{"id":398,"date":"2010-04-19T10:23:00","date_gmt":"2010-04-19T14:23:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=398"},"modified":"2018-08-20T15:39:05","modified_gmt":"2018-08-20T19:39:05","slug":"now-revenues-need-to-grow","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/04\/19\/now-revenues-need-to-grow\/","title":{"rendered":"Now revenues need to grow"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Good morning everyone!\u00a0 I hope that this posting finds all of you in good spirits.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">The Wall Street Journal this morning has an article talking about something I have been talking about for almost 9 months on the blog.\u00a0 Namely, that corporate revenues need to start growing and not just profits.\u00a0 It&#8217;s like this&#8230;<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\">During the recession many businesses saw the bottom fall out of their profits as revenues dwindled.<\/span><\/li>\n<li><span style=\"font-size: 16px;\">That led to many of them cutting costs rapidly, especially via layoffs.\u00a0 That, in turn, led to an improved profit picture.<\/span><\/li>\n<li><span style=\"font-size: 16px;\">When corporate earnings are reported the tradition in reporting is that numbers are compared to the year prior&#8217;s quarter.\u00a0 Because profits were so depressed a year ago during the <strong>heart<\/strong> of the recession, profits look to be up strongly.\u00a0 But in fact, it&#8217;s just because the comparisons are so easy.<\/span><\/li>\n<li><span style=\"font-size: 16px;\">There is only so much cost cutting that businesses can do to boost profits so at some point additional profits have to come from sales\/revenue increases whose dollars then fall to the bottom line.<\/span><\/li>\n<li><span style=\"font-size: 16px;\">The deepest part of the recession was December &#8217;08 to June &#8217;09.\u00a0 That means we have about one more quarter&#8217;s worth of easy profit comparisons.\u00a0 Then it will start to get very interesting.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">What I am a little surprised by is that the mainstream business press is just starting to write about this issue.\u00a0 I would consider this to be a &#8220;dirty little secret&#8221; that many in the corporate world have been talking about for sometime.\u00a0 The big question is: what will happen to investor confidence and stock market levels when the comparisons get tougher?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">My personal feeling is that the economy is still slooooooowly climbing out of recession and that the financial markets have been a little ahead of themselves in pricing a strong recovery.\u00a0 If I am right, then the probability that financial markets are going to fall is slightly higher than that they will rise.\u00a0 I don&#8217;t think any decline would be big, but it would be noticeable.\u00a0 So what does all of this mean in terms of whether you should be investing now?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">I am spending portions of my busy day looking for prospective investments.\u00a0 I have been in cash since about November and have been quite content to hang out there until some of the economic uncertainty passed.\u00a0 Now I am about 65% convinced I should be buying &#8211; which is why I am looking and examining.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Good morning everyone!\u00a0 I hope that this posting finds all of you in good spirits. The Wall Street Journal this morning has an article talking about something I have been talking about for almost 9 months on the blog.\u00a0 Namely, that corporate revenues need to start growing and not just profits.\u00a0 It&#8217;s like this&#8230; During [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-398","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=398"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/398\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}