The Stock Market Says Taco Quality Is Poised for Rapid Improvement

A blog about business and economics.
Feb. 28 2014 12:13 PM

Efficient-Markets Hypothesis Says America Is Poised for Better Tacos

German tacos in Kreuzberg.

Photo by Sean Gallup/Getty Images

Some friends and I were lamenting the sorry state of the D.C. area's taco offerings, and I observed that if Taco Cabana were to expand to the area, it would crush the competition. Not because Taco Cabana is the single greatest taco in the universe or anything, but it's a taco chain that's had to cut its teeth amidst the taco plenty of Texas. It has managed to bring to scale a homogenized chain taco concept that can plausibly go head-to-head with a robust taco culture.

So I've often thought that if and when they ever expand to the people-dense, taco-poor Northeast Corridor, they will clean up.

In fact, I even considered investing in the company on those grounds. But then I remembered the First Rule of Picking Stocks is: Do not pick stocks. The Second Rule of Picking Stocks is: Do not pick stocks. The third rule is look up the current price-to-earnings ratio and see what financial markets are already assuming. In the case of the Fiesta Restaurant Group that means a 129 PE ratio (average would be about 15), which is really high. That means investors are optimistic about FRG's growth opportunities. Like they've noted that this is a regional chain that's very successful in a core taco market and reasonably likely to be a smashing success on a national basis.


Which is to say that if the efficient-market hypothesis is correct, America is poised for a massive expansion of quality tacos. It's an exciting time to be alive.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?


Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
Dear Prudence
Oct. 21 2014 9:18 AM Oh, Boy Prudie counsels a letter writer whose sister dresses her 4-year-old son in pink tutus.
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
Oct. 21 2014 8:38 AM An Implanted Wearable Gadget Isn’t as Crazy as You’d Think Products like New Deal Design’s UnderSkin may be the future.
  Health & Science
Bad Astronomy
Oct. 21 2014 7:00 AM Watch the Moon Eat the Sun: The Partial Solar Eclipse on Thursday, Oct. 23
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.