More Opinion by The Springboard

THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Thursday, July 20, 2017

Chipotle: Point of No Return

Let's face it. Bad things happen. When it comes to companies, sometimes they have the ability to clear their name, and sometimes it just ain't happenin'. I am reminded of Sizzler back in the day which all but collapsed after an e. coli outbreak in a restaurant. And there was Jack in the Box which had to change its name for a while to Monterey Jacks because of a similar incident. Sizzler really never recovered. Jack in the Box however, is still operating today and eventually did lose the Monterey Jack moniker.

BP suffered blows after a major oil rig disaster. United has had its fair share of incidents. Volkswagon got itself into some trouble, and back some time ago Toyota lost some faith of its customers due to its acceleration problem.

All of them have, or will recover.

Chipotle, however, I do not believe will not have this opportunity. For the first thing, Chipotle sold itself on fresh, organic and quality which was really its brand. It is exactly what was supposed to separate its brand of quick serve from the rest of the guys. When your brand is healthy and fresh, and people get sick, not once, but twice...

That is not going to leave customers feeling too great about entering your store anytime soon. When is the last time someone got sick after eating a grease laden burger at McDonald's? Although, while Taco Bell will not make you sick, it certainly could be advertised as a quick serve laxative to be sure.

But that is an entirely different thing.

You have two incidents whereas customers have gotten sick eating at Chipotle restaurants. You have admissions from the CEO after the first string of incidents that the company was lax in its quality standards and monitoring, and was going to revamp its business by retraining employees on quality standards and good manufacturing and sanitation practices.

But now that seems to be for naught because people got sick again. And now you have reports of rodents dropping from the ceilings which in and of itself will cause more than one potential Chipotle customer to squirm.

What exactly made me sick? Could it be rodents urinating and defecating into my food? What exactly is going on behind the scenes at my Chipotle restuarant? What are the employees missing?

Truth is, being a former pest control technician, rodents and other insects like roaches are actually commonplace in food establishments. But, that's what the pest control specialists are there for. To educate staff and to control the population of pests in the establishment.

More often than not, when pest control technicians had difficulty controlling rodent and insect populations in restaurants, it was primarily due to a lack of willingness on the part of management and other staff to do their due dilligence when it came to good manufacturing practices, and especially when it came to sanitation practices.

So if rodents are falling out of the ceilings or even running rampant in the store, something is seriously wrong with everything going on in the back while your food is being prepared, and God knows what is exactly going into your burrito.

For me there is only one outcome here. The company will be filing for bankruptcy sometime in the near future. The trouble is this is two and three incidents, and customers will be weary about entering their stores anytime soon.

The stock is dropping. Customer traffic will fall dramatically. The coupled effect of this will be a downward spiral too quick and too steep for the company to be able to effectively manage.

Will Chipotle be a name that gets tossed into the garbage can? In this particular instance I think so. I think Chipotle is dead as a company.


Saturday, July 8, 2017

Ruler Foods: Two Complaints

Don't get me wrong at the outset of this commentary. I am a huge fan of the Kroger brand of grocery stores known as Ruler's. For one thing they have stellar prices. And when I say stellar, I mean (if you have been following me) their prices far surpass, in many instances, my threshold prices on myriad regular items I generally buy.

For example, here are some current prices as of this writing that I think are out of this world:
  • 1 dozen eggs, 28 cents
  • 5 pound roll of 73/27 ground beef, $9.95 (or $1.99 per pound)
  • Boneless, skinless chicken breasts $1.88 per pound
  • Whole chicken, 95 cents per pound
  • Green peppers, 49 cents each
  • Cream soups, 49 cents each
  • Taco seasoning packets, 39 cents each
  • 16 ounce salad dressing, $1.29
  • 3 pound bag of yellow onions, $1.49
  • Box of two envelopes of onion soup mix, 69 cents
  • 1 pound of ham lunch meat, $2.99
  • 1 1/2 pound brick of cheese, $4.89
In addition, so far as I can tell, Ruler Foods has the best price in town on 75 feet of Reynold's Freezer Paper. A must for anyone like me who buys meats in bulk and freezes it in manageable portions. They also have the best price in town on gelatin which is a good thing since my wife does like her Jell-O. A simple 15 ounce can of pork and beans runs only 49 cents, and they are as good as some of the Bush's Best variety I like. My wife and I also generally will buy coffee creamer there, as well as cottage cheese, sour cream, margarine, soda, and laundry detergent as their prices stack up better against everyone else I shop.

Ruler Foods operates similar to the way that Aldi does. You pay a refundable 25 cents for your cart, and you bring your own bags or use boxes that the store may provide from it's stocking efforts to take out your groceries.

Here is my first complaint, and a bit of an observation.

