Time and time again, investors hold onto stocks of “loser companies.” Why? Because at loser companies, the hype around the future is always stronger than the actual financial performance. “If this product hits in a big way, we will make a ton,” proclaims the well-polished CEO, and then it’s backed up by a dizzying amount of financial projections from the CFO.

You, the investor, get hooked on the stock like a crack addict does on lines of blow at a rave. Even as the stock is causing you severe financial agony, the future is supposed to be bright and by now, you might as well hold onto the stock since it’s down 10 to 20% in three months because the next quarter will be the “big one.” Yeah, sure, dude.

Identifying loser companies is relatively easy for our in-house stock guru, so the twist today is providing a decoded toolkit for noticing loser companies with no outwardly apparent loser qualities. The guinea pig: Pepsi.

Why Pepsi Looks Great if You Don’t Know Shit About Investing

• CEO is wicked smart, highly regarded, and has brought significant change to the company.

• Pepsi has a diversified product portfolio ranging from fatty, surgery snacks to healthier alternatives. Diversification in revenues is usually a positive attribute of a company.

• Tons of cash on the balance sheet to fund future acquisitions and product innovation.

• Deep bench of executives to eventually succeed the present CEO.
 

Why It’s Still a Loser Company

• #Fails the rivalry showdown: Coca-Cola shares have outperformed Pepsi (Coca-Cola: +12.4% ; Pepsi: –3%) in the past 52 weeks, owing to strong product innovation, strong growth in growth brands, and strong marketing programs.

• #Fails the financial data minutia test: Due to paying significant premiums for acquisitions (brands and bottling operations), basically investing in the long-term with muted near-term financial payback, Pepsi’s return on invested capital metric has declined to 11% from 22% a couple years ago (competitors have a number around 15% to 19%).

• #Fails the Wall Street sentiment test: Analysts are calling for a breakup of Pepsi to “unlock value” (be smart: sell businesses, or turn them into separate publicly traded companies, so that Pepsi could score money and focus on the most important brands) and management changes. This type of discussion does not happen at companies performing solidly (investors are loving Coke’s CEO Muhtar Kent).

• #Fails the coast-is-clear test: Pepsi recently announced layoffs and other cost reduction efforts to save $1.5 billion over the next three years.

• #Fails the cool new product test: Coke has developed a pioneering new fountain machine for fast food restaurants that allow consumers to create their own mixed drinks. Pepsi is just trying to get a hot new product to market with the correct marketing.

To receive your one-week free membership trial, and score the remainder of today’s member note, send an email to newsletter@decodingwallst.com.

Decoding Wall St. is an interactive, online investor education platform designed to teach the masses about investing and the world of Wall Street in a fresh, easy to understand way. For those aspiring to become investors, or those relatively new to the world of investing, our Gumshoe membership teaches you everything there is to know about what the “experts” are talking at you on a daily basis. As for industry pros, our Sleuth membership helps to decode all of the nitty gritty stock market facts and jargon you love, and then guide you to winning stocks based on that knowledge. Both membership options provide the member with direct access to Editor in Chief of Decoding Wall St., stock market/investing expert, and media personality Brian Sozzi. decodingwallst.com

PREVIOUSLY: How Much Do You Really Know About Your North Face Jacket?

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Why do we have this funny feeling inside that every single user on Facebook is not aware of the impending IPO (initial public offering)? We aren’t referencing the dogs and babies that rock their own pages and fly timelines, but the 15-year-old sneaking on the iPhone app during class or the 65-year-old mom reconnecting with friends made at Woodstock. Suffice it to say, if groups such as these have not as least heard of the Facebook IPO, and are unaware of the planned trading symbol of the stock (“FB”), then there is teaching work to be done on our part.

The Facebook IPO has been discussed from every possible angle since we previewed it months back. There is a chance that Wall Street titans, and the media that follow them, could easily rattle off five interesting facts on Facebook faster than listing their breakfasts for the past five days. We want to decode the final remaining moments of Facebook as a super-secretive, private company so that you understand the major frenzy likely to find the newspapers by week’s end.
 

