billddrummer

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    • Tue Oct 14th 12:02 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To cramerwatcher,

      I trust you watch for entertainment, not investment advice.

      But aside from that, why does CC need 3,500 people at HQ in the first place?

      And what do they do?
      View article »
    • Mon Oct 13th 17:52 PM | Rating: 0 0
      Commented on:
      Homebuilder Update [Housing Tracker]
      Hi Judy,

      Thanks for this resource!

      Centex and KB Homes are doing the same thing here in Northern NV. A new subdivision is advertising homes in the <$200,000 price range, when only 18 months ago the going rate for new construction was $300,000+. These homes are basic, with small lots and few amenities. With Centex, houses in later phases are discounted by $30,000-$50,000, depending on the floorplan. I spoke with one recent purchaser who saved $30,000 on a house they had already put a deposit on. By the time the home was completed, it was cheaper.

      Lots are getting smaller too, as developers try to make up for building costs by cramming more units onto a parcel. The planning commission has been favorable to density adjustments in many starter subdivisions.

      Rationality has returned to the new home market here. So if you want to call a bottom, this might be it. The problem I see is that this bottom won't be rising any time soon.

      I look for flat to declining median home prices for at least another 6 months, and then no appreciation for 3-5 years after that. So a 'recovery' as classically defined won't begin until 2011 at the earliest.

      Housing is no longer a growth industry in Northern NV.
      View article »
    • Mon Oct 13th 17:35 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To sav:

      That response is similar to how the CEO of GM, Mr. Wagoner, responded when a reporter asked him about the impact of Toyota on GM's domestic sales. He replied (paraphrase) that he wasn't focusing on what the competition was doing, but rather the progress of the cost-savings plans for GM.

      Shortly after that, Toyota surpassed GM in market share.

      It's funny how management in different industries makes similar mistakes. If GM could figure out how to speed up its new product cycle (and didn't leave obsolete brands on sale [Oldsmobile ceased being relevant fully 7 years before GM pulled the plug]), it would represent formidable competition to Honda, Toyota, et al. Instead, its debt trades at a 34% yield, and the stock is within a hair of its all-time low, notwithstanding the surge today.

      CC said its target customer wasn't Wal-mart's. They've discovered that their target customer isn't anybody. WMT takes the bargain shoppers, and BBY takes the rest.

      Like the old saying "Stay at our hotel for a change and a rest. The bellboy takes the change, and the hotel takes the rest."
      View article »
    • Mon Oct 13th 12:10 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To iwish,

      I too am sorry to hear that you were let go for discussing financial matters. And as far as the discussion itself, I'm curious--why would management care? Information we discuss here is based on review of public data that's readily available--SEC reports, stock market analysis, company communications and the like--so it puzzles me about why an employee would be let go for talking to another employee. (I'd understand if you were telling a customer proprietary information.) As phil said, it's the loss of freedom of expression that is disturbing. And if line management is that defensive with employees, how will customers be treated?

      I believe the company will be split up after the holidays, and the Canadian division sold to raise cash. It won't bring as much value as management was looking for, but it will be better than nothing.

      I read today that the letter of credit market was showing signs of stress. LOCs are how most companies finance imports. But the stress was on the banking side, not the customer side. The loan commitment includes a subline for letter of credit issuance (principally to guarantee payment for inventory shipped from overseas). If the LOC line is restricted, then CC will have real trouble fulfilling its vendor agreements.

      But please understand, this is all speculation, based on a review of current market conditions.

      Meanwhile, the fat lady is halfway through the first stanza.
      View article »
    • Mon Oct 13th 11:59 AM | Rating: 0 0
      Commented on:
      Failed Short Sales Exacerbate Foreclosure Losses For All [Housing Tracker]
      Hi Judy,

      Great compilation!!!

      To alivewweb,

      Good for you for paying cash for your real estate.

      I had a conversation with a bank customer some years ago about why he owned all his property free and clear. He had substantial cash balances and positive cash flow from his rentals, and could easily qualify to refinance the properties if he wanted.

      He said he didn't like the interest clock running against him. If you have debt, the interest clock runs against you. With cash, it runs for you.

      Similar to headwinds and tailwinds. With a debt load, you have a headwind impeding whatever you want to accomplish. Without a debt load, you have a tailwind.

      Sounds like you're coasting on a tailwind.
      View article »
    • Fri Oct 10th 19:07 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      Thanks!

      I like tire-kickers, because I get to practice my selling techniques with them, whether they buy or not.

      Some of them actually come back, too. I had one couple who visited the store three separate times before purchasing a fridge. Now, the problem with that is they were counted as 6 people entering the store, but only one sales transaction resulted from it. That's a 16% close rate (bad), but I saw it as a 100% close rate (good).

      Some of the managers aren't as clued into the fact that people are coming in to shop, rather than to buy. I think even senior management is guilty of expecting a higher close rate than would be reasonable in the current environment. But that's just me.

