Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Lay off the decaf
You know what's sillier than Wednesday night's horrendous quarterly report from Starbucks
Sure, the company wasn't getting a lot of traction there. Stores were pouring a lot of unordered decaf down the drain. Logic would dictate that decaf would be a better seller later in the day, but reality was clearly telling Starbucks otherwise.
However, when a patron walks into a quiet store -- as most are after the morning rush -- and is obliged to wait an extra four minutes or so because decaf is made on demand, doesn't that waste everyone's time? Eventually, customers will stop coming at all, rather than subjecting themselves (and the baristas) to the unnecessary hassle.
I'm all for trimming waste, but this is another move in the company's downward spiral. The ideal solution is not to cut decaf service, but to attract enough afternoon traffic to make all of its products -- decaf included -- more popular.
2. Nobody trades Sirius anymore -- it's too crowded
Sirius XM Radio
Analysts come and go all of the time, but Ratcliffe's reason for moving on stands out.
"The equity price is not being driven by fundamentals or the future of the underlying business, but rather purely by speculation as to the company's ability to refinance or restructure upcoming debt maturities," he notes.
Sure, Sirius XM has been taken over by speculators on both side of the fence. Still, that isn't a good enough reason to ignore a broadcasting giant that remains one of the exchange's most actively traded stocks on a share basis.
3. Bezos' blooper
"We're particularly grateful for the unusually strong demand for Kindle in the fourth quarter," he notes in the earnings release.
Nearly everyone knows that the company will introduce the second generation of its Kindle e-book reader next week. However, the original Kindle has been out of stock since mid-November, entirely missing out on the holiday selling season. I'm sure there were plenty of people placing backorders, but Bezos seems silly touting his company's own inability to meet customers' demands. If anything, the Kindle's poorly timed vacation opened the door to e-book competition from gadgets like Sony's
4. Ring my Dell
When will Dell
Does anyone remember when Dell tried to take on the iPod? It was not a pretty Ditty. Dell needs to stick to its knitting. Sure, it can get away with flatscreen television sets -- they're glorified monitors, really -- but it can't compete against companies like Apple
Why try, when the effort will only confuse the Dell brand and associate it more closely with inevitable failure?
5. A year of dumbness
Finally, why settle for a week of stupidity when you can reflect on an entire year of lamebrain moves? Check out our special "The 10 Worst Stocks for 2009" feature for a glimpse into some of the market's biggest losers. You can even cast your vote for the coming year's biggest bellyflop stock.
Let's beat the dumb drum:
Starbucks and Dell are Motley Fool Inside Value picks. Starbucks, Amazon.com, and Apple are Motley Fool Stock Advisor picks. The Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz is a fan of dumb and smart business moves. Investors can learn plenty from both. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a highly intelligent disclosure policy.