1. Facebook Is Defiant

The stock market has hit the skids, we won’t bore you with the Decoded reasons. Facebook is truly thumping its chest, though, recently taking the “price range of its IPO to $34–$38.” For any normal company seeking to do an IPO amid rampant stock market swings, raising the range of money that it’s seeking would not be the go-to action. If a company were to do this, it risks a poor reception for its stock as underlying demand by Wall Street titans and the mom-and-pop investor ensues. Weak demand, less money raised on the most important day in a newly borne public company’s history. Facebook knows its IPO has a considerable interest behind it by people all over the world, and is looking to swing for a homerun and raise as much money as possible.
 

2. Why Go Public Now?

Facebook shares have actually traded on what is known as a “private market” for a while. This is where early believers in the company, and those wanting to get in pre-IPO, bought and sold stock. The number of shareholders in a private market for a company’s stock has a limitation, however.
 

3. The Fear Is Raging

If Facebook reaches the high end of its IPO range (that is, the amount of loot it’s trying to raise from people), it could end up with an initial $104 billion valuation (how much the company is worth) by the end of a single stock-trading session. That would make Facebook worth more than Citigroup and McDonald’s. Furthermore, it would be worth three times more than when Google went public in 2004.
 

4. The Demand Is High …

Facebook IPO is “oversubscribed,” meaning the demand to own a piece of a social media website exceeds the number of shares it plans to sell.
 

5. … But Some Don’t Think Facebook Will Deliver

“Institutional investors” were not enthralled with the company’s long-term financial prospects during its “roadshow” (where executives of the company sell the company’s amazingly bright future, while sharing coffee and jokes), being unsure if Facebook would deliver enough sales and profits to support a valuation of over $100 billion. These “deep-pocketed investors” tend to hold stock in a company for a long time so their vote of little confdence in Facebook is concerning.
 

Decoding Wall St. is an interactive, online investor education platform designed to teach the masses about investing and the world of Wall Street in a fresh, easy to understand way. For those aspiring to become investors, or those relatively new to the world of investing, our Gumshoe membership teaches you everything there is to know about what the “experts” are talking at you on a daily basis. As for industry pros, our Sleuth membership helps to decode all of the nitty gritty stock market facts and jargon you love, and then guide you to winning stocks based on that knowledge. Both membership options provide the member with direct access to Editor in Chief of Decoding Wall St., stock market/investing expert, and media personality Brian Sozzi. www.decodingwallst.com

Nothing But Gold Productions is a multimedia production company focused on creating accessible financial content across various platforms. Nothing But Gold Productions has a diverse client base that includes traders, individual investors, major retailers, and content providers. More information can be found at: www.nothingbutgoldproductions.com

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Not a day goes by that someone on the streets can’t be spotted wearing with pride a North Face fleece. Even in the early summer mornings, throwing on a North Face just seems like the proper thing to do in making that first run to Starbucks.

Surely, when catching a bout of the sniffles, the go-to article of clothing is not a $5 thermal from Walmart, it’s — you guessed it — that comfy, broken-in black North Face fleece. (Who buys the white ones anyway? Come on, that would require it be cleaned twice a month).

We are willing to bet our closet full of North Face gear that while reading up to this point, you think North Face is a mega company pumping out $175 form-fitting security blankets. Unfortunately, that thought, while easy to understand, couldn’t be further from the truth. But hey, that’s why Decoding Wall St. is here — to bring Wall Street to every single person who’s unaware that — gasp! — there is no North Face Inc. But we can help you decode whether the stock is a worthwhile investment.

The Decoded Truth on North Face

North Face is just a cog in the wheel of apparel manufacturing conglomerate VF Corp. (Sound Smart: stock symbol is VFC … tell that to the Macy’s store associate). This ultra-huge company sells jeans, fleeces, hats, backpacks and boots under a few brands that may ring a bell:

• Vans
•  Jansport
•  Wrangler
•  Lee
•  7 for All Mankind
•  Timberland (bought in 2011)

Let’s not stop the decoding fun there on this superhuman company:

•  VF Corp. produces 400 million units of merchandise a year.
•  It churns out products for no fewer than 36 different brands.
•  Some of you may have driven by a VF Corp. distribution facility (Sound Smart: “DC”) and not realized it. The company operates 30 of them.
•  Don’t for a second think VF Corp.’s brands could only be purchased at Macy’s or Dick’s Sporting Goods. On the contrary, the company has over 1,050 retail stores selling brand specific merchandise (such as the Vans store in the local mall).
•  Ever see a North Face advertisement in Men’s Health magazine? Of course you have, and so have others, as VF Corp. spent $540 million on advertising in 2011.

