Here at The Motley Fool, we love seeing old industries take new twists and turns. It appears the entrepreneurial spirit is alive and well in Hong Kong, where pet-shop owner Danny Tam is now renting dogs by the week. A Reuters' story says the strategy is working so far; since Tam started up rent-a-pooch in early summer, his business has grown fivefold and only 10% of his dogs have been returned.
Maybe the Rule Breaker Portfolio should look into this important, emerging industry. (Or maybe not.)
The Motley Fool 50, which dropped almost 2% today, can be rented for birthday parties and anniversaries.
In today's Motley Fool Take:
- HP's Bitter Honeymoon
- Discussion Board of the Day: Hewlett-Packard
- TV Plans for 9/11 Anniversary
- Quote of Note
- Take Your Social Security and Run
- Shameless Plug: Choosing Stocks Online Seminar
- Quick Takes: Nortel Networks, Philip Morris, Office Depot, more
- And Finally...
HP's Bitter Honeymoon
It was a wild courtship followed by a controversial wedding, and now the honeymoon looks more bitter than sweet. Hewlett-Packard
The report seems routine enough. The massive $3 billion in merger-related charges and the ultimate $0.14 a share in pro forma profits were expected. Sales dipping by 9% to $16.5 billion weren't far off the mark. Once again, investors ought to be awfully cautious in accepting pro forma results. There's no telling what expenses are included in those "one-time" charges.
The real problems begin when you break down the results. Hewlett-Packard's bread-and-butter imaging and printer business was up by 10%, while the personal systems and enterprise business Compaq offered up as a dowry suffered a 20% top-line slide.
Like a snake swallowing a house rat, it's a slow digestion process. This will take time. Hewlett-Packard CEO Carly Fiorina fought the unpopular decision to acquire Compaq and had little choice but to see it through, despite the slim margin of victory that isn't much of a mandate on behalf of shareholders.
Fiorina is trying to sell Wall Street on the synergy, when she's actually pitching a lemonade stand to make a lemon like Compaq work. But cost-cuttings are going as planned, and she still sees $2.5 billion in savings next year. That's a substantial sum, even if the company loses some of its sales growth to get there.
The economy is a remedial student, and it might bounce back just as Hewlett-Packard has fully absorbed the rodent in its system. That could be a case of perfect timing, as long as the company can take full advantage of the global downtime to jockey for market position. Unfortunately, the market's a lot of things, but none of them is patient.
Discussion Board of the Day: Hewlett-Packard
Did Hewlett-Packard do the right thing in buying Compaq? Should it have waited and gotten a better deal? What are the true strengths of the merged companies? All this and more -- in the Hewlett-Packard discussion board. Only on Fool.com.
TV Plans for 9/11 Anniversary
As the first anniversary of Sept. 11 approaches, companies have chosen various approaches for how to handle it.
Eight cable networks have announced plans to essentially go black and be commercial-free in the morning. According to Star.com, A&E, The History Channel, The Biography Channel, and History International (all A&E Television networks) will "fade to black and show a continuous scroll of the names of attack victims for 1 hour and 43 minutes," beginning at 8:46 a.m. ET. The Scripps Networks (HGTV, The Food Network, The DIY Network, and Fine Living) will replace their usual programming for two hours that morning with "a series of images intended to inspire quiet reflection."
Fox News Channel will air no commercials on Sept. 11, while CNN will significantly reduce its number of commercials.
In general, we can expect to see much less advertising than usual on 9/11. A New York Timesarticle (free registration required) reports that, "Most marketers, agencies, and media companies are deciding that they would rather go adless or limit their advertising than risk being perceived as exploiting the day for mercenary purposes."
Companies planning to significantly cut back or completely cut off advertising include the American Airlines division of AMR
Many companies that plan to advertise will keep ads away from coverage related to the attacks. But that may be hard to do, as networks scramble to put together massive memorial lineups. Some television critics are urging networks to use a little restraint and rein in the hype, but their words are not likely to be heeded.
Brace yourself for a week or more of "9/11: The Day That Changed America," "America Remembers," "Concert for America," and "9/11: The Day America Changed."
Quote of Note
"Peace is not merely a distant goal that we seek but a means by which we arrive at that goal." -- Dr. Martin Luther King, Jr.
Take Your Social Security and Run
You know you want it. It's so close you can almost taste it. The question is, if you get it, can you live with the consequences for the rest of your life?
Of course, we're talking about Social Security. You can begin receiving your retirement benefit as early as age 62, or you can wait until your 70s. The earlier you take it, the smaller the check will be -- permanently. So should you take the money as soon as possible, or should you wait for the fatter payout? The answer -- as it is for an adult with bladder problems -- is... depends.
If you're below full retirement age but still working, it probably doesn't make sense for you to start receiving Social Security. That's because your benefit will be reduced $1 for every $2 you earn above an annual limit (which is $11,280 this year, but is increased annually). If you're not working, then it might be worth receiving Social Security sooner (though smaller) rather than later. That depends on several factors, including your...
Full retirement age
This is the last year that 65-year-old Americans will be able to receive full retirement benefits. Henceforth, full retirement age will begin to creep up to 67. By visiting the Social Security website, you can see what your full retirement age will be and how much your benefit would be reduced if you receive benefits early.
Putting it off
Even though you can start receiving benefits at full retirement age, Uncle Sam gives you a reason to put it off. For every year after your full retirement age that you postpone receiving benefits, your eventual check will increase by 6.5%. If you're eligible at age 65 but don't cash in until you're 70, your benefit will be almost a third bigger. Is it worth the wait?
The breakeven age
By visiting this calculator at the Social Security website, you can get an estimate of your benefit. After submitting your numbers, click on the "break-even age" tab to get a calculation of how long you must live to make a delayed benefit worth it. That's what it comes down to: how long you will live, and thus how long you'll receive benefits. For most people, it will take 13 to 15 years to make a later, bigger check pay off.
Unless longevity runs in your family (you can find out by asking your 115-year-old grandmother), you would probably benefit by taking the money as soon as you can.
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Former WorldCom Chief Financial Officer Scott Sullivan was indicted today on seven charges, including conspiracy to commit securities fraud. Sullivan has been under investigation for allegedly helping to hide $3.8 billion in expenses for the now-bankrupt telecom firm.
Continuing an August tradition, Philip Morris
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