Morning Commentary
I have to give a posthumous shout-out to Ronald Read, who was a soldier in WWII. He was a former gas station worker and a part-time janitor during the years most men stop working. He passed away last summer at the age of 92.
He was known for wearing clothes that were held together by safety pins. Once, a woman knitted a hat to replace his tattered baseball cap that provided little warmth during the harsh Vermont winters. This would appear to have been the death of a regular person who went through life without the need for any handouts, but who was otherwise nondescript.
As it turns out, Mr. Read had one passion- investing in the stock market. He was pretty good at it. However, I should really say that he was pretty good at not being shaken out. He bought plain old blue chip names and focused on "dividend-producing" stocks. We learned this week that he left $1.2 million to the local library and $4.8 million to the local hospital. There is nothing regular about that! How many people squander money each day and say they cannot change their lot in life? It can be done and if you are ready to sacrifice a lot of the trappings of life, you can also change the lots of others too.
Hold This Job
The jobs headlines are screaming great things, but workers are not buying it…yet. Consider this: job openings are at a 14-year high, hires a 7- year high, but quits at a 4-month high.
Job Openings |
5.03 million |
14 Year High |
Job Hires |
5.15 million |
7 Year High |
Quits |
2.7 million |
4 Month High |
In fact, a close look at the JOLTS report shows ‘quits’ have actually declined for high-paying professional and business services from a year ago, up largely in the retail space.
JOLTS Report |
Dec 2013 |
Dec 2014 |
Construction |
85 |
156 |
Manufacturing |
121 |
134 |
Retailers |
383 |
462 |
Professional Services |
540 |
453 |
Education |
316 |
331 |
Healthcare |
283 |
293 |
Regionally, the south had an impressive increase in ‘quits,’ along with the Midwest that also had a positive gain.
JOLTS Report |
Dec 2013 |
Dec 2014 |
Northeast |
342 |
366 |
South |
983 |
1,125 |
Midwest |
518 |
595 |
West |
574 |
575 |
We Don't Believe
Sure, the news around jobs is better, but according to Pew Research, only 28% of the population calls it “mostly good." People simply do not see the jobs market as portrayed by the government or commentators, myself included. This means, the economy is still missing that spark and it might take longer for it to materialize. Certainly, it will take longer than the rate of change in the data.
On the other hand, this is good stuff for the Fed–watchers, but I cannot wait for Ms. Yellen to start hiking rates. Of course, if Main Street begins to buy the hype too late and the Fed acts too soon, we could see the inflation crisis surge- which is bound to happen; it could be one or two years away.
Today’s Session
The major equity markets took a slight hit this morning and are trending lower, save for the NASDAQ which is holding in the green thanks to Apple (AAPL) hitting new all-time highs. Europe continues to remain in focus as the European Union continues to discuss what to do about Greece.
Below are some of the notable companies that reported earnings this morning.
Date |
Company |
EPS |
Cons. |
Revenue ($M) |
EPS Guidance |
EPS Consensus |
11-Feb |
GNRC |
0.98 |
0.79 |
$404 |
- |
FY15 3.38 |
11-Feb |
LO |
0.93 |
0.93 |
$1,283 |
- |
FY15 3.66 |
11-Feb |
MOS* |
0.97 |
0.86 |
$2,379 |
- |
FY15 3.38 |
11-Feb |
OC |
0.47 |
0.42 |
$1,261 |
- |
FY15 2.31 |
11-Feb |
PEP |
1.12 |
1.08 |
$19,948 |
FY15 4.63 |
FY15 4.77 |
11-Feb |
TWX |
0.98 |
0.92 |
$7,525 |
FY15 4.60 - 4.70 |
FY15 4.64 |
*WSS holds in its Portfolio
Comments |
KUDOS to RON READ..... T. David on 2/11/2015 10:30:11 AM |
Not to be too picky, but if Mr. Read passed away in 2014 at age 92, he would have been born in 1922 (depending on his birth date) and so could not have been a soldier in WWI. Perhaps you meant WWII? Or did he serve in WWI with Brian Williams? Tim Irving on 2/11/2015 11:05:31 AM |
Funny comment by Tim Irving but Tim, Charles did say WWII above. Thanks again. Brian Williams Brian Williams on 2/11/2015 11:38:54 AM |
Thanks Tim and "Brian," for my morning laugh Jeff Rycus on 2/11/2015 11:57:38 AM |
With a great story/lesson on savings I was not concerned about the details of his birth year! Garro on 2/11/2015 12:11:37 PM |
Both Tim Irving and Brian Williams are correct: Charles did write "WWII" in the above commentary; however, the email containing the intro/lead-in to this story has "WWI". Buck Greene on 2/11/2015 1:40:50 PM |
The main point and learning lesson is the value of investing and the cautionary cavat to stick with solid companies that reward investors with good dividends and be diversified. That said I beleive it is also important to hire an investment company that's philosphy mirrors your risk tolerance. Greg Doyle on 2/11/2015 2:48:04 PM |
Wonder how states that hiked their minimum wage are doing? Again there will be no real hiring or wage increase as long as we still have Obamacare redistributing money from the business class and deterring hiring and growth. It is rarely talked about, even by your panelists. AL on 2/11/2015 4:10:15 PM |
Obamacare was intended and has achieved the objective of making available to millions of uninsured a right to the same lifestyle business owner live. Hiring more people does not only benefit those hired but also the employer who uses their labour to multiply profit. If there is profit to be made, the employer will hire no matter any legislation providing healthcare or increasing minimum wages. ssekajo on 2/13/2015 3:06:39 PM |
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