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DPZ – Comments from Analyst day

At the DPZ analyst day management was commenting on the impact of industry competition. A throw away comment was the impact of WMT advertising of cheap pizza. Because of WMT advertising strategy, DPZ management thinks consumers begin to think “how cheap can I buy pizza.”

I only point this out because WMT is now running commercials on how cheap breakfast is at WMT compared to the QSR industry….

BYD: I LIKE THE GGP NEWS

Last night General Growth Properties announced that the company is selling the Fashion Show Mall and The Shoppes at The Palazzo to satisfy debt obligations. Both of these malls are located on the Las Vegas Strip. GGP is also a 50/50 JV partner in another Strip project: Echelon.

BYD’s decision to delay Echelon put the company on the right side of the liquidity trade. I continue to believe the project will not be restarted for a considerable period of time, at least not until 2010. GGP is likely to join MHGC as a FORMER Echelon partner with BYD. This can only delay Echelon which is a positive for BYD shareholders and debt holders.

Trading Gold?

If you want to get in the game here and trade the black stuff or the yellow stuff, we have a view. Buy low, sell high. For the immediate term "Trade" we like gold (GLD) long at $688/oz, don't like it at $766/oz.

Our quant models refresh every 90 minutes of trading. As the facts change, our math does.
KM

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Trading Oil?

This is a simple picture, and we have painted the lines around how we are going to deal with it. Buy low, sell high. In the immediate term, we buy oil around $61/barrel, and sell it at $69.

This is a trader's market. We're game if you are.
KM

Refreshing our S&P500 Levels: The Fear Centers Aren't Done Yet...

Some people don't respect that their brain's amygdala (fear center) generally dominates their reward center. We respect neuroscience. We respect math. We let our models show us tail risk rather than letting our emotions govern portfolio decision making.

Our models refresh every 90 minutes of trading. Here are our new S&P Levels for 11am EST:

Buy "Trade" = 823
Sell "Trade" = 913

Don't allow David Faber at CNBC or your fear center dominate your thinking. Faber is right about Morgan Stanley's liquidity concerns, but he is 3 hours behind us on that call.

KM

MACAU UPDATE FROM THE (CONSTRUCTION) GROUND

Our guys in Macau have put on their construction helmets and safety glasses. Some interesting observations as follows:

• LVS stopped construction on 2 of the 4 towers on Lots 5 and 6.
• Construction remains on the Sheraton and St. Regis towers. We continue to believe construction will pause on these 2 towers as well after they skin the building.
• Shrangi-La and Traders postponed indefinitely and immediately
• Construction of two Cirque theaters on Lots 5 and 6 have been cancelled. The Cirque production teams have been sent home. The Cirque du Soleil show at The Venetian remains intact.
• MPEL’s City of Dreams has moved to a 3 phase opening from a 2 phase opening. Surprisingly, the opening of Phase 1 has been moved up to March 2009. It is our understanding that Phase 1 will include the casino floor and Crown Tower

We’ve been predicting the construction delays on Lots 5 and 6 for some time but incrementally the news is probably a positive for LVS and the Macau market. Less Capex means more cash flow near term. Regarding MPEL, for the City of Dreams to begin generating cash flow sooner is also a positive.

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