Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
Manufacturing is not coming back to the U.S.
The workforce commonly classified as 'manufacturing workers' has been steadily declining for the past 50 years, even as output per man hour has exploded.
It is true that the cost of production is higher in the US than in other countries. But did anyone seriously think that as other countries developed their manufacturing capacity, that companies would not take advantage of lower cost structures and friendly regulation?
What the US excels at now is creating wealth through knowledge. Peter F Drucker dubbed the modern American worker as a 'knowledge worker' who managed ideas rather than 'things that hurt if dropped on your foot.'
This trend has accelerated in the last decade, to the point that being a production worker has become an anachronism--and those workers who remain are more likely to use technology daily, to improve their...productivity, thereby reducing manufacturing jobs even further.
Just because one doesn't like the direction the train is headed is not going to keep it from its destination.
I expect this trend to accelerate further in the coming years.
Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
Compelling data, thank you for the article.
It's interesting to note that the 65+ cohort has determined that its lifestyle has begun to depend on continued employment--unlike a generation ago, when 'retirement' meant leaving the workforce for other pursuits.
With the slow drumbeat of inflation eroding our purchasing power every day, it's no wonder that older Americans have no choice but to work.
Thank you again for an illustrative and sobering article. Looking forward to more contributions.
The 'De-Bestbuyification' Of Consumer Electronics [View article]
I would have to agree with you.
BBY began introducing Pacific Sales SWaS (Store Within a Store) to capitalize on high end appliance buyers. These designated appliance areas are usually located in larger (40,000+ sf) outlets that already have Apple and Magnolia stores.
The idea is that the higher end buyer (formerly Barry and Jill, from the company's 'customer-centricity' purchasing demographic profile), can stop in one place to satisfy all their electronic, home entertainment and appliance needs.
(Please see the comment below which further explains how BBY separated its buying groups.)
Oil is set to fall by 30% this year, says Levitt Capital's Robert Levitt. The impact of increased shale oil supplies have been drastically underestimated by the markets, Levitt says. This increase, when combined with the resolution of pipeline transportation issues, should ease upward pressure on oil prices. "Once we have all these issues straightened out, the price of oil is going to come down and that will be a great boom for the global economy." [View news story]
There's already $4 gas in Northern CA.
This morning I passed a gas station that posted prices for regular unleaded at $4.009 for cash, $4.069 for credit.
This afternoon, the same station showed $4.069 for cash, $4.129 for credit.
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
I believe BBY is on its death bed.
It's going to pass from a lingering, wasting illness.
Which flies in the face of those who believe the company's ultimate demise will be dramatic and swift.
I think the company will drift into irrelevancy over the next 5 years, until an electronics reseller takes over the remaining locations and turns it into the equivalent of an Electronic Dollar Tree.
In the meantime, look for further closings of marginal locations in your local town.
Disclosure: Long with shares purchased through the company's ESPP.
I tend to think that with the company's online price match policy during the holidays, the gross margin were compressed, while the SG & A margin rose because of flat sales and higher operating expenses.
Result? Lower operating profits.
Operating profits at $1.53 for the quarter seem to represent the upper end of the range to me.
Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
This is why I took a dim view of BBY crowing about how its website was one of the top 5 visited over the Black Friday weekend.
Visits aren't sales, as is clearly shown here.
I was actually researching some flat panel TVs but found two thirds of them out of stock at the website.
You can't sell what you don't have.
They apparently learned their lesson from last year, when they did sell things they didn't have--and had to disappoint customers at Christmas time.
AT&T (T) introduces the U-verse Screen Pack, a $5/month movie streaming service for its TV subs. Some are calling the service a Netflix (NFLX) killer, but as AllThingsD's Peter Kafka points out, Screen Pack's relatively small content library makes it more on par with Comcast's Streampix, which hasn't exactly eaten Netflix's lunch. AT&T is also announcing new U-verse media-sharing apps, and a home security/automation service called Digital Life; the latter relies on a control panel developed by Cisco (CSCO). [View news story]
U Verse is still rolling out at a glacial pace.
T has been promising it for my neighborhood for 4 years now.