I used to shop Aldi frequently before Ruler Foods came into town where I live. Honestly, Ruler Foods beats Aldi's prices, and that's why I rarely shop Aldi anymore. But whenever I plopped a quarter into my cart at Aldi, I always got it back when I returned my cart. Every single time. This process went without a hitch every single time, and there was never a time I did not easily retrieve my quarter.

Not so with Ruler Foods.

The Ruler Foood store in my area has been around for roughly two years, and their carts are already showing massive signs of wear when it comes to their "quarter" mechanisms. In the last 6 months I have gotten my quarter back roughly 75% of the time. Now, while that's not terrible, that means in another six months I may get my quarter back 50% of the time, and eventually, 25% of the time, and if the trend continues, may never see my quarter returned at all.

Ruler Foods needs to maintain their carts. It's only a quarter. But it's my quarter, and if Aldi can keep my quarters coming back so can Ruler Foods. It's a minor thing, but if you add a quarter to my bottom line, I do consider the offset. While it may not impact the cost of my food by that much, it is still a factor for me.

And I am a stickler for saving my money. All of it. Every single red cent of it.

My second complaint? For roughly three months Ruler Foods has had two advertised prices for a 30-pack of Busch Beer. $17.49 and $14.97. In that time $14.97 was the correct price and was honored. Today when I went to the store the cooler price was advertised as $17.49 and HUGE display in the middle of the store with stacks of 30 packs of Busch Beer and Busch Light advertised $14.97. But when I got to the register I was charged the $17.49 price.

You cannot and should not, for three consecutive months, not have the ability to know what your correct price is and make sure that you are advertising to the customer what the correct price is. What they have done, in my opinion, is condition the customer to trust the big middle aisle display as the correct price, and since many customers customarily do not check their receipts, they can sell beer at a great price that is not a great price once checkout is complete.

Between your carts and confusing pricing displays Ruler Foods, I suggest you get it together, because if I have to scan my receipts (and do anyway) and continue to find discrepancies, the likelihood that I continue to shop your store becomes less and less. If I cannot trust you, what is the point of trying to save money?

The Ruler Food store I shop is located at 1703 N. Belt West, Belleville, Illinois 62226.


Saturday, May 13, 2017

Can United Airlines Get Any Worse?

As the old saying goes, when it rains, it pours. And for plagued United Airlines it seems the rain may never stop. In some ways United may be experiencing something similar to what Carnival Cruise Lines did not so long ago, and to be sure its reputation will be tarnished for some time to come. Moreover, as the punches keep on coming, this whole string of incidents from beaten down passengers, to dead rabbits and scorpion bites—United Airlines may be an airline company that crashes without a single plane in the air when all is said and done.

You'll remember quite a few years back when PanAm was driven out of business after a series of deadly crashes that made it the butt of more than a few jokes, and left passengers weary to fly the ill-fated airline for fear they might not make it to their destination alive.

It's not just that passengers are bailing on United in droves. The investors are too, and for good reason on both counts.

Perhaps it is nothing that United Airlines is specifically doing wrong that has caused this string of bad press for them. They could well be simply a victim of circumstance. The Dr. David Dao incident just happened to thrust them smack dab into the spotlight. Of course, I do think there are some serious tears in the fabric of their entire operation, and this has led to much of their woes of late. But really, looking at the bigger picture, it might well be that the entire airline industry faces similar problems. We're just not as acutely aware of them since right now United is deeply embedded in bad press to take some of the heat and pressure off of the other airlines.

As one would expect, some of United's competitors are already taking advantage of United's missteps and misfortunes. For example, Southwest Airlines recently announced it would end the age-old practice of overbooking flights. As things tend to go in business, it's sort of a game of copycat if the idea sits well with customers, and it would  not be surprising to see other airlines quickly scrambling to follow suit. All of the airlines are already doing anything they can, of course, to scoop up any foot traffic they can grab from passengers abandoning United.

At this point it seems apparent that apologies from United's CEO, Oscar Munoz, are most definitely going to fall on deaf ears. What that means to me is that the only next step for Oscar Munoz to take is to step down from his top post and leave the clean up of this whole mess to someone else.

Does it mean someone else can fix it? Maybe. Maybe not. Toyota seemed well poised for a rather precarious situation after their Camry's accelerator problem left terrified drivers essentially in the back seat of their own cars while they were helplessly driven into walls, barriers, and other cars on the road. The stock did take a tumble, and certainly Toyota said very openly they made some mistakes, and the stock did recover, and so did the reputation of Camry cars. Carnival has been able to clean up its image a bit as well over time, and the cruise line is actually doing quite well again.

If there is any certainty for United Airlines, it is that it cannot afford an ounce of additional bad press. In fact, one more story of something happening on a United Airlines plane may serve as the final coffin nail.

