We Be Huntin' - A Look Back at My El Pollo Loco Trade (NASDAQ: LOCO)

Hunting in Packs - Sam Biglari -- El Pollo Loco (LOCO)

Investing is a lot like fishing or poker -- it takes patience and discipline. I've found that some of my best trades have come about because I did my research early, had conviction, and then entered the terms of my trade in hopes it would be filled when the market met my expectations -- NOT the other way.

My Mansa Musa network often helps to shape my thinking and when we execute trades together or hunt -- we often make money together in business, real estate, investing, etc. When I combine all these concepts or mentalities into one you get the Mansa Musa Mentality. Arguably the richest person in history, Mansa Musa, ruled over a large empire and put cities like Timbuktu on the map as they were known for their cities and libraries.

This posts is an example of how the #MansaMusaMentality work and how I use my extended network to invest. Almost like a case study, I'll highlight how these contacts guide me on investments such as buying real estate, stocks, precious metals, cryptocurrencies, etc. And I want to foster a community culture, so I'll show you how I learn from them and maybe in the future we can crowdsource or here we call it #tribesource investment ideas for the future.

"Detail" - A Breakdown of my El Pollo Loco (LOCO) Investment

Year: 2023

Throwback Link: Link Back to El Pollo Loco 

Research Timetable: August 2023

Research Details:

I read a really good article about Sam Biglari, an investor, who is in my Mansa Musa network. He has been a major investor and had a significant impact over Steak 'n Shake. Now it's time to show my age. When I was growing up Steak 'n Shake was a cool place to take a date. It reigned supreme as a late-night spot with low expectations. This was two decades ago, but I felt like it had commonality with grease -- greasy meal with greasy floors. You had to walk carefully but as a youth it was all good because you and your date were only there for the "shakes". The shake never failed you. Fast forward, one of my employees was telling me they eat occasionally at Steak 'n Shake and even called it clean. My interest perked up because I had over the decades disowned the fast-food shop for exactly the opposite reasons. I got more intel and recently tried it with my young kids. In fact, it was clean, they now had a drive-thru, and the food was hot which is a step up from the off-the-assembly lines fast food chains.

The article I read back in August detailed how Sam made investments into the company years back which was in a dire situation. They turned a profit back in 2021 and shrewdly closed about 90 locations. Adding drive-thru gives them an opportunity for more volume as they become of a fast-food restaurant and reduces costs from less dining in.

Huntin' In Packs Alert: Sam's picked up a large stake in another restaurant chain El Pollo Loco. By buying an ownership stake around 9% of the entire restaurant chain ($33 million dollars) I decided it was worth riding shotgun with my guy Sam.

The Setup: Check the stock chart above back in August 2023. The stock was trading around $11 dollars a share. Now me, I remember was candy bars were .50c so I like value. If I don't see Reese's Cups selling for this level -- I pass. Same with my trades, I like to build a margin in by betting on the lower side of where a stock has been trading. I did my research (usually by analyzing the stock's movement in the last year) and set a price I'd like to get in around $8-9 dollars a share. I put the trade in my account in August and it hit in November. The stock dipped to $8.60 range and my trade hit!

Don't Believe Me Just Watch - This is what I said literally back in August:

Call me crazy, or should I say LOCO, but let's see how our trade does. I like LOCO around the $8 level and for I'll enjoy hunting with Sam.

#HuntinPacks - designates investments I made alongside someone in my network

#MansaMusaMentality

 

Hunting in Packs - Sam Biglari -- El Pollo Loco (LOCO)

I have had quite a busy year. I've not invested heavily this year because I was concerned about the increase in inflation and the impact to stocks. I think my thesis has generally been correct, but November is trying to upend this trend. What's important about November? Well, this past month aligns with the Federal Reserve signaling they will halt increases in interest rates. This usually bodes well for stocks. So, it may be time to slowly start reinvesting the funds I moved to boring old cash. But some smart money folks in my Mansa Musa Network still are calling for a recession in 2024 or 2025. So, I'll come back to this subject soon but for now I'm TRYING to be a bit cautious with my trades by being less active. The strange thing about investing is that it takes patience. Because I've been busy, I recently learned that a trade that I researched back in August 2023 just filled. How is this possible? Well, I use a strategy that will only execute a stock trade IF my terms are met. I hope this sounds familiar as I often write about navigating through life and trying to ensure that you do things the right way and on your own terms.

Now there is no need to babble any further about what the trade is the trade I found out was recently executed and I only realized it because it was sitting in my inbox "unread".

Hunting in Packs - Sam Biglari -- El Pollo Loco (LOCO)

I got a great hit in my feed about an investor, named Sam Biglari, who is in my Mansa Musa network. I've never hunted for stocks with him, but I've read about the brother as I learned he had a significant impact over Steak 'n Shake. Now Steak 'n Shake is never at the top of my radar and that could have been a reason why Sam made investments into the company years back which was in a dire situation. I heard they turned a profit back in 2021 and much is likely attributed to shrewd moves that led to roughly 90 locations closing. As I wrote this I wondered if Steak 'n Shake was a franchise operator and just learned he is moving to that model as well as turning them into more of a fast-food restaurant to reduce the labor costs of dining in (which is what they were known for).

Sam's name was on my radar back in August when I read he was picking up a large stake in another restaurant chain El Pollo Loco. They say it goes down in the DM, and in stock trading Sam is definitely interested in LOCO. I believe he picked up enough shares in the company that would put his ownership stake at just north of owning 9% of the entire restaurant chain (see what I did their with "stake"). Based on his track record and the fact that he's putting a $33 million dollar investment in, I'd like to nibble here at the stock and trade along. Do I just jump in --- hell no. Like Flo Rida and T-Pain once rapped you gotta go Low Low Low Low, I like to build a margin in by betting on the lower side of where a stock has been trading. I did my research (usually by analyzing the stock's movement in the last year) and set a price I'd like to get in.

Call me crazy, or should I say LOCO, but let's see how our trade does. I like LOCO around the $8 level and for I'll enjoy hunting with Sam.

#HuntinPacks - designates investments I made alongside someone in my network

#MansaMusaMentality