Friday, July 23, 2010

Ford "Headgame Wording"

Ford (F) released great numbers but a few items need some scrutiny. The wording of the earnings release plays a few mind games. Take note of this one after explaining most of the current financial issues.

“Take actions to strengthen its balance sheet and become investment grade” Nice motherhood statement. Was this just a throw in or are they planning something else? The automotive side is to become debt free so what is to become investment grade?

Next item “Expand its business, particularly in the growth regions of the world, such as China and India” The China and India story are old news. Getting a little tired of hearing the same old refrain. By omission the question becomes what are you doing in still large and lucrative markets of North America and Europe.

Will there be enough resources to capitalize on opportunities and defend existing market shares?

Disclosure: No position in any stocks mentioned in this post.

Thursday, July 22, 2010

Baidu -- Murky Tech Future

Baidu (BIDU) announced earnings and then confused thinking investors about the future. Robin Li, Baidu's chairman and chief executive officer made this comment in the earnings release "Baidu continues to focus on user experience and has many initiatives on this front to ensure Baidu remains at the center of China's Internet ecosystem."

No real substance. Just a motherhood statement. No comment as to possible acquisitions of technology or funding of R&D. They are on a rocket right now. Yes the Chinese market is huge. But remember Google (GOOG) knocked Yahoo (YHOO) off its perch. Baidu shows no signs of understanding that critical lesson.

Disclosure: No position in any stocks mentioned in this post.

Wednesday, July 21, 2010

Yahoo Silent on China?

Yahoo (YHOO) issued earnings and made no mention of China. Google (GOOG) is struggling with Beijing and cannot claim momentum. Yahoo has some 40% of Alibaba and more than just a foot hold in the Chinese market. The investor got silence. It’s not just what you hear but what you do not hear that is significant.

Disclosure: No position in any stocks mentioned in this post.

Tuesday, July 20, 2010

Johnson & Johnson Consumer Marketing Costs Will Explode

Johnson & Johnson (JNJ) experienced disaster within their domestic consumer sales channel. Domestic division reported a 14.3% decline. International sales increased an anaemic 1.8% which was attributable to FX fluctuations. Management is blaming slow spending consumers. Problem with the excuse is that once brand loyalty shifts to generic options JNJ will be faced with a permanent loss of market share or will have to mount expensive recapture marketing campaigns.

Difficult decisions coming which management is not addressing in the earnings release. Margins will be squeezed with additional marketing costs.

Disclosure: No position in any stocks mentioned in this post.

Monday, July 19, 2010

Warren Buffett Propaganda

Warren Buffett of Berkshire Hathaway (BRK.B) has some interesting corporate propaganda with the recent Netjets ads. The ads feature both Buffett and David Sokol as Netjets owners. The tag line claims they are among the most productive people. No mention of their positions as equity owners or executive responsibilities.

Subliminally we may assume David Sokol's anointment as the crown prince. But when you own the equity and hold down executive positions to make the claim that you also hold fractional shares in aircraft is superfluous.

So Warren what was the agenda on this one?

Disclosure: I do not hold positions in any stocks mentioned in this post.