      I tell the folks I work with that if you can establish a relationship with a customer, the likelihood that they will come back to you when they are ready to purchase is far greater than if you treat them like everyone else.

      Some listen, some don't. Age makes a difference. The younger the salesperson, the less likely they'll listen. And as you know, BBY definitely has a young tilt to its sales and management staff.

      In the 2nd quarter earnings report, BBY said they would be beefing up inventory for the holidays. We've already begun receiving holiday-specific SKUs, but haven't got new planograms yet. So all the stuff is piling up in the warehouse. We have the buying power, the good relations with vendors, the space, the staff, and the financing (HSBC handles the proprietary cards). And there will be great promotions over the holidays.

      I'm cautiously optimistic.

      View article »
    • Fri Oct 10th 18:58 PM | Rating: 0 0
      Commented on:
      Mortgage Rates Falling [Housing Tracker]
      Hi Judy, great stuff!!

      I think BAC is postponing the pain on those borrowers. Let's hope they get really good jobs and can afford higher payments down the road.
      View article »
    • Fri Oct 10th 16:34 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To phil,

      Good one, huh?

      I couldn't access the link because I'm not a subscriber to the service, but your summary is just about what we've expected all along. Limp through the holidays, close nonperforming stores in January, and go away.

      BBY reported a same store sales decrease of 2% in Sept., citing lighter traffic. I wonder what CC's same store sales did?

      I work at BBY as a part time sales associate, and I've seen less buying traffic but more window shopping. The close rate for our store has dropped by double digits (proprietary data) since August, but traffic counts are up over last year. What that means to me is that people are price-conscious, and looking in person to get the best deals they can. We're still profitable (proprietary) but not blowing the doors off by any stretch.

      And BBY is opening a new store in a brand new mall not 5 miles away. The new mall will feature an expanded Target, eventually a casino-hotel, and is anchored by Scheel's, a 240,000 s.f. sporting goods store.

      I expect good traffic for Black Friday, but lower average revenue per transaction through the holiday season. Profits will get squeezed, but I believe BBY will be all right.

      CC will have a stroke.
      View article »
    • Thu Oct 9th 18:53 PM | Rating: 0 0
      Commented on:
      Clueless - Cramer's Mad Money (10/8/08)
      I don't watch Cramer because I work for a living.

      Having said that, it's just a TV show. If you're going to invest, do your own research.
      View article »
    • Thu Oct 9th 17:25 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To phil,

      It's a lot harder to find BUYERS without the exposure to the NYSE.

      CC would also violate the minimum market cap rule ($100 million, if I read it right).

      They flunked the earnings and cash flow rules long ago.
      View article »
    • Thu Oct 9th 16:16 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      A followup comment:

      There's not much more to say, is there?
      View article »
    • Thu Oct 9th 15:58 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To phil,

      Thanks for the link. Here's another tidbit to chew on: CC is in danger of being delisted from the NYSE if its stock price stays below $1 for 30 days.

      www.bloomberg.com/apps...

      NASDAQ is seeking an accommodation to the rules governing that exchange, but the Big Board doesn't do that.

      So the only way to buy stock after that happens is on the pink sheets.

      If you recall, CC was removed from the S & P 500 in January.



      View article »
    • Wed Oct 8th 19:09 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      A followup comment:

      As long as the bank group is shoveling dollars out to the suppliers, the vendors will stay happy. All they care about is getting paid for the orders.

      Now if the banks alter the terms of the credit agreement, it's a whole new ball game. I remember a clothing retailer that was sold to Men's Wearhouse some years back after its bank changed the terms on its credit facility. At the end, bankers were in each store collecting cash receipts and applying them to the loan balance first. Men's Wearhouse paid almost nothing for the locations, assumed the leases, and paid off the bank from its own credit line.

      Look for the same scenario to play out here. BofA is the lead bank, and ChaseJPMorgan is a primary agent. Money center banks are having trouble funding loans to each other, much less honoring commitments to struggling companies.

      Stay tuned.
      View article »
    • Wed Oct 8th 19:03 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      To Phil & CanadaD,

      The three of us have been keeping this thread alive for two weeks now.

      Should they call us the Three Stooges or the Three Musketeers?

      But all kidding aside, the baseball analogies are spot on. I'm into football (US, not world) and to me it's similar to trailing 49-0 going into the fourth quarter with your starting quarterback hurt and his replacement a walk-on you signed the Tuesday before the game. He's got plays written on his wristband, and confuses the running back and tight end because they stand together in the huddle.

      And it's 4th down and 35. You're on your own 6 yard line. So what do you call?

      I say you call time-out, give the ball to the ref, and walk off the field.
      View article »
    • Tue Oct 7th 18:28 PM | Rating: 0 0
      Commented on:
      Circuit City Falls Further: 'Bring Out Your Dead'
      I wonder who wants the chain now?
      View article »
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