Now take these facts into the Tuesday-morning meeting with the boss to gain extra cool points! Seriously, though, the world of investing is all around us. By nature, we are afraid of the unknown, in this case buying stock in a company because doing so is a confusing process, the industry is so overwhelming, and there is the dreaded risk of losing money.

Oftentimes the best investment is right in front of us and all it takes to own a sliver of VF Corp. is about $160 (buys a single share) and the opening of a free stock trading account. That $160 ties you into a company that is delivering top-quality products that are spurring top quality financial results (your willingness to spend $175 on that black North Face fleece, which is never on a sale, is great news to VF Corp’s CFO … and potentially to your stock trading account).

To receive the entire Gumshoe newsletter for today, please visit decodingwallst.com. Based on the book co-authored by former CNBC anchor Nicole Lapin and Wall Street analyst Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. investor education newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On FaceBook and Twitter, Decoding Wall St. releases unique streaming content daily, as a compliment to the newsletter, to help get you through interviews right on down to after work cocktail parties. For more information, including to join the movement, please visit www.decodingwallst.com.

The post How Much Do You Really Know About Your North Face Jacket? appeared first on HyperVocal.

Today is the day every fund manager who owns Apple’s stock* and wears white earbuds on the train ride into work has been waiting for: the company’s hotly anticipated earnings report.

We have watched through the years the building excitement for Apple’s “after-the-bell” earnings release around 4:30 p.m. EST. The pomp and circumstance stems from Apple being the most highly valued publicly traded company on Mother Earth as it refreshes products continuously to excite customers and develops new categories from the thin air (you did not know you needed an iPad until the company said so). Apple has gained rock-star status amongst financial community pros. Its stock has made these ’80s music listeners look like geniuses and, in the process, made their clients a boatload of money. That is, until April, as Apple shares have fallen back to earth amid a whole bunch of “what if”s and not a ton of substance. Today, we decode these myths and assorted truths and tell you why to stay long and strong on Apple, even as Wall Street is mired in an intense debate on this generation’s technological leader.

Decoded facts

• Apple shares are down 10% since reaching a record on April 9.
• Apple’s value has represented a massive 4% of the S&P 500 index since February 28; as goes Apple shares, so goes the S&P 500, say some on the Street.

Myths & Assorted Truths

Possible shortage in key components for mobile devices and computers hurting Apple: This is perhaps true as Apple CEO Tim Cook stated in October that Mac product lines will be affected by supply shortages emanating from a flood in Thailand. However, computer hardware giant Intel noted last week that the supply shortage has concluded. Furthermore, who really buys Apple’s stock for robust Mac sales numbers? A purchase of Apple shares is a bet on very strong mobile growth globally fueled by the iPad 2 and iPhone 4Gs. We think growth in each of those categories is poised to continue to be strong.

Decline in sales of the iPhone at Verizon Wireless: Verizon spooked Apple devotees by stating it sold 3.2 million iPhones in the first quarter, down from 4.2 million in the previous quarter; the figure was higher by 46% year over year. Based on our analysis, this number is misleading for it overlooks Apple filling its distribution channels with inventory.

iPad Mini: A $300 iPad? Nothing has been announced, pure speculation. In discussing this with one of our guest writers on Twitter, we thought out loud that a mini iPad would steal sales from pricier iPads and hurt profit margins. Given Apple’s reluctance to release a device to kill a market (smaller tablets now dominated by Amazon and Android based systems), instead focusing on innovation, it’s hard to support the iPad mini theory.

Lofty stock price target by Wall Street analysts: The highest price target on Apple shares on Wall Street is $1,000, valuing the company at an eye-popping $1 billion. Some investors have used the raft of robust price targets to suggest there are too much optimism on Apple’s future, and not enough appreciation of near-term business risks (there are Android phones on the market … ). We would tend to agree, but do not believe it’s reason enough to send Apple shares (which are not valued excessively) down 10% in two weeks’ time as has been the case.
 

To receive the entire newsletter for today and read the latest posts, please visit www.decodingwallst.com.

Based on the book co-authored by former CNBC anchor Nicole Lapin and Wall Street analyst Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily, as a compliment to the newsletter, to help get you through interviews right on down to after work cocktail parties. For more information, including to join the movement, please visit www.decodingwallst.com.

