Investing Thread

[MU82]

In the 1930s, Fleshlights were made in America!

[Hards Alumni]

Thanks 4 breakin em in for me

You just openly admitting to buying second hand fleshlights????

[Frenns Liquor Depot]

[Pakuni]

You just openly admitting to buying second hand fleshlights????

We don't kink shame here, do we?

[Skatastrophy]

We don't kink shame here, do we?

Not unless it's foot stuff

[tower912]

Drinking diet Pepsi will get you mocked.

[Jockey]

Drinking diet Pepsi will get you mocked.

As it should.

[tower912]

 

[TSmith34, Inc.]

You just openly admitting to buying second hand fleshlights????

Bee Jay is quite penis obsessed

[MU82]

Are we winning yet

Nine straight winning sessions on Wall Street.

Of course, the person who has anointed himself the top economic mind in the world said only two days ago that it was the previous president's stock market.

Who are any of us mere mortals to disagree?

[Jay Bee]

Nine straight winning sessions on Wall Street.

Of course, the person who has anointed himself the top economic mind in the world said only two days ago that it was the previous president's stock market.

Who are any of us mere mortals to disagree?

^^^ ban dis gurl

[MU82]

Talking to the New York Times about how the tariffs are already affecting his company is Peter Schwartz, the owner of Aremco Products, a privately held business in Rockland Country, N.Y., that develops and produces ultrahigh-temperature adhesives and coatings and distributes ceramic parts for the semiconductor, aircraft, aerospace, automotive and power generation industries. The business generates about $8 million in annual sales and employs 21 people.

We import a few raw materials for our manufactured products such as yttrium oxide, which is derived from a rare earth metal. We also import technical ceramic parts mainly produced by two exceptional suppliers from China. One immediate effect of the tariff is that we had a shipment of raw materials en route when the 145 percent tariff was imposed — so our cost has just increased dramatically.

We also have 15 to 20 transactions pending with Chinese suppliers of technical ceramic parts, and our margins will be trimmed significantly — by as much as 35 to 45 percent.

We are now factoring tariffs into any new price quotations. For example, a part we ordered in January, that cost $1.57 per unit, in April costs $2.97 because of the new tariffs. Even though we anticipated paying the January rate, we have to pay the higher April rate since it's dependent on when the part comes in. Even with that price increase, we are trimming our own margins. Our customers will definitely have to pay higher prices going forward, but it is too early to tell whether they will accept higher prices or postpone or cancel projects.

We did receive a letter recently from a major customer stating they would not accept any price increases attributable to tariffs.

We're also dealing with inbound shipping problems. This has to do with the end of the de minimis exemption. Many of the parts we import qualify for this exemption, but not anymore. Now, companies like FedEx are required to collect a tariff on any shipment valued at more than $1, so we think the end of de minimis is causing deliveries to be delayed. The bottom line is we're having problems getting shipments now.

On the export side of our business, we have a major China customer that purchased approximately $60,000 worth of our goods in March, and the shipment was prepared to leave just as China said it would apply reciprocal tariffs after President Trump announced his tariffs of 145 percent on "Liberation Day." As a result, our customer asked us to store the product, hoping that the issue will be resolved shortly. I wrote to them and said, "We're glad to hold it, but I strongly doubt that it will be resolved shortly."

Before this, our China business had been growing significantly. About 40 percent of our sales come from exports. I would not be surprised if our China sales now drop by 50 to 75 percent. And the hit may not be reversible because our customers in China will likely search for domestic suppliers.

The tariffs have already baked in a recession. I expect our total sales to decrease by 15 to 20 percent if a recession hits. We experienced an 18 percent decline in 2008, so we have some basis for our prediction. And this is all being brought on by an unforced error, namely the 145 percent tariffs on China and around the globe. We find that our China suppliers are extremely competent and very responsive, and we enjoy working with them. We have no plans to change our supply chain.

It's a bit like an earthquake in the Indian Ocean. It's not felt thousands of miles away, but the tsunami will eventually hit us, and that's what this feels like. The tsunami is inflation and unemployment.

[dgies9156]

This is amusing to me.  For several years I effectively boycotted Walmart for being the "big bad retail giant".  For a myriad of reasons I've become pretty loyal to Walmart the past couple years.  Why funny?  Do people really think having Amazon (retail giant)  deliver things to them is better (in terms of local economy) than shopping at a local store?  Sure there are some actual "local stores" I visit occasionally.  I love that my Ace hardware is *pretty* local, but I still do plenty of shopping at Lowes & Home Depot.  I have a local-ish grocery store that I visit, but I do most of my shopping at the big chain groceries. 

