Subject: Re: Fallen knives compared
Lulu (I am tempted).
...
That's the one I would choose, too???

Hmmmm. Canadian, so I have to start with optimism. But.

Specialty retailers. Clothing brands.

Quick, name a couple of industries with a higher frequency of failure and popping after exuberance, or lower average long run average returns. Take your time.

Rollups and concept restaurant franchises maybe? Anything else? Beuller?

Their future might be fantastic, but I am reminded of the "base rate" rule. By default, assume that the return from any type of investment will equal the historical average for that type of investment. To whatever degree you expect a given situation to be exceptional relative to that average, demand evidence of exceptionality that is itself commensurably exceptional.

I have no reason at all to doubt that LULU will do well from here. But I don't personally know of any exceptional reasons to expect their fate to be exceptional. Maybe you folks do, and it's just my ignorance, absolutely possible.

Just two cents worth of food for thought.

Jim