Christmas is finally here, and for many it's a time of joy spent with friends, relatives, and loved ones.
Christmastime is also when Santa Claus makes his list and checks it twice to find out which children have been naughty and nice. As the legend goes, children who've behaved often get their wish list granted, while those who are naughty wind up with a lump of coal in their stocking.
While I'm certainly not rocking a white beard, and I have nothing that would resemble a Santa-like physique, I'm going to don my red hat and bag of coal and stamp out four groups and concepts worthy of coal this holiday season!
Source: White House on Flickr.
1. Congress
Perhaps no group deserves a larger lump of coal this Christmas than our local member of Congress. Although Congress recently hashed out a budget plan (nearly a year late, may I add) that will allow us to avoid another government shutdown, it still allowed a 16-day government shutdown to occur in October, which threatened to cripple U.S. consumer spending and furloughed close to 1 million federal employees.
Furthermore, Congress has been unable to come to any meaningful long-term compromise between both parties as to how to deal with our growing national debt problem. With the considerable perks that come along with being a member of Congress, you'd think your local representative would be looking after your interests, but it's been nothing of the sort in 2013. With an approval rating that is practically bordering on zero given the margin for error, I'd suggest that two lumps of coal may even be in order.
2. Obamacare
In Obamacare's defense, there is no such thing as a health-care reform without a significant number of hiccups. When Medicare Part D went into effect in 2006, it was a year filled with glitches, so Obamacare probably should get a little slack from the public in that regard.
Beyond that, however, the federally run health exchange, Healthcare.gov, and a majority of the state-run exchanges certainly belong on the naughty list this year. Healthcare.gov was practically unusable for the first two months until the "tech surge" of Oracle (ORCL -0.55%), Red Hat (RHT), and Google were brought in to fix the glitches. Without Red Hat and Oracle's expertise in connecting multiple data centers with the end user, and Google's ability to diagnose source code problems, we'd probably still be discussing CGI Group's disaster of a website.
Even with Healthcare.gov now fixed for a majority of U.S. citizens, Obamacare itself has been one delay after another. The employer mandate, the December health insurance enrollment coverage cutoff date, and even full implementation of the individual mandate have all been delayed within the past six months. It's looking as if getting Obamacare off the ground by the mid-March coverage cutoff date is going to be nothing short of a miracle.
3. Metal miners
I certainly am among a dying breed of metal mining supporters these days, but it's only fitting that they deserve a lump of coal this year after the abysmal performance most put up.
There are more than enough reasons to avoid metal and mining companies these days, including precipitously falling commodity prices, weakened demand for metals in struggling markets like Europe, relatively low U.S. inflation to which gold is often purchased as a hedge, and the beginning of the end for the Federal Reserve's monthly stimulus, known as QE3, which means a more slowly increasing money supply.
However, I feel mining companies really deserve their lump of coal for their lack of prudence when it comes to expanding their operations without giving any thought to the future price of gold. The number of writedowns this year in the mining sector has been off the scale, as aggressive companies have been slammed. Newmont Mining (NEM 13.36%), for instance, has taken two billion-dollar-plus writedowns in just the past two years as the cost to build out its properties just isn't economically feasible at the moment.
4. J.C. Penney's management team
Last, but certainly not least, we have the circus that practically ran J.C. Penney (JCPN.Q) six feet into the ground. Although Ron Johnson is no longer CEO of J.C. Penney, he left a lasting impression with shareholders in the worst possible way.
Voted the "Worst CEO of the Year" by myself and my fellow Motley Fool coworkers, Johnson attempted to do the unthinkable by dictating consumer shopping habits in Penney rather than allowing the customer to dictate what Penney should carry. The result was that Johnson pushed away from discounting to an everyday low price, and attempted to mix up Penney's branding with a slightly higher-end feel. In other words, Johnson wanted to slowly turn Penney into Macy's (M -1.38%). Ironically, the two department stores were at one point at each other's throats over the right to market Martha Stewart Living OmniMedia's products in its stores, but Penney's wound up dropping the suit before heading to court in order to save on legal costs.
Ultimately, Johnson's plan backfired and Penney delivered perhaps the ugliest retail quarter in the history of man, with same-store sales falling 31.7% and the company reporting a nearly $1 billion loss for 2012. To add insult to injury, Johnson's compensation, and that of the top three executives he brought in to lead Penney's turnaround, cost a cumulative $170 million in salaries, stock warrants, and severance packages. You might say that this management team deserves a golden parachute filled with coal this holiday season!
