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  • Kellogg Is Now Investing To Restore Growth [View article]
    A few decades ago when I was young and immortal, I used to hitchhike across the country. Once I got a ride from the driver of a beverage-delivery truck. He was a young man eager to make his operation a success. I was much amused to learn the dirty details of his business delivering several brands. He said that placement in the store and on the shelves was critical in order for the product to move, and so drivers with competing brands would place their products on shelves where they might not have permission to be and push a competitor's products to the back. These were mostly small convenience stores, where the drivers would not only deliver but help to stock shelves. I waited while he made one quick delivery near the highway. I doubt this has much relevance today, except that it makes me smile at the DSD strategy. I can see how a delivery man might help sales through his interaction with a store manager in some cases, but I don't know that i'd want to increase my delivery costs by 50% to bank on these guys.
    Feb 14, 2014. 04:46 PM | 2 Likes Like |Link to Comment
  • Forget The Weak Payroll Numbers. January's Employment Report Was Fundamentally Positive [View article]
    Oh, my god. The recent report didn't say that the new health care law will cost 2 million jobs. It said that some (mostly older) workers who would rather not work but are hanging on only for health coverage will be inclined to retire. This can only be a good thing, both for humanity and for the economy. Those jobs won't disappear, as younger workers will take them. Another positive aspect that the report did not mention is that when people are not forced to remain in boring jobs to just to get affordable health care, then some are emboldened to start their own companies. The absence of affordable health care has been a drag on entrepreneurship and innovation in the economy.
    Feb 9, 2014. 11:16 AM | 5 Likes Like |Link to Comment
  • Capitulation? Market Sees Biggest Outflows In A Decade [View article]
    The bigger picture shows that interest rates are in a multi-decade downtrend. Sure, they can go up some, but with no signs of wage inflation, rates can stay pretty darn low for a very long time.
    Feb 8, 2014. 04:57 PM | 1 Like Like |Link to Comment
  • A Note To John Hussman [View instapost]
    Love the stories! Made my day.
    Feb 7, 2014. 08:15 AM | Likes Like |Link to Comment
  • A Note To John Hussman [View instapost]
    Very amusing, and very nicely written. I think you are right about people like Hussman -- some rigid thinking (focusing on what "should" be rather than endeavoring to learn what is), curmudgeonly righteousness (the market has sinned and must be punished), and some wishful thinking, like the boy with his airplane of sticks. By the way, do you know what became of the kid? I'm long SPY, too.
    Feb 7, 2014. 08:00 AM | 1 Like Like |Link to Comment
  • Capitulation? Market Sees Biggest Outflows In A Decade [View article]
    Chris, thank you for sharing your research in very nice articles, beautifully presented. One point, though. When you state averages for stock at major market peaks (ie, on average, 16.54% of stocks were within 2% of their peaks), it would be helpful to provide either the standard deviation or the range for that. In other words, how tight is the pattern? Comparing just one major market peak (07) to this particular time might simply to say that these two times are different.
    Feb 7, 2014. 07:35 AM | Likes Like |Link to Comment
  • Why I Sold Apple And Bought Yahoo [View article]
    Yahoo seems to be getting worse with the changes. Yahoo email got so bad, with flashing ads that make it impossible to read a message without going batty, that i would have dropped it after 15 years except that Apple's email program will download the messages without me having to visit the site. Yahoo Sports, which had been my default, is now buggy and less useable, plus, Yahoo fired their best writers and eliminated their entertaining sports video, so now I hardly use Yahoo Sports. My fantasy football league would not even consider Yahoo because several of us had seen how buggy their pages can be. Their MyYahoo page doesn't work as well now that they have revamped it, like the Sports pages, clearly aiming at mobile. I still use Yahoo Finance, but that's about it. So sure, mobile use should be up, and they did need to make changes, but overall it doesn't look promising for this user.
    Feb 3, 2014. 01:23 PM | 2 Likes Like |Link to Comment
  • Existing Home Sales Down YoY And Down 10% From High For Second Month In A Row [View article]
    Call me a doubting Tommy, but the top chart shows that sales shot well above trend in the summer of 2013, as buyers rushed in to get ultra-low mortgage rates before the widely publicized rate hikes. So I would expect sales to oscillate back below trend for a while, similar to what happened with vehicle sales a while back after incentives expired. We should expect this to happen for a while even if interest rates now are still low enough for almost all potential buyers. It might not mean that the overall trend is broken.
    Jan 23, 2014. 06:00 PM | Likes Like |Link to Comment
  • Why The Decelerating Trend In Housing And Car Sales Is A Cause For Concern [View article]
    Isn't leasing more expensive than buying? And don't leasing dealers have to buy as many cars as they lease? They tend to auction the leased cars as soon as the factory 36-mo warranty runs out.
    Jan 22, 2014. 04:29 PM | Likes Like |Link to Comment
  • Why The Decelerating Trend In Housing And Car Sales Is A Cause For Concern [View article]
    Let's see. We're still building less than 1 million homes per year, significantly below the long-term average. I wonder how many people rushed to buy last year in anticipation of the increase in interest rates? I know some people who did that. No surprise then at the downturn when rates jumped up a bit. Yet interest rates are well below historical averages and may stay that way for a long time. So the downturn in housing might be a temporary reaction in a longer-term continuation of the slow climb back to average.
    Jan 22, 2014. 04:09 AM | Likes Like |Link to Comment
  • Netflix Likely To Rocket After Earnings, But In What Direction? [View article]
    I agree with Water Bros that the straddle isn't the best bet. This is not by any means a binary event -- the stock can also go sideways. But if you buy calls and puts that are 5-10% out-of-the-money in each directions (a strangle) and a month out in time, your loss on a sideways move of the stock could be on the order of 20-30% (due to a collapse in option premiums, IV) but you can get a double or better if the thing moves 10% or more. My mistake on these in the past has been to sell too soon when the stock does start a big move -- the monthly gives you time to let it run.
    Jan 20, 2014. 06:05 AM | Likes Like |Link to Comment
  • Is J.C. Penney Past The Point Of No Return? [View article]
    Fun read. Thanks for the link to Zipporah.
    Jan 20, 2014. 05:16 AM | Likes Like |Link to Comment
  • Nu Skin, An American Pyramid In China? [View article]
    Well then it looks like we could learn something from China in this case.
    Jan 19, 2014. 07:49 AM | Likes Like |Link to Comment
  • Nu Skin, An American Pyramid In China? [View article]
    Just curious: why can't a class action lawsuit be brought against Nu Skin or Herbalife? The class would be all of the salespeople who were recruited on the deceptive promises that they can make unlimited money, when it's impossible that most of them will. Why wouldn't that work?
    Jan 19, 2014. 01:24 AM | Likes Like |Link to Comment
  • Intel: Earnings Post Mortem [View article]
    Russ, I hope you are right, but in my own field I have seen highly intelligent people make stupid mistakes too many times to remember. There are many reasons for it. Hubris, a strong desire to lead with bold moves, a reluctance to admit to error, and so on.
    Jan 17, 2014. 04:43 AM | 12 Likes Like |Link to Comment