Electric word life
It means forever and that's a mighty long time
But I'm here to tell you
There's something else
The after world
A world of never ending happiness
You can always see the sun, day or night…
…And if the elevator tries to bring you down
Go crazy, punch a higher floor
-Prince and the Revolution R.I.P.
We hear the words ‘revolt’ and ‘revolution’ a lot these days, but we may be too complacent of a nation to stay angry beyond November. However, Prince had it right- start a revolution within your own life.
Staying safe is at the center of our personal and business lives so much that it’s not only driving behavior and politics, but it also affects corporate budgets as well. Last week's Philadelphia Fed Manufacturing Survey had a supplemental question on safety spending, and the results are eye opening. The 60% overall increase in spending for data and networks is actually too small, considering the rise in threats while the 73.9% increase in order to meet government rules underscores the bureaucratic chokehold slowing economic growth.
Cost of Staying Safe |
Data & Network Sec |
Employees & Plants |
Compliance EPA, OSHA |
Decreased Substantially |
1.5 |
0.0 |
0.0 |
Decreased Modestly |
3.1 |
3.1 |
0.0 |
Unchanged |
35.4 |
65.6 |
26.2 |
Increased Modestly |
47.7 |
25.0 |
47.7 |
Increased Substantially |
12.3 |
6.3 |
26.2 |
% Cap Spending |
4.7% |
2.8% |
5.8% |
Earnings Season
I have long said that I wish American companies posted results just twice a year, as the emotions that drive stocks that miss by a penny for a three-month period is way out of hand. It’s just one of the reasons Americans have abandoned the stock market. According to Gallup, each financial bracket and age group has less exposure to stocks than they did back in 2007. A lot of this Wall Street has brought on itself, but I continue to stress that there is a difference owning great American companies and that place in Lower Manhattan that deserves your scorn.
While Wall Street (the place) is guilty as charged, individual investors need to check themselves as well. Their overreactions have not only added to gyrations, but they are also manipulated by the powers-that-be. I admit it’s the tail wagging the dog and from time to time. And I move to avoid getting stampeded by closing positions I would like to own a year or three or five years from now (though never in my own portfolio) because there are limits to hand-holding.
On that note, there was serious carnage after the bell Thursday night; all the big names came up short.
Google (GOOGL)
Microsoft (MSFT)
Starbucks (SBUX)
Last week, I witnessed United Rentals (URI) make one of the most impressive intra-day reversals ever after missing the Street the evening prior. I am a huge fan of the company and we have open positions, but it took a recent position up about 25%. I point this out because what happened in a single session happens over a longer period with great companies. That isn’t the green light to hold all losers. Remember the operative word is great company that just had a hiccup; not dead, which is different from fundamentally fractured.
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