This post first appeared on Minyanville.
As data pours in from the holiday shopping season, stories of tight purse strings and a general rejection of the extravagant abound.
But bucking the trend, Amazon.com (AMZN) reported strong sales and record buying activity. The world's biggest online retailer called the otherwise bleak environment it's "best ever." Still, online sales are expected to slow from the previous year for the first time ever.
On December 15, according to the Wall Street Journal, Amazon's customers snapped up items at a clip of nearly 73 per second, or 6.3 million for the day. That's the busiest the site has ever been.
Leading the record-breaking sales were Nintendo's (NTDOY) Wii video game consul, Samsung's 52-inch HD television and Apple's (AAPL) 8-gigabyte iPod Touch. In addition, Acer Inc.'s Aspire One netbook attracted buyers looking for cheap access to the Internet. The tiny laptop, with a screen that measures just 8.9 inches, sells for less than $500.
Amazon's strong results are in sharp contrast to most brick-and-mortar retailers, which rang up weak sales despite aggressive discounting. Consumers, hunting for bargains and reticent to brave harsh winter weather across much of the country, shunned malls, preferring instead to shop from the comfort of home.
The site's relative success is evidence that, even during recession, the cream of the corporate crop can still thrive. Economic activity doesn't grind to a halt just because Apocalyptic headlines seem to be without end.
Instead, downturns weed out the weak hands, building a stronger foundation for future growth.
Showing posts with label WII. Show all posts
Showing posts with label WII. Show all posts
Monday, December 29, 2008
Friday, October 24, 2008
Pension Funds Feel Burning Sensation Where Money Once Was
This post first appeared on Minyanville.
Retiring at 65 may be a thing of the past.
Even as Americans watch their 401Ks brutalized by wild swing on Wall Street, some may now need to worry about the security of their pensions as well.
Amid the turmoil in the financial markets, the California Public Employees’ Retirement System, or Calpers, is watching its billions dwindle away.
Since the beginning of the year, I’ve catalogued 2 instances of Calpers making losing real estate bets. The largest pension fund in the country has seen investments in both a Manhattan housing project and vacant land in California turn sour.
Where there's smoke, apparently, there's fire: Calpers has lost $48 billion, or 20% of its total portfolio in the last four months.
The fund manages around $200 billion in pension money for state employees, most of which is contributed by employers like schools, police departments, cities and other public agencies. According to the Wall Street Journal, Calpers is considering upping the contributions from its members to help cover losses. This would further cripple the state’s budget, which is already reeling from lower sales taxes and the collapse in the housing market.
The problem isn’t unique to California.
Calpers is actually outperforming most other pension funds, which have on average posted a 5.1% loss during the fiscal year that ended in June. According to Merrill Lynch, Calpers lost only 2.4% during that time.
And while other states have more red tape to cut through before higher employer contributions can be implemented, as losses mount, it’s not unreasonable to expect California to be the first of many to pass these costs on to their members.
So why should anyone -- at least anyone who isn’t depending on a state pension to fund their golf and tennis in Palm Springs -- care?
States aren’t exactly flush with cash these days, as debt costs rise and tax receipts fall. In order for pension funds to cover payouts in years to come, they need more money. Short of a sharp reversal or a sustained recovery in equity markets, that money needs to come from somewhere: Higher taxes could be in everyone’s future.
Recent stock market losses have thrust the argument over who manages retirement money into the spotlight. Big brokerages like Merrill Lynch (MER) and Morgan Stanley (MS) would love to take money away from pension funds and Social Security, instead trumpeting personal choice as the way to save for the future.
Washington, on the other hand, will point to the financial crisis as evidence the government should have more say over how retirement money is invested.
What’s evident, however, is that, irrespective of the outcome of this heated debate, it's likely Americans (and even Argentineans) may have to figure out cheaper ways to enjoy their golden years.
Anyone for Wii Tennis?
Retiring at 65 may be a thing of the past.
Even as Americans watch their 401Ks brutalized by wild swing on Wall Street, some may now need to worry about the security of their pensions as well.
Amid the turmoil in the financial markets, the California Public Employees’ Retirement System, or Calpers, is watching its billions dwindle away.
Since the beginning of the year, I’ve catalogued 2 instances of Calpers making losing real estate bets. The largest pension fund in the country has seen investments in both a Manhattan housing project and vacant land in California turn sour.
Where there's smoke, apparently, there's fire: Calpers has lost $48 billion, or 20% of its total portfolio in the last four months.
The fund manages around $200 billion in pension money for state employees, most of which is contributed by employers like schools, police departments, cities and other public agencies. According to the Wall Street Journal, Calpers is considering upping the contributions from its members to help cover losses. This would further cripple the state’s budget, which is already reeling from lower sales taxes and the collapse in the housing market.
The problem isn’t unique to California.
Calpers is actually outperforming most other pension funds, which have on average posted a 5.1% loss during the fiscal year that ended in June. According to Merrill Lynch, Calpers lost only 2.4% during that time.
And while other states have more red tape to cut through before higher employer contributions can be implemented, as losses mount, it’s not unreasonable to expect California to be the first of many to pass these costs on to their members.
So why should anyone -- at least anyone who isn’t depending on a state pension to fund their golf and tennis in Palm Springs -- care?
