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Beware of Greeks

They aren’t bearing them but getting them.  And they can’t even do that with a modicum of grace.  Politicians of various stripe have their horse in this race to insolvency.  The EU is exhibiting paranoia harking back to The Hundred Year War.  From it inception it has sought consensus between national interest which have never shown past trust.  It has mixed strong economies with weak.  That’s taking steel and mixing in tin to come up with a bastard pot metal.

The following is a one year chart for ADP.  It is a well run company that was growing in a troubled economy.  It provides payroll and HR resources to business.  With the loss of jobs from the mortgage crisis — jobs relating to its growth — it still exhibited the strength you associate with well run concerns.  The November to May chart exhibit that in a strong trend line that overcame our internal problems by making solid decisions.


If you click on the chart you’ll see a larger and clearer chart.  The moving averages are just what you wanted to see until June. Here is where a lot of EU news kicks in.   Things proceed to tank into August — giving back the profits.  (It is a stock that Amy recommended in the low 40 and suggested selling around 54.)   But now comes chaos and paranoia on a grand scale.  The stock yo-yos like a penny stock.   Volatility is atypical based on a well run company continuing to show decent profits.

What is supposed to  happen is that the markets should reflect the value of a stock.  Well run companies may not have growth like that shown but they will at least show lateral movement.  Poorly run companies with risky business plans are the stock that have regular gaps in price and exhibit the yo-yo patterning.  With success they turn into the more staid business with stability.

ADP has been successful since its inception. Ignoring the split adjusted pricing you see the steady success that well run companies exhibit.  But, the chart also reflect the political/economic disturbances like we are seeing today.  The down trends reflect the world around the company that it has no control over.  The worst decline represent halving the value.  But equally disturbing is the current situation.   Prices gap up and down leaving white space between days.  This is paranoia like we’ve seldom ever seen.

I’ve talked about both technical and fundamentals for the stock.  Fundamentals are the business’ ability to generate a profit and for the management to successfully react to the problems and opportunities presented.  Fundamentally, ADP is close to as good as it gets and has proved itself over decades.   The period since August reflects panic and paranoia  worse than a boiler-room hyped penny stock.   That is very scary to see in ADP.

In tough times a good company should “consolidate” — move laterally for an extended period.   But the current paranoia prevents that.  Looking at ADP is looking at ourselves and the world around us.  You have no idea what comes next.  That isn’t a good place or time.  This isn’t about Fat Cats and Occupy this-n-that.   It is letting that about a company or ones life be controlled by outside forces.  This isn’t about some guy getting Fat Cat status.  It is taking away basic building blocks to success. — your and my success and success for others tomorrow.

Look at the chart.  The last 10 years have basically been thrown away.  With inflation adjustments that is a net loss.  And tomorrow is a total question-mark.

ADDENDUM:

I recently spoke about freedom of speech and that includes hate speech.  That isn’t always a red/blue issue.  The big lie abounds.  I thought that evident in the reverse race card stupidity exhibited by two poster children for the supposed liberal agenda.  I really found it disgusting when it came to my attention.  I’m at best a partial fan of the man.  Frankly, I don’t see a candidate that I find particularly attractive.  That’s as sad and disturbing as the rest of the day’s post.

How to become a Fat Cat

In an application dated October 24, the unincorporated association “Occupy Wall Street” applied for the trademark to “Occupy Wall Street.” The trademark application says the group would like to use the phrase on merchandise such as clothing and bags, in periodicals and newsletters, and on a website featuring “photographic, audio, video and prose presentations” about the Occupy movement.

To quote a missing blogger: Laughter Ensued.

 

Categories: It's the economy-stupidTags:
  1. November 1st, 2011 at 11:09 | #1

    “To quote a missing blogger: Laughter Ensued.”

    What, no link to him? 

  2. November 1st, 2011 at 11:53 | #2

    With one post since August 1st, can we award him one? 
    Sending folks would waste gas. 

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