Are you really shopping somewhere morally better than your local Walmart?  I think you're fooling yourself.

Brother Rocky:

You pose an interesting question. Do I think Target, Macy's or Amazon is any different than Walmart in their merchandise sourcing? No, I wasn't born yesterday. Nor do I hold it against Walmart for usurping the role of small, downtown businesses in smaller rural communities nationwide, which was a big reason why people hated Walmart (even though they shopped there).

My objection to Walmart is how they began their Chinese/overseas effort. As noted in Anthony Bianco's 2006 book, The Bully of Bentonville, Walmart was the pioneer in the China effort. Huffy bicycles, Ohio Art Etch-a-Sketches etc., were made in the United States until Walmart wanted an "Everyday Low Price" price point less than the cost of producing the merchandising here.

When the producers explained the problems with the price point, Walmart recommended they contact Walmart's Global Procurement Center in Tiajin, China, where the designs were evaluated and Walmart's price point was met. Of course, nobody said anything about how the Chinese were getting that price point -- working conditions banned in the United states a century ago, disregard for environmental and child labor laws and, in many cases, theft of U.S. intellectual property.

The community to which I referred in my earlier post was Dubuque, Iowa. There, the UFCW and the UAW bitterly opposed Walmart on grounds of their anti-union attitude. All the while, many, many of those same people shopped at Walmart. Enough so that Walmart opened a Supercenter across the street.



 

[The Sultan]

Brother Rocky:

You pose an interesting question. Do I think Target, Macy's or Amazon is any different than Walmart in their merchandise sourcing? No, I wasn't born yesterday. Nor do I hold it against Walmart for usurping the role of small, downtown businesses in smaller rural communities nationwide, which was a big reason why people hated Walmart (even though they shopped there).

My objection to Walmart is how they began their Chinese/overseas effort. As noted in Anthony Bianco's 2006 book, The Bully of Bentonville, Walmart was the pioneer in the China effort. Huffy bicycles, Ohio Art Etch-a-Sketches etc., were made in the United States until Walmart wanted an "Everyday Low Price" price point less than the cost of producing the merchandising here.

When the producers explained the problems with the price point, Walmart recommended they contact Walmart's Global Procurement Center in Tiajin, China, where the designs were evaluated and Walmart's price point was met. Of course, nobody said anything about how the Chinese were getting that price point -- working conditions banned in the United states a century ago, disregard for environmental and child labor laws and, in many cases, theft of U.S. intellectual property.

The community to which I referred in my earlier post was Dubuque, Iowa. There, the UFCW and the UAW bitterly opposed Walmart on grounds of their anti-union attitude. All the while, many, many of those same people shopped at Walmart. Enough so that Walmart opened a Supercenter across the street.

And like a lot of midwestern cities of similar background, Dubuque (like Milwaukee) has reinvented itself and  is doing just fine now. Turning the clock back 50-60 years ago isn't going to help anyone.

[JWags85]

Brother Rocky:

You pose an interesting question. Do I think Target, Macy's or Amazon is any different than Walmart in their merchandise sourcing? No, I wasn't born yesterday. Nor do I hold it against Walmart for usurping the role of small, downtown businesses in smaller rural communities nationwide, which was a big reason why people hated Walmart (even though they shopped there).

I have dealt with Walmart sourcing/procurement in both CPG and their jewellery merchandising groups, and I'll actually disagree.  Ive also worked with Macys, JCPenny, Costco, and Kroger on the jewellery side, and then Target, Kroger, and others on the CPG side.  Walmart is actually very different.  Far more controlling, far more demanding, and far more hostile.  Going to Bentonville to negotiate/meet on a purchase order is a dreadful process.  Some of it is size and influence advantage, but I know 2-3 supplier companies Walmart has legitimate crippled if not outright killed with their merchandising practices.

Some of it is just business, some of it I blame the suppliers on not being cautious/strategic enough in knowing what they will get into.  But no other major retailer I know has locked a small supplier into a multi-year contract, necessitated them holding inventory more than fiscal quarter, sometimes, in advance of delivery...then found a cheap knockoff in China, cancelled the contract and open invoices, returned merchandise, and basically said "sue us and see what happens" knowing the companies can't win.  Its beyond gross.  I actually had a friend who accepted a senior level finance position with a clothing manufacturer and upon seeing their risk level and commitment to Walmart, along with a few other bits of chaos, resigned the position within a month.

Ive told friends and peers, don't get involved with Walmart unless A) the initial few orders can bring you enough profit to set you up very comfortably business wise for awhile or B) the Walmart business can vanish tomorrow and any investment or incremental merchandise can either be reallocated to another customer or written off without damage.

