Why Rent-A-Center, Chefs' Warehouse, and Seagate Technology Tumbled Today

As painful as Apple's decline was, the stock market managed to overcome the tech giant's decline. But several other stocks also fell sharply, with Rent-A-Center down 22%, Chefs' Warehouse dropping 14%, and Seagate Technology posting an 11% decline. Find out why.

Jan 28, 2014 at 8:30PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Last night, after Apple reported disappointing earnings that sent the stock plunging in after-hours trading, it appeared that the stock market might be in for yet another losing day today. But even though major stock market benchmarks managed to post solid gains, that didn't prevent some major losses in other key stocks, including Rent-A-Center (NASDAQ:RCII), Chefs' Warehouse (NASDAQ:CHEF), and Seagate Technology (NASDAQ:STX).

Rent-A-Center plunged 22% after the provider of rental and rent-to-own furnishings reported that net income fell by 72% in its fourth quarter. A 1.1% drop in same-store sales held back overall revenue growth to just 2%, and cautionary guidance for 2014 pointed to the ongoing problems for Rent-A-Center's cash-strapped customer base. The results throw cold water on the idea that the U.S. economic recovery has been felt equally across those of all income groups, as CEO Mark Speese said that its customers are still "under severe economic pressure" that could weigh on results into the future.

Chefs' Warehouse fell 14% after giving an earnings warning after the market closed yesterday afternoon. The specialty-food distributor said that it now expects revenue of between $670 million and $673 million for the full 2013 fiscal year, with net income of $16.5 million to $16.7 million and adjusted earnings per share of $0.80 to $0.81. Chefs' Warehouse also disclosed an accounting issue related to alleged employee malfeasance, but it also blamed adverse weather and high costs that pressured profit margins as causes for the poor guidance. The company also got downgraded by BB&T Capital Markets following the downbeat warning.

Seagate Technology dropped 11%, in the aftermath of its own poor earnings report. Seagate missed earnings estimates for the quarter by $0.06 per share, and its revenue guidance for the current quarter led investors to believe that its sequential sales would fall even more than expected. Despite a smart strategy that involves trying to evolve past its hard-disk drive prowess to play a bigger role in the enterprise solid-state drive market, Seagate hasn't been able to capitalize on that opportunity as much as it had hoped. Still, with relatively cheap valuations, Seagate could regain today's losses in the near future if it can execute better on the enterprise side of the business and take full advantage of the potential of cloud computing.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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