Updated

5/20/24 - $lulu - too much risk to owning it this wk into print

5/20/24 - vrockstar - - clearly there's something wrong on a day like today where mkt is ATH and moving higher and 23x next year PE LULU is getting crushed. this is a bad omen for EPS, or the expectations need to come down and the stock is incorporating this. the real conundrum is beyond a beat (if that's the case this RIPS), the stock is going to probably take some time to find its lows and oscillate in the 250-300 region for a while (perhaps a quarter or two). if you don't need to own this, i'd probably let the EPS catalyst pass risk free. this px action tells a pretty dismal story of big owners that would seem to know something you/we don't. careful fam. i like the name and want to own it... but not now. too much risk.

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and *there* it is - the chief product officer leaving and mgmt intending to 'reinvigorate' growth and speed of launches. something is off and needs to get explained before the stock is ownable in this discretionary risk off tape. if isn't ownable, with these issues coming off a dismal prior quarter is even tougher. maintain that the closer we get to $250 you probably have built a decent entry/ mgn of safety, but anything above $300 at this pt seems too expensive for the unknown unknowns. the px action told us before we knew. eyes open frens

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alright fam. this is becoming more interesting by the day now that it's sub $300. while i still believe hitting the bid here is not an easy trade... i've looked into many of these "competitors" that might be driving marginal concerns

vuori - guys this is a lifestyle brand - some overlap, obviously, not a lulu killa

alo - better px point - but it's been around.

y'all need to understand *narrative is a lagging indicator* contrary to what stonk-tik-tok will educate you to believe. it is used to explain moves. yes it can help sustain a move, one way or another. yes it's helpful to know. but by the time you learn the narrative, you've probably missed the meat of the move.

so now we're in a 'how low do we go?' period - finding a floor. i stand by my valuation comments above and won't regurgitate the same. i took a small 50 bps starter position. i'd like to get this to 2-2.5% by the point we get closer to $250 if/ does go there, but i suspect this is wishful thinking absent a market puke-a-roo. so for now i'll do 50 bps increments each 5% lower is the trading plan.

great company, great brand, not going anywhere. operational hiccups yes, and deserving of this px action to an extent.

but buy the fear. this name will outperform the index in the MT/LT.

gl all.

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found this excellent thread on X that affirms the sizing thoughts above and also validates my 50 bps start of position sub $300 today.

x.com/MattJMcClintock/status/1795566864082628900

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discretionary is getting twerk'd today, 's move doesn't help. let's see what brings after the close. but i'm noticing something interesting in the mkt that's worth pointing out, which is the bid for cash flow or *reasonably* high growth (let's define that as >10%) stonks that are tier 2 (not mega caps).

the cyber names and some B2B r running today (russia n3wz - it's all fake frens - but the normies and bots still trade it as Truth). many of the B2B stuff IS profitable, so it's an extension of the take profits from trade idea published two weeks ago... just moving down the pecking order.

even my largest position (at the moment besides the giant orange word in my pocket) is and running today (still incredibly cheap guys - don't sleep on this).

SO BACK TO LULU ... *cough* sorry.

this is gonna get bid if this mini rally continues. the floor is/ has been mostly established at the $300 line. if you DON'T NEED to own it (which is most of us) you could probably wait for a 2 handle to get busy (risk free/ ex oppty cost). but i like the merits here coming into a big friday OPEX where the QQQ's remain bid despite semis being dragged b/c of $MU. not hard to see the risk/reward 2:1 higher:lower in the immediate term for $lulu.

have popped into some of the competitor shops in the last weeks of my traveling (vegas and miami) and they're not even close. lulu is proof of work. the others are proof of stake. numbers will tell u that. in this environment BUY THE LEADER THAT KEEPS WINNING.

feel free to share if u feel differently. that's why i push my comments public in an otherwise private discussion to myself over many years.

V

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thanks

adding here!

VROCKSTAR

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