Amazon sucks for a variety of reasons and Kroger can be short sighted/unimaginative in some of their buying, but neither are as toxic and unabashedly predatory as Walmart, from my experiences.

[dgies9156]

I have dealt with Walmart sourcing/procurement in both CPG and their jewellery merchandising groups, and I'll actually disagree.  Ive also worked with Macys, JCPenny, Costco, and Kroger on the jewellery side, and then Target, Kroger, and others on the CPG side.  Walmart is actually very different.  Far more controlling, far more demanding, and far more hostile.  Going to Bentonville to negotiate/meet on a purchase order is a dreadful process.  Some of it is size and influence advantage, but I know 2-3 supplier companies Walmart has legitimate crippled if not outright killed with their merchandising practices.

Some of it is just business, some of it I blame the suppliers on not being cautious/strategic enough in knowing what they will get into.  But no other major retailer I know has locked a small supplier into a multi-year contract, necessitated them holding inventory more than fiscal quarter, sometimes, in advance of delivery...then found a cheap knockoff in China, cancelled the contract and open invoices, returned merchandise, and basically said "sue us and see what happens" knowing the companies can't win.  Its beyond gross.  I actually had a friend who accepted a senior level finance position with a clothing manufacturer and upon seeing their risk level and commitment to Walmart, along with a few other bits of chaos, resigned the position within a month.

Ive told friends and peers, don't get involved with Walmart unless A) the initial few orders can bring you enough profit to set you up very comfortably business wise for awhile or B) the Walmart business can vanish tomorrow and any investment or incremental merchandise can either be reallocated to another customer or written off without damage.

Amazon sucks for a variety of reasons and Kroger can be short sighted/unimaginative in some of their buying, but neither are as toxic and unabashedly predatory as Walmart, from my experiences.

Brother JWags:

You and I agree on Wallyworld. See the second half of my comments on why I don't like them.

I also think they treat their people like crap. I know too much there, so I'll leave it at that.

I'd do business with Satan before I'd do business with Walmart for all the reasons you note. I've negotiated contracts for much of the last 40 years as a consultant. I've dealt with some of the cheapest people on the plant. Still, you make sure you know what you're getting into when you begin negotiating. And, you expect to be treated with respect, just as you treat prospective clients with respect. 

Brother Sultan:

I agree with you in principle. However, it's easier for Milwaukee with a far more diversified economy to re-invent itself than it is for some old manufacturing community along the Mississippi River to do so. Dubuque has done a nice job but you're right, it will never be what it once was.

Ditto for the Quad Cities in Illinois and Iowa or Superior, WI, two other cities I'm extremely familiar with.

[MU Fan in Connecticut]

Wags,
I have done business with and supplied to Walmart in the past.  During the pandemic, my company was supplying aluminum mask wire to Walmart who had another supplier manufacturing masks for them.  They were actually one of the easiest customers I ever dealt with and they paid on time.  We joked that why can't every customer be that simple.  I did not have to go Bentonville.  It could have just been the product we were supplying.

[JWags85]

Wags,
I have done business with and supplied to Walmart in the past.  During the pandemic, my company was supplying aluminum mask wire to Walmart who had another supplier manufacturing masks for them.  They were actually one of the easiest customers I ever dealt with and they paid on time.  We joked that why can't every customer be that simple.  I did not have to go Bentonville.  It could have just been the product we were supplying.

I'm glad to hear that.  Obviously when it comes to stuff like that, YMMV and clearly product matters.  If it was just a single interaction, I'd chalk it up to a bad experience, but I know far more negative experiences supplying them than positive. 

They do pay on time and without issue, I'll give them that.  But ironically, in my experience, most of the larger companies I work with that will try to cut a suppliers legs out without a second thought...also are the ones who have the best accounts payable support and timing.  A large US retailer that has flat out cheated us and stolen hundreds of thousands in data and IP...also will often pay Net-30 invoices within a week.

[MU82]

Brother JWags:

You and I agree on Wallyworld. See the second half of my comments on why I don't like them.

I also think they treat their people like crap. I know too much there, so I'll leave it at that.

I'd do business with Satan before I'd do business with Walmart for all the reasons you note. I've negotiated contracts for much of the last 40 years as a consultant. I've dealt with some of the cheapest people on the plant. Still, you make sure you know what you're getting into when you begin negotiating. And, you expect to be treated with respect, just as you treat prospective clients with respect. 

Brother Sultan:

I agree with you in principle. However, it's easier for Milwaukee with a far more diversified economy to re-invent itself than it is for some old manufacturing community along the Mississippi River to do so. Dubuque has done a nice job but you're right, it will never be what it once was.

