18 April 2010

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Over the last week or so many indicators have come out which purport to show either good or bad news, depending upon the prognosticator. I would assume that the mixed bag of indicators means the economy is improving in many ways, but remaining bad, or worsening, in others. The latest indicator to come out is Venture Capital investment over the last quarter:
Except for the first three months of last year, however, this year’s first-quarter tally was the lowest for any quarter since the second quarter of 2003, when $4.57 billion was invested. The median amount invested in a round last quarter, $4.5 million, was the lowest since the fourth quarter of 1997, when the median amount was $3.9 million. The 2009 first-quarter median was $5 million.
This is a pretty low haul for Venture Capital investment, but it does not mean the economy is not also on the upswing. It is simply one of many indicators–the full scope of which seem to indicate that the economy is improving, but slowly.
29 March 2010

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One of the most important things for bosses to recognize when hiring new employees is to consider the costs, both the obvious costs and the hidden ones. This means that although you might hire someone at $10 an hour, you should consider the hidden costs of that hire first. This article details how the hidden costs of labor can be much more serious than most employers think.
For Jim Garland, who owns a corporate aircraft cleaning and support services company, a $14 per hour worker has a true cost of $19.63 per hour, or about 40% more than base pay. This so-called “loaded rate” includes fixed expenses — federal and state taxes, health insurance, workman’s compensation, uniforms, and paid time off — along with soft costs like the time spent training a new hire.
An increase of 40% of the base pay is a huge hidden cost, and one that could sink a business if the people in charge weren’t aware of the costs.
05 March 2010

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Weekly job numbers and rising retail sales helped to boost the Dow Jones Industrial Average today. Of course, the majority of the lifting was done by Boeing, Coca-Cola, and Disney.
The Dow Jones Industrial Average added 47.38 points, or 0.46%, to 10444.14, its first close in positive territory for the year to date since January. It is up 0.15% in 2010.
Walt Disney was the Dow’s best performer, up 93 cents, or 2.9%, to $32.57 after Bank of America Merrill Lynch raised its investment rating on the stock to “buy” from “neutral,” calling it “one of the most compelling equities in media and entertainment” heading into fiscal 2011.
Coca-Cola climbed 54 cents, or 1%, to 54.47 after UBS raised its investment rating to “buy” from “neutral,” saying it sees a buying opportunity and considers its bottler acquisition “the right move” in the long term.
These aren’t earth shattering numbers, but Coca-Cola posted a solid performance, as did Walt Disney and Boeing. It bodes well for the economy that these companies are finding ways to make profits even in the depth of a recession.
21 January 2010

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Starbucks was a company that exploded onto the scene all of a sudden. It expanded so rapidly that every comedian began making jokes about seeing Starbucks located right across the street from another Starbucks. The company suffered a couple of years ago because of this over-expansion. However, it seems to be making a steady comeback. The company made a 4% improvement over the last quarter.
On Wednesday, Starbucks reported that sales at stores open at least a year grew 4 percent, the first increase since December 2008.
Net income at the company, which is based in Seattle, was $241.5 million, or 32 cents a share, up fourfold from $64.3 million in the same period last year. Revenue climbed 4 percent, to $2.7 billion.
Analysts expected the company to earn 28 cents a share on revenue of $2.65 billion.
“In two years time, we have transformed the corporation and, I think most importantly, the customer experience,” Mr. Schultz said in an interview. “The luster is back on the brand.”
I have seen anecdotal evidence of this. While people were claiming that Starbucks’ coffee tasted awful only a couple of years ago, they now have their stellar reputation back.