*(sound smart: “long” the stock)
 

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Ever heard of earnings season? If so, did you hear of it when growing up on the local news channel? We are guessing the answer to that question is a resounding negative, unless your father was a Wall Street Journal–reading stockbroker. Why we find earnings season so odd:

1. Most people not in financial services will go a lifetime never hearing about this non–Mother Nature–induced season. Yet people and companies are the ones that bring about earnings season four times a year by purchasing goods (a T-shirt) and services (a piece of cheesecake from the Cheesecake Factory). Shouldn’t the power of earnings season be shared with the masses? You bet, we say.

2. Earnings season and all its daily intensity for a month-long stretch is resigned to stock trading desks at investment banks or financial news television shows, and individual investors at home trying to make sense of the madness. Outside of this sphere, it’s business as usual globally. Downright creepy!

3. When earnings season is discussed in an open forum, the banter does not go deep enough to explain the “must-know” stats from a Goldman Sachs report. So, even those interested in learning what earnings season is all about are usually left scratching their heads.

4. Why are there no books (that we are aware of) on earnings season, sort of like a guide for successful investing during this whirlwind period? Although market opinions change daily, therefore making each earnings season unique, there are basic principles to follow (which we have shared in the past).

Having completely thrown you for a loop, is there a sense of “OMG, totally overwhelming.” There should be, earnings season is complex stuff not only due to the sheer volume of wonky information released at once in the morning and afternoon, but because there are always hidden stories to understand.
 

The top Decoded story for 1Q12 (Sound Smart: First quarter 2012):

Bank sector earnings: Collectively called earnings from the “financials,” a couple high profile banks have released their earnings to hungry investors. All in all, the figures and CEO commentary has been bankable, as in solid and painting a picture of a still improving economy. Investors, collectively called the “market,” have had mixed emotions on the true strength of the reports, sending shares of JP Morgan and Wells Fargo down initially last Friday with only a modest recovery in value to begin this week.

There were decoded messages from the financials worth mentioning:

To receive the entire newsletter for today, please visit www.decodingwallst.com.
Based on the book co-authored by former CNBC anchor Nicole Lapin and Wall Street analyst Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On FaceBook and Twitter, Decoding Wall St. releases unique streaming content daily, as a compliment to the newsletter, to help get you through interviews right on down to after work cocktail parties. For more information, including to join the movement, please visit www.decodingwallst.com.

  

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Unfortunately, all that was discussed on the Street was that the CEO didn’t respond quickly enough to how consumers were purchasing electronics, the continued operation of retail shrines that not many frequented on the weekends, and by the way, the VIP with the mustache was the subject of a personal conduct probe by the company’s audit committee. None of that commentary is wrong, with the personal conduct probe being a particular black eye, but the fact is Best Buy failed in so many departments and it was only natural the CEO would be eventually pay the piper so to speak.

Hence, we are here to shed light on the anatomy of a CEO departure.

Anatomical Breakdown

The Head: Compensation

Ever watch the CBS show “Undercover Boss” where the CEO is often videotaped sitting in a cushy office signing papers or talking with team members? That’s pretty much the role of a CEO at a publicly traded company, to be a big strategic thinker and then translate those visions to the underlings. For this all supposed forecasting acumen, a CEO rakes in the loot. When strategy fails to drive strong profits (or any profits), consequently, that large compensation becomes an albatross. Best Buy’s CEO got paid quite well for sub-par financial performance of the company.

According to data from Thomson Reuters:

May 2011 ended fiscal year

• Salary: $1.1 million
• Other compensation: $3.9 million

May 2010 ended fiscal year

• Salary: $961,541
• Other compensation: $9.3 million

May 2009 ended fiscal year

• Salary: $876,926
• Other compensation: $1.5 million

The Shoulders on Down: Strategy and Results

Brian Dunn took over as CEO on June 24, 2009. Instead of thinking more like a visionary and positioning the company for battle versus online rivals, the following actions were assumed.

Start of 2010

• Opening of 50 to 55 new Best Buy large format stores.
• Intention to repurchase $2.5 billion in stock.

End of 2010

• Spent $1.2 billion to buyback stock at $36.62 average price (stock is currently at $22 and change).
• Announced a restructuring of the international business.
• Same-store sales declined 3%.

End of 2011

• Spent $1.5 billion to buyback stock at $27.47 average price.
• Announced a $800 million cost reduction plan.
• Announced the closing of 50 Best Buy large format stores.
• Same-store sales declined 1.7%.

