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  • The Basic Business Sense Netflix Bears Refuse To Grasp [View article]
    Read an interesting article called something like "Canary Stocks"...canaries in the coal mine AKA stock market.

    Stocks like Netflix, Amazon, facebook, Linkedin. Priced based on expectations not what profits they produce now. Serious weakness in these will suggest a worn out bull...time to trim. And then bargain time!

    I personally love 3 of these as a consumer. But they are truly fragile as stocks the category of gambles vs investments. Long moats. Can be marginalized in a heartbeat, just by a change in popular sentiment.

    Good luck to all.
    Apr 14, 2013. 09:29 AM | Likes Like |Link to Comment
  • Three former Apple executives who were hired by ousted J.C. Penney (JCP) CEO Ron Johnson have reportedly left the department store company. The departures are COO Mike Kramer, who received a compensation package of $33.4M when he joined JCP, Chief Talent Officer Daniel Walker, who got $20.2M, and Chief Creative Officer Mike Fisher. [View news story]
    They should rejoin Johnson and start a new company without the drag of a previous reputation. I'm sure Ackman has a few bucks left.

    As one who still thinks JCP needed to be reinvented, I am disappointed in the manner Johnson tackled the project. The first rule of fashion retailing is to test. Test and then reorder.

    I have no idea, but I wonder how thoroughly Joe Fresh was tested in middle America? Canadian fashion tastes are a bit different.

    Introducing new shops, new vendors is great, but you do it carefully without sacrificing legacy brands and sales volume. Floor space should be productive 100% of the time. Resets should be completed overnight.

    Bottom line: you don't tell the customer what to buy, the customer tells the merchant. The smart ones listen to their customers.
    Apr 11, 2013. 07:08 AM | 6 Likes Like |Link to Comment
  • The Basic Business Sense Netflix Bears Refuse To Grasp [View article]
    I respect your long term patience. Truly. And lets' face it, equity prices are less a function of math and more that of opinion...just like a recipe for ribs.

    As a huge fan of Netflix, I am on board the Hastings train. The subscription price could increase dramatically and I would be very irritated. But it would still be a huge bargain relative to the offerings of the blood sucking monopolies called cable.

    However, I think the potential for disruption is great. The stock price could tank with one good deal between Amazon and a major studio. It's all about the availability of content...and the speed of availability.

    Last years Oscar winners are just now available on disk. The company that wins the first streaming deal to kill the disk may upend the whole dynamic. NFLX, therefore, has no moat.

    Regardless, tonight we watch "Pi" and wrap up "The Borgias" (nasty pope, nasty). Then onto "Downton Abbey". So much to see, so little time.

    Good investing luck to you!
    Apr 9, 2013. 10:29 AM | Likes Like |Link to Comment
  • The Basic Business Sense Netflix Bears Refuse To Grasp [View article]
    Nice article. The name calling does scream frustration, I agree. It's just silly. Here is my take as a Netflix investor way, way back. I have no position now having taken my profits way too early.

    We watch Netflix content every night...almost exclusively. I will admit that we only watch an hour or two each evening. The rest of the day the screen is black. (We enjoy our tablets, Kindles, Nooks and books.) We subscribe to the 2 disk plan in order to get "recent releases" and we use the instant function from the first Roku ever made (maybe).

    My theory is that if a movie or series is really good, I will read the review in the Times or hear about it from friends or cousins. If it sounds like a good fit for us both, I put it in the Q. So this week we saw Lincoln and Argo with some Nurse Jackie thrown in to lighten it up. Our Q is huge! I have enough high quality entertainment lined to last a year. If I have seen a season of Madmen later than others, who cares? It's still wonderful.

    Simply put: Hastings and Company are doing a fabulous job for us at $20/month. I don't need gives me enormous pleasure to cut the cord and just pay for internet. For news and weather, use an antenna. For many folks the HD picture is better!

    That being said, Netflix, in my humble opinion, is over priced - wicked over priced. I see it settling around $125...and that is rich based on the fundamentals and the competition that will disrupt their mini-monopoly.
    Apr 8, 2013. 07:52 AM | 1 Like Like |Link to Comment
  • In an interesting twist, J.C. Penney (JCP) CEO Ron Johnson took longtime critic (and former CEO) Allen Questrom on a tour of a prototype store in Dallas last week in an effort to show the him the futuristic shop-in-shop look the retailer plans. Questrom hasn't comment publicly yet if his opinion of the retailer has been altered. Shares of JCP are a rare sight, adding 2.2% as the broad market capitulates. [View news story]
    Should buy before it returns to the 20's.
    Apr 5, 2013. 10:50 AM | Likes Like |Link to Comment
  • Will Institutional Support For J.C. Penney Vanish? [View article]
    Anyone have any clues as to the current comp sales figures for the last 6 weeks? They are kept under wraps I know...but am so curious.