The whole Twitter, Wendy's, Wilkerson "debacle" is not that story by the way.

At the very least what United Airlines needs is a major overhaul of its business. They need to either fire Munoz, or he needs to step down. That is step one. In addition, a new CEO needs to assure passengers that major changes will be made to the way they book flights, the way they get staff moved around, the way they handle cargo (especially live animals), and what they intend to do to sweep planes better—to keep scorpions from appearing out of the sleeves of sleeping passengers as happened on one recent flight, and passengers actually being stung which happened on yet another flight.

It still may not be enough to quell the looming disaster that is becoming their company. Unlike other businesses, airlines customers are quite a bit more perturbed than they are in other industries. The entire experience of flying has become such an abysmal and irritating experience, by the time passengers are sat in their seats, they are poised like hungry lions waiting for just the right moment and opportunity to strike. In fact, on a recent Southwest flight two passengers took to literal blows after who knows what transpired before the incident.

What that means is that customers are going to be far less forgiving when it comes to United as a whole. Flyers are fed up. And telling United where to go despite any efforts United may try to make to set things straight may be a very strong message to the airlines left standing...

You better get things right and treat flyers like customers, or we will ground your planes next.

Even if United Airlines makes it through the fall-out, their opportunity to have a second chance will require an awful careful approach to every single interaction it has with their customers. Because if they don't, they won't get a third chance.

Saturday, May 6, 2017

Why The Hell Are You Still Long on Ford?

There is panic on The Street—again—when it comes to Ford Motor Company. I suppose there is at least a smidgen of reason for it. The last couple of quarters have shown a rather steep decline in auto sales, and banks continue to tighten sub-prime lending practices making it more difficult for a large segment of the population to buy new cars. But the trend is nowhere near exclusive to Ford. It's happening across the entire auto sector.

So far as I can tell, however, there is nothing that clearly indicates to me that Ford is a bust, nor that it will not pull itself—again—out of the doldrums.

Here are a couple key factors I think well support Ford's share price surviving the sell off, and maintaining itself as a strong long term investment:

  • Ford has more than $28 billion in cash on the books.
  • All data suggests that with an average life expectancy of the average car or truck being roughly 180K miles, support for new replacement vehicle sales remain at an average of 17 million vehicles per year.
  • Ford continues to maintain very good income from sales of its trucks, really the meat of its business, and with Ford trucks being the top selling truck for the past 40+ years, they will continue to reap the rewards of sales of trucks.
Cash on the books.

Right now Ford sports a pretty hefty dividend when compared to its peers in this sector, currently a whopping 5.39%. The actual dividend is actually higher if you consider that two years in a row so far instead of increasing their dividend, Ford has opted to pay out an annual special dividend. With more than $28 billion in cash on the books, Ford is well poised to not only maintain its dividend at current levels, it is also well positioned to weather the current storm, has plenty of money for marketing, research and development, and to maintain its day-to-day operations.

Ford is nowhere near bankruptcy.

Life expectancy of vehicles.

The average service life for all vehicles is somewhere around 11.7 years considering the average mile life of a car or truck being around 180K miles. This data supports roughly 17 million new cars have to be produced each year to replace any cars on the road being tossed into the junkyard. Of course the actual annual sales figures will fluctuate due to a variety of factors. Ability of consumers to by new vehicles is certainly one of them.

And lets face it, consumer confidence data and other economic factors, while improving finally, are still not where they ought to be. Or where they can be quite frankly. This is going to have a short term impact on auto sales figures throughout the world. Although China is still a large area of growth for Ford specifically, especially when it comes to their Lincoln line of cars, it is still not enough to make a dent right now on the numbers.

Ford trucks.

So long as Ford can maintain its leading position in the market when it comes to trucks, and so long as gas remains under $4 per gallon, Ford truck sales will continue to be strong. For one thing, no one is predicting $4 per gallon gas anytime soon. In fact, it is well predicted that the oil sector will remain depressed. Initiatives by the Trump administration actually support this strongly. The more involved the U.S. in oil production, the more pressure it places on OPEC and the oil sector as a whole. That pressure can easily drive down oil prices, and keep them down for the foreseeable future. So long as fuel prices are at a reasonable level, consumers will be more inclined to buy bigger vehicles like SUVs, crossovers, and yes...

Trucks.

Let's not also forget that if there is a boost in construction—which it seems there could be—there will also be a need for more trucks in that sector. Ford will lead the job in fulfilling that demand, and since their trucks are the beef of their income, this only bodes well for Ford. It's no secret that smaller cars have never been the mainstay of Ford's business, and quite frankly, never has been for GM either.

