Consumer

BJ's Comparable Sales Fall, But They Aren't Bothered At All (BJ)

11/18/2009 by Research Reloaded

BJ's (BJ) reported falling comparable sales, yet held it's guidance for the all important fourth quarter. Comparable sales fell only 2.5% nevertheless, and actually a weaker economy continues to help BJ's given that strapped consumers are flocking to it's discount pricing over other retail options. The company is a great example of a business that has performed remarkably well through the U.S. economic downturn and could be interesting given that earnings, which were never hit that bad too begin with, could now be on the upswing. Meanwhile the stock remains well below 2008 highs despite the fact that it has been able to use this downturn to its advantage.

(The author does not own BJ shares)

Check out the full thing here.

 

 

Don't Underestimate The Blogosphere's Power As A Learning Tool

10/16/2009 by Research Reloaded

Marginal Revolution makes an excellent point in a recent post: Don't underestimate the blogosphere's power as a learning tool. With instant feedback, thousands of view points, and a harsh criticism just a click away, blogs have put the human exchange of ideas into overdrive. Whether or not one's views are initially right or wrong, in the end you'll be much richer for the experience of hunting down information and opinions then debating them with anyone around the world and in mere seconds.

People who learn economics through the blogosphere also receive feedback, especially if they sample dialogue across a number of blogs of differing perspectives. The feedback comes from which arguments other people found convincing. Do the points you wanted to hold firm on, or cede, correspond to the evolution of the dialogue? This feedback is not as accurate as Rybka but it's an ongoing test of your fluid intelligence and your ability to revise your opinion.

Not many outsiders understand what a powerful learning mechanism the blogosphere has set in place.

The Advertising Recovery Will Be L-Shaped

09/22/2009 by Research Reloaded

Ad agency WPP's CEO believes that while ad spending will recover with an improving economy, it will never be the same as it was. One big reason for this is the transition from traditional media to the internet.

He explains that companies currently spend only 13% of their ad budget on web-based advertising, despite the fact that people now spend 20% of their time online. This alone implies that online advertising still has a long way to grow. If one imagines that we'll all spend increasing amounts of time online, and that ad budgets should track the amount of time we spend on any one type of media, then online advertising could easily double from where it is now. At least.

Still, WPP believes that the overall advertising environment will remain subdued for quite some time.

We describe the recession as L-shaped, which implies that it will never go back to where it was before. The forecast for levels of increase in ad spending, both traditional and nontraditional, are pretty anemic for the next two or three years.

Check out the full WSJ interview below.

Highlights From The Money Game

09/18/2009 by Research Reloaded

As stock markets kept rallying, the consensus has increasingly been forced to accept the fact that the global economy has indeed improved. Still, dollar weakness and gold strength shows that the US government's massive monetary stimulus comes at a cost. Check out recent highlights from The Money Game below.

-Vincent

How One Newspaper Beat Back the Internet

08/23/2009 by Research Reloaded

Here's proof that newspapers will never be dead, despite threats posed by the internet. They'll just take different forms and be consumed for different reasons than today.

An Amish newspaper "The Budget" has stayed in business by focusing on a loyal audience of 20,000 Amish readers, and has actually shunned the internet in order to create a sense of exclusivity.

AP: As other newspapers increasingly shed staff and reduce the frequency of their print editions in the face of growing competition from the Internet, The Budget is plodding along comfortably in the recession.

Subscriptions, which cost $42 a year and account for most of the newspaper's revenue, have dropped by just a few hundred in the past year. Advertisers — who are mostly Amish — are not fleeing to the Internet. And plans are in the works to add a couple of reporters to The Budget's editorial staff of about a dozen people.

...

Amish newspapers provide a sort of social glue for the community, says Don Kraybill, a leading expert on the Amish. "They may not be able to worship together or collaborate together, but they can learn about each other through these newspapers," Kraybill explains.

The Budget has upside potential as well, given there are 227,000 people in their target Amish market.

There must be thousands of niche audiences across the US who would pay to receive a newspaper-style product. At the very leasr, "Classic" usually has a market within most product types. Also, there is an experience to be sold on top of the information you provide.

Hopefully struggling newspapers companies get their act together. Or at least learn how to get a decent-looking website running.

Shooting the Messenger: CNBC Blamed for Not Foreseeing the Crisis?

08/13/2009 by Research Reloaded

CNBC has faced a lot of criticism lately, from Jon Stewart skewering Jim Cramer to people demonizing Rick Santelli's unforgettable rant against supporting "loser mortgages". But come on, now they are blamed for not foreseeing the crisis?

Tom Rosenstiel, director of the Pew Research Centre's Project for Excellence in Journalism, says many of its shows are built around "punditry and personality" rather than any genuine attempt to report business news.

Rosenstiel says that despite devoting its entire output to finance, the channel failed to flag up warning signs sufficiently prominently before the credit crunch began: "They missed the financial meltdown. They missed the effect of derivatives and toxic mortgages on the financial system. They missed the big stuff."

CNBC sits far, far down the list of institutions who should have seen the problems mounting, but failed to. Come on here, don't shoot the messenger.

Cash for Clunkers: Don't Forget That Building New Cars Consumes Energy

08/09/2009 by Research Reloaded

Responding to a comment on my previous argument against Cash for Clunkers, I feel it's important to highlight that building new cars from scratch consumes energy. A commenter wrote:

A Microcosm of What Has Been Wrong With the US Consumer

08/06/2009 by Research Reloaded

The Washington Post published an in-depth article following an unemployed US family day by day for months, who are "out of options", in Indiana. Thing is, it seems the family they picked made, and continues to make, a lot of horribly irresponsible financial decisions. Yet from a global perspective, they still have a pretty high standard of living relative to most people in the world, even those in pretty developed countries, given they still have two cars, a dirt bike, hunting rifles, an x-box, a blackberry, watch cable tv and buy lotto tickets regularly. Their main problem is that they never saved any money even when times were good.

He sinks into the couch, foot jiggling, his gaze traveling from his wife to the television to the darkness outside, broken now and then by the distant glow of passing headlights.

His mind settles into another round of "What if?"

As in: What if we don't have cash to buy milk, eggs, bread or diapers? What if our unemployment benefits run out? What if we never find jobs?

...Scott got a job on a paint crew at an RV plant, and by the end of 2007 his income had climbed to $53,000, more than he had ever earned. After work he was the man at the bar with the thick roll of bills, the man he had always wanted to be, buying round after round for himself and his friends. The man with "the full pocket," as he liked to say. He took his son on a fishing trip. He took his family out to eat and told them to order whatever they wanted.

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