Post of the Day
April 21, 1998
From our AOL
Eastman Kodak Board
Subject: Re: News
Congratulations on your patience Larry. When I saw the price quote suddenly at $70, my first thought was, "Yea! Uncle Lar's in the black!"
Now for the pertinent question: Should you sell or hold on for a while longer?
I think you should probably give serious consideration to selling if:
- It keeps you awake at night.
- You learned something unsettling that you didn't appreciate when you bought.
- Something changed for the worse in the economics of their business that they are not dealing with appropriately.
- Investor expectations for the stock have become irrationally optimistic? (That doesn't mean euphoric. If the business is going into the toilet, then even neutral sentiment would qualify.)
- Kodak abandons its efforts on digital.
You should probably hold if:
- You bought while following a "Dogs of the Dow" strategy.
- You think that the finally-announced "restructuring" will continue to help them earn money even on lower operating revenues (some of the lower earnings in absolute terms were due to spinning off a business) and will allow them to compete better with Fuji on price and defend or grow their market share both at home AND abroad.
- If you think China will become as large a market for film as the US or Japan, and that Kodak's recent deal with them will translate into an advantage in that market.
|I don't think that "digital" is going to determine the outlook for Kodak's stock in the next year or two. I DO think the digital products and services they come out with in the next couple years will have a big influence on where "they" are six or seven years from now.|
I don't think that "digital" is going to determine the outlook for Kodak's stock in the next year or two. I DO think the digital products and services they come out with in the next couple years will have a big influence on where "they" are six or seven years from now.
I say "they" because my only affiliation with EK is the stock. The fact that I chose go to a couple web pages to look up facts, figures, and dates to support my posts doesn't make me an EK employee any more than my having visited Rochester a couple times and remembering a few names like Genessee River and Lake Canandaigua.
Kodak DOES have real problems, some of which are external but more of which are internal; and they neither begin nor end in the office of the CEO. I am not some naive George-worshipper. The restructuring process he is FINALLY beginning (and probably ONLY beginning) should have begun at least a couple years ago. He too, probably made the mistake of thinking that "as goes the CEO so goes the company", and that with his brain transplanted into the CEO's office the "team" would get moving again and unleash the power of the Kodak brand.
Well guess what? He is now in serious danger of having his high reputation forever scarred because THAT'S NOT HOW IT WORKS! If it was so simple, one of the several CEO's over the last decade would have found the magic button in his office and pushed the sucker. I believe they were all very smart people who wanted very badly to succeed. But there are many levels of management that ALL have to work effectively in order for a company the size of Kodak to flourish. The more lower and mid-level managers that are brought in from the outside, who aren't stuck in their ruts and petty agendas the better off EK will be down the road. IMHO.