Urbanomics Outlook on the Economy
Here is my outlook on the economy. The economy is like a leaky faucet, slowly dripping. If you review the last few months, the data supporting jobs and economic growth have been bad kind of like when your faucet is clogged up. But every now and then you get a surprise and a few gushes come out and occasionally the economic numbers have had a few surprises. But if you put it all together the economy continues to be a very slow drip for a population of Americans that are thirsty for jobs and an economic rebound to our investments, 401K portfolios, real estate, and lifestyles.
Do You Yahoo?
I know I do. I use Yahoo all the time. Yahoo is my home page, my email service and also my source for fantasy football. But even with all these reasons they are having trouble keeping up with the big boys of technology (Google, Amazon, Ebay). They are even used as a verb, no one ever asks whether you ‘Yahooed’ something! Well it may be time to circle the wagon on this old reliable tech company. We have a little help in stirring the pot. Dan Loeb, founder of the hedge fund Third Point sent a scathing letter to Yahoo’s Board and then kindly reminded them that he now owns a roughly 5% stake in the company. Here at Urbanomics we are fans of investors that stir the pot and when it happens at unloved companies like Yahoo we get excited.
All Talk…
I guess I’m going on record again to reiterate how much the investment community has stopped talking about stocks and strategies like value, growth, and dividends. It seems like we’ve almost stopped investing and now just blame the government for everything. While the government does create an environment for us all to operate in, it is still up to all of us (as individuals and corporations) to be compromise and get things done. And there definitely has not been an attitude of compromise. So of course if I were to play President, Senate, & Congress for a day, I would consider the following measures to stimulate the economy. First policy consideration:
German-Style Unemployment Benefits – An unemployment system that works with corporations when they are going to employ mass layoffs. The corporations keep the employees on staff (short work) at a reduced hours which helps the company stay productive and the economy humming and reduces long-term unemployment.
More to come on if I were a politician for a day…
Netflix
Nextflix is in play again. They have made some bold changes to their service offering that many consumer are not too happy about. They have split the company into the two parts:
1. The DVD service is now called Quickster
2. The streaming service will retain the name Netflix
Our real life example is this doesn't appear too well thought out. It's a hassle and a frantic push to migrate consumers over to the streaming service. The content is not appealing enough to justify the inflating price and I just wish that when the stock was well above $300 I went with my gut and initiated my short. I often said I wasn't a believer, but it doesn't matter if you don't pull the trigger. Stay tuned...
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