The Motley Fool 50 skipped down the yellow brick road again today, outpacing the major market indexes and gaining 3.34%. But it was a good day all around for stocks. The Naz, Dow, and S&P all had their third consecutive day of strong gains.
Don't get too giddy. Just like during those putrid days of triple-digit losses, stick to your financial plan and stay focused on your goals. What? You don't have goals? Well, then read on, Fool.
In today's Motley Fool Take:
Are You Wasting Money?
It's day three of our internal audit campaign inspired by the SEC's mandate to CEOs: Know your numbers. In the week before the SEC's Aug. 14 deadline, we're taking 15 minutes a day to see if our own finances pass muster.
If you've been playing along at home, you've already got a snapshot of your current balance sheet. And yesterday you tracked every dollar that left your hands (right?), to get an inkling of your annualized spending.
Today, take 15 minutes to hold a strategic planning session with your board of directors (or sole dictator, if you're single). Write down your short-, mid-, and long-term company goals. If you don't already have a cash cushion for emergencies, that's a good short-term place to start. What big expenditures do you plan to make in the next 5 to 10 years? (A new roof? College for the kids? New Humvee?) Now think even farther out. Retirement sounds like an OK long-term goal, right? What else gets you excited about saving and investing?
Next, take a moment to think about how closely your everyday spending reflects the goals you set for You, Inc. The best CEOs run their companies with laser-sharp focus, making sure every dollar they spend and save is aligned with their company mission. They aren't easily distracted and don't fritter millions away on ventures that don't add to their ultimate vision. So ask yourself: Are you funding the things that are most important to you?
Remember that $7 lunch you bought yesterday? When you annualize that expenditure, it comes out to around $2,500. What percentage of your annual income is that? Was the hour of satisfaction (and extra jiggle in your thigh) worth it?
No expenditure is too trivial to throw off your plan; every dollar counts. Can you afford to set aside just 10 bucks a week? Over the course of 15 years, you could pile up more than $11,600 in savings (assuming a 6% annual rate of return). By contrast, spending $10 a week on a credit card charging 18% interest will leave you owing $40,000.
Your assignment today: Take 10 minutes today to make a list of short-, medium- and long-term goals, and see how yesterday's spending stacked up against it.
We'll continue our series on self-auditing on Monday, with a discussion on how to put your savings plan in motion -- and on autopilot.
"Wherever you see a successful business, someone once made a courageous decision." -- Peter F. Drucker, management consultant and educator
No Holes in Whole Foods
Shares of Whole Foods Market (Nasdaq: WFMI) surged over 10% this morning following a strong earnings report.
The world's largest organic and natural food supermarket chain recorded third-quarter net income of $0.36 a share, which was 37% above the prior-year period and ahead of analyst estimates. Revenue increased 21%, thanks in large part to a 17% growth in square footage. Same-store sales were also strong, however, jumping 10.5%.
The most important measure of a company's success is the amount of cold, hard cash that flows into its coffers. (Earnings per share, remember, is just an accounting number -- and sometimes a dangerous fiction.) Whole Foods' free cash flow for the 40 weeks ended July 7 was over $147 million, a nice 90% increase over the same period last year.
The company's firing on all cylinders now. Fool co-founder Tom Gardner highlighted the stock a few months ago in Motley Fool Stock Advisor and pointed to strong management, financial discipline, and investor-friendly corporate disclosure as Whole Foods' strengths. That certainly hasn't changed, and with 10 straight quarters of 20% or better sales growth -- through the worst economic conditions in recent memory -- this green grocer is worth a closer look.
If CEOs are such great golfers, why are they landing so few shots on the green? In a case of bad timing by Golf Digest, the magazine is releasing its biennial list of the country's 200 best corporate golfers.
Why is this bad timing? Well, with CEOs under fire lately due to everything from insider trading to auditing shenanigans, the last thing the public wants to hear is that the executive ranks are spending time on the green rather than plotting new ways to earn more green for their companies and shareholders.
Topping the list for the third time in a row is Scott McNealy, chief of Sun Microsystems (Nasdaq: SUNW). I hear he got a hole-in-one... (pause for comedic effect) company. But seriously folks, his 0.3 handicap is awfully impressive, though literally and symbolically speaking, it means no CEO is up to par in his endeavors.
Golf's a great game. Even if your game is limited to getting the ball past the spinning windmill at the putt-putt course, it's still a solid distraction. Everyone deserves a little bit of recreational activity away from the office.
Scott's game was only marginally worse when his company was the toast of the tech-stock universe. But maybe this isn't the right time to picture company executives chipping away with their Callaways, caddies in tow.
With corporate leaders in the proverbial sand trap, Golf Digest's list may be a double bogey.
Discussion Board of the Day: Foolish Golf Tips
How good is your golf game? Have any tips to share with your fellow golfing enthusiast Fools? Is Tiger Woods really that good? All this and more -- in the Foolish Golf Tips Discussion Board. Only on Fool.com.
Shameless Plug: Refinance and Save
Does saving potentially hundreds of dollars per month on your mortgage sound good to you? Mortgage rates remain historically low, so now might be the time to refinance and save yourself some dough. Our Home Center can help.
Retailers' same-store sales rose 2.6% in July, led by discounters Wal-Mart (NYSE: WMT) with a 4.5% gain, Target (NYSE: TGT) with 2.2%, and Costco (Nasdaq: COST) with 5%. Beleaguered Gap (NYSE: GPS) saw an 8% decline, while Sears (NYSE: S) posted a 4.9% drop.
Same-store sales were flat for electronics retailer Best Buy (NYSE: BBY). Its shares lemminged over a third after the company today cut its EPS forecast from $0.30-$0.32 to $0.17-$0.21 for its Q2 that ends Aug. 31. On the other hand, same-store sales for home-furnishings retailer Restoration Hardware (Nasdaq: RSTO) increased 8.9% yet, because that was below expectations, shares tanked about 20%.
U.S. producer prices dropped 0.2% last month, surprising economists who had expected a 0.1% increase. Some believe that this evidence of low inflationary threat may give the Federal Reserve cover for another interest rate cut.
Intel (Nasdaq: INTC) joined Cisco Systems (Nasdaq: CSCO) and Microsoft (Nasdaq: MSFT) in announcing that it won't expense stock options, citing difficulty in valuing them. Intel also said it aims to keep dilution due to options to an average of below 2% annually.
The International Monetary Fund yesterday pledged a $30 billion aid package for Brazil, and today the leading presidential candidate, Luiz Inacio Lula da Silva, indicated that his government would conform to the package's budget strictures. The Brazilian financial markets responded with delight. The three top candidates are populists who have promised voters the moon, and there was uncertainty about their reaction to the offer from the IMF, known for imposing controversial conditions.
And Finally...
Today on Fool.com: The market imploded well before Enron, and who's to blame? We are.... Dividends defy gravity, even during a down market.... Find out whether a Roth IRA is for you, in Fool's School.
Contributors:
Bob Bobala, Robert Brokamp, Jeff Hwang, Tom Jacobs, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Jackie Ross, Reggie Santiago, Dayana Yochim
RSS Headlines
Fool UK
