Wednesday, December 15, 2004
Gold, Oil, and the Dollar
The dollar isn’t buying much these days at nearly $1.33 to get a euro and gold is jaw dropping at over $450/oz. It keeps going and people just might start hocking their fly rods for gold pans. Thank goodness at least oil isn’t on shooting for the moon any longer and that’s helping to ease inflation concerns.
I am quick to caution the investor against commodity and currency speculation. Nearly a year ago I wrote an article titled Don’t Shortchange the Dollar. At that time a euro would have cost you around a buck and a quarter. Since then the dollar has strengthened somewhat and weakened somewhat. Relatively speaking it hasn’t moved a great deal in either direction when compared to the time a euro cost less than a buck. Yes the dollar is now weaker than ever, but mind you it did strengthen be enough pennies and for long enough to shake out many a weak handed speculator wannabe. I view jumping into these markets akin to getting in on the day trading and dotcom game in the latter part of the last century. I was one of the foolhardy. I for one don’t intend to be fooled twice. To me it’s the difference between going for a leisurely horseback ride vs. hopping into a rodeo chute onto the likes of Little Yellow Jacket or Mossy Oak Mudslinger. It aint for everybody!
But it sure doesn’t hurt to watch, and you certainly should want to pay close attention to these three key ingredients in the economic mixer. This is a hangover economy. Beware the hair of the dog that bit you.
posted at 2:12 PM
Oracle-PeopleSoft
More than a year ago when Larry Ellison was asked what he intended to do with PeopleSoft should his hostile takeover attempt be successful. He aggressively and arrogantly responded that he would absorb the company, scrap the PeopleSoft brand, and can the employees. We shall soon know whether he was bluffing or not since according to Oracle, PeopleSoft has finally caved.
Regardless of Mr. Ellis’s intent, his unabashed tact has paid off for Oracle. PeopleSoft’s products require large investments in IT and infrastructure for the companies that purchase them. The loss of support and upgrades would be very costly such companies.
In another life I sometimes do contract IT and have worked with PeopleSoft products. A general observation I have made is that there has been a significant increase in demand for knowledge of Oracle’s Applications product line, which includes CRM, Supply Chain Management, and Financials among others. To put it simply, the strategy scared customers over to Oracle and made the deal inevitable. And it’s a deal that gives Oracle a market share lead. Remember that Oracle will also be getting what used to be J.D. Edwards. So it’s a twofer.
posted at 12:02 PM
Christmas Spending
So far retailers are saying that holiday shopping has been lackluster. Retailers are hoping for a strong finish. I think they will get it. My take is that it’s still very much an employers job market out there and that’s got employees overworked and leery about taking off early to get some shopping done. So shoppers are apt to make a last minute dash when work grinds to holiday halt and their bosses are on vacation. This is what happened last year and has been evidenced thus far by the fact that sales of luxury goods have been strong.
posted at 12:01 PM
Tuesday, December 14, 2004
United Airlines
The cost cutting continues. After two years in bankruptcy United continues to lose money. Its latest plan is to cut more than 500 employees from 18 locations and reduce its flight capacity by 14% after the holidays. The changes are intended to focus its business on the most profitable routes. Or would it be more accurate to say the least unprofitable?
posted at 7:05 PM
It’s a Mad Dash for Sprint
Sprint’s $35 billion bid for Nextel could be stymied by a trumping bid from Verizon Communications, which has received permission for the move from its partner Vodafone Group. Sprint and Nextel are expected to make an announcement today regarding their proposed merger.
posted at 1:23 PM
