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View Full Version : it is sad to see sears go after 125 years



Brett Hurt
10-14-2018, 05:52 PM
https://www.theguardian.com/business/2018/oct/14/sears-bankruptcy-mall-stores-closure I did like there tools and have a lot of them, but you can not compete with hf on th tool side. If I was starting out again in this hobby hf would be my go too place. I got this as my frist tool from them https://www.harborfreight.com/1-hp-4-in-x-6-in-horizontalvertical-metal-cutting-band-saw-62377.html and after 30 years still running same motor.

Doozer
10-14-2018, 06:25 PM
Just sell all the tools you have now,
and buy all new ones at Harbor Freight.
There, problem solved.

-D

Tungsten dipper
10-14-2018, 06:56 PM
Just sell all the tools you have now,
and buy all new ones at Harbor Freight.
There, problem solved.

-D
So cold, but funny! LOL!

J Tiers
10-14-2018, 07:02 PM
Well, at least folks will stop buying broken Sears tools and trying to get them replaced free.....

And the price on old Craftsman tools may drop a bit.... some people seemed to think they were worth Snap-on collector prices.

It's kinda crazy, Sears should have OWNED the internet.

Sears was the store most likely to have beat Amazon to the punch, given their long history, and they never seem to have even thought about trying. They were a natural to be in there as of 20+ years ago, almost before the internet really became a "standard personal accessory". But they never did.

rickyb
10-14-2018, 07:09 PM
https://www.theguardian.com/business/2018/oct/14/sears-bankruptcy-mall-stores-closure I did like there tools and have a lot of them, but you can not compete with hf on th tool side. If I was starting out again in this hobby hf would be my go too place. I got this as my frist tool from them https://www.harborfreight.com/1-hp-4-in-x-6-in-horizontalvertical-metal-cutting-band-saw-62377.html and after 30 years still running same motor.

We knew this was coming the minute Sears announced its merger with KMart. To make thing worse, they tried to maintain both entities. A bit like trying to make a right out of two wrongs. CEOs and board of directors should be held accountable for poor decision making.

flylo
10-14-2018, 07:21 PM
Sears made their profit for years on credit sales. They didn't take anyone elses card & make a killing. I don't know how they could buy Kfart while in bankruptsy or why they would wany sh*thole Kfart in the 1st place. It was way past it's prime & on a fast downhill slide. Also they quit sending catalogs & never got a website that was any good. They just didn't keep up with they changing market.

danlb
10-14-2018, 07:31 PM
With regard to Sears out competing Amazon, I think that Sears was much too conservative. They rigidly opposed Visa and Mastercard when they came out, insisting on using their own revolving credit system. Each large purchase had to be approved individually. That lost them sales... Well, some of mine. Who wants to stand around for 20 minutes waiting for a manager's approval to buy a vacuum cleaner?

Sears never quite got past the idea of making a profit from shipping and handling on catalog sales. There was even a handling charge the last time that I picked up a catalog purchase at the store.

But I really liked other aspects of the business. We had a service center right here in town where I could pick up any part needed for repair of most of their equipment. I bent the shaft of my first hand drill, and even though it was 20 years old they had parts to fix it. They had a great selection of goods in the store and had the catalog to back up that inventory... as long as you were willing to wait a week or 3.

I'll miss them too.

danlb
10-14-2018, 07:36 PM
Sears made their profit for years on credit sales. They didn't take anyone elses card & make a killing. I don't know how they could buy Kfart while in bankruptsy or why they would wany sh*thole Kfart in the 1st place. It was way past it's prime & on a fast downhill slide. Also they quit sending catalogs & never got a website that was any good. They just didn't keep up with they changing market.

You got that backwards.

K-Mart was in bankruptcy and bought Sears while Sears was doing OK. Like many mergers, it was a leveraged buyout using the equity of Sears assets. It amazes me that we allow companies to be bought based on promises that the stock will go up and knowing that they will sell off assets once the merger completes.

radkins
10-14-2018, 08:02 PM
Well, at least folks will stop buying broken Sears tools and trying to get them replaced free.....

And the price on old Craftsman tools may drop a bit.... some people seemed to think they were worth Snap-on collector prices.

It's kinda crazy, Sears should have OWNED the internet.

Sears was the store most likely to have beat Amazon to the punch, given their long history, and they never seem to have even thought about trying. They were a natural to be in there as of 20+ years ago, almost before the internet really became a "standard personal accessory". But they never did.

Well they stopped the free tool replacement some years back! I see now that Lowes has the complete line of Craftsman mechanic tools and tool boxes, the tool section of our local Lowes building supply looks like a sears store from a few years back except they don't have the wood working tools (yet anyway).

