Trump Coup

I was awakened early by the heavy rains and unable to sleep, I dragged myself to the computer. Luckily, Fifi couldn't sleep either and she had a cup of French pressed mocha java waiting for me. Asking her if perhaps there mightn't be a doughnut or bear claw to go with it, she shot me a “You're lucky to get the coffee, missy” look and said that she was going out to walk the pooch. Oh well. And here I thought she had a heart...

Perusing the charts, I found one in particular that stood out, not just because it's up almost 9% on the day which attracted me to it in the first place, but because of the overall chart pattern. It was TRMP, Trump Entertainment, which as everyone knows is owned by “The Donald.” Now a 9% gain sounds pretty good, but looking at the overall chart, the stock is down by a whopping 78% from just a year ago and 82% from its all-time high set in November, 2006. Today, it's trading around $4.20, and had you shorted it a year ago, you would have made a cool $14.50/share.

Smelling a rat, the smart institutions began heading for the exits as early as June of last year. Just two weeks ago Moody's announced that it's keeping the company's credit rating on review for a possible downgrade because of rising competition in the casino area, and this announcement came after Trump restructured its debt instrument. Moody's said that a possible downgrade would affect about $1.25 BILLION of debt!

On top of that, it was just announced that Trump's much-publicized 26 year old daughter, Ivanka, is being added to the company's board. I don't want to bash Ivanka--I like her. I saw her on Oprah and she came off as a very poised, intelligent, down-to-earth young lady. She said that she was a straight A student at Wharton, preferring the company of a good book to a night-club--a refreshing change from the Paris Hilton's and Britney Spears' that dominate the media. Heck, if God could assure me a kid like that, I would have had ten of them, and I can't blame The Donald and Ivana for being unabashedly proud. But to put a 26 year old on your board???

What I really don't understand is why everyone on CNBC and on Trump's show, The Apprentice, is kissing his butt. You'd think he was Warren Buffett the way he's treated. I know Warren Buffett, and believe me, Donald Trump is no Warren Buffet. (Okay, I don't know Warren Buffett but I was dying to say that.) I mean, even the mighty Jim Cramer (who is probably worth a lot more than Trump) calls him “Mr. Trump”!

Is this respect deserved? If you had been holding Trump stock for the past year, what would you be calling him? Whatever it is, I bet it wouldn't be Mr. Trump. If the boardroom of The Apprentice were filled with his top shareholders, who do you think would be fired?

Let's hope that today's stock turnaround is real, if only for the sake of Trump's image. Maybe if the stock increases enough in value he'll be able to afford a good rug instead of combing his hair over from the back of his head. Fifi thinks it makes him look like a duck. Speaking of Fifi, she just came in from the rain and brought me a chocolate croissant from the French bakery up the street.

Maybe she does have a heart after all...

Posted by Dr. Kris at 10:30 PST