States aren’t exactly flush with cash these days, as debt costs rise and tax receipts fall. In order for pension funds to cover payouts in years to come, they need more money. Short of a sharp reversal or a sustained recovery in equity markets, that money needs to come from somewhere: Higher taxes could be in everyone’s future.
Recent stock market losses have thrust the argument over who manages retirement money into the spotlight. Big brokerages like Merrill Lynch (MER) and Morgan Stanley (MS) would love to take money away from pension funds and Social Security, instead trumpeting personal choice as the way to save for the future.
Washington, on the other hand, will point to the financial crisis as evidence the government should have more say over how retirement money is invested.
What’s evident, however, is that, irrespective of the outcome of this heated debate, it's likely Americans (and even Argentineans) may have to figure out cheaper ways to enjoy their golden years.
Anyone for Wii Tennis?
Tuesday, May 27, 2008
Gamers Open Wallets, Readers Stay On Couch
This post first appeared on Minyanville.
Barnes & Noble (BKS) and GameStop (GME) are headed in opposite directions. Heavily dependent on shoppers' waning discretionary dollars, the fate of the two retailers lies squarely in consumers' fickle hands.
According to The Wall Street Journal, Barnes & Noble reported a $2.2 million loss for the quarter ending May 3rd, including an $8.3 million charge stemming from a legal battle in California over the collection of sales tax online. The bookseller also lowered sales estimates for fiscal 2008, but reiterated its view that earnings per share will fall in line with its previous forecast.
The Journal reported earlier this week that Barnes & Noble may be looking to buy Borders Group (BGP), which put itself on the block in March. Regulators are likely to scoff at a merger of the two companies, however, as it would create a book retailer with more than 30% market share.
But pricing power in the world of print may not matter; who reads books these days anyway? Certainly no one between the ages of 12 and 25 - they're too busy playing Grand Theft Auto IV (TTWO) or Guitar Hero (ATVI).
That's good news for GameStop. The purveyor of new and used video games saw profits double from a year ago amid strong demand for new titles like the aforementioned Grand Theft Auto IV and Rock Band. Despite a dip in margins, same-store sales jumped 27% - stronger than the company's own estimates. New video game sales increased 72% from a year prior, while used game sales grew by 27%. GameStop guided earnings for the second quarter at the high end of analysts' estimates.
During tough economic times, consumer preferences play a more significant role in which retailers stay in the black and which ones fold. Investors should expect niche players like GameStop, well positioned despite a sluggish economy, to outperform catch-all electronics stores like Best Buy (BBY).
In contrast to fad products like Crocs (CROX) and Under Armor (UA), video games represent a longer-term trend toward a more interactive entertainment experience. The popularity of games like Guitar Hero and Nintendo's (NTDOY) Wii Fit that force users to get off the couch is evidence of this shift.
And unlike TVs and computers that have relative shelf lives, video games "must" be replaced every six to twelve months when a new release or edition comes out. Final Fantasy, a popular role playing series for the Sony (SNY) PlayStation, is already up to its 13th iteration.
Gamers are a loyal bunch. The ability to buy used games for a fraction of the cost of new ones, even during tough economic times, means they can keep on playing.
Barnes & Noble (BKS) and GameStop (GME) are headed in opposite directions. Heavily dependent on shoppers' waning discretionary dollars, the fate of the two retailers lies squarely in consumers' fickle hands.
According to The Wall Street Journal, Barnes & Noble reported a $2.2 million loss for the quarter ending May 3rd, including an $8.3 million charge stemming from a legal battle in California over the collection of sales tax online. The bookseller also lowered sales estimates for fiscal 2008, but reiterated its view that earnings per share will fall in line with its previous forecast.
The Journal reported earlier this week that Barnes & Noble may be looking to buy Borders Group (BGP), which put itself on the block in March. Regulators are likely to scoff at a merger of the two companies, however, as it would create a book retailer with more than 30% market share.
But pricing power in the world of print may not matter; who reads books these days anyway? Certainly no one between the ages of 12 and 25 - they're too busy playing Grand Theft Auto IV (TTWO) or Guitar Hero (ATVI).
That's good news for GameStop. The purveyor of new and used video games saw profits double from a year ago amid strong demand for new titles like the aforementioned Grand Theft Auto IV and Rock Band. Despite a dip in margins, same-store sales jumped 27% - stronger than the company's own estimates. New video game sales increased 72% from a year prior, while used game sales grew by 27%. GameStop guided earnings for the second quarter at the high end of analysts' estimates.
During tough economic times, consumer preferences play a more significant role in which retailers stay in the black and which ones fold. Investors should expect niche players like GameStop, well positioned despite a sluggish economy, to outperform catch-all electronics stores like Best Buy (BBY).
In contrast to fad products like Crocs (CROX) and Under Armor (UA), video games represent a longer-term trend toward a more interactive entertainment experience. The popularity of games like Guitar Hero and Nintendo's (NTDOY) Wii Fit that force users to get off the couch is evidence of this shift.
And unlike TVs and computers that have relative shelf lives, video games "must" be replaced every six to twelve months when a new release or edition comes out. Final Fantasy, a popular role playing series for the Sony (SNY) PlayStation, is already up to its 13th iteration.
Gamers are a loyal bunch. The ability to buy used games for a fraction of the cost of new ones, even during tough economic times, means they can keep on playing.
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