous around the world announced it was closing 600 company-owned stores in the United Sates to try to bolster its business.
The closure of the "underperforming" stores in Australia was the result of conditions specific to Australia that were not reflected elsewhere in the world, Starbucks' chief executive Howard Schultz said in a statement.
Is New Zealand next? Not to worry. You can still hold onto those laptops and get your Feist fix.
"While this decision represents business challenges unique to the Australian market, it in no way reflects the strong state of Starbucks business in countries outside of the United States," he said. "There are no other international markets that need to be addressed in this manner."
You do wonder what those unique challenges are in Australia, although I imagine a Frappuchino may not wash down a vegamite sandwich all that well. I also wonder whether I can throw in any more stereotyping.
Anyway, is the VIX "predictable? Michael from MarketSci blog has this.
Buy the VIX at today’s close if the 11-day EMA of the VIX crosses under the 11-day SMA. Close that position and short the VIX when the EMA crosses over the SMA (see geek note 1). Yes, I realize that you can’t directly trade the VIX (see geek note 2), but bear with me - I’m trying to demonstrate predictability, not tradability.
The graph above (click thru to see) shows the VIX index (dotted purple line) and long (red), short (green), and long/short (blue) versions of our strategy for “trading” the VIX.
As you can see, the VIX itself doesn’t trend very well. It tends to oscillate around some general value. But despite that fact, look at the “gains” we were able to pull from it. That’s about as predictable an instrument as you’ll find. This is purely a theoretical exercise, but just for giggles - that’s a 7,397,408% gain in 18+ years.
Now of course you couldn't actually trade off this, even if the products existed. VIX futures and options all assume mean reversion and price accordingly.
The point as I take it is yet more evidence of the noise surrounding the VIX, and why we should avoid over-interpreting each little tweak. Again, to me, the best use of the VIX is to start asking questions when the VIX does not do what one would expect. Like if it exploded today in an up market, on a Tuesday, with no cosmic news on the horizon, I'd wonder what the market sees that we don't.
8 comments:
Being from NZ and a significant contributor to SBUX profits on several continents, I would report:
1. SBUX Verona is an excellent accompaniment for vegemite sandwiches. And Chesdale -- a Kiwi version of processed cheese -- is an excellent accompaniment to Vegemite. Breakfast/lunch food of champions.
2. I was in Christchurch for several days in 2005; every morning, arriving ~30 mins after opening, I had to wait for them to actually make the coffee...the natives still prefer tea as a morning libation.
3. At the risk of upsetting the management of these pixels, Dunkin Donuts' Coffee is dishwater. Any airline does better.
Vix more or less IMploded today in an upmarket. Do I have a bad feed??
Greg: LMAO, forget you were from NZ. Next time I have a Vegamite I'll have to try that, although then I'd have to admit I never actually tried it. I agree with most everything on your site, but do strongly dispute your opinion on DD.
anon: no, it caved. But that's expected in a strong market.
Only on this site can I see, juxtaposed, a Seinfeld reference, a picture of The Grateful Dead, an seductive airbrushed pose from a second rate TV actress, and endless...and I mean endless...pictures of French women newsreaders.
As was once said about the movie "The Great Escape" (cinematically a mess but something you can watch over and over again)...
...beyond criticism.
Well, I hope this doesn't harsh karl's mellow, but Cramer had this at the end of the day on NG:
"Let me just say though, after furiously trying to get out of natural gas fearing a break to $8, I now feel you have a level of safety because the decline in the fuel is running into natural buyers not traders."
Wow? Maybe I was abducted by aliens and missed a day, but at no time in the last two weeks do I recall Cramer furiously trying to get out of NG. I remember him calling for support at $10. And then $9. And now at $8. And maybe his fury was shared only among his subscribers. But I think this seems another example of the revisionist history to which he is so wont.
You've been warned. Me, I'm waiting for him to call them all goats, then I'll probably pick up some MLP's yielding 12% or so. :-)
i'll buy her a drank...
allenf,
well, i guess i missed that Cramoo "wanting to get out of NG thing" too.
Cramerland has its own history, written by gnomes, in secret, and apparently available only to left-handed wombats.
Lennyland has its own rules.
None of these rules conforms to the laws of physics or rational numbers.
But they can make your head hurt, big time ;-)
he did have something bearish on NG last week I believe. Not to be confused with banging the drum on the long side when it was lifting. And not to be confused with piling everyone into the DVN's and APA's of the world when it was near the peak.
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