Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Comment-palooza

By -

If you look back at the night of the 2016 election, you’d probably be very, very surprised at my reaction to the shocking news that Trump was winning:

To explain………..I was excited about the fact that the equity markets were suddenly heading into a free fall (and would ultimately be limit-down). That didn’t last, of course, nor did my enthusiasm.

What was interesting about that night, however, was the sheer popularity of the comments section; it was absolutely packed with people (of course, this was before social distancing existed):

(more…)

Negative Sales Growth Emerges

By -

A much larger volume of filings last week lifted the 3rd quarter financial statement update to about 33% complete. Still too early to make any macro measurements but anecdotally we are seeing a large frequency of rising gross and operating profit margins at companies with negative and falling sales growth. That is the opposite of the last quarter when profit margins fell very broadly. We suggested back in July that layoffs were being delayed but this has now become reality as shown in the recent financial reporting.

Companies are beginning to assess the longer term now as it looks like businesses will be disrupted for an extended period. A higher gross profit margin for a negative sales company means that costs are dropping at a faster rate than sales. That is layoffs of production labor are imminent. Similarly, the only way for costs to decline when sales are negative is to layoff salespeople, administrators, and management.

(more…)