Is there an investment message in our checkbooks? Very likely. Since consumers account for 70 percent of the economy, changes in how we...
Is there an investment message in our checkbooks?
Since consumers account for 70 percent of the economy, changes in how we spend are the make-or-break factor for most companies.
With that in mind, I used my Quicken files to see where the Burns family is spending more (and less) money.
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Don’t think of what follows as stock tips, because there are a zillion reasons our spending may differ from yours. But if your checkbook and credit-card statements contain a similar message, you may have the nugget of an investment idea. What I found:
Until recently, Albertsons (ticker: ABS) got most of our dollars for food at home. Its supermarkets are large, well-stocked, well-priced and have good produce sections. As the primary food shopper and cook in the household, I regularly chose Albertsons over other markets.
No more. Albertsons’ management reduced staffing at its checkout stations, turning their stores into Hotel Californias. As the Don Henley lyrics say, “You can check out anytime you like, but you can never leave.”
Albertsons decided to save payroll dollars by wasting customers’ time. Now I shop at Whole Foods (ticker: WFMI), where produce is even better and the checkout lines are short. Some call it “Whole Paycheck,” but time is (also) money.
My gas purchases have gravitated toward ExxonMobil (ticker: XOM), as I have found that more of its gas stations keep their pay-at-the-pump printers supplied with paper. Consequence: I get a receipt at the pump. This eliminates the need to go in the station and stand in line with lottery-ticket buyers.
Among retailers, Target (ticker: TGT) looms large for general household purchases. Nordstrom (ticker: JWN) looms large for clothing. We seldom exercise it, but the Nordstrom guarantee of satisfaction or return the merchandise is the best loyalty builder going.
Wal-Mart may be the most successful (and threatening) retailer in the world, but it gets virtually none of our business simply because we find its store interiors confusing.
For most of my first 15 years in Dallas I was a loyal American Airlines customer, flying Southwest (ticker: LUV) only on short flights inside Texas.
Over the last five years, however, I’ve felt that American (ticker: AMR) has been working hard to lose me as a customer. It did this by making it difficult to use AAdvantage Miles and making nonstop flights scarce.
As a consequence, I now think of Southwest Airlines first. Significantly, $10,000 invested in LUV 20 years ago would now be $171,000. The same investment in AMR would now be worth $7,648, according to Morningstar Principia.
Before the Web, my book purchasing was scattered over bookstores big and small. Today, Amazon (ticker: AMZN) gets most of my book business.
My wife just made her first purchases on eBay (ticker: EBAY). We’re spending more on FedEx (ticker: FDX) and UPS (ticker: UPS) as Web shopping displaces mall shopping.
The last two cars we’ve purchased have been Toyotas, a 2003 and 2004 Prius. We sold the 2004 so that someone who drives more than we do can reap the better mileage.
Our last American car purchase was a 1997 Jeep Grand Cherokee, which we still have. That doesn’t auger well for GM, Ford or DaimlerChrysler. It shows up in the value of the stocks. Toyota (ticker: TM) was recently worth more than General Motors (ticker: GM), Ford (ticker: F) and DaimlerChrysler (ticker: DCX) combined.
One indication that these observations are shared by many is that Albertsons, AMR, GM and Ford were among the 20 NYSE stocks with the highest short positions in mid-March.
Is there a connecting theme in these shifts?
You bet. The companies that capture our dollars are the ones that conspicuously respect our time. Companies must not only compete on price and quality, they must also recognize that all of us — regardless of age or income — are pressed for time.
(Full disclosure: The bulk of my money is invested in index funds, but I am a direct shareholder in ExxonMobil and several other oil companies.)
Questions about personal finance and investments may be sent to Scott Burns at The Dallas Morning News, P.O. Box 655237, Dallas, TX 75265; by fax at 214-977-8776; or by e-mail at email@example.com. Questions of general interest will be answered in future columns.