Apparently, there are some real stock market junkies at the Pentagon. According to CNN, the Department of Defense constructed a website -- essentially a simulated stock market game -- that would offer traders the chance to win money for correctly predicting terrorist attacks.
Yes, you read that correctly. Participants were to buy and sell futures contracts on terrorist plots, kind of like energy traders betting on future oil and gas prices.
Fortunately, the Senate Armed Services Committee stepped in this afternoon and put the kibosh on the whole project. Pentagon staffers had hoped the simulation would provide clues and scenarios to predict terrorist machinations.
Just has to make you wonder what else the Pentagon is doing that you know nothing about, doesn't it?
In today's Motley Fool Take:
- U.S. Is Lovin' McDonald's
- Quote of Note
- Berkshire's Billion
- Achieving Perfect Credit
- Low-Fare Atlantic Coast Air
- Discussion Board of the Day: Disney
- Quick Takes: Immersion, Brightpoint, U.S. consumer confidence index, more
- And Finally...
U.S. Is Lovin' McDonald's
Big Mac daddy McDonald's
Earnings dipped 5% to $470.9 million, or $0.37 a share. In the prior quarter, McDonald's earned $497.5 million, or $0.37 a share. As the company predicted earlier in the month, restructuring costs ate into earnings. It's part of the fast-food giant's moves to slow new-store build-out.
Revenues rose 11% to $4.28 billion, and systemwide sales (which include sales from franchises) jumped 10% to $11.47 billion. Accounting for the weak dollar drops sales growth to 5% and 4% for company and systemwide sales, respectively.
McDonald's made real progress in the U.S. during the quarter. Comparable sales increased 4.9%, the highest growth rate in five years, according to the company. Premium salads and McGriddle breakfast sandwiches are pulling 'em in here. McDonald's is also developing healthier alternatives that it hopes will drive sales.
From here, McDonald's needs to find a way to maintain its U.S. momentum, while also generating the same buzz overseas, to offset currency effects that will eventually turn against the company. To quote fellow Fool Bill Mann, "McDonald's bread is really buttered internationally these days, so the currency gains are important and should be noted."
McDonald's stock has run up from around $12 back in March to its current $22 level, signifying that investors believe the company's turnaround is for real and solidly under way. Chairman and CEO Jim Cantalupo won't concede success yet, though, with an eye towards 2005 as the date the company should be fully on track.
Quote of Note
"People rarely succeed unless they have fun in what they are doing." -- Andrew Carnegie, Scottish industrialist, 1835-1919
When it comes to money, Warren Buffett isn't one to monkey around. Well, maybe just this once. Pepsi's
Irony runs soda syrup thick here because, of course, Berkshire Hathaway has been a longtime investor in Pepsi's rival Coca-Cola
Pepsi paid an undisclosed seven-figure sum for Berkshire to assume the risk of the show's final contestant winning it all. As an insurance giant, Berkshire Hathaway didn't need to study its actuary tables to realize that this was a good deal. The odds of someone walking away with the billion-dollar prize is a bleak million-to-one long shot. That's chimp chump change for Berkshire, which should emerge as the real winner here.
Berkshire will have to pay no more than 250 times what it is receiving from Pepsi and the chances of paying it out, to any of the thousand participants, are one in a thousand? Nice odds. Find a casino that pays out just 25% of the take? Even the state-run lotteries have better distribution chances. Berkshire looks to be the one that will have a Coke and a smile by the time it's all over.
Achieving Perfect Credit
Do you have any idea what's in your credit report? Remember, what you don't know... Well, you know. Join us for our upcoming online seminar, Achieving Perfect Credit, and find out how to fix the financial boo-boos you've committed through the years and set yourself on the path to clean credit living. The seminar starts August 1, so sign up today!
Low-Fare Atlantic Coast Air
Shares of Dulles, Va.-based Atlantic Coast Airline Holdings
Atlantic's United Express service currently provides 85% of total revenues, the rest flying in on its Delta Connection operation with Delta Air Lines
Atlantic has produced consistent free cash flow outside of the slow first quarter, but as yesterday's market showed, shareholders will bail if the business is threatened. The demise of the United deal may serve as a catalyst for the new low-fare structure that Atlantic reportedly has considered for two years, but I suspect another force at work, too. It's called JetBlue
This low-fare carrier and Whitney Tilson favorite currently flies from Atlantic's Dulles hub to California and Florida and could certainly expand. Skeen doesn't need that. By emphasizing that Atlantic has the most departures a day from Dulles and plans 275, plus up to an additional 50 with plans to buy 15 to 25 more planes by early 2004, he may be trying to keep JetBlue from weighing in further.
All of this is good news for the Baltimore-Washington area, where travelers must now drive to Baltimore-Washington International Airport for low fares, courtesy of Southwest
To be sure, Atlantic faces headwinds from JetBlue, Southwest, ATA
With about $189 million in cash and equivalents and only $53 million in total debt as of Mar. 31, 2003, Atlantic will get a running start. Whether it takes off is pure speculation.
Discussion Board of the Day: Disney
Did you catch Spy Kids 3D over the weekend or did the 3D gimmick keep you away? What about Pirates of the Caribbean? Was Disney's attraction-titled release a swashbuckling good time? And, hey, how about that Finding Nemo? All this and more -- in the Disney discussion board. Only on Fool.com.
Mobile phone distributor Brightpoint
Speculation in Chinese Internet media-related companies continues apace. Shares of Netease.com
The Conference Board reported that its index of U.S. consumer confidence fell from 83.5 in June to 76.6 in July. The index measures views of the economy six months from now. The index of current sentiment fell from 64.2 to 61.9
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- JDS Uniphase's Telecosmic Trip: Tom Jacobs wonders if the fallen king is a turnaround bet.
- InterVideo Poised to Roll: Jeff Fischer describes the many positive aspects of InterVideo.
- Untying the Knot: Untangling money messes outside the bonds of marriage.
- In Fool's School, at what point during a stock market crash should you panic?
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim
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