Perhaps if we are talking about Toyota the numbers would be more meaningful if smaller car sales were in decline as they are for Ford. But we're not talking about Toyota. We're talking about Ford. The impact to Ford of even a steeper decline in their smaller car sales will not be enough to offset the revenues derived from their truck sales.

Speaking of trucks, let us not forget that Ford will bring back the Ranger in 2019, and in 2020 will bring back the very popular Ford Bronco. And let me tell you, that Bronco, based on what we know about what it will look like, may even make me—a guy who typically never buys new vehicles—to run out as soon as they come out and trade in our Ford Edge.

I think the Bronco will be a huge seller for Ford Motor Company.

My recommendation.

What I recommend is quite simple. If you are long Ford, buy the dips. If you are not long Ford you may want to wait for the stock to bottom before buying in. I would also put in high dollar amount per share sell orders to make those shares unavailable to short sellers. Short sellers cannot borrow shares that are for sale.

When you look at the balance sheets it seems clear to me that while Ford certainly suffers from, and has for some time admittedly, downward pressure, there is much to be assured that Ford has great potential for some strong upside.

I am long Ford, and continue to be long Ford. And for me, this short term sell off is only a good reason to take advantage of the discounts and add more shares. Played right, the dividends I earn alone while I wait might just be enough to, if not outright buy that Bronco when it comes out, but can at least support a hefty down payment on it.

Mark my words.

Saturday, April 1, 2017

How To Cook A Corned Beef Brisket

Corned beef brisket, whether it be a flat cut or a point cut, is a truly delicious meal. But due to the brining process a corned beef brisket can be quite salty. Depending on who you talk to, people have various ways of cooking one of these. This is the way I cook my corned beef brisket, and I have done it this way for years, and it always turns out quite delicious, and the process is easy as well.

The way I like to cook my corned beef brisket is to bring it to a boil, and then simmer it. The general rule is that you want to cook your brisket for about 50 minutes per pound. Usually I have at least a 4 lb brisket.

STEP ONE: Cut the brisket out of the bag and drop it into a large pot. Find the "seasoning packet" and set it aside. The bag is full of blood and brine. This is all flavor folks. Before I put any water into my pot, after dropping the corned beef brisket into the pot, I rinse the bag it came in and dump that mixture into the pot with the meat. This way I get all the goodies. Next, turn on the tap and fill the pot so that the meat is fully covered to the top in water.

STEP TWO: Add the seasoning packet that came with your corned beef brisket.

STEP THREE: Set the pot, uncovered, on the burner. Set your dial high and bring the pot to a slow, rolling boil. Once it is boiling let it cook for about 3-5 minutes, watching the foam. If it foams too much just turn the heat down a notch.

STEP FOUR: After it has boiled for about 3-5 minutes, turn down the heat to a high simmer and cover it. Set the timer for 50 minutes per pound. Just let it cook. Watch it to make sure you don't have to make some heat adjustments, but mostly your corned beef brisket will simply cook on its own without any attention at all for the allotted time.

Note: If at any point during the cooking process if you feel the meat should need more water, just add it. You are not going to impede the flavor at all. The meat should be covered with water through the cooking process. If you add some water, just bring it back to a slow boil and then bring it back down to simmer and you are fine. You will not screw this up. Trust me. A corned beef brisket is all flavor. You cannot kill it.

Now here's a little secret. A lot of the time when someone cooks a corned beef brisket they want a combination of cabbage, carrots, and potatoes. Many people will simply add these ingredients to the pot about 45 minutes to an hour before cooking is done.

Frankly, this makes for some pretty salty vegetables.

What I do instead is to cook my vegetables separately. I still want the corned beef flavor. But I do not want the excessive saltiness that goes along with it. So here is what I do.

STEP ONE:1 hour before your brisket is done, prepare your vegetables, cut up your cabbage, carrots, and potatoes and set them aside. (This should take about 15 minutes)

STEP TWO: Siphon off 1 cup of liquid from your corned beef brisket pot and drop that into your vegetable pot. (If you have to add water to your corned beef brisket follow the note above). This gives you the corned beef flavor you want. Add 2 cups of beef broth. Drop your veggies into the pot and mix it all up.

STEP THREE: Cook your veggies for about 40-45 minutes bringing them to a boil first, then dropping them down to a simmer. Add a tad of Worcestershire just for some added flavor if you want, and  normally I do this...but normally there is enough flavor already. I just like a little bit of Worcestershire with my veggies.

When the corned beef brisket is done it is best to let it stand for at least five minutes before carving it. This only makes the cuts more "presentable." If you do not care about presentation, just dig in.

This has been the method I have used to cook my corned beef brisket for years, and the veggies to boot. It always turns out good. I hope this was helpful.

Enjoy your corned beef brisket.