Best Buy earnings - don't ignore them
September 15, 2009
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RELATED TICKERS: BBY
I've said for a long time that Best Buy sales would suffer from a squeezed consumer. Best Buy sells stuff that people don't need. You could live the rest of your life without ever going there. Well, at least you could live the past three months of your life without going there, or at least some of you could. I know I did, and judging from the earnings, I'm not alone.
My theory has always been that Best Buy is full from floor to ceiling with the first items you can cut out of your budget when things get tight.
CD's. Easy. As a matter of fact, sell the ones you own and never listen to. Then take a lesson from that and don't buy any more of them. The radio's free. More CD's will probably not improve your life much, but they sure can eat up some cash. Count your CD's and figure you paid at least $10 a piece on average. Now go throw up.
DVD's. Even easier. Most movies are worth one or two viewings in a life time. Sure, there are a few classics you can watch every year for a lifetime, but not that many. So quit buying DVD's or Blu-Ray or whatever they sell these days. It's a waste of money. If you disagree with me, then go look through your huge collection of "classic" movies and find one to watch again instead of buying more.
New Computer. Don't buy it. You bought one before, and now for some reason you are wanting to buy another. No, the new ones are junk too. They get viruses - no, they haven't fixed that and I haven't even heard about any plans to do so. They still go slow for no apparent reason. They crash and they piss you off, so you go and buy a new one. Save yourself the headache. The one you have pisses you off less knowing that you saved $500 by not buying a new one. Some day they'll figure out how to make computers that actually work correctly, and then it will be time to buy.
Flat Screen TV. Yeah, it looks slightly better, but it also costs a LOT, even though prices have come down. The shows on it still suck mostly, so it's an easy budget cut.
Front-load washer and dryer - The main difference is that they cost about three times as much as the old top loader kind. Also, since other people are singin' with Beyonce "Let me upgrade", you can take advantage and buy the top loaders used for a song. Easy budget cut.
Fancy huge "green" appliances - The only thing greener is the cash register. Remember the #1 rule of going green - buying new stuff is not green. Buying nothing is green. Using what you already have is green. If you are building a new house with all green, solar powered, zero emissions fireplace, carbon dioxide sequestration system, whatever - it's all bullsh*t. Just buy an existing home and it will be better for the planet barring that you live there for 90 years or something. I think the whole green movement to date has been net brown because people thing to help the earth you throw away your old sh*t and buy new overpriced sh*t with a bunch of buzzwords attached to it. This concept will eventually be exposed for what it is - a marketing gimmick.
Video games - I still play Tecmo Bowl from 1994 occasionally. No need for Madden 10. Super Mario Karts from Super Nintendo is still a good playable game. I'll be fair on this one and admit that I'm not a gamer so I really can't say for sure if people get their money out of their games or not.
If times are tough, you have to cut something. I guess you could pull Congress old trick and pay for it "by cutting waste, fraud, and abuse." (Yes, Congress actually had the nerve to tell us they'd pay for $400 billion of Obamacare, approximately $1300 per every man, woman, and child, by cutting down on Medicare waste, fraud, and abuse, and this was AFTER Obama personally went through the budget with a fine tooth comb line by line looking for things to cut.) Since you aren't Congress, I'd suggest that a good way to cut down is to avoid buying anything that Best Buy sells.
And oh, avoid buying the stock too.
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