Vacuum Cleaners Discussions

Early news reports in the USA are saying the London financial markets nosed dived today in the worse downturn ever.  This comes on the heels of a 4 percent drop in the Dow Jones Industrials last week alone.  Since today is a Federal Holiday in the US in observance of Dr. Martin Luther King the financial markets are closed.  Not sure what impact the London market fall will have on the US markets--have to wait to see.

What and how long will it take jaydee to realize that he needs to enter the low to middle price range vacuum market to stay competitive in the USA in the big box stores' venue?

Any news yet on the 2007 dyson sales? 

Carmine D.

mole wrote:

Hello Mole:

The bright spot in the weakening US economy and the fallen US dollar is that the goods we produce for export are less expensive for consumers overseas. 

US retailers are bracing for the worse.  Many are retrenching by laying off staff and culling inventories.

In hindsight, in 2002 when gold was waffling at $250 an once, the gold mining stocks [like Newmont and Anglo] and the commodity were excellent buys.  Why?  At the time, companies make money on the mining when gold hits about $275.  By August 2006, the gold mining stocks doubled in atock price and gold was at $500 an ounce.  Some investors sold and took their profits.  Always a good thing to do.  But...now gold is over $1000 an ounce.  The TV is awash in gold infomercials.  Many commodities followed gold's lead and are at record highs: Wheat, oil, gas and so on.  Unfortunately, not vacuums and especially at the big box retailers.

I agree that eBay has increased competition especially in pricing.  But for vacuums it's been short lived in the current economy.  Why?  People are not buying new high priced vacuums from brick and mortar stores.  My sense is the same is true for eBay.  The stores [and web sites] offering service [and parts] will survive to see better vacuum sales days ahead.  If they make it through the months and possibly couple years ahead.

Carmine D.

Venson wrote:

Hello Venson:

Not for the investors who bought and held Bear Stearns stock.  One billionaire investor lost $800 MILL on the sale and purchase by JP Morgan Chase.  I don't think he is feeing very well these days.

BTW, Fed cut the rate 25 basis points over the weekend, deciding again not to wait until later this week.  Don't know what the US markets are doing.  But most agree that 25 is on the low end.  Most were expecting at least 50 basis points and some even 75.  Some think the markets already factored the cut in and the rate change won't have a effect.  Have to tune in and see how the markets reacted.

Carmine D.

CarmineD wrote:

Oh c'mon!  He'll probably get some more from somewhere.  (How many billion did he start out with?)  After all if JP Morgan Chase can buy Bear Stearns for $250 million and then have the government kick in a $30 billion line of credit anything's possible.  Them that's got -- get.

Per the Times Online, the Dow was up 21 points when it cloosed today.

Best,

Venson

Venson wrote:

Venson:

My heart goes out to the 14,000 BS employees whose 401 K accounts are heavily weighted with the company stock.  They not only have the risk of losing their jobs but their retirement savings too.

Word on the street is that the Fed will cut again tomorrow, maybe 100 basis points.  Which may explain why the US market opened down 150 today and then recovered and made a slight gain. 

Also, Lehman Brothers went down to $20 a share today and may be the next financial to go belly up if investors bail.  This time the Fed may not intervene.

BTW, markets around the world opened down today as a result of the US bailout of BS and subsequent purchase by JP Morgan Chase.  Gold hit a high of $1033, as flight to safety.  Have to see what happens tomorrow when the Feds meet.  And world markets are down 5 percent more than the US market so far this year.

Can you imagine buying an asset for 2 cents on the dollar with a guaranty from the US government.  That's exactly what JP Morgan Chase did with the acquisition of BS. 

Carmine D.

CarmineD wrote:

Carmine that's what I meant when I said them that's got get.  Only 14,000 employees? There was a statement made during a news show I watched earlier that claimed about 30 percent of Bear Sterns' stock was owned by employees. That's sad if true.

Venson

Venson wrote:

Hi Venson:

The employees who own the Bear stock could not bail.  Why?  Something in the financial industry called a 'lock up' period.  Before companies issue their financial results and earnings employees are preempted from buying and selling its stock.  Not so with the investors.  Sure isn't fair.

Carmine D.

Sir James thinks people will be investing in his high priced vacuums during a recession :-

http://news.sky.com/skynews/article/0,,30400-1309648,00.html

Do you agree with this point of view, Carmine? ;-)

M00seUK wrote:

Hello M00seUK:

I understand his reasons for saying this.  Unfortunately, saying it's so does not make it so.  While his perspective is from the business view [R&D], the real issue is what will consumers do?  Buy new?  Wait?  Buy cheaper?  Repair?

There was an interesting survey [done by a Consumer Electronics group} recently of persons in the USA about to receive the cash rebates from Uncle Sam and what they will do with the money?  It amounts to $600 US per tax payer and $300 for their dependents.  An overwhelming majority of the persons said they will pay down debt and expenses.  Not buy new gadgets and household items.  This defeats the purpose of jump starting consumer spending.

My sense is that people are people all over the world.  The sub prime slime here in the USA has taken a huge toll on US consumers' spending and confidence.  Not so in the UK where housing and real estate is still experiencing a bullish market.  But you and I [and James] know that dyson exports to the US and other countries account for the bulk of dyson profits.  With the dollar down, and the Euro at all time highs, the dyson exports are too expensive for US consumption. 

Having 40 plus years in the vacuum cleaner sales and service business [1949 to 1992] and weathered many economic cycles, I also have to disagree with James. 

I think a good barometer of dyson future sales are the dyson 2007 sales.  Unfortunately so far, this dyson information has not been forthcoming.  Although I recall last year this time, dyson 2006 sales and profits were widely circulated on the Forums and Web Sites along with 2007 quarter 1 vacuum sales by brand [thanks to the NPD and US News and World Report].

I'd like to see dyson's 2007 financials. Then I can answer with more accuracy and information on Jame's beliefs.

Carmine D.

CarmineD wrote:
Thats all well in good if we actually made anything anymore. Outside of Exporting Oil & Food and Making Tractors and Airplanes what do we actually produce. (Even at that our own Air Force doesn't want to buy our planes).

Unfortunately the weak dollar means our real estate and corporations will be sold and bought by foreign entities at bargain basement prices.

I've always said every "ism" used by itself is destined to fail including free market capitalism. We need a bit of protectionism, socialism etc. Yin & Yang so to speak.


At some point savvy investors are going to drop gold, make a killing and leave the late buyers to hold the bag. Then they will buyback into the US low and sell high...just have to wait till they're ready....can you hold out till then is the question.

Lucky1 wrote:

John Deere and its products are selling very well in eastern Europe, Russia and China.  Thanks in large part to the weak dollar [double edged sword] and the strong euro.  The USA still imports most of its oil and due to the $110 a barrel cost, we don't have a trade surplus, despite strong exports.  Tourism in the USA is booming.  Again, thanks to weak dollar. 

The lead contractor in the Air Force contract is Northrop Grumman a California based company.  Of course its partner is EADS, a French company.  The AF contract is in dispute and has gone to the Government Accountability Office for a ruling.  As long as the Air Force followed the rules and regulations for bid solicitations and acceptance, I doubt the GAO will overturn the AF decision.

Carmine D.