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Observations from vacation: A great wolf, a rockin robin, Starsucks, and an amazing advance in sausage technology

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April 29, 2008 – Comments (0) | RELATED TICKERS: WOLF , RRGB , SBUX

Greetings everyone.  I'm back from a two day vacation on which I forced myself not to use a computer.  I have a number of random investment thoughts that popped into my head during that time, here they are in a stream of consciousness format:

Originally my wife, my three year-old son, and I had scheduled a cruise out of New York City to go to Disney and into the Bahamas.  Right after we booked the trip, we found out that she is pregnant with our second child.  Hooray!  Unfortunately, I made the executive decision that I didn't want her six-months pregnant in the middle of the ocean where the only treatment available would likely be from a "Chinese intern with a dull spoon" as Al Pacino so eloquently put it in the classic film Carlito's Way and canceled the trip.  Besides we're probably going to have to circle the wagons financially while she is on maternity leave anyhow.  So instead of lounging on a beach in the Bahamas, I found myself headed to the Poconos this weekend.  Those of you from the Northeastern U.S. are probably thinking that I went to "Beautiful Mount Airy Lodge" and lounged in their heart-shaped hot tubs (to bring back an over-played television commercial from my youth), but we actually went to a place called Great Wolf Resort (WOLF). 

Of course, the first thing that did was check to see if the place is a publicly traded company so that I could report back about my experience (writing about the experience makes it deductible, right ;) ).  After a quick glance, I see that the "Great Wolf" has not been such a great investment, dropping from a high of $25 right after its IPO in early 2005 to $6.15 as of today's close.  Yuck.  No wonder, the place lost $0.31 per share last quarter.  I don't know how these guys are losing money, because the food that they served was the worst quality, most over-priced stuff that you'll ever see.  My wife, son, and I went to their dinner buffet last night and the bill for the three of us came to over $70 before the tip, and my son ate for free!  I know what you're thinking, "Hey this is Deej we're talking about here, he probably had 50 beers with his meal."  Well Mr. or Mrs. Smarty-Pants, I only had two, if you must know.

The place itself was not cheap either.  We got an Internet special of $250 for one night for a smaller room, but the normal rate is much more than that.  Supposedly, they were charging $500 per night for a similar room last week when most schools around here had Spring Break and the place was supposedly packed.  I don't know how these guys are managing to lose money, but it wasn't because of us.  This must be one poorly managed company.  Perhaps they are still in expansion mode.  In general, I'm not a big fan of investing in amusement parks anyhow.  Sorry that I don't have a potential gold mine for you.  We actually had a great time.  My son loved the water slides.  It was nice to take a step back from everything for a couple of days and spend time with the people who matter the most in my life.

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Inside the Great Wolf Resort was a Starbucks (SBUX).  Not that this will come as a surprise to anyone, this place bothers the heck out of me because they should be printing money but somehow they are managing to screw something as easy as sell overpriced coffee to the masses up.  Don't get me wrong, the coffee is pretty good and I do like a good Frappochino, but enough with all of the fluff already.  Stop with the music, books, first-ever 10% recycled paper cups, and healthcare for everyone who picks your coffee beans.  Good grief.  Most customers just go to your stores for COFFEE!!!!  It's time to circle the wagons people, use cheap cups, buy high quality coffee beans as cheaply as possible, get some cheap labor in there, and start printing money like you should.  Until they get back to basics and cut costs, Starbucks is going to suck as an investment...especially in an environment where consumers are cutting back and the cost of coffee beans is skyrocketing.

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On the way home from Great Wolf, my family stopped at Red Robin Gourmet Burgers (RRGB) for lunch.  Ever since reading the good write-up that Eldrehad did on it over in his official picks (see article: Inaugural Pick: Red Robin Gourmet Burgers), I have been curious to try one.  So naturally we had to pull off for a rest stop when I saw the sign for one off of Route 80.  I must say that I am really impressed.  The place was much better than what I had expected.  It is definitely a notch above Johnny Rockets, Chilis, Ruby Tuesdays, Applebys, etc...  The burger that I had was really good, the place was immaculate, our service was excellent, and they had beer (no I didn't get one at noon in the middle of a long drive).  If I didn't anticipate a world of pain coming down the pipeline for restaurants (see articles: Sell Your Restaurant Stocks NOW!!! / more pain for restaurants) I would definitely consider investing in Red Robin.

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Wow, it's getting late already.  I could go on and on, but I had better go unwind for a little while. I leave you with this last bit of disgustingness.  I made my weekly trip to the grocery store after getting back from vacation today.  While innocently strolling through the frozen food section, minding my own business, I saw the most horrifying thing that I have ever seen.  THIS:

What is that you ask?  It is a Jimmy Dean sausage wrapped in a blueberry pancake.  BRLAFFFFFFFFF.  Excuse me while I wipe the barf off of my keyboard.  Adding insult to injury, or vice versa, it contains 18 grams of fat and 20% of your RDA of salt.  Yuck.

That's all for now, 

Deej

No position in WOLF or RRGB 

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