Adam Lass, Senior Editor, WaveStrength Options Weekly
Is stealing 177% from summer-dazed investors ironic? You betcha!
“…I gotta wear shades.”
Who says only Gen Xers can appreciate irony? Heck, François-Marie Arouet (a.k.a. Voltaire) was writing about “the best of all possible worlds” back in the heady days of 1759, when snotty wit like that could get you strung up by your thumbs in the Bastille.
Still, the line from Timbuk3’s 1986 hit by that name is particularly apropos – and particularly ironic – in all sorts of ways these days.
Did you catch Luxottica Group (NYSE:LUX)’s wild 15% rally last week? In case the name is unfamiliar to you, Luxottica is the Italian company that owns those stalwarts of the American mall, LensCrafters and Sunglass Hut, and those ultimate summer scene accouterments – Ray-Ban and Oakley sunglasses – so heavily pitched at same.
Profits Down – Shares UP!
Now I should point out that LUX shares have been on a tear for some time now, rising some 57% since setting a six-year low back in March. Clearly the stock had more than a little momentum going into last week.
But even still, the reason buyers gave for this latest spike is worth noting: LUX’s first quarter income fell 23% to €80.4 million (roughly $108 million).
Now in normal times, one might expect news like this to have a slightly different effect. It seems intuitive that investors ought to prefer companies that are, well, actually making money?
Best? Worst? How About “The Weirdest of Times”
But these are not normal times.
We have a new president who is inventing trillions of new dollars and thousands of novel ways to spend those dollars. He is also inventing reams of new regulations and hiring hundreds if not thousands of new bureaucrats to enforce them.
After so much economic destruction, this is now the era of “Hope,” as in: “I hope the stocks I am buying will go up eventually. I have no real economic reason for believing that. I’m just tired of all this bad news and have decided to fly on faith here. Now take all your facts and figures and leave me alone!”
“But first: could you hand me my sunglasses, ‘cause man, it’s bright out there.”
When a Loss Ain’t a Loss
LUX qualifies as an absolute winner under this new “hope-based” regime. You see, the “experts” who watch sunglass companies for a living had slated LUX profits to come in around €66.5 million.
