Flags of our Fathers  debuted October 20 and the Chicago Sun Times review  is here.  Roger Ebert is recovering from medical treatment so another chap wrote it.  I mentioned in class that  Eastwood is famous for budgeted movies that come in on budget and on time. Here is a link to an interview with
Clint who directed the movie.

This movie is based on book by the son of  a Marine who was in the battle.  The real story is that the three Marines who survived the battle were brought home as ‘heroes’ to sell War Bonds to a war weary United States.  They recoiled at the idea of being labeled heroes when so many of their comrades had been killed. 

I started this blog so that we could visit about more than just accounting.  I said that college should be a larger experience of finding oneself and examining the life we move through.  We are still bombarded with images of manufactured heroes.  Just recently the Army would have us believe that Jessica Lynch and Pat Tillman were heroes in Iraq. The truth was that Jessica was the unfortunate victim of a car wreck and a ‘staged’ rescue.  Pat Tillman, who gave up an NFL career to enlist, was killed by ‘friendly fire.’  Friendly fire is the euphemism for being killed by our own troops by mistake.  But that would hardly make a great story so the Defense Dept changed it to suit their needs.  And that is Eastwood’s point in making the movie. 

Oliver North will examine the Iwo Jima campaign tonight on Fox in his War Stories series.  It was the most costly Marine campaign ever.  Virtually every Japanese solider died on the island, 22,000.  It was a battle  for a volcanic islands smaller than Manhattan. The straategic reason was that Iwo Jima would be an airfiield for an invasion of Japan.  Next year Eastwood will debut a film from the Japanese point of view.  Making the first film, he realized there were two stories to be told.

Chevy posed a question and I will answer it here.  The book was written by James Bradley , the son of one of the original six soldiers who raised the flag.  Oliver North detailed the actual true story last Sunday evening and I did see War Stories .  This short article does not do justice to the coverage in the television show.  First, a colonel had ordered the original flag raising atop the only hill on the island.  Dissatisfied with the size of the flag, he ordred another flag raised.  Only three of the six soldiers left the island alive.  One, Ira Hayes,  a Pima Indian, was the subject of a song by Johnny Cash.  Tragically he drank himself to death, dying in 1954 after being arrested dozen of times for drunk and disorderly.  The second fellow never went beyond odd jobs and being featured in parades as a hero.  Both men were overcome at the memory of all their comrades that were lost on the island and resented being called heroes. The third solider lived to the age of 70 and was James Bradley’s father.  His dad never spoke of the battle  even though he had earned a Navy Cross, the second highest medal the USA awards.  I have not seen the Eastwood movie but the War Story report was one of the best I have seen Col. North produce.

Here is a good account of the actual battle.   The Normandy invasion lasted one day on the beach.  This fight went on for a month and took 25,000 lives from both sides in one month, and that is just the number dead.  All for one island smaller than Manhattan…..

A review of Eastwood’s work appears in this link.

DLE

Both Chevy Norwood and Pam Joyce say they are turned off by Sears approach to clothing, hmm, with two ladies commenting in the negative I decided to take a look.  A few posts back I  reported that Sears was going to try a store within a store concept for Lands End.  So I went to the website.

Sears   is now part of Sears Holdings which includes Sears and K Mart.  But as you will see, I really had to hunt for Lands End, give it a try on the hyperlink. It is hard to see how Sears is going to recoup its $1.6 B investment without a better link to the brand on the site or in the store.  Additionally when I did find it, Lands End is a cold weather retailer, not exactly the problem we face here in sunny DFW, eh? Once again, it is hard to succeed without a plan without a target you don’t know if you hit the target or not. 

In spite of this Sears Holdings  continues to do well.  I was puzzled that Sears bought Western Auto to better sell their tools and then gave it up within two years, now wonder they got bought out.

DLE

Julie Boatman asked if Dairy Queen is a low end business.  I am not sure what she means by that but…
DQ is concentrated in small towns, I don’t think there is a small town in West Texas without one.  But I guess the formula is successful.  Click here to learn that no less than Warren Buffet  bought the company in 1993. He has high standards of return on capital so they must do well. Remember the ratios we studied – margin, return on assets, ROI, etc?  From the stand point of what we study in cost accounting it makes sense.  Locations in Andrews, Seminole, and Seagraves Texas are certainly less expensive than those on I 35 coming into Dallas.  While they may not  have as large a customer base, when you are the only game in town, you can still do well. Come to think of it, a McDonald’s and a Burger King both came and went in Andrews, TX, but the DQ is still there! MCD and BK lasted less than two years as I recall. 

Now they are rolling out a new concept, Grill and Chill to better compete with MCD and the rest. As for not taking credit cards, well there is a percentage and a fixed fee charge for that.  Restricting it to cash customers means more money in the till at the end of the day. And if there is no MCD next door as there isn’t in many small towns, I guess DQ can get away with that practice. I notice many establishements now have a minimum price at which they will accept credit cards in payment.

Click here to learn more about the cost of becoming a Grill and Chill  owner,  Before you click, take a guess at the total cost of becoming a franchisee.  Notice the requirements that you must have been in this type of business previously.  Why do you suppose DQ requires that?  Notice that DQ requires a business plan including a projected budget which we study in Chapter 9 in the cost class. 

By the way, if you have not read Warren  Buffet’s annual report to shareholders, this would be a good time to do so.   Click right there for the link. 

Thanks Julie, a good question that lead to an illustration of several concepts in the cost class!

DLE

I have written a good deal about the importance of design.  And more magazine covers and business schools are getting on board the design bandwagon.  And so an ad for JItterbug  caught my eye. The trend has been to overload cell phones with features.  A phone, a camera, an MP3, a Windows Mobile program, a QWERTY typepad, no wonder these things can cost $500.  Now Samsung goes full circle announcing that Jitterbug does not play games,  take pictures, or give you the weather, or presumably stock quotes.  It features two buttons, yes and no, and a keypad.  Now there is a simple design. 