    If the first quarter goes positive...even a'll hear the sighs of relief all the way from Plano.
    Mar 16, 2013. 07:28 AM | Likes Like |Link to Comment
  • Sell Home Depot: It Is A Bad Dow Stock [View article]
    Customer to HD:
    Huge opportunities to increase sales and profits. Return to a philosophy of being in stock. Your inventory control efforts may have improved turns (was an issue)...but I walk out of the store empty handed more often than not. That little tag that says "coming soon" is an sends me to Ace or Lowes.

    Then you could take some of that share buy back money and invest in knowledgeable full time employees.

    Someone needs to state the obvious: Bernie called it when he said we're doomed when the bean counters take over. Sad.

    Back to basics and you could grow again.
    Mar 14, 2013. 06:44 PM | Likes Like |Link to Comment
  • J.C. Penney: Is The End Near? [View article]
    A good article recapping all the latest and consensus info. However, as all retailers know, it's the comp sales numbers that tell the tale. If the tide is turning for the better, we'll know when we see those numbers (up against really soft history) for the 1st quarter.

    The stores look and feel fresher, brighter. As a former department store merchant I applaud the changes. What I worry about most, from a selection point of view, is that the "new JCP" may leave the 45+ female shopper behind. She doesn't want Alfred Dunner or some of the dull private label goods of the past. She has a nice sense of taste but she isn't 110 pounds/size 8 either. She might shop at Chicos or J. Jill but can't afford it.
    Mar 11, 2013. 04:45 PM | 4 Likes Like |Link to Comment
  • J.C. Penney Is The Next Eastman Kodak [View article]
    The stores look fresher, brighter and the fashion more fun. The old stores were for old people...I mean really, really old. There was no reason to visit. Now I would check it out just because it's new.

    Great opportunity to buy a turnaround story cheap...really cheap.

    But hey, its' more fun to beat up on Johnson. Go for it, gang. Enjoy.
    Mar 7, 2013. 08:33 PM | Likes Like |Link to Comment
  • Don't buy rumors J.C. Penney (JCP -10.6%) may have a buyer, or a savior CEO will be brought in, writes Jeff Matthews. Steven Roth sold not because he was in trouble, not because of a margin call, but because he wanted to sell. Roth's as tied in as they get and he's on the board - would he be unloading his stake if he had an idea something game-changing was imminent? [View news story]
    Roth sold because he had a break point re the performance of his fund. It is about the math for anyone. While not encouraging info, the only real news that counts is comp sales for the first quarter.
    Mar 5, 2013. 05:45 PM | Likes Like |Link to Comment
  • Though it's been hotly debated in retail circles for quite a while, it looks like directors at J.C. Penney (JCP -9.5%) are finally considering a change at the top. If sales don't turn around, a push to sell the company or replace Ron Johnson could be in the offing, according to The Wall Street Journal[View news story]
    OK, sack Johnson. Then what? Then who? Then what strategy? Mistakes were made, but the place was headed for oblivion before he arrived.

    There is no time for this foolishness. Let's say you are crossing the desert on a horse with just enough water for the you shoot the horse? Or do you hope he delivers you alive?

    Once sales comps return to the plus side (even single digits) the stock price will make you wish you bought at 16. Get the thing moving in a positive direction...then sack him if you need to.
    Mar 5, 2013. 04:43 PM | 5 Likes Like |Link to Comment
  • J.C. Penney (JCP +5.2%) tells CNBC the layoffs at the company won't be as large as earlier reports claimed. Though employees themselves are saying over 300 were axed yesterday at headquarters, it's a move the company calls a "minimal team member reductions across multiple departments." Shares of JCP are reacting favorably, clearing $22 for the first time of the year. [View news story]
    Apple...shmapple.. I don't even like Apple products. They are overpriced. Johnson was also a dress shirt buyer.

    Ron knows the single most important truth about retail merchandising: It is the product and the nature of the selection that counts. He is bringing the company into the 21st century.

    As to the comps, when you re-invent a retail concept, it takes time. But watch the stock price, once there is a consistently positive number...even in the single digits.

    As to the wisdom of his direction, I guess it is indeed just a matter of opinion. For those who loved the old J C Penney, there is nothing that can change that point of view. Sorry, it's gone. And for your shopping pleasure, there is Kmart, Sears, Walmart...or Dollar Stores.