Are Student Loans Destroying Consumption? [View article]
Thank you for your kind words, and your willingness to put financial resources behind a cause which is obviously important to you.
One thing that has become evident is that many, if not most, students who attend 'at-risk' schools are not college material. They are either academically ineffectual (falling behind in traditional schools, having little interest in more challenging curricula), or simply are in high school to get a diploma before moving to one of the services, or finding some sort of menial work after graduation.
In those cases, if students are granted loans to go to 'college,' it's much more likely that the money will be spent on courses which lead inevitably to dropouts--and these students are saddled with student loans that they will not be able to repay, because their employment prospects will remain poor without degrees.
On the other hand, if those same students are given the opportunity to learn skills in technical, trade or personal service schools, there's a much better chance that they will find productive work and be able to repay those loans.
I believe that the system which has been tilted toward 'college for everyone, regardless of ability' should be broadened to provide financing for trade school training (not necessarily the for-profit diploma mills), but schools which can provide meaningful skills, leading to value-added career choices which can prove more lucrative than the 'liberal arts' education mentioned elsewhere in this thread.
The music major who manages to buy a small house on his meager teacher's salary will have to call a well-trained HVAC technician when his furnace fails in mid-January.
Chances are, the HVAC technician makes more per hour.
Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
The workforce commonly classified as 'manufacturing workers' has been steadily declining for the past 50 years, even as output per man hour has exploded.
It is true that the cost of production is higher in the US than in other countries. But did anyone seriously think that as other countries developed their manufacturing capacity, that companies would not take advantage of lower cost structures and friendly regulation?
What the US excels at now is creating wealth through knowledge. Peter F Drucker dubbed the modern American worker as a 'knowledge worker' who managed ideas rather than 'things that hurt if dropped on your foot.'
This trend has accelerated in the last decade, to the point that being a production worker has become an anachronism--and those workers who remain are more likely to use technology daily, to improve their...productivity, thereby reducing manufacturing jobs even further.
Just because one doesn't like the direction the train is headed is not going to keep it from its destination.
I expect this trend to accelerate further in the coming years.
And those who are unprepared will be left behind.
Struggling To Get Ahead: The Age Demographics Of Weekly Earnings [View article]
It's interesting to note that the 65+ cohort has determined that its lifestyle has begun to depend on continued employment--unlike a generation ago, when 'retirement' meant leaving the workforce for other pursuits.
With the slow drumbeat of inflation eroding our purchasing power every day, it's no wonder that older Americans have no choice but to work.
Thank you again for an illustrative and sobering article. Looking forward to more contributions.
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
Best Buy's CEO Discusses F4Q13 Results - Earnings Call Transcript [View article]
I expected the number to be materially higher.
Oh well, time will tell whether the slow approach proves worthwhile.
The 'De-Bestbuyification' Of Consumer Electronics [View article]
BBY began introducing Pacific Sales SWaS (Store Within a Store) to capitalize on high end appliance buyers. These designated appliance areas are usually located in larger (40,000+ sf) outlets that already have Apple and Magnolia stores.
The idea is that the higher end buyer (formerly Barry and Jill, from the company's 'customer-centricity' purchasing demographic profile), can stop in one place to satisfy all their electronic, home entertainment and appliance needs.
(Please see the comment below which further explains how BBY separated its buying groups.)
http://bit.ly/YB82Nt
I say 'separated' because immediately after Mr. Dunn became CEO, the customer-centricity program was dismantled.
In any event, it is clear that transformation is vital to the company's future.
The question becomes, will transformation occur rapidly enough to save it?
Disclosure: Long BBY with shares purchased through the company's ESPP.
Former employee.
Oil is set to fall by 30% this year, says Levitt Capital's Robert Levitt. The impact of increased shale oil supplies have been drastically underestimated by the markets, Levitt says. This increase, when combined with the resolution of pipeline transportation issues, should ease upward pressure on oil prices. "Once we have all these issues straightened out, the price of oil is going to come down and that will be a great boom for the global economy." [View news story]
This morning I passed a gas station that posted prices for regular unleaded at $4.009 for cash, $4.069 for credit.