As far as what has killed sears it was their STUPID sales strategy! In 2005 I went into Sears to buy a Craftsman lawn tractor that cost a bit over $2600, I went into the store cash in hand and they had TWO, not one but TWO of the very model I wanted sitting on the floor but I was told that those were display models and I would have to order the tractor I wanted and wait a week to ten days on the thing! Several other stores, Tractor Supply, Lowes, Home Depot, etc had comparable tractors and I could take them home as soon as I paid for them, Sears had those two sitting there but all I was allowed to do was look at the darn things! Later that Spring I went back into the same Sears to buy a garden tiller they had on sale, I hit the same snag AGAIN! Although they had various models sitting there (again including more than one of the one I wanted) I was told AGAIN it would take a week to ten days and then I could come and pick it up, I walked out and have never bought anything from Sears again but I did stop at Tractor supply that same day and brought a new tiller home with me as soon as I paid for the thing.

The Sears I am talking about was a large store that was the center of a shopping mall, it was not a catalog center.

As far as I am concerned it's GOOD RIDDANCE, with a sales strategy as dumb as that how did they expect to stay in business?

alanganes
10-14-2018, 08:08 PM
It is too bad to see them fade out, last time I went into a Sears store it looked like a going out of business sale was going on. Lots of empty space on the shelves, open packages, and just a general unkempt look about the place.

I read an interesting commentary about how they unfortunately missed the boat on the whole on-line/internet sales thing (but then so did most everyone else), when in a way they were the Amazon of their day when they got started, bringing a wide array of product choices to remote customers anywhere and shipping them their purchases. Similar model using different technology.

J Tiers
10-14-2018, 08:20 PM
.....
I read an interesting commentary about how they unfortunately missed the boat on the whole on-line/internet sales thing (but then so did most everyone else), when in a way they were the Amazon of their day when they got started, bringing a wide array of product choices to remote customers anywhere and shipping them their purchases. Similar model using different technology.

Exactly the point...... they were in position to be in there first, and they did not have the vision to see that.

Mcgyver
10-14-2018, 08:49 PM
they were in position to be in there first, and they did not have the vision to see that.

they never do, its why companies don't last and no matter how huge the giants seem today, some one will come along with something new and eclipse them.

Human nature. While a company is on top, the biggest and most profitable in the world in its field, and everyone is getting rich, it would be laughable for someone to suggest, just as they posted the best year ever, the strategy that has them on top is now wrong and doomed. Meanwhile at a start-up on the other side of town....

Very few firms are able to practice creative destruction, intentionally cannibalizing themselves with new strategies that will destroy what they currently have.

good news for us little guys.

danlb
10-14-2018, 09:06 PM
they never do, its why companies don't last and no matter how huge the giants seem today, some one will come along with something new and eclipse them.

Human nature. While a company is on top, the biggest and most profitable in the world in its field, and everyone is getting rich, it would be laughable for someone to suggest, just as they posted the best year ever, the strategy that has them on top is now wrong and doomed. Meanwhile at a start-up on the other side of town....

Very few firms are able to practice creative destruction, intentionally cannibalizing themselves with new strategies that will destroy what they currently have.



If you think about it, most startups die in the first year. That makes it a very bad idea for a large, successful company to change it's core way of doing business while it's ahead. Ebay was once a giant, and was mentioned half a dozen times each day on this forum. They started making a lot of changes to "stay fresh" and threw away a lot of the things that made it successful. Now it's seldom a first choice and seldom does anyone post about a great deal from them.

Dan

lynnl
10-14-2018, 10:02 PM
I think Sears' decline started quite some time before the internet age. I think it was in the early 80's they decided to diversify, starting with the acquisition of Century 21 Realty, and some other activities totally unrelated to what they knew how to do. They seemed to be on a downhill slide from then on.

DS_park
10-14-2018, 10:16 PM
I remember pouring over the Sears catalog with my siblings around holiday season.

Years later I worked for Sears in their lawn and garden equipment maintenance department. The down hill slide was evident. No money was made fixing mowers but all the mechanics were pushed to sell maintenance agreements. If a customer had a maintenance agreement cost to fix was no limit. Many a time I put a new short block on a mover at a cost that exceeded the retail cost of an equivalent new mower. Then there was the call per hour cost per call game. One could easily do the spring special (oil change, new filter, blade sharpen) to 5 mowers per hour. Made your completed work (# of calls) per day high but dropped you below the desired $50 per call. Course on the flip side do a few riding tractors and your cost per call was high but calls per day low. Every week or so to the managers office to discuss your poor performance. We'd trade jobs to flip flop the results week to week. Was a game and everyone knew it. Actually surprised they made it another quarter of a century since then.

bborr01
10-14-2018, 10:31 PM
Sears totally missed the boat in the internet age. I remember going on their site to buy a filter for a 16 gallon shop vac. I put in the search term "16 gallon shop vac filter" and came back with 6,000 pages of every thing in their store except for filters.

