Month: May 2022

Boeing Requires An Overhaul

Boeing Requires An Overhaul

Boeing (BA) senior management and Board requires an overhaul. We first wrote that Boeing ought to replace its CEO and Board back in September 2020 and as recently as February 2021, well before Ryanair CEO Michael O'Leary voiced his opinion. Boeing is a Technology company that would do well to look to the Technology sector … Continue reading Boeing Requires An Overhaul

The Next Government Regulation to Hit Earnings

The Next Government Regulation to Hit Earnings

The SEC estimates that climate disclosures will cost small cap companies approximately $420,000 per year on average and $530,000 for larger public companies. The winners will be law firms, accounting firms and the SEC at the expense of companies. It is logical that this type of punitive legislation and time-consuming disclosure will push out IPO … Continue reading The Next Government Regulation to Hit Earnings

Consumer Strength Is Waning

Consumer Strength Is Waning

The New York Fed released its quarterly report on Household Debt and Credit this past week. Consumer strength is waning, not gaining. Loan delinquencies and foreclosures are up across auto loans and mortgage debt which is primarily where debt expansion has occurred in prior months. There are a number of charts between pages 3-40 that … Continue reading Consumer Strength Is Waning

What Will The “New Normal” Look Like?

What Will The “New Normal” Look Like?

Over the past several months we have written that the new economic normal means a target CPI in the 3-4% range and muted Real GDP in the 0-2% range. Interest rates can't go back to the Volcker days as Treasury would not be able to refinance its debt at double-digit rates. We could however see … Continue reading What Will The “New Normal” Look Like?

More Layoffs Are Coming

More Layoffs Are Coming

Inflation, interest rates and OpEx are climbing while demand softens for many companies. One glance at the table below shows that layoffs over the past two months are fairly widespread across industries. We believe that more layoffs are coming as inflation and interest rates rise. Rates will accelerate higher in June should the Fed make … Continue reading More Layoffs Are Coming

Earnings Estimates Will Be Revised Downward

Earnings Estimates Will Be Revised Downward

On March 31st we told investors to be prepared for weak earnings. After almost 30 years in the capital markets one lesson learned is that sellsiders are slow to publish bad news. Therefore it is not terribly difficult to predict that the sellside will lower EPS estimates for 2023 and beyond when the June and … Continue reading Earnings Estimates Will Be Revised Downward

Corporate Boards Need To Be Overhauled

Corporate Boards Need To Be Overhauled

Corporate Governance practices are flawed in our view as it relates to independent Board members. Corporate Boards are littered with outsiders who know little about the industry or the company for which they serve on the Board. My view has always been that smart investors bet on Management Teams. I would prefer a Board that … Continue reading Corporate Boards Need To Be Overhauled

NASDAQ: Further To Fall

NASDAQ: Further To Fall

Some months ago we stated that the NASDAQ Composite had 40-50% downside. On March 8th we said another 20-30% downside. This implies a NASDAQ Composite of around 9,000. Thus, we have further to fall. Interest Rates: Rates are going higher regardless of what the Fed does (other than more QE of course). Economy: There will … Continue reading NASDAQ: Further To Fall