Yes, Best Buy being a publicly traded company leaves it susceptible to having to cater to the unrelenting demand of Wall Street analysts and money managers. Dunn got caught in a vortex of having to ponder the future and deliver results in the present, and who knows what else regarding possibly inappropriate conduct.

Decoding Wall St.: Based on the book co-authored by Nicole Lapin and Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily to help get you through interviews right on down to after-work cocktail parties. To receive the entire newsletter for today, including the “Decoding the Wall Street Expert” component, please visit decodingwallst.com.

The post Anatomy of a CEO Departure: Best Buy Edition appeared first on HyperVocal.

To all the single ladies out there on the hunt for a good fella with a job in the financial services industry, preferably a high-profile gig on Wall Street, we dedicate this post to you.

As for the guys: Sorry, dudes, we have to keep it real and let some secrets out of the bag. With the rise in prominence of online dating, female members of the big-name sites are inundated by men proclaiming to be big in many areas, especially their bank account and job title. Some will forward along pictures of themselves with a supposed B-list movie star (hello, Photoshop) or at their latest Nordstrom shopping expedition (to use the bathroom). Those that work on Wall Street may go on for hours about the deal they just closed or what CEO they rubbed elbows with at the bar (no CEO of a company has time to chill at the bar. Just saying).

There will be a select few that shoot over a PDF document of a report or short story they have written for the boss or as an op-ed in a business newspaper. This is where we want to focus our decoding efforts today. Ladies, today we give you the tools to pick apart, right from the beginning, whether this smooth-talking Wall Street fella is the last person on the deal team, not even on the deal team, or — possibly — the real deal.
 

5 Characteristics of a Real-Deal Wall Street Guy

1. He’s bold and blunt, but has the facts to support his claims. (You should ask for a photo of his badge.

2. He’s precise. (Ask him for a non-rounded number from the deal he said he closed.)

3. He’s regimented. (Ask when and how his day begins. The day ends or starts at the gym — never both.)

4. He knows everyone. (Ask him the names of professional organizations he belongs to.)

5. He’s a fitness fanatic. (Ask what he has for breakfast. Correct answer: Nothing, black coffee, or a piece of fruit after the gym.)
 

5 Characteristics of a Wall Street Wannabe

1. He’s quiet and modest, which means he ain’t crunching the large numbers on a deal — and maybe works in the IT department.

2. He’s a “rounder”: He speaks using rounded numbers, a sign that he reads The Wall Street Journal and, you guessed it, isn’t crunching large numbers on a deal.

3. He’s a bed fan. He arrives at the office as late at 8:30 a.m., which he calls “an hour before the market opens.”

4. He’s not an overachiever. He asks you out on a stock market holiday because the market is closed … but high finance never really closes for business.

5. He’s not well-endowed … in the wallet. He lives in the city, but he has no car because he “lives so close to the office and could take the subway or bus.” A real player has a car in the parking garage — or, better, a car that picks him up in the morning.

* * *

So, ladies, you make the call. Using our checklist, is this person below (quotes taken from a reputable business website) a Wall Street guy worthy of bringing home to Mom? Or is he a Wall Street Wannabe who’ll be forcing you to watch football games after the three-month honeymoon period is up?

Mystery man says:

• “Apple shares have nearly risen by 50% this year.”
• “The American stock market increased today.”
• “Apple has a $100 billion cash pile.”
• “Apple is short on physical capital but long on brainpower.”
• “GE Capital contributes almost half of the profits for General Electric.”
• “There is a period of austerity in the economy right now.”
• “Brokers are competing to come up with the highest potential price target for Apple’s stock.”

Send your answers (Wall Street Wannabe or Wall Street Baller) to newsletter@decodingwallst.com, and we’ll send the decoded messages!

* * *

Decoding Wall St.

Based on the book co-authored by Nicole Lapin and Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily to help get you through interviews right on down to after-work cocktail parties. To receive the entire newsletter for today, including the “Decoding the Wall Street Expert” component, please visit decodingwallst.com.

Nothing but Gold Productions

A multimedia production company focused on creating accessible financial content across various platforms. Nothing But Gold Productions has a diverse client base that includes traders, individual investors, major retailers and content providers. More information can be found at nothingbutgoldproductions.com.

The post How to Spot a Wall Street Wannabe appeared first on HyperVocal.