Ditto for the Quad Cities in Illinois and Iowa or Superior, WI, two other cities I'm extremely familiar with.

Cities, towns, states and the nation overall have always had to evolve - as innovations have come in, companies have advanced, generations have died off, etc. It's always been that way in America, starting even well before the Declaration of Independence was signed, and it's still that way today.

Places big and small and in between, from New York to Detroit to Birmingham to Dubuque to Bumblefork have had to change to thrive and/or survive.

The notion that going back to the way things were 40 or 60 or 80 or 100 years ago will make things great again is just plain stoopid. First, it simply ain't gonna happen - an economy based on industry in smoke-filled factory towns is about as likely to return as the Pony Express. And second, things weren't all that great for lots of Americans way back when. Nostalgia is powerful, but nostalgia is all it is.

Anyhoo ... Investing ...

The market's stretch of 9 straight winning sessions ended today. But it was only down a tad. Things could get more interesting later this week, as several more big companies release earnings reports and as the Fed meets to discuss interest rates.

Also, Berkshire Hathaway (BRK.B) was down 5% today after Saturday's rough earnings report and Buffett's announcement that Abel will succeed him as CEO. Still seems overvalued to me - and Buffett must think so, too, because they aren't doing any buybacks.

[The Sultan]

I agree with you in principle. However, it's easier for Milwaukee with a far more diversified economy to re-invent itself than it is for some old manufacturing community along the Mississippi River to do so. Dubuque has done a nice job but you're right, it will never be what it once was.

Ditto for the Quad Cities in Illinois and Iowa or Superior, WI, two other cities I'm extremely familiar with.

If what you mean is that they have lost their traditional large manufacturing base, sure - they are quite different than they used to be. But Dubuque and the Quad Cities have been growing for awhile now. (Superior has not.) As MU82 has said, cities always grow, change and adapt.

[dgies9156]

If what you mean is that they have lost their traditional large manufacturing base, sure - they are quite different than they used to be. But Dubuque and the Quad Cities have been growing for awhile now. (Superior has not.) As MU82 has said, cities always grow, change and adapt.

In principle, I agree with you. A dynamic community embraces opportunity and, in time, things change. I grew up in Nashville, TN, and the city I saw this past weekend bore no resemblance to the city in which I was raised. Nashville faced some severe problems in the 1980s, when NLT, a life insurance company that owned the Opry and the local NBC radio and TV affiliate, and the local banks were all sold. The city responded by embracing manufacturing, health care and country music.

The problem with the Quad Cities and Dubuque is both were heavily manufacturing based. Both were disaster areas economically in the 1980s (we left in 1982, just as hell was breaking loose in the Quads). Dubuque has reinvented itself nicely based on tourism, the River and what's left of its manufacturing base.

The Quad Cities may be growing in population but economically, it's nowhere near recovered from the mid-1980s. While some economic strength remains -- Deere, Alcoa and related suppliers -- it has barely begun to replace what it lost when International Harvester was sold and Case, Caterpillar and Deere all closed plants.

The inherent problem in the Quad Cities is the issue that the Administration is trying unsuccessfully to solve with tariffs. You have way too many folks whose lives revolved around working in factories who either couldn't or wouldn't be retrained or move to where their skills are in demand. 

[rocky_warrior]

You have way too many folks whose lives revolved around working in factories who either couldn't or wouldn't be retrained or move to where their skills are in demand.

You do realize that you're talking about jobs that were lost 45 years ago! Those people are 65+ now.  What, did they just raise their kids and say "Get your life ready for a good factory job...they'll come back some day!!"?

[The Sultan]

You do realize that you're talking about jobs that were lost 45 years ago! Those people are 65+ now.  What, did they just raise their kids and say "Get your life ready for a good factory job...they'll come back some day!!"?

I have shared this before, but I had family members who worked in the factories in Milwaukee and lost their jobs in the 80s and 90s. Places like Briggs and Allis-Chalmers. And they all pretty much figured it out, got new jobs, raised their families, and are largely now comfortably retired. (None of them moved either.)

And I will tell you that they have no desire to have their children working those jobs - and none of them are.

[Uncle Rico]

I have shared this before, but I had family members who worked in the factories in Milwaukee and lost their jobs in the 80s and 90s. Places like Briggs and Allis-Chalmers. And they all pretty much figured it out, got new jobs, raised their families, and are largely now comfortably retired. (None of them moved either.)

And I will tell you that they have no desire to have their children working those jobs - and none of them are.

I have a hard time believing they could be happy without working in a factory.

[MU82]

I have a hard time believing they could be happy without working in a factory.

There are always coal mines, railyards and the docks.