This afternoon, the same station showed $4.069 for cash, $4.129 for credit.
Where's the relief coming from?
Today's Market News To Trade On: 5 Stocks Moving On News [View article]
It's going to pass from a lingering, wasting illness.
Which flies in the face of those who believe the company's ultimate demise will be dramatic and swift.
I think the company will drift into irrelevancy over the next 5 years, until an electronics reseller takes over the remaining locations and turns it into the equivalent of an Electronic Dollar Tree.
In the meantime, look for further closings of marginal locations in your local town.
Disclosure: Long with shares purchased through the company's ESPP.
Former employee.
Best Buy's Buyout Blues [View article]
It's a shame they removed it.
Best Buy's Buyout Blues [View article]
Result? Lower operating profits.
Operating profits at $1.53 for the quarter seem to represent the upper end of the range to me.
$1.25--$1.40 seems more reasonable.
Best Buy Sales Not What They Seem [View article]
It will be interesting to see what the full-year operating results will be.
And what FCF will really become for the year.
I, for one, think FCF will be less than $400 million.
Which will leave precious little cash for restructuring unless the company borrows it.
Now, there is ample availability on the currently unsecured credit line.
But I wonder whether this is the same path Circuit City took--borrowing to restructure, which ultimately doomed the company.
Disclosure--long through shares purchased in the company's ESPP.
Former employee.
Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
Oh, found it--$6,050/sf, twice that of Tiffany's
http://bit.ly/13flXwF
That takes specialty retail to another galaxy.
And oh by the way, does AAPL qualify as a BBY peer?
Conversion, conversion, conversion: A quick scan of the performance of some major retail websites shows the biting criticism of Best Buy's (BBY +0.5%) online business may be well-deserved. The company only converts 31% of its visitors into a sale compared to the 81% of visitors at Amazon.com and 76% checking in at Apple's site that actually buy something. Comparing the retailer's sales per physical space to brick-and-mortar peers yield similar disappointing results: Best Buy $865 per square foot vs. Costco at $1,031 and GameStop at $1,015. [View news story]
Visits aren't sales, as is clearly shown here.
I was actually researching some flat panel TVs but found two thirds of them out of stock at the website.
You can't sell what you don't have.
They apparently learned their lesson from last year, when they did sell things they didn't have--and had to disappoint customers at Christmas time.
AT&T (T) introduces the U-verse Screen Pack, a $5/month movie streaming service for its TV subs. Some are calling the service a Netflix (NFLX) killer, but as AllThingsD's Peter Kafka points out, Screen Pack's relatively small content library makes it more on par with Comcast's Streampix, which hasn't exactly eaten Netflix's lunch. AT&T is also announcing new U-verse media-sharing apps, and a home security/automation service called Digital Life; the latter relies on a control panel developed by Cisco (CSCO). [View news story]
T has been promising it for my neighborhood for 4 years now.
Are Student Loans Destroying Consumption? [View article]
One thing that has become evident is that many, if not most, students who attend 'at-risk' schools are not college material. They are either academically ineffectual (falling behind in traditional schools, having little interest in more challenging curricula), or simply are in high school to get a diploma before moving to one of the services, or finding some sort of menial work after graduation.
In those cases, if students are granted loans to go to 'college,' it's much more likely that the money will be spent on courses which lead inevitably to dropouts--and these students are saddled with student loans that they will not be able to repay, because their employment prospects will remain poor without degrees.
On the other hand, if those same students are given the opportunity to learn skills in technical, trade or personal service schools, there's a much better chance that they will find productive work and be able to repay those loans.
I believe that the system which has been tilted toward 'college for everyone, regardless of ability' should be broadened to provide financing for trade school training (not necessarily the for-profit diploma mills), but schools which can provide meaningful skills, leading to value-added career choices which can prove more lucrative than the 'liberal arts' education mentioned elsewhere in this thread.
The music major who manages to buy a small house on his meager teacher's salary will have to call a well-trained HVAC technician when his furnace fails in mid-January.
Chances are, the HVAC technician makes more per hour.
And paid much less for his education.