Not quite donning as long a beard as Santa Claus, an individual by the name of Ben Bernanke had his mug plastered all over TV stations Monday. Did you happen to catch his televised discussion, “Recent Trends in the Labor Market,” held at the National Association for Business Economics Annual Conference?

It’s OK if you didn’t. Unless you’re directly tied to the financial-services industry, where offices, bathrooms and cafeterias have TVs running financial news close to 24/7, the reality is that it was a missed live event.

The question we pose to the online universe is twofold. First, are you fully aware who Ben Bernanke is and the power that his mouth possesses? Sure, the name may ring a bell, but honestly, do you know what he is all about? Second, if you take the extra second to TiVo the latest episode of Jersey Shore, is a Ben Bernanke televised appearance also worthy of TiVo hard drive space?
 

The Game: Who Is Ben Bernanke (other than the Federal Reserve Chairman)?

• Think of him as the king of the world’s economists.

• Was once a mere mortal member of the Federal Reserve (2002 until landing the top spot in 2006).

• His likely favorite golf tournament is the Masters, as he was born in Augusta, Georgia.

• Has a cool nickname of “Helicopter Ben,” given to him for a comment made back in the day about dropping money from a helicopter to support economic growth.

• Would most likely win the award of “Most Down-to-Earth Federal Reserve Leader” over Alan Greenspan (predecessor) and Paul Volker (Greenspan’s predecessor).

• You know you have attained near the pinnacle of a career when the president appoints you to a government position.

• In the future of Apple-based only textbooks, Bernanke will be viewed as the fed chairman that pushed the boundaries of the Federal Reserve’s allowable powers. We could only imagine the interactive timeline possibilities.
 

Why Bernanke Deserves TiVo Lovin’

Unlike Snooki, who could cause a certain brand of liquor or energy drink to register a spike in sales upon her endorsement, an endorsement by Bernanke could make or lose you money. The endorsement by Bernanke tends to be much less obvious than a scantily clad Snooki in a TV commercial, so it really takes a stock market expert to decode what this man is trying to share with the world (even though many don’t realize he exists).

What Bernanke’s speech yesterday caused:

• S&P 500 index increased over 1% on the day. Solid move.

• The S&P 500 finished at its highest level since May 2008.

• The Russell 2000 Index, a measurement of stock values for small domestic-oriented companies, climbed to the highest level since July 2011.

• Gold prices rose 1.0%.

• Silver prices jumped 1.5%.

What Bernanke said of interest in his speech: “Better jobs numbers seem out of sync with the overall pace of economic expansion.”

• Decoded: The economy may be increasingly adding new jobs month to month, but it isn’t enough. Interest rates have to be kept low for even longer.

“The job market remains far from normal.”

• Decoded: Yes, people are returning to work, but there remains this pool of unemployed that have been out of work for six months or longer and will not see a new job anytime soon as their skills erode further. The decoded truth to that mouthful: interest rates have to be kept low for even longer.

“The job market is quite weak relative to historical norms.”

• Decoded: Job recoveries in the past following recessions were so much stronger than what is occurring today. You guessed, let’s keep interest rates low for a while.

* * *

Decoding Wall St.

Based on the book co-authored by Nicole Lapin and Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily to help get you through interviews right on down to after-work cocktail parties. To receive the entire newsletter for today, including the “Decoding the Wall Street Expert” component, please visit decodingwallst.com.
 

The post Why Should We Care About Ben Bernanke’s Labor-Market Speech? appeared first on HyperVocal.

You rock the white earbuds while pumping iron or running at the gym. You tap away on an iPad and mentally prepare for a Skype chat with a loved one. But really, what else do you know about Apple other than it sells cool products that benefit daily activities in one way or another? Were you aware that today was perhaps a “Top 10” moment in the company’s long-storied history on Mother Earth as it announced its first ever dividend, or as Wall Street moneymakers like to say, “shareholder-friendly initiatives”? It’s OK if this news was not the first thing on the to-do list this morning, but it’s important — it could impact your life over the long run. How so?

Through your purchases of Apple products year after year, it has built up a huge pile of money in its savings account. Following years of internal debate, Apple has finally decided to mail billions of dollars quarterly to its shareholders in the form of a dividend starting later this year. Furthermore, Apple will be using $10 billion of its cash (sound smart: pulled from its “war chest”) to buy back its stock in the marketplace. Unlike other share repurchase programs done by companies Apple is essentially taking a mere $10 billion (sense the sarcasm?) to offset the negative profit impact of employees cashing in their stock options. Normally a stock buyback plan reduces the amount of shares available for investors to buy, creating scarcity and a higher stock price. Think of it like the classic high school love advice: the less you give yourself to a lady the more she wants you (or so say various dating blogs).

