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Archive for May, 2010

Free Food! Free Food!

May 18, 2010 3 comments

Panera Bread just opened a a new restaurant where customers “pay whatever they want.”

From the Associated Press: CLAYTON, Mo. — Panera Bread Co. is asking customers at a new restaurant to pay what they want. The national bakery and restaurant chain launched a new nonprofit store here this week that has the same menu as its other 1,400 locations. But the prices are a little different — there aren’t any. Customers are told to donate what they want for a meal, whether it’s the full suggested price, a penny or $100.

The full story can be found here: http://www.google.com/hostednews/ap/article/ALeqM5g__EQ-OG9DhU1YwC4Fo4s5QREdbgD9FPBIMG0

This bizarre business model has Trophy Wife jumping up and down with excitement as she hopes that Tiffany’s jewelers may adopt a similar pricing policy.  Additionally,  if Panera succeeds in this approach, it will be bullish for textbook publishers, as  it will require a re-write of every college economics textbook!

[Disclosure: Rocky doesn’t own any shares of Panera Bread (PNRA), but if he did, he might be tempted to sell them before he lunches at Panera for a penny.]

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Gold vs. Gold Stocks: Trophy Wife speaks

May 10, 2010 8 comments

Last week, the “VGPMX” ( the Vanguard Precious Metals & Mining Fund) lost 9.5%. However, the price of gold rose by 2.3%.

Rocky wondered whether this divergence posed a market opportunity, so he sought advice from his expert on all things shiny: Trophy Wife.

Rocky: “Do you think we should sell our gold and buy the VGPMX?

Trophy Wife: “The VGPMX is just a piece of paper with no psychic satisfaction. What good does that do for me?”

Rocky: “The VGPMX holds some of the best mining companies in the world. They generate ample free cash flow, dividends and will reflect the profitability of precious metals and mining over time.”

Trophy Wife: “At least if I get the ring, I keep the ring.”

Rocky: “Assuming that gold prices remain constant, and using an adjusted discounted cash flow analysis, the value of VGPMX represents an excellent risk return.”

Trophy Wife: “Buy me the gold ring with the diamond. It’s better than the stock market day and night.”

[Disclosure: Rocky took Trophy Wife’s sagacious advice. His investment portfolio seems stable, and his marriage is doing fine too.]