Only those wanting to believe in the fairy tales coming out of Washington would have believed the employment picture was improving. But the massive numbers of people simply having given up on looking for work is what is driving the unemployment rate down. The real reason the Dow Jones Industrial Average tumbled 168 points, or 1.3%, on Friday, was the labor force participation rate -- the number of people actually still working -- dipped to 64.8%, the lowest level since 1981.
But some companies fell even harder than the markets, so first let's see whether they had good reason to drop. Sometimes, panic-fueled declines can make excellent buying opportunities.
A disconnect on growth
Making something that's so popular could end up biting you if you can't fill the demand. That seems to be at play with Qualcomm
Whatever the cause -- and some say Samsung is behind it, having bought up all the chips for its new Galaxy smartphone -- the problems are rippling out through the industry. "Motion processing" chipmaker InvenSense
But I'd view the slapdown Invense got as a buying opportunity. Taiwan Semiconductor Manufacturing says the worst of the capacity shortage is behind it so that Qualcomm and NVIDIA
That should mean supply lines will open soon enough and product will start flowing again. I've already rated InvenSense to outperform the market indexes on CAPS because not only are gyroscopic, sensor, and other technologies integrated into the Apple
2b or not 2bebe
Retail's party girl, bebe stores
bebe narrowed its losses from the year-ago period, and revenues rose 10.5% in the fourth quarter, yet its walk of shame was oh-so-predictable, and in fact I did that three years ago, when I said it was on a path to drag its name through the mud.
The fashion retailer lost its fashion sense and instead embarked on a campaign to appear hip. Out went its bebe sport stores and in came PH8, a nearly unpronounceable amalgam of "fate" and the streetwise "phat." Also on board was a low-cost concept store called 2b, and that upright model of respectability, Kim Kardashian, was brought in to hype its lines. PH8 was a dismal failure and closed in 2010, and Kim was quickly tossed out on her prodigious backside, yet 2b lingers on (and the Kardashians linger on as well, both on TV and now at Sears Holdings).
But bebe is still grasping at how best to run its business with the latest idea being to bring its online store in-house. In fact, that was the reason behind the disappointing results bebe had in the quarter, though management believes the long-term benefits outweigh the near-term costs.
With one in five CAPS members rating the fashion retailer to underperform the market, it's clear that like some certain starlets they don't believe the company has learned its lesson. But tell me in the comments section below or on the bebe stores CAPS page whether you think it can make it to recovery, and then add the stock to the Fool's free portfolio tracker to see whether it can regain its fashion sense.
Ready for a resurrection
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Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Qualcomm, and InvenSense. Motley Fool newsletter serviceshave recommended buying shares of Google and NVIDIA and writing puts on NVIDIA. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.