Apple sort of wagged its finger at Uncle Sam by noting its actions today will be funded through the use of “domestically held cash.” Companies are taxed aggressively on cash brought back to the U.S. that is held in overseas accounts, and many executives have called for a more reasonable tax rate (or complete repeal) so that money could spent on creating domestic jobs. Note that of December 31, 2011, Apple had a whopping $64 billion of cash held in overseas accounts.
 

Why Should You Care?

Apple identified five main places that it will look to apply its cash that are less obvious than issuing a dividend and buying back stock.

1. Research and development: More tech people trying to develop the next game-changing product, the more productivity and fun you have brought into your life.

2. Acquisitions: More acquisitions of companies developing the hottest technology will only enhance the products that arrive on the shelves at Apple stores.

3. Retail store openings: Offers a nice place to visit (and buy game-changing products) with the kids in the mall. #familybonding

4. Supplier pre-payments: Apple pays its suppliers super early as to obtain low prices for its product parts, allowing it to offer you good prices on those must have products.

5. Capex (be smart: investments in buildings and computers): Open a new office with high-speed computers and people will have to be hired to oversee the operations. This is Apple’s way of promoting employment.

Decoding Wall St.

Based on the book co-authored by Nicole Lapin and Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily to help get you through interviews right on down to after-work cocktail parties.

Nothing But Gold Productions

A multimedia production company focused on creating accessible financial content across various platforms. Nothing But Gold Productions has a diverse client base that includes traders, individual investors, major retailers, and content providers. More information can be found at: www.nothingbutgoldproductions.com

The post Why You Should Care About Apple’s First-Ever Dividend appeared first on HyperVocal.

As Wall Street pays homage to the daily helping of economic data of choice, we think the results of the Federal Reserve’s “stress tests” (be smart: computer programs that run scenarios to see what in the economy would cause a megabank to go under) are intriguing on a multitude of levels.

There is the fact that most banks are still not paying dividends to shareholders some three and a half years after investment bank Lehman Brothers filed for bankruptcy. Then there is this notion that to feed the dividend-seeking appetite of shareholders (which include bank executives themselves), banks will take all sorts of financial risks once again, basically finding loopholes in new government regulations (hey, I-bankers are a smart bunch).

Or how about the crowd that believes banks shouldn’t be allowed to shell out dividends at all, since taxpayers will be bearing the brunt of saving (sound smart: “bailout”) the financial system in late 2008 for years into the future?

Anything involving how banks operate and what causes their stocks to rise and fall tends to be complex. As simple as this may sound, banks are a complete different beast to invest in than Walmart, given the layers of government making sure they are operating on the up and up. That said, there are basic concepts and terms to decode to get you through a party discussion on an industry that always steals the front pages of newspapers. At the very least, you deserve to understand the decoded real deal on a JPMorgan before heading to a local branch to make a deposit.

Stress test: People hate going for a stress test; it causes them to take a day off from work to address a problem that may not even exist. Same goes for banks, except the doctor that administers its exams is their personal physician, the Federal Reserve. Under a bank stress test, hardcore number crunchers plug data into a computer model to tell if one not so little bank, should the economy stumble into a period of a 13% unemployment rate, risks sending other banks to the cleaners. How that bank would fail its stress test is if owns too many dodgy loans (example: loans of homeowners with poor credit ratings and late payments) and does not have enough money (sound smart: “capital”; “reserves”) to cover potential losses. Fail a stress test, wave goodbye to paying dividends and buying bank stock, Mr. CEO.

Give back too much: A person close to our team once said “less is more.” In the case of banks, that could be quite true. If a bank passes the latest stress test and tries to enrich its starving shareholders quickly, it runs the risk of not having enough money on hand should the economy head south again. There is also the risk of triggering a public backlash.

If a real life MD doesn’t disclose your health records, why should the Federal Reserve disclose a bank’s?: Let’s say XYZ bank is found to be “inadequately capitalized,” which is the high class way of saying, “Hey, bro, you failed your stress test.” Now, the entire world of investors, aka the “market,” is aware that your bank is sickly; in turn they opt to short your stock or if already a shareholder, dump it altogether. By doing this, it would set in motion additional problems. Sometimes “less is more.”