    From an investors point of view, anything Wellington Management takes a position in catches my immediate attention. Read Morningstar for more.
    Feb 23, 2013. 09:30 AM | Likes Like |Link to Comment
  • J.C. Penney (JCP +5.2%) tells CNBC the layoffs at the company won't be as large as earlier reports claimed. Though employees themselves are saying over 300 were axed yesterday at headquarters, it's a move the company calls a "minimal team member reductions across multiple departments." Shares of JCP are reacting favorably, clearing $22 for the first time of the year. [View news story]
    If you focus on the past, you can't see the future. Last years comps are ancient history. The "once proud company" was loaded with stodgy, dull merchandise and was headed for the dustbin of retail history. The only retailers that were generally viewed as worse are Kmart and Sears.

    Johnson has guts, vision and the backing of important investors (about 75% of the company) who have good business savvy. Forward ho, Ron.

    JCP may actually breathe some life back into enclosed malls...a place many have abandoned.
    Feb 22, 2013. 12:22 PM | Likes Like |Link to Comment
  • J.C. Penney (JCP) is taking steps to develop land around its corporate headquarters in Plano, Texas which could set up the properties for future sales. The bigger issue: The retailer is under the cash microscope with its moves in the credit markets highly scrutinized and a promise out to Wall Street to have one billion in cash by the end of Q4. JCP -2.5% premarket. [View news story]
    Eyewitness report: Thursday afternoon in a modest Florida mall. It was about 3 pm, typically a dead zone for shopping in malls. And this mall was no exception. You could count on your hand the number of shoppers in Dillards and Macys.

    JCP was active! The registers were ringing and all the sales people were engaged with customers. While most of the parking lot was empty, there were dozens of cars in front of JCP. The store was offering a deal if you opened a JCP account. A classic department store technique to get customers in the habit of shopping there. Of course, it only works if the goods are right.

    The store looked and felt youthful, bright and energetic. The music was great, the mannequins were very cool. But most importantly, the merchandise was fresh, attractive and priced so low my jaw dropped.

    This was not one of the stores that had been filled with vendor shops. It was probably a "C" store. Regardless, I look forward to returning when I need some new clothing or home goods. Just check out the bedding department. The fashion and prices are spot on.

    At the mall entrance was a section labeled "Clearance". Winter seasonal merchandise was being flushed out to clean the pipeline for spring goods. A must do for any clothing merchant. What was remarkable was the contrast between the styling on the clearance racks and the rest of the store. Good riddance.

    When I was a fashion merchandiser, most "spring" goods were scheduled for a 3/30 complete shipping date. That means that the next 30 days will say a lot about the new JCP. I am planning a 3/15 visit to feel the level of inventory and just how well put together it is.

    Nutshell impressions: Macys and Dillards are filled with stodgy over priced merchandise for affluent folks in their 70's and older. JCP is being stocked with well priced, exciting goods that will appeal to the young and young thinking boomers. I believe that a "Target" customer will be attracted in particular. JCP has that vibe but in a much classier atmosphere. Target feels like a youthful Walmart...plastic shopping carts and all. The new JCP stands alone as a place that might breathe some life into enclosed malls. No wonder Vornado is a big investor.

    Check it out, before you sell that stock at a loss. I am long on JCP.
    Feb 15, 2013. 08:48 AM | Likes Like |Link to Comment
  • J.C. Penney (JCP) CEO Ron Johnson is on the hot seat again, this time taking shots from current and former employees in a scathing New York Post article. The exec's long absences from the main office has bred a culture of half-hearted workers, according to the assorted potshots.
      [View news story]
    I comment as a 33 year veteran of department store and big box retailing. I ran stores and fashion merchandising divisions.

    The old J C Penney was a store that it never occurred to me to shop in...except for underwear, maybe socks. It was a step up from Sears, sometimes. It was headed for the dust bin of retail history.

    Radical change is hard. It's especially hard on those that have not bought into the new "vision". And unfortunately, the process is a long one.
    I feel bad for the old timers commenting here. The retail bubble they are living in is an antique one. Nonetheless, I feel the pain.

    And btw, comments about how and where Johnson spends his time reveal that antique attitude as well. In a modern world of business, it matters not how many hours you put in at "the office". What matters is what you achieve. Who cares where it's directed from? The office is virtual but the ideas are real and exciting.

    That being said, I think the stock is a screaming buy. Johnson is innovating and leading us into a new era of retailing. Keep your eye on the new vendor shops like "Joe Fresh". Watch the focus on new technologies to better serve the customer. I am sure an exciting new web presence is not far behind as well. People under 50 will embrace this and the momentum will be surprising.

    How many stocks have a Morningstar 5 star rating? With a "fair value" estimate of $38 it would seem to me anything under $20 is a real deal. JMO.
    Feb 11, 2013. 12:18 PM | 1 Like Like |Link to Comment