since when did Best Buy become a bellwether?
Posted by Jason Apollo Voss on Nov 12, 2008 in Blog | 2 comments
Just a quick note:
As you may know financial markets are reeling again today. The cause seems to be Best Buy’s Third Quarter Earnings report. Best Buy did say some things using pretty strong language. For example, “Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we’ve ever seen,” said Chief Executive Brad Anderson. Obviously that is strong language. But since when is Best Buy a tech or economic bellwether? The answer is that it is neither. Wal-Mart is THE consumer spending bellwether. And the tech bellwethers are numerous (Google, Microsoft, Cisco, etc.), but Best Buy is not one of them. So why the big market sell-off on this news?
Despite the fact that folks like the Motley Fool are saying that our problems are behind us, the fact that a non-bell wether firm’s results can roil the financial markets is strong indication to me that investors still don’t feel comfortable re-entering right now.
Your last paragraph above hit the nail on the head! We are in an airplane that dives 20,000 feet, then climbs 15,000 feet, then does a barrel roll, then plunges 10,000 feet and then….well, that plane is the stock market of late, and after all that, are any of us “passengers” not grabbing and using the “air discomfort” bags collectively? Every time I see the market move more than 200 points in either direction I want to grab the “air discomfort” bag and put it to use. It definitely gives me a sick feeling!
Is it any wonder that we are happy to keep using that tin can in the backyard for now? At least it is planted on solid ground and not diving up and down like a yo-yo! I honestly feel like I’m on a jet that has lost all hydraulics and it will be an absolute miracle if I and many others don’t end up scattered a half mile across a corn field! We cannot safely leave the plane at 20,000 feet since none of us thought to bring a parachute! I cannot wait until the market gets some stability and begins a slow but steady creep up the incline of prosperity!
BTW, if Technology was a religion, then Best Buy would definitely be the biggest church, and attendance would tell a lot about the state of the economy! That’s why I think it is a barometer of consumer sentiment and spending trends.
Good day John K! Thanks for the comment. What I meant by Best Buy not being a bellwether is that when I was working as a professional, Best Buy was certainly not a “market mover.” What you said about many consumers thinking of this electronics paradise as their first choice for high technological shopping is true. However, the important point of the post was that there is clearly still much agitation in the markets when Best Buy can move them.
High regards!
Jason