Business on the mind

Thoughts for the day

Shot some emails back and forth with friends about the current state of the economy and the bailouts. Some of my views
-I am very much a free market, capitalist person...with a little a bit of a guiding hand involved. Markets work best when they are left alone to sort things out (survival of the fittest) but rules or incentives need to be put in place to guide business to do the right thing (pollution control, executive pay, protect workers, etc...)
-I hate the idea of the bailout but something must be done to stabilize the economy and the debt markets. How do we do this with out rewarding banks and home buyers for making poor decisions is the question.
-I am very much anti auto bailout. The big 3 have been run piss-poor for quite awhile and we shouldn't be expected to support business that cant figure it out nor should we support bad union contracts.

Microsoft is planning on opening retail stores
-They have tasked the head of the initiative to figure out when and where as first priority. How about how or why?
-I view it as a interesting chance to bring the cool back to Microsoft. Also could be a great way to show off the xbox and other innovative products.
-One problem, it could backfire...badly. Not sure how they could easily bounce back from that

Target Q4 analyst call: I listened in to the Target 4th quarter analyst call. As always its interesting stuff. Doug Scovanner, the CFO of Target, is awesome to listen to. He really knows his stuff and is pretty engaging in person and on the phone. Here is what I gleamed:
-Target is in great shape with its inventory. We shouldnt be seeing tons of markdowns and clearance this spring
-The CEO, Gregg Steinhaffel emphasized that Target will not damage the brand of Target for short run financial gains. That strategy is one of the things I love about Target.
-Look for consolidation in Target's private brands in order to streamline items and drive sales
-2009 will have 60 net new stores. 2010 could range anywhere from 5 new stores to 30 new stores
-Here are some nice indicators of the financial position of the company

• Q4 expenses were lower than Q4 2007 in terms of cash
• A share now is worth $84 dollars in sales compared to 5 years ago when it was worth $40 dollars in sales. Share price 5 years ago was around $40

-Look for Target to continue to focus on changing the consumer perception that Target is more expensive for basics than the 900 lb gorilla.