Finance is prone to problems and complaints. There's too much regulation, then not enough. There's the politically valuable common man (the "working class") and there's Mr. Burns. Financial information is abundant; there's too much. Jim Cramer should annoy most sane people.So when you open floodgates of financial media, you either have to ignore most noise, or only rarely but deeply pay attention. Faro prefers the former. Selecting what is newsworthy is hard given the prevalence of financial data: CPI, Case-Shiller, employment, level of the Dow vs eight days ago (who really cares?), oil, commodities, trade imbalances, inflation, etc.
These all have value. But meaningful short-term economic forecasting is extremely difficult. There is, however, a great source of data that come direct from companies (though you should be selective since most CEOs are salesman). Only pay close attention to companies whose business models you admire or that have a compelling special situation scenario--real "change" in the works.
This site is following three companies during this week's earnings calls: Borders, Costco and Tiffany & Co. All are household names and operate in the easy-to-understand worlds of books, food and electronics, and high-end jewelry.
All should add insight to investors on commodity costs, consumer behavior, and luxury consumers. Borders is in the news as a potential acquisition target for Barnes & Noble. A combination would have 30% of the book market. Costco brought in 1.3B in membership fees, curiously close ((1.2x) to its reported FY2007 profits. That's a fair trade-off for good food, a 90-day return policy, and tasty Saturday samples. Tiffany seems immune to the current economic woes. Drop in USD will be interesting in results, as will expansion plans.
Grab a pen, pay attention and ignore the buzzwords.
Wednesday: Borders
Thursday: Costco
Friday: Tiffany & Co.
Disclosure: None
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