McDonald's introduced a new Happy Meal for adults today. For about $6, you get a salad, a bottle of water, a "stepometer," and a booklet with tips for walking and working out. But the country is squarely divided over this new marketing gimmick. A poll of over 20,000 people on CNN.com this afternoon found 50% saying they would try the new Happy Meal and 50% saying they would not.
Either half of Americans know a marketing gimmick when they see one, or half of them are really dissatisfied that the adult Happy Meal prize is just so lame.
In today's Motley Fool Take:
- Dow 10,000? Ooops!
- Shameless Plug: Motley Fool Champion Funds
- Overstock Rocked
- Discussion Board of the Day: Low Carb Way of Life
- Oracle, PeopleSoft Need Owners
- Quote of Note
- More on Fool.com Today
Dow 10,000? Oops!
By Rick Aristotle Munarriz (TMF Edible)
They call nice round numbers like 10,000 psychological barriers. As the Dow Jones Industrial Average buckled below that mark at yesterday's close -- the first time that has happened this year -- one is left to wonder if the market should see a shrink about the shrink in its valuation.
Rising interest rates a concern? Sure. You can't discredit that. If yields spike and you start getting attractive returns on money market funds, CDs, and bonds, that's going to pose a competitive threat to stocks -- if only in the near term. But if rising rates are tied to a buoyant economy with improving corporate profits, that obviously has to be factored into the equation. I get all that. I do. But what's the deal with holding on to a number just because of all the zeroes behind it?
Dow 10,000 a barrier? Bah! It's barely a speed bump. Six years ago, as the media got all jubilant at the sight of the S&P 500 crossing the 1,000 mark, I was less euphoric. What's in a number, really?
"Did you ever have a car whose odometer hit 100,000? Odds are you were driving by Aunt Edna's Crab Shack or just pulling up to pick up some dry cleaning," I wrote at the time. "It was just another day in automotive living. Maybe you took the time to smile and reflect, but you were certainly not at your intended destination."
So, yes, I do realize that the S&P 500 is now a 9% slide away from revisiting that milestone. Six years of gains erased? Nope. Any good Motley Fool Income Investor reader knows that dividends don't factor into that equation. But what's the significance of the S&P at 1,000 or the Dow at 10,000?
A stock analyst who would blindly issue a buy rating at $50 and a sell at $100 would be laughed out of grade school. Where is the fundamental analysis? You're not even talking about the same basket of stocks: Dow components like Pfizer
So, yes, the Dow closed below 10,000. I get it. Wake me up when that, in and of itself, actually means something.
Longtime Fool contributor Rick Munarriz really doesn't have an Aunt Edna. He also does not own shares in any of the companies mentioned in this story.
Stock ownership isn't for everyone. But mutual funds aren't always flowers and candy, either. Find out which funds will help you wallop the market and sleep well at night. Give Shannon Zimmerman's Motley Fool Champion Funds a free try for 30 days.
By Jeff Hwang
Friday night, Overstock.com
In the first-quarter letter to shareholders dated April 22, Overstock President Patrick Byrne discussed the volatile nature of the company's cash balance due to the cash-to-inventory-to-cash cycle of the business:
In theory, our current cash will suffice to handle this year's September-October inventory build, even assuming our present high rate of growth continues. However, that would necessitate running cash uncomfortably low just before the holidays. In addition [to a $20 million credit line with an affiliate of Wells Fargo
(NYSE: WFC)], our shelf filing was declared effective by the SEC in March, so we can issue stock if we decide we need more capital and the environment is right.
In other words, we were told this was coming -- and why.
Basically, the cash will act as a safety net as the business grows. In the fourth-quarter letter to shareholders, Byrne noted that, despite closing the quarter at $40.3 million, the cash balance had hit a nadir during the quarter of $9.7 million. Compared to that, the $50 million or so in proceeds from the share offering is a significant amount of cash to help ensure that Overstock has enough to fund inventory growth without cutting it too close.
Of course, a stock's valuation is called into question whenever a company raises cash by issuing stock following a huge run-up. That's especially true when the whole sector -- including eBay
As for whether Overstock is undervalued or just cheaper than Amazon.com
Fool contributor Jeff Hwang owns shares of both Overstock.com and eBay.
Folks scaling back on their carbohydrates intake has helped some eateries while punishing others, but has it had an impact on you? Has an Atkins-approved diet helped you or someone you know? Want to know how to get started? All this and more -- in the Low Carb Way of Life discussion board. Only on Fool.com.
By Tim Beyers
My wife and I just last week returned from a relaxing vacation across the Atlantic. To get back in the writing groove, yesterday I did what I usually do: scan the news for proof that we're actually home. It didn't take long. Seeing that a trial date had been set in PeopleSoft's
Database giant Oracle is already facing a court date with the Justice Department on June 7 over its proposed hostile takeover of business software supplier PeopleSoft. On Nov. 1, it will defend against PeopleSoft's charges of libel and unfair competition.
Regardless of who wins, these contests have proven costly to shareholders. Owners of PeopleSoft have seen the value of their stake drop 29% from the stock's 52-week high of $24.04 to $17.07 a share at yesterday's close. Those holding Oracle shares haven't done much better. The stock is 26% off its 52-week high of $15.51, finishing trading yesterday at $11.40.
Ouch. And yet I don't feel sorry for Oracle and PeopleSoft shareholders, because they aren't without blame for their current predicament. Really, I'm serious. Superinvestor Benjamin Graham was clear in his writings that shareholders should act as if they own 100% of the companies they invest in. As an owner, Graham was often the conscience of management, challenging executives when cash wasn't applied well or when strategy failed to deliver a reasonable return on equity.
How many of you who own a slice of either Oracle or PeopleSoft would meet Graham's standard? Have you read the materials covering the proposed merger between the two? How about the proxy statements that detail management proposals and pay? I fear the knowledgeable investors who contribute regularly to our Oracle discussion board are in the minority. I hope I'm wrong, of course.
The bottom line is there is no excuse for not engaging management as an owner, especially when it's so easy to contact them. That's what investor relations departments are for. You can reach Oracle's here and PeopleSoft's here. Please, if you have an opinion about either of the lawsuits, do as Ben Graham would: Act like an owner.
Fool contributor Tim Beyers is setting aside time to read the proxy statements and annual reports that piled up during his vacation. He has no stake in any companies mentioned, and you can view his Fool profile here .
Dayana Yochim asks: Can you cover the bill for the second half of your life? And smart asset allocation is critical to successful fund investing. Shannon Zimmerman shows you what it takes to Build the Perfect Portfolio... And don't forget to check out the second installment of David and Tom Gardner's interview with Starbucks Chairman Howard Schultz.
In other news:
- Pay More for Payless?
- Sony Makes the Cut
- Good vs. Evil Mutual Funds
- Martha: I'm Too Important for Jail
For a list of all our stories from today, see our Today's Headlines page.