Feb

5

Two customer anecdotes:

Anecdote #1

My wife goes into Tiffany's and asks the salesperson to measure her ring size. The saleswoman looks at her with one of those "you don't belong in here" expressions and tosses her the ring of samples for sizing across the counter. (My wife measures her finger and walks out — in a moment eerily reminiscent of the scene on Rodeo Drive in the movie Pretty Woman.) 

Anecdote #2

I drop off my car at the Lexus dealer and I tell the rep that I need new brake pads and rotors. Two hours later he calls me (and I expect to hear that the bill is several hundred dollars). Instead he tells me that I'm good for at least another 5,000 miles and that he didn't do any work. The only reason I took the car in was because the mechanic who performed my required annual inspection said my brake pads were worn out.

Many business lessons here.

Jim Sogi writes:

I ordered a custom made down jacket from an outfit in Washington called Nunatak.  A guy named Tom claims he makes the garments. I"ve read elsewhere he jobs it out. They make high end outdoors gear. When I ordered it, I paid in advance and he said it would deliver in 8 weeks. Okay, I understand that. 10 weeks go by with no word, so I email…No response. I call… No response. Another two weeks go by. I email again, and get no response. I figure its a rip off scam, so I call my credit card company. The day before my expedition the guy calls and says he will mail it to my son's in LA. It never gets delivered. When I ask him, he goes off on me and says, "Wow, I apologize for setting off your anger issues….I believe Walmart has what you need in the future. Tom" This is supposed to be high end custom gear, and I would have bought thousands of dollars of gear if it was any good. Is this anyway to run a business? What an unpleasant experience. I've never had this kind of antagonism from a vendor, ever, much less a custom operation. I hope this gets put on the website so others don't have similar problems with Nunatak. The guy was not pleasant to deal with or reliable or helpful.

Mr. Kris Rock writes:

He must have been Colombian and knew from hacking your email you were headed to Argentina.

Nov

29

Shouldn't dividend paying stocks consider reducing or eliminating dividends, and instead use free cash flow for share repurchases? Assuming long term cap gains tax will be less than tax on dividends.

Gary Rogan writes:

They have to consider that many of their holders are sub-250K and many hold in tax-shielded retirement accounts. "Widows and orphans" still rely on dividends to some degree, so there is probably some sort of a Laffer-like curve where the post-tax income total return averaged over all the holders is optimized by a particular dividend policy.

Mr. Krisrock writes:

You can't turn on a financial news program without hearing about special dividends. Companies are also rewarding employees with 15% dividends as a year end bonus. Even better is issuing debt, which is tax deductible and buying back stock when ITS is not at a market peak?

This will likely happen sometime next year…not now. Most liberal Californians haven't figured out how Obama has tactically created the seeds for a republican internal war in 2014. Boehner has made sure his entire house leadership is comprised of supporters, and he can cut a deal that enrages the tea party whom he despises. Now tell me who defends personal property rights, when there is a rebellion among republicans. Obama can get back the house in 2014 simply allowing the brain dead rep establishment to self destruct. They are really that dumb…and he is really smart …he won re-election no matter how he did it.

It would be a waste of corporate cash to buy stocks here and now and the more special dividends from companies like Home Depot, the more we can confirm the worst is coming.

Jim Sogi writes:

Isn't the threat of dividend tax a good way to shake out accumulated cash held by corporations? Wouldn't a better way be to get rid of the dividend tax? Equities would go through the roof.

Sep

24

Somebody is spending, but who? This chart shows YOY customs duties and excise taxes which are a fairly good surrogate for retail spending.

However, here's a question: if the federal government buys a fleet of new Chevy Volts (the ones that burn up, LOL), do they pay excise taxes?

Mr. Krisrock writes: 

The combination of Higher Energy, Higher Dollar, Higher Commodities, and the September 15 California Tax on the internet has caused a SURGE in amazon orders to beat the increase…and of course Obama's playing with the numbers. Look at the huge drop in employment a year ago in October. Obama knows how the numbers work a year ahead, and of course, where do auto parts come from…electronic components come from Asia…for starters…and foreign car assemblies do buy foreign parts.

Jan

25

Here is a fascinating "CIBOARD" series from the St. Louis Fed.

Mr. Krisrock writes:

It's clear that inventories are peaking and that seasonals can't account for the extreme cold weather and the probability of a weather slowdown in European and North American sales which the Russell2000 underperforming the Dow may demonstrate…so the need to borrow cash right now is high with inventory raw material costs rising in many items. Right now there are many similarities to 2007 patterns, including the rising volatility in stat arb fund counter funds. Finally, there is high likelihood of higher ranges in the week after a democrat delivers a state of the union. With the market above its 50 and 200 day MA, theories of 1220 gold and lower crude are making the rounds…

Jan

18

Krisrock writes:

Sports betting is about emotion more than reason.

People love the Patriots and bet according to their heart.They count one way and others count other way, proving how you can get beat with 100% confidence you're right and all those who you disagree with are wrong.

Walters proves that point especially in the equity markets…he just doesn't know those who count in a different way.

Pitt T. Maner III responds:

I have heard of people that have a "team-like" attachment to stocks like AAPL. It would be almost impossible for them to sell their AAPL stock; almost as difficult as it would be for a Pats fan to bet against his team.They are emotionally attached to Macs, iPods, iPhones and everything AAPL. Perhaps there is some component of this that is reflected in price action. There are not that many companies that have that sort of following. 

Jeff Watson comments: 

The devotion, attachment, or worship of a team by the general public might be the "Achilles Heel" that allows them to exploited and/or manipulated by the flexions. It would be hard to find something rational with devotion, attachment, or worship.

 Gary Rogan Responds:

Most of the story was about his sports betting operation, which looked quite impressive and totally devoid of emotion. He counts, knows a lot about all the teams, diversifies, employs experts with total recall who remember even more, and on top of it attempts to "push the line". The story ended with his complaint about the market, but it seemed like he simply didn't apply any of his normal techniques to a new area and got wiped out.

Jeff Watson comments:

Walters attempts to "push" the point spread is no different than a local at an exchange or a market maker trying to goose the bids or offers to move the direction of trading to prices that have the most liquidity, stops, and booby traps for the unsuspecting. The sports gambling market is really no different than any other market when you think about it, and it's probably percentage wise, more honest. 

 

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