Tuesday Oct 20, 2015

IBM drops 5.53% on poor earnings report.

Back in the day IBM or Big Blue as it was called was the bluest of blue chips, like Apple today. But IBM lost its way and had to be re invented by Lou Gerstner in the early 1990s. Now it is borrowing to pay the dividend and struggling again to find its place in a social media world. 

Tuesday Oct 20, 2015

Sonic CEO says MCD all day breakfast is not big deal.  While MCD has been having all sorts of difficulties with menu and customer confusion, Sonic sails right along. Their two guys in the car commercials appear successful. They offer all menu all day long. Nothing is prepared before it is ordered.And they hit earnings targets just above where expected. The stock was up 5% as a result. 

I finally figured out that the appeal of Sonic is that everyone has a drive in window of their own. 

Tuesday Oct 20, 2015

We study the calculation of earnings in accounting. A fifth of the S & P companies will report earnings this week.

How important are earnings?  IBM had a larger than expected 14% decline in earnings sending its stock price down 5%. Reading for context will increase your understanding of just how accounting reports on business activity. 

Monday October 19, 2015

Fiat Chrysler wil put 10% of the total Ferrari shares on the market this Wednesday. The idea is valued at $9.8 billion.  Production will be increased from 7,000 to 9,000 a year. CEO Marchionne claims that will not water down the demand or sales. 

Now appreciate that annual auto and light truck sales in the US this year will be some 16 million. So we are talking the tiniest sliver of the luxury market. Buyers typically wait a year for their delivery and prices start well into six figures.

The brand is touted as recession proof, the Middle East money just keeps pouring in.  

Mood wise this is occurring right at the top of the stock market recovery form the August sell off. From that standpoint it should be well received.