To receive the entire newsletter for today, including the “Who the Heck Are These Bank CEOs” component, please visit http://decodingwallst.com.

A multimedia production company focused on creating accessible financial content across various platforms. Nothing But Gold Productions has a diverse client base that includes traders, individual investors, major retailers, and content providers. More information can be found at: www.nothingbutgoldproductions.com

The post Great News! Wall Street Execs Poised to Make Even More Money appeared first on HyperVocal.

Quick Wall Street insider dose of reality: When a major global retail brand makes the homepage of a major global business news brand, it’s either because sales and profits are abnormally strong, abnormally weak, or there is a game-changing new product poised to hit the shelves. There are, of course, exceptions to these loosely held rules, but by and large this is the decoded truth.

When Nike lands on a business news homepage, however, it’s almost always good news for holders of its stock and bad news for the wallets of unknowing consumers. How so? A great example is the building hype surrounding Nike’s July launch of the Flyknit sneaker, dubbed the “sock shoe.” Carrying a hefty price tag of $150, the sock shoe will have a full court press marketing campaign to drive excitement on the part of teens and workout enthusiasts, so much so that each class of consumer overlooks one key element: They will be paying more for a product that has less materials and that may not hold up particularly well in the rain.

Essentially, the consumer will be shelling out $150 for a neon pair of sock shoes that could be ruined if caught in a rainstorm when leaving the gym, but at least the exit from the gym is in style, right? Note that if you would have never read this truth-telling, decoded piece Nike executives would basically be talking behind your backs to the financial community, while you wander into the store and buy a must-have sock shoe.

Not very cool, huh?

Comments from Nike’s high powered executives on the sock shoe: “The process cuts costs so much that eventually we could make these shoes anywhere in the world, which makes things very interesting.” Yes, makes it very interesting for the future profits of Nike.

Unlike Nike’s other shoes, there is no cutting out pieces and assembling them. The upper is made in one piece and then fastened to the sole. That makes “production quicker with less labor and larger profit margins.”

How a Wall Street insider views the “sock shoe”:

• Strong global marketing campaign = higher sales
• Strong marketing campaign + higher sales + lower product costs = strong profits
• Strong marketing campaign + higher sales + lower product costs + strong profits = higher stock price

End result: Wall Street insiders buy the stock before the product arrives to stores, and prior to the average investor, sometimes also being the average investor, realizing they have a winning stock being worn on their feet.

Decoded: We hope you are saving up to buy a cheaper quality product.
 

To receive the entire newsletter for today, including the launch of our youth financial education series titled “The Lost Generation,” please visit decodingwallst.com.

About Decoding Wall St.

Based on the book co-authored by Nicole Lapin and Brian Sozzi, Decoding Wall St., the daily Decoding Wall St. newsletter, is a lifeline to unlocking, and acting upon, an endless array of hidden financial and world news clues. On Facebook and Twitter, Decoding Wall St. releases unique streaming content daily to help get you through interviews right on down to after work cocktail parties.

Brian Sozzi is Chief Equities Analyst for NBG Productions. In this capacity, he is responsible for developing unique online financial content and actionable stock recommendations for an institutional and retail investor base, as well as corporate partners (he is an active contributor to Forbes, TheStreet.com, Minyanville, and Benzinga). In addition, Sozzi is the Editor in Chief of the “Decoding Wall St.” daily newsletter, and co-author alongside former CNN/CNBC anchor Nicole Lapin of the first book in the series, titled Decoding Wall St.

Sozzi was previously a senior equity research analyst specializing in the apparel and hard goods sectors of the retail industry for Wall Street Strategies Inc., where he managed a client book that included leading financial institutions. He also contributed to his firm’s twice-daily stock market commentary and trading services and monthly newsletter.

Routinely sought after as a trusted point of reference for opinions and insight on the global economy and stock evaluation, Sozzi is a frequent on-air guest on CNBC, Bloomberg, Fox Business and PBS, and is cited regularly by online/print publications that include CNBC.com, Bloomberg, The Wall Street Journal, MarketWatch, Reuters, The Associated Press, Barron’s, Financial Times and Kiplinger’s. He graduated summa cum laude from Dowling College.
 

The post Why Wall Street Loves Nike’s New Sock Shoe appeared first on HyperVocal.