rlxdoc

Why Wal-Mart Hirings Do Not Help U.S. Economy

The stat about the "cost of a store" at $420,000 is based mostly on tax credits which are costs if you assume that all wages are owned by the government and what the worker keeps is a "cost".

WMT looks like a good place to be in a recession that hasn't quite ended yet.

Jamba Juice Should Bear Fruit by Mid-2009

Your Q4 forecast is based off of an 11 week period in 2007. I believe that this year's Q4 should be approximately 7-8% higher in sales. This modeling error follows through to 2009 also. Your comp assumption seems a little low. The two year comp stack is -3.3% (in Q3) which implies -4% in Q4 and mid single declines in Q1 & Q2. The oatmeal should help sales (and visits?) although not do much for profits.

I heard Mr. White speak recently and he appears competent and capable. Still this is a longish play. I get to a forecast of $1.30 in mid-2010.

Borders Changes Around Management, Wants an Aggressive Turnaround

I think the book business isn't a good business. The internet is just too interesting. Used book velocity has increased as used book companies have moved on-line as have used book swap sites. The music business is gone and on-demand video has crimped DVD sales.

The problem wasn't Jones and the answer isn't Marshall. If the board is happy with the change so far, what are they reacting to? Could it be the low stock price? This is a change that has been underway for 30-60 days, since the stock dropped below $5 a share.

This is trading like a bankruptcy, although they are generating positive cash flow and should recover. Big risk, big return.

A Capitalist Reformation

I believe there is a change, but the change isn't capitalism, it is our view of capitalism's underpinnings, the fiscal and monetary policy of our government. In the 1930's Keynes upset the prevailing understanding of capitalist economies, which until then had focused only on monetary policy to the exclusion of unemployment. The last big shakeup in economic thought was the early 70s when we realized that Keynes didn't have all the answers and that both fiscal and monetary policy were important.

A large cause of the problems you cite are related to over investment. This over investment was driven by low interest rates. The process of over investment and shake-out, or that every boom is followed by a bust, appears to be as relevant as the "full employment, low inflation, GDP growth" targets of our Federal Reserve. The austrian school of economics and the boom/bust of business cycles seems to explain what is going on.

Capitalism didn't create low interest rates. It took advantage of them.

Naked Shorting Needs to Be Stopped

Let's just ban shorting stocks. Then stocks will always go up.

Starbucks Turns to Emerging Markets to Recoup U.S. Losses

The Q2 reports don't support your argument. Operating income in the international business was down in Q2 y/y.

More troubling is that international appears to be a low profit, high investment strategy. Domestically last year they ended with $2.2b invested and an operating profit of $1b (15%) for a high forties return on assets. International had $886m invested and $137m in profit (8%) for a mid-teens return on assets. So international is both less profitable and requires more capital per $ of sales than the domestic business.

I like the company. I'd like it better if they faced up to the reality of declining marginal returns and recognized that they are becoming mature. Selling more product to the same customers in the US is going to be a MUCH, MUCH better strategy than investing millions in India and China.

Jamba Juice: The Worst Already Factored In

JMBA has a complicated reporting structure that makes it difficult to analyze. Hopefully with the K we will finally get to some clarity about year over year trends. The lease debt a lot higher than $180m, but remember leases are both liabilities and assets. The lease debt is not out of line with sales.

Comps are weak, but not a disaster. California has a boom/bust economy, and although the housing market is awful, I don't see how that will impact the average JMBA customer (who is younger on average and more likely a renter).

Restaurants & retail in general do not go bankrupt easily, and lots of debt is required to push them over the edge. This seems unlikely in this case. At this rate losses would have to continue for 4 or 5 years before they'd work through the cash. Bottom line is that it is cheap, but there isn't any near term reason to own this one.