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."
Saturday, May 13, 2017
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
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.
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...
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.
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
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.
Monday, March 27, 2017
While some may see this move by Iran as a "brazen and bold" move by the country, I happen to think it amounts to little if nothing at all. It's basically just a show. None of these companies do an extensive amount of business in Iran, and even if they did, Iran is so small that it would pale in comparison to any business dealings these companies may have elsewhere abroad.
It's a virtual drop in the pan.
It is a sign of growing tensions between the two countries. And some might add that what the sanctions imposed by Iran really have to do with is the threat by the Trump administration to rip up the Obama and U.N. struck deal with Iran to bar them from making nuclear defense ballistic missiles. A deal that, for all intents and purposes, was an awful deal for the United States without a doubt. And rightly so, the Trump administration has stated that Iran has already defaulted on the deal by conducting ballistic missile testing.
The fact is that we are not dealing with a country who can be dealt with on fair terms. I think even the Obama administration knew this, but they struck the deal anyway, and sent a hefty cash payment along with it to help to seal the deal.
Monies, by the way, according to most legal experts, the United States was never obligated to pay. But that's for another day.
Is it alarming that Iran/U.S. tensions are on the rise? Of course it is. Especially when you couple this with the fact that tensions are also on the rise with North Korea and even Russia. What should be more alarming is the eight-year long disarming of the U.S. military during the Obama administration, and the aging state of our military defense equipment which makes us less prepared to defend ourselves in multiple arenas.
Still, I feel that our military forces are quite a bit more prepared and able than anything the Iranians might throw at us, even if they happen to join forces with a larger, more equipped adversary. It would be tougher, but I also believe that the pace at which the Trump administration will re-equip our U.S. military and add troops will be much faster than anything we have seen in recent years, and by the time we get to the end of Trump's first four years in office our military might well be quite a lot stronger than it has been perhaps since the Reagan years.
We have the ability, more than any other country, to beef up our military force faster than anyone else can, and you can bet that is exactly what the Trump administration aims to do. I happen to think Iran is all too well aware of this as well.
I also think that while countries like Iran are not the brightest bulbs in the pack, I think they are wise enough to know that Trump, and this country, will go to great lengths to defend itself. I don't know what the Iranians know of history, but I am certain they recall the words of Japanese Admiral Isoroku Yamamoto, who after the attack on Pearl Harbor said, "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."
The Iranians must also know that part of the reason that the American people elected Donald Trump to the presidency is due to a great fear by many Americans that the former administration was not doing enough to protect its citizens from harm especially abroad, and that the American people knew all too well that Hillary Clinton would have continued to do nothing.
Some fear that war will come with a Trump administration ultimately. I think the opposite is true. War would have come certainly from a Clinton administration. These other countries have to know that a Trump administration is not an Obama administration, and if Trump declares a "red line," you can bet he will follow through if is crossed.
The sanctions imposed by Iran against U.S. companies will do nothing to harm the United States, will do nothing to harm our economy or the companies sanctioned, and it will do nothing to make the United States change its current position regarding the Iran deal brought forth by the Obama administration, nor our resolve against radical Islamic terrorism, countries who harbor terrorists or support terrorism, or our ability to defend against any of these things.
The sanctions are essentially no big deal.
Sunday, March 26, 2017
But driving still appeals to me. And I never enjoy being a passenger.
So in just that respect alone the idea of self driving cars really does not appeal to me. But there is another aspect to the whole idea that actually quite frightens me. And the latest crash of an Uber car in Arizona, which according to Uber's policy, also had "safety" drivers in the driver's seat and the car still crashed when another car failed to yield to it, is precisely a good part of the reason I just don't want cars to be driving themselves.
The self driving cars are not able to foresee trouble it appears. And while I am sure the "brains" can work faster than a human brain can, and while the cars won't be distracted by smoking, eating, hairstyling, shaving, or turning the dial on the radio...
And certainly the car won't be texting or talking on a cell phone either...
It still seems to me that nothing can and nothing should replace an attentive driver in the driver's seat calculating and making split second decisions. One could argue, of course, that it is not the self driving car that is the problem, but human driven cars getting in the way.
Still, the whole idea just seems problematic, and I can't help but think there will be many more crashes reported in the future the more common these cars become. And I suspect the death toll will begin to ramp us as well.
I am all for technology, and I get that the car makers and others surrounding the whole of our nation's roadways are wanting to opt for something to take the driver out of the equation thereby somehow reducing traffic accidents...
But I still think there is no replacement for a human driver in the cabin.
Besides, I am also an investor in the auto industry, and something tells me that if you take away the driving aspect from the car experience, the whole industry becomes boring and there is no reason to market power, performance, or even design. The whole industry goes kaput.
In any event, I just don't see this technology as being all that appealing to the average car buyer. So what's the point anyway? If you don't want to drive, why not take the bus?