As Guadalupe observed, her favorite things was a hand operated fruit slicer.  Most of us have a favorite pair of jeans.  Chanel still makes No. 5.  There is always a market for elegant simplicity.  The service even features, are you ready, an operator, gee there’s a one hundred year old concept.  And it comes pre programmed with your favorite 15 numbers.  Service, it never goes out of style. Once again, Dr. Deming had it right.

I will be in Austin, TX the next three days at the Texas Society of CPA Educator Conference.  I will be making a presentation that was selected for the Innovative Curriculum Presentations at the Regional and National American Accounting Assocaition meetings last year.  It involves using cost volume profit techniques to determine break even and profit levels for a high end versus low end restaurant.

More on the latest in pedagogy when I return.

DLE

When asked how the world had changed in his lifetime, British Philosopher Bertrand Russell replied, "It certainly has, from Rule Britannia to just another country!"  Okay that’s not an exact quote but Russell did note that England had fallen from World Empire in the late 1800s to just another player on the stage after WW I. 

In 1949 some Chinese on the mainland literally starved to death.  Times change.  Jerry Flint reports on the  rise of the Chinese auto industry in this column.  Already European manufacturers, dominate in 2000, have fallen behind to Middle Kingdom producers. While behind in quality, marketing, and distribution, the numbers (10x in ten years) are most impressive.  I suspect that in my lifetime the USA will experience a somewhat similar jolt to that of England in Russell’s, which may not mean that much for me, but it sure will for my students reading this Blog, are you ready? Can you imagine the President of the US going to China to find out what China wants her to do?

Chery’s website is in Chinese so instead try this wikipedia article.

DLE

Here is a perspective for you.  Sears bought Lands End in 2002 for $1.86 B, about the same price Google just paid for You Tube.  Is You Tube worth as much as a known brand that has been around since the early 1960s?  I don’t know but….why hasn’t Sears done something with it?

Ed Lampert has cut costs at Sears Holdings SHLD but hey you gotta get sales up.  The answer is a Store with in a Store concept that will highlight Lands End.  Well, like the WMT example below, will folks go into a K Mart Sears in search of higher end expectations? I doubt Sears has even come close to recovering its $1.86B purchase price, will this work?  Are you headed to Sears, er Lands End?

DLE

Many a television star has tried to make the transition to movies, McClean Stevenson of MASH and Sally Struthers of All in the Family come to mind, only to discover that their tv fans just don’t see them as movie stars.  Leopards don’t lose their spots so to speak. 

And so the 10/17/06 WSJ P. B1 reports that WMT is having trouble going up market.  WMT stores open one year report sales up only 1.3% and apparel sales were a big reason. Seems that the younger set does not care for that dressing room in the middle of the store while Target TGT moves ahead.  Folks are brand conscious; once you bill yourself as prices falling it is hard to re make your self as fashion conscious rising.    Other stores like Dress Barn and TJX are emerging as favored destinations.

Okay, so what does this mean for WMT’s stock price?  Can WMT find a way to increase sales?  Or is WMT just another retailer now in a mature product life cycle of existence?

DLE

Pete Kendall’s blog  explores the new study of socionomics.  Understand this URL copntent is  changing, you can find the comments later at this site under the heading NEWS for Oct 17 2006. Pete is making the same point I made in Fin State Analysis last night, which is that mergers take place at market highs, no one buys when this stuff is cheap.  For example, a hedge fund waited till oil got over $70 a barrel to buy Kinder Morgan.  The merger in question is the Chicago Board of Trade and the Chicago Mercantile Exchange.  They have competed in different commodity markets for over 100 years, only now are they merging.  The reason is explained by socionomics. Bull markets exude a feeling of inclusiveness, let’s get everyone on board.  Bear markets are exclusive, kick the bums out.  I have noted we are already seeing bear signs the way Boards are sending CEOs packing, one every six hours.  The article notes that at similar merger of the NYSE has not resulted in higher prices there either.  A giant hospital takeover, the largest ever recently occurred. I also noted that Neiman Marcus actually LOST money due to the high debt level brought by its acquisition by two hedge funds.  If Neiman’s is not making money in the best of all worlds, ie DOW Industrials 12,000, where will they be at DOW 9,000?

NYSE trades under the symbol NYX, CBOT and CME are BOT, take a look.

DLE

Ben Stein usually has some ideas on making money.   I redid this hyperlink per Michelle’s suggestion.  I re did this a second time.  If it does not work, just go to finance.yahoo.com and then go to columnists.   This hyperlink is to one  of his columns that is no exception to that rule.  You may remember him from Ferris Bueller’s Day Off. His ad and movie career took off with his droll character.  We are reading Dale Carnegie’s book in the Personal Development Class. In this column Ben touches on many of those same issues, and how to avoid blunders. Remember the other guy always puts himself first.

Update-Margaret points out that people who switch real estate agents complain that they prior agent never listened to them.  I can relate to that, this was the case with the lady who listed our house in San Marcos, and then never showed it.  At the closing she came and read a magazine, having little to say to us.  Listening is a fine art; it requires composure, asking open ended questions of the client; it requires the person asking questions to continually gauge the reaction of the person talking.  Breakdowns in relationships in marriage, work, school, start when one party stops listening.  Dale Carnegie talks about this in his famous book, How to Win Friends and Influence People that we are reading in Prof Development.  My copy I bought used is in its 87th edition, incredible for a non fiction book, as Margaret said, amazing we have to be reminded of these things.

DLE