I also never understood giving people a receipt that took 30 seconds to print and was about 5 separate receipts that were five feet long each. Just to throw away later.

Edwin Dirnbeck
10-14-2018, 10:38 PM
Back in the 1960s, when Walmart was doubleing in size every 2 years,Sears could have easily bought one of the Walmart copies and run it separately. They could have plundered walmarts management and strategy,and follow them into every new market.In St Louis ,we have Lowes , home depot and menards fighting it out,often 2 or 3 blocks away. There would have been almost no risk,it would have been small change for sears in the 60s.Edwin Dirnbeck

wierdscience
10-14-2018, 11:05 PM
IMO they started thier downward slide 30 years ago when they started closing most of their service centers.They were the selling point for a lot of Sear's product.The idea that parts and service were just a few miles away.

Paul Alciatore
10-14-2018, 11:41 PM
That mile long receipt was there answer to the internet. It was a lot cheaper to print those receipts than to hire a proper IS staff to create an internet sales site.




Sears totally missed the boat in the internet age. I remember going on their site to buy a filter for a 16 gallon shop vac. I put in the search term "16 gallon shop vac filter" and came back with 6,000 pages of every thing in their store except for filters.

I also never understood giving people a receipt that took 30 seconds to print and was about 5 separate receipts that were five feet long each. Just to throw away later.

tomato coupe
10-14-2018, 11:49 PM
I think Sears' decline started quite some time before the internet age. I think it was in the early 80's they decided to diversify, starting with the acquisition of Century 21 Realty, and some other activities totally unrelated to what they knew how to do. They seemed to be on a downhill slide from then on.

I don't think Century21 was ever owned by Sears.

A.K. Boomer
10-15-2018, 12:15 AM
I admire them - they had a certain degree of integrity for a large company, born from the roots of the nation and more than just a "company" - they were what people would make plans with and dreams of, their catalogs were legendary and when they got old were the only real source of toilet paper people had,


Sears will remain that icon everybody else can get in line for the shallow monetary gain, at least they don't have to bow to that crap anymore... survival is not everything if you can still go down with some pride, which is more than i can say for most of the rest of them. time to slow down people... and please stop reproducing with your dim-witted offspring... my guess is if that happened - Sears would make a comeback...

Dan_the_Chemist
10-15-2018, 12:25 AM
The only reason I went to Sears was the "we will replace it forever" warranty on the hand tools. About 30 years ago their power tools started a serious down-slide. I still have a 1950's Craftsman table saw that is made of solid cast iron, good castings, and good machining. But after 1980 everything started to become cheaper, flimsier, crappier. Finally I just decided to never buy a Sears power tool ...

Then they told me that they were not going to honor the Craftsman "forever" warranty. I walked out of the door and never went back. So personally I don't care that they are going the same way as the East India Company, Woolworths, and Enron...

A.K. Boomer
10-15-2018, 12:44 AM
Snap-on did the same to me with the "forever" warranty

try paying three times the price of what your craftsman tool cost then having the dim bulb snap-off guy tell you "well i can't warranty that"

talk about a deal breaker,,, I WILL shop at HF --- at least they will replace it and hate to break it to Dooz but same country of origin as good ole "made in USA" snap on. lol I love Chinese stuff - just eat it up..

J Tiers
10-15-2018, 12:56 AM
I was given a brand new set of Craftsman taps and dies..... The taps were fine.

The dies appeared to have been chewed out of the steel by a crew of drunk squirrels, and worked about as well as you would expect.

I eventually got them to take the whole works back, with the agreement of the giver (my wife) for 100% refund. Since then I buy used brand name taps and dies, Butterfield, Card, etc (yes I know some are out of business). Much much better.

I actually HAD bought one of those cheap import sets at a tag sale, just to have representative units for most US and Metric threads. That cheezy low cost import set worked better than the Sears Craftsman set.

US manufacturing has gone to heck every single time a company decides it must "compete with" the offshore cheap stuff. The only way to compete is price, and the only way to lower price in the US is to cut corners. So they cut corners, which the import brands do not NEED to do..... And the US made stuff is then worse than the import.

Tungsten dipper
10-15-2018, 06:25 AM
You would think if Sears watched the demise of Wards, they wouldn't do the same thing. Though they did last a little longer.

Brett Hurt
10-15-2018, 07:56 AM
this https://www.npr.org/2018/10/15/657395298/sears-drowning-in-red-ink-finally-files-for-chapter-11-bankruptc

garyhlucas
10-15-2018, 08:25 AM
And then there is McMaster Carr, also a catalog company and also over 100 years old. Not only made the transition to the internet but did it better than most!

My in-laws home was bought as a kit from the Sears catalog around 1960. I stopped going there a good thirty years ago.

lynnl
10-15-2018, 08:50 AM
Some of my fondest childhood memories were provided by Sears and Roebuck ...along with J.C. Penney, Montgomery Ward, Spiegel, and Aldens.

We lived about 25 miles from a sizeable town (Florence, Ala) and Dad didn't own a car until I was 12. So Mom did the larger portion of shopping by mail order (the Bezos family lived next door by the way.)
Mom was a good seamstress and sewed dresses for my sister, and many of the shirts for my younger brother and I, but stuff like pants, shoes, socks, coats, school supplies, toys, etc., along with almost all household items (towels, sheets, etc.) were mail ordered, with Sears being probably the main go-to source.

The order would usually arrive, not in a box like nowadays, but in a shapeless bundle wrapped in heavy brown paper. Man! I can still remember the thrill and excitement those bundles would provide ...for the entire family! We'd be whooping and hollaring and making such a ruckus they could hear us over at the Bezos'es. Sometimes little Jeff would come over to see what was going on. It was like Christmas several times a year!

And, speaking of Christmas, ...Ah, the countless hours of joy from early November through the rest of the year poring over the Christmas mail order catalogs, drooling over all the toys, and creating a world of pure delight in my mind. Although poorer monetarily back then, we were much richer in the ways that really matter.

Thanks for the memories Mr. Sears,..Mr. Roebuck, ..Mr. Penney.
...Oh yeah, you too Mr Bezos!

Mcgyver
10-15-2018, 09:13 AM
Ebay was once a giant, and was mentioned half a dozen times each day on this forum. They started making a lot of changes to "stay fresh" and threw away a lot of the things that made it successful. Now it's seldom a first choice and seldom does anyone post about a great deal from them.


that metric is "what grumpy machinists looking for a bargoon think of them". Take a look and revenue, profit and stock price and argue they've blown it.

Start ups die because they were bad ideas and/or they out of money....that is not an argument for sticking with the status quo because statistically most new things fail - not all of them fail and one day, one will eclipse the incumbent. An incumbent has the knowledge and resources to have a better chance of any in pursuing a new direction; but it doesn't (or rarely) happen because of the inertia of the current success.

If you were the CEO of a large firm doing better than it ever had, would you listen to someone who'd not yet accomplished anything but was telling you everything you are doing and wrong and you need change? doesn't happen.

Arcane
10-15-2018, 09:36 AM
............

The order would usually arrive, not in a box like nowadays, but in a shapeless bundle wrapped in heavy brown paper. Man! I can still remember the thrill and excitement those bundles would provide ...for the entire family! We'd be whooping and hollaring and making such a ruckus they could hear us over at the Bezos'es. Sometimes little Jeff would come over to see what was going on. It was like Christmas several times a year!

.............

Looks like we now know who planted the kernel in Jeff Bezo's mind that grew into the mail order giant Amazon.com.

MichaelP
10-15-2018, 10:13 AM
As far as I can see, Sears has been dead for quite some time already.

Doozer
10-15-2018, 10:25 AM
Something I have observed....
Made in USA used to mean something.
It is sad to admit, it is not as good as it used to be.
The market is flooded with cheap price and poor quality goods.
The real reason for this is the drive for corporate profit.
Many American companies are publicly traded affairs with shareholders.
The shareholders demand a profit every quarter, but that is not enough.
They demand an ever increasing profit.
So American companies, even though they say proudly that their product
is made in the USA, it is made with 80% China parts and assembled here.
Managing Chinese supplier quality so you have good parts to build your
product assemblies here in the USA is a difficult task. As a result, many
times the name brand USA made products are no longer as good as they
used to be years past. Not to mention all the engineering designs have
been made as cheap as possible to reduce cost. Many times also, parts
come in that do not meet print, and production chooses to use them
anyhow, with risk, so that they can get product out the door, and keep
the numbers up for the shareholders. This happens all the time.
So these are just a few reasons why made in USA is slipping and that
(sadly) many times the Harbor Freight stuff is as good or better than
the USA made stuff. I guess with the principles of a free market economy,
if the USA stuff gets better and cheaper, consumers will start buying
USA again, but with the demands of corporate greed (and it is greed),
it is a sizeable task to dig American manufacturing out of the hole that
it is currently in. I admit HF wrenches and sockets are pretty good.
I just always try to buy American if I can afford it, even though I work
in manufacturing, and I know the quality is not as good as years ago.
I have no good advice on how to dig out of this hole. All I know is that
once a privately held company sells out to shareholders, things for the
product that company makes go down hill fast.

---Doozer

A.K. Boomer
10-15-2018, 10:46 AM
There is one part of the equation that I can never see leveling out - you can even the playing field tariff wise - you can try your best with design and quality control, you can crunch the beans in whatever direction you want but the truth remains that they will simply out-work us and do it for peanuts,

so you have to come to grips with the fact that if we ever really did "try to compete" that way - that we as a people would be absolutely miserable in doing it...

it is what it is, we don't want to be miserable, but there might be a happy medium that could work if the emphasis was still on quality and our typical factory worker got allot more done for less pay. not miserable pay but still enough to afford a $150,000 dollar house and fill it full of crap, you know - instead of the half million dollar house filled full of crap...

macona
10-15-2018, 01:38 PM
Start ups die because they were bad ideas and/or they out of money....

From the ones I have been involved with it was usually people running the company that had no business running a company. Sigh...

softtail
10-15-2018, 03:41 PM
It's been dying for at least 30 years... and this doesn't mean they are dead.....yet. They should just get it over with and throw in the towel... talk about a slow motion wreck. Chinese tariffs may be the nail in the coffin.

Companies have lifespans. GE is tanking as well. Amazon won't be around forever.

mister honey
10-15-2018, 04:15 PM
Just to pile on the I hate Sears bandwagon:

As a young pup, my friends and I would visit Sears with our hard earned dollars and buy Craftsman stuff for our toolboxes. Fifty years later, I still have and use those Craftsman wrenches, ratchets and socket sets.

Some 35 years ago, I went into the local Sears, cash in my pocket, intending to buy a freezer for my newlywed wife. The sales guy was an absolute jerk and insisted that I open a Sears credit card as that was "the best thing for a young guy like me." Our discussion became somewhat heated and I finally told him FU and went to Swallens (local Cincinnati appliance store) where they were thrilled to take my cash.

Years later (yes, I am a slow learner) I needed to return a sweater to Sears, so I went to a checkout counter and the attendant said she could not help me. I should take the sweater back to the counter in the clothing department (which was perhaps 20 feet away from her area.) So, I go to the clothing department counter and wait 15 minutes or so for someone to show up. No one ever appeared and eventually, the previous attendant came over and said "Oh, I can help you over here."

Good riddance to Sears as they were a pox on good customer service and were their own worst enemy!

Mike

Tony907
10-15-2018, 05:00 PM
I still wonder why the checkout registers look they are from the early 90's. To me it's just another sign of lack of re-investment into the company. Those things look like they should have a CRT screen.

I remember when I could walk in with an old tool and walk out several minutes later with a new one. No 20 questions, no phone number, no email and no credit card harassment.

After a very recent debacle with several impact guns that were still in warranty, I will NEVER buy another new power tool that says craftsman.

Dan_the_Chemist
10-15-2018, 05:16 PM
In 2008, Sears CEO Eddie Lampert decided to restructure the company according to Ayn Rand’s principles.

Lampert broke the company into more than 30 individual units, each with its own management and each measured separately for profit and loss. The idea was to promote competition among the units, which Lampert assumed would lead to higher profits. Instead, this is what happened, as described by Mina Kimes, a reporter for Bloomberg Business:

An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other — and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources.

A close-up of the debacle was described by Lynn Stuart Parramore in a Salon article from 2013:

It got crazy. Executives started undermining other units because they knew their bonuses were tied to individual unit performance. They began to focus solely on the economic performance of their unit at the expense of the overall Sears brand. One unit, Kenmore, started selling the products of other companies and placed them more prominently than Sears’ own products. Units competed for ad space in Sears’ circulars…Units were no longer incentivized to make sacrifices, like offering discounts, to get shoppers into the store.

Sears became a miserable place to work, rife with infighting and screaming matches. Employees, focused solely on making money in their own unit, ceased to have any loyalty to the company or stake in its survival.

We all know the end of the story: Sears share prices fell, and the company appears to be headed toward bankruptcy. The moral of the story, in Parramore’s words:

What Lampert failed to see is that humans actually have a natural inclination to work for the mutual benefit of an organization. They like to cooperate and collaborate, and they often work more productively when they have shared goals. Take all of that away and you create a company that will destroy itself.


https://www.pbs.org/newshour/economy/column-this-is-what-happens-when-you-take-ayn-rand-seriously

softtail
10-15-2018, 05:27 PM
Dan, interesting.

A toxic culture fueled by greed where everyone is out for themselves. Reminds me of something... can't put my finger on it.. hmm.

754
10-15-2018, 06:13 PM
I can remember she you walked into Sears with a warranty tool, and walked out with an equivelant replacement. then one day I took in an awl I think out of the screwdriver sets, what they offered me was cheaper looking, different color, did not match the rest of the set..
After that I realized anything they replaced would probably make me unhappy..

Jim Stewart
10-15-2018, 06:13 PM
Twenty years or so ago I decided I'd never again buy a Sears power tool. Not that they were bad tools, as a rule, but because they had nonstandard consumables and repair parts. Like the belt sander that used a belt 1/4" longer than any standard sander - of course, Sears' price was outrageous. This experience is known as "getting Searsed".

Then, ten or 12 years ago, my local Ace Hardware started carrying Craftsman hand tools, an excellent selection of them. I haven't been in a Sears store since.

Oddly, I've found Sears Parts (online) has an excellent selection of repair parts, even (for example) for my 30 year old Weedeater riding mower - and my most recent order for a control cable arrived in four days. I hope this segment of the Sears empire survives. In Dan's post above I note that the units of Sears were semi-independent. Maybe that means the parts unit will survive somehow.

-js

Wheels17
10-15-2018, 06:50 PM
The last broken hand tool I had replaced was a Craftsman shovel. The replacement was a Companion brand shovel without a warranty....

Mcgyver
10-15-2018, 07:54 PM
What Lampert failed to see is
]

guys like Lampert will make you mental. I knows lots, really bright guys who know business and finance extremely well. Most people you meet or know would not be capable of the corporate finance ability and understanding they bring to business. I can play in the space and to a degree hold my own, but the stars are very impressive. The issue though is they've done so well for themselves they start to think theirs just really doesn't stink and what a business really needs is their brilliant input. The problem is their understanding has only ever been as an outsider, they've never created anything, done commerce with customers and suppliers, built a team, faced competition or sweated making payroll for that matter. And hence the input is stupid, the strategies not built on deep understanding they get viewed by all involved as arrogant wastes of time. All supporting my theory the single biggest problem in business and management is ego.

I hope I don't ever take a private equity dollar unless its for all of it

lugnut
10-15-2018, 08:46 PM
WAY, WAY back when I was a pup, in the 50's we used to look forward for the Sears catalog to show up in the mail box. The Sears Christmas Catalog was nearly wore out by the time Christmas rolled around. Living on a farm in Idaho, we raised potatoes and at the age of 8 to 12 years old we would pick potatoes and make a lot of money for the day. We would spend every cent on stuff ordered from the Sears Christmas catalog. Later in my teen years and later as a young adult I always looked at Craftsman tools as one of best you could own. But then as usual they started having them made in China and they are no better the HF tools... I see our local TrueValue store sells Craftsman tools. I still own a few treasured, early Craftsman tools. It is sad to see a American Icon go down tube.

A.K. Boomer
10-15-2018, 09:49 PM
I have both craftsman and snap-off hand wrenches,

the older craftsman are bombproof but the downfall is they are very bulky, still - if its wide open space and no need to worry about fitting into area's i reach for the craftman allot of time simply because they don't cut into your hands when you use them, snap-offs are too thin in that area,

no reason they could not make mild I-beam construction with the same amount of material... technically Im not extremely attached to either, I could design a much better wrench that is both strong and user friendly.

I do bad mouth snap off every chance i get, highly overrated - and do not stand behind their products anymore - I do like their sockets due to flank drive but iv broken and ton of snap-offs sockets also - still they are thin wall and it's amazing what they do take so I am partial to them...

yet when snap-off tanks I think I will sound allot like the guys here talking about craftsman --- they are cooking their own goose so should be done soon...

tlfamm
10-15-2018, 09:57 PM
"I have both craftsman and snap-off hand wrenches,"

As do I - I think only once did I have to return a Craftsman 1/4" ratchet (defective right out of the store). I've never broken anything, but I'm not in the trades.

A.K. Boomer
10-15-2018, 10:52 PM
It's the price difference between the two that gets me the most - you pay three times the price you expect some loyalty,

but snap-offs developed a "holier than thou" attitude - you guys ain't jack $hit...

Just in case any sales reps are listening hear this --- Im not here for you - your here for me, if i so choose - got it? I don't depend on you - you depend on me - I can walk in any direction I want yet you cannot as you are the vulnerable one who has to depend on customers - got it, good - Im glad we had this little talk about how the real world works - cuz you will never see another dime from me and in fact iv curbed dozens of minds in the industry and put a hefty dent in overall bean counter profits,,,

id add the advice to not piss people off but a little late for that and once that cats out of the bag its never going back in...

i'll pick your crap up at yard sales for pennies on the dollar when you fail - got it ? good...

JRouche
10-16-2018, 12:55 AM
WAY, WAY back when I was a pup, in the 50's we used to look forward for the Sears catalog to show up in the mail box. The Sears Christmas Catalog was nearly wore out by the time Christmas rolled around.

Yup.. We always referred to it as the "Wish Book". Always a good time thumbing through the old sears catalog. JR

Machine
10-16-2018, 07:33 AM
The thing I'll miss most about Sears is not being able to buy products like this anymore...
https://farm9.staticflickr.com/8876/18593535046_f2302ea13e_b.jpg
https://farm9.staticflickr.com/8876/18593535046_f2302ea13e_b.jpg
https://farm9.staticflickr.com/8863/17997274304_3911114ec4_b.jpg
https://farm9.staticflickr.com/8863/17997274304_3911114ec4_b.jpg

And especially this...
http://www.airplanesandrockets.com/magazines/images/minibike-1969-sears-christmas-wishbook.jpg

http://www.airplanesandrockets.com/magazines/images/minibike-1969-sears-christmas-wishbook.jpg

Brett Hurt
10-16-2018, 08:55 AM
the time line https://www.cnn.com/interactive/2018/10/business/sears-timeline/index.html

gaston
10-16-2018, 10:30 AM
30 years ago we went to the mall and parked in the big sears lot if we could find a space wife shopped clothes ,I shopped tools ,it was always ur first stop and often our last to do our shopping,'
this week I made a stop at the same mall and as usual I parked in the sears lot. I did so because it always empty and a short walk thru the sears store into the rest of the mall . Nice wide isle and nothing of interest to distract you!

thaiguzzi
10-16-2018, 10:32 AM
It's the price difference between the two that gets me the most - you pay three times the price you expect some loyalty,

but snap-offs developed a "holier than thou" attitude - you guys ain't jack $hit...

Just in case any sales reps are listening hear this --- Im not here for you - your here for me, if i so choose - got it? I don't depend on you - you depend on me - I can walk in any direction I want yet you cannot as you are the vulnerable one who has to depend on customers - got it, good - Im glad we had this little talk about how the real world works - cuz you will never see another dime from me and in fact iv curbed dozens of minds in the industry and put a hefty dent in overall bean counter profits,,,

id add the advice to not piss people off but a little late for that and once that cats out of the bag its never going back in...

i'll pick your crap up at yard sales for pennies on the dollar when you fail - got it ? good...

I've got about 35k in English Pounds in Snap On & Mac Tools, so in excess of 40k$. 15 years of buying every week, min payment 5, usually 10 Pounds off the dealer coming round in his van. 1988-2003.
What's your opinion on Mac Tools these days?

Post #49 - LOL!

MichaelP
10-16-2018, 12:21 PM
The thing I'll miss most about Sears is not being able to buy products like this anymore...
You made my day. :)))

softtail
10-16-2018, 01:28 PM
The catalog had everything a boy could wish for...
I never did get the nerve up to ask Santa for the brunette on page 274 of the lingerie section.

tlfamm
10-16-2018, 01:54 PM
I didn't really begin shopping at Sears until I was in my twenties. In my formative years, my family went to the giant 8-story Montgomery Wards building in Baltimore:

https://explore.baltimoreheritage.org/items/show/412

I have only one surviving memory of the place: a large section of one floor was devoted to garden tractors, and possibly small farm tractors. The rubber tires on those tractors were outgassing something that I found vaguely appealing (probably carcinogenic), so I was always happy to be among the tractors.

As an adult I gradually built up a substantial collection of Craftsman mechanics tools, some carpentry tools, etc: these were generally subjected to no more than homeowner-level stress*, and I can't really really recall any tool failing.

I'll miss Sears - but I'm left with the sense that the corporation could not evolve and really could not be effectively managed. Maybe Lowes will be an effective steward of the Craftsman brand.


*I've got a pal who has an obscenely large tool-chest (must be close to the size limit of such) loaded with mostly Snap-on tools, valued at eleventy-seven thousands of dollars. In the pressure of work at his Mercedes dealership, tools wear out, break, and sometimes go walkabout. Different from a homeowner environment.

mattthemuppet
10-16-2018, 02:10 PM
Something I have observed....
Made in USA used to mean something.
It is sad to admit, it is not as good as it used to be.
The market is flooded with cheap price and poor quality goods.
The real reason for this is the drive for corporate profit.
Many American companies are publicly traded affairs with shareholders.
The shareholders demand a profit every quarter, but that is not enough.
They demand an ever increasing profit.
So American companies, even though they say proudly that their product
is made in the USA, it is made with 80% China parts and assembled here.
Managing Chinese supplier quality so you have good parts to build your
product assemblies here in the USA is a difficult task. As a result, many
times the name brand USA made products are no longer as good as they
used to be years past. Not to mention all the engineering designs have
been made as cheap as possible to reduce cost. Many times also, parts
come in that do not meet print, and production chooses to use them
anyhow, with risk, so that they can get product out the door, and keep
the numbers up for the shareholders. This happens all the time.
So these are just a few reasons why made in USA is slipping and that
(sadly) many times the Harbor Freight stuff is as good or better than
the USA made stuff. I guess with the principles of a free market economy,
if the USA stuff gets better and cheaper, consumers will start buying
USA again, but with the demands of corporate greed (and it is greed),
it is a sizeable task to dig American manufacturing out of the hole that
it is currently in. I admit HF wrenches and sockets are pretty good.
I just always try to buy American if I can afford it, even though I work
in manufacturing, and I know the quality is not as good as years ago.
I have no good advice on how to dig out of this hole. All I know is that
once a privately held company sells out to shareholders, things for the
product that company makes go down hill fast.

---Doozer

Making a profit is the aim of running a company, right? It's not to provide for your workers or to support some industrial policy.

USA companies made profits - huge ones if you look at all the industrial philanthropists this country has produced - before China came on the scene. How did they manage it? Lack of competition, just the same way Google, Facebook and the tech giants make huge profits now. Why the drive to offshore production? Increase in competition exposed their various costs, especially healthcare, pensions (most US companies are really healthcare and pension providers that make/ supply things) and environmental regulations, and inefficiencies, such as poor supply chains and supply chain management. It also exposed their lack of reinvestment (a classic symptom of a lack of competition) in product and production - just look at Southbend lathes and Bridgeport milling machines, those things were dinosaurs being produced in the same form from the 30's to the 70's.

It happened to the US auto industry when import protections were relaxed, allowing Japanese imports in which were both better AND cheaper than US made and designed cars. It happened with the accession to the WTO by China. Part of their competitive advantage is lower costs due to no healthcare, pensions or environmental regulations, but a large part is their incredibly efficient supply chain, which far surpasses anything you can find in the US. And while one can easily point to the lost jobs and change in manufacturing that China's rise has caused, you should also consider the fact that those low prices have also kept US inflation subdued which has allowed the Fed to keep interest rates low for years, far lower than they would have otherwise. That might not matter much to you individually, but it matters a great deal to people buying a house or a car, which in turn matters a great deal to the people building those things.

something to think about anyway

J Tiers
10-16-2018, 02:30 PM
Making a profit is the aim of running a company, right? It's not to provide for your workers or to support some industrial policy.

USA companies made profits - huge ones if you look at all the industrial philanthropists this country has produced - before China came on the scene. How did they manage it? Lack of competition, just the same way Google, Facebook and the tech giants make huge profits now. Why the drive to offshore production? Increase in competition exposed their various costs, especially healthcare, pensions (most US companies are really healthcare and pension providers that make/ supply things) and environmental regulations, and inefficiencies, such as poor supply chains and supply chain management. It also exposed their lack of reinvestment (a classic symptom of a lack of competition) in product and production - just look at Southbend lathes and Bridgeport milling machines, those things were dinosaurs being produced in the same form from the 30's to the 70's.

It happened to the US auto industry when import protections were relaxed, allowing Japanese imports in which were both better AND cheaper than US made and designed cars. It happened with the accession to the WTO by China. Part of their competitive advantage is lower costs due to no healthcare, pensions or environmental regulations, but a large part is their incredibly efficient supply chain, which far surpasses anything you can find in the US. And while one can easily point to the lost jobs and change in manufacturing that China's rise has caused, you should also consider the fact that those low prices have also kept US inflation subdued which has allowed the Fed to keep interest rates low for years, far lower than they would have otherwise. That might not matter much to you individually, but it matters a great deal to people buying a house or a car, which in turn matters a great deal to the people building those things.

something to think about anyway

To sustain the new profits will require having customers. But the customers, making now far less than they used to, no longer can buy.

The system depends on having an asymmetric relation of cost to manufacture in the source country vs the destination. And that is unsustainable. It inevitably works to reverse the positions of the two, which is highly destabilizing.

danlb
10-16-2018, 02:52 PM
Making a profit is the aim of running a company, right? It's not to provide for your workers or to support some industrial policy.



Strangely, some very large companies got that way because of objectives that were not profit motivated. We HAD a government policy of maintaining the ability to support a war effort. That required a healthy industrial base. We HAD a policy that exchanged territorial monopolies for telecommunications in exchange for high quality and low cost. Their profit? Guaranteed 3-5% based on necessary expenses. We had "non profit" hospitals and other organizations needed for the public benefit.

That worked well through most of the 20th century. I don't know why the focus changed to requiring ever increasing stock prices and profits.

flylo
10-16-2018, 03:52 PM
I remember a time when & can't tell you when but the US car makers could have taken back the business lost to Japan because the yen to dollar made US cars cheaper but the idiot short sighted bean counters & investors raised the US car prices instead. The little profit they made