Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. Let's take a look at five dumb financial events this week that may make your head spin.
1. Gag me with an orange apron
The life of a visionary is short, so I have no idea why Home Depot
"We don't think we're at the bottom yet, but we think you can see it from here," he told the audience, before pointing out that the market will remain "under pressure certainly through the rest of this year and probably into the beginning part of 2009."
Nice job, Blake. You just lit the fuse. It's a long fuse for sure, but good luck explaining what you actually saw if the company is still in a funk a year from now.
Take a cue from some of the tattered homebuilders. Hovnanian
More to the point, Blake: Toll Brothers
2. Chico's and the plan
In one of the more unlikely endorsement deals to come out of last month's Olympics, Chico's FAS
Don't get me wrong. I think Ms. Phelps was one of the more inspiring stories of the Beijing games, as she cheered her son on to gold medal after gold medal in the pool. Once Chico's discovered that she was routinely wearing Chico's outfits in the stands, the allegedly six-figure endorsement deal was a natural. I guess it didn't occur to Chico's that comps at its stores fell 10% last month, even as Ms. Phelps was generating plenty of screen time for its wares.
I also think it's great that the otherwise fickle fashion industry can embrace a plump, older figurehead at a time when too many people are obsessed with youth and body image. However, there's a problem when you back a "real person" who has never been known for fashion sense. Does anyone remember when Penny Marshall and Rosie O'Donnell were doing Kmart ads? Even when you go to the other extreme, like Morgan Fairchild with Old Navy, it doesn't work.
Unless Chico's is conceding everything short of the hipster grandmother demographic, I don't see the upside here. What does the FAS in Chico's FAS stand for, Find Another Spokeswoman?
No offense, Ms. Phelps.
3. Humpty Dumpty had a big fall
Details of the new Starbucks
- Starbucks Perfect Oatmeal
- Chewy Fruit & Nut Bar
- Apple Bran Muffin
- Berry Stella
- Power Protein Plate
Perfect. Starbucks was worried about the aromatic clash of greasier, meat-based sandwiches with its sweet java scents, but what about my ears? Do I really want to sit next to someone slurping down oatmeal or chewing down a hardboiled egg? Yes, a hardboiled egg is really part of the protein plate.
And what's the deal with items like fresh fruit, muffins, and fruit bars. Can't folks just grab these items from home? Why pay Starbucks a premium? If a busy commuter doesn't have the time to nuke instant oatmeal at home, will she really have the time to sit and eat the stuff at a local Starbucks? The allure of quick-service breakfast items is the tall order of home prep. I can't piece together an Egg McMuffin at home. I don't even know how to get the cheese into the cheesy tater tots. I have no problem with the healthy menu, but challenge patrons. Don't insult their economical sense.
4. Is a traveling zoo like a traveling circus?
Travel deals publisher Travelzoo
It is losses overseas -- which can't be used to offset profits back home -- that have led to mind-boggling effective tax rates of 98%, 164%, and 168% over the past three quarters. Maybe it's just me, but I would rather have a million profitable Europeans opting in than 2 million who aren't.
5. Thinking outside of the Xbox
It's official. Starting today, you can get an entry-level Xbox 360 for just $200. It's a gutsy move by Microsoft
However, what if it isn't able to overtake the Wii in unit sales this season as the price leader? What if the Blu-ray-playing PS3 laps it on home theater functionality? This is the holiday season that will make or break the 360. If it can't gain traction now, what's next? Free Xbox 360s with the purchase of every Windows Vista?
Let's beat the dumb drum:
Starbucks, Microsoft, and The Home Depot are Motley Fool Inside Value selections. Starbucks is a Motley Fool Stock Advisor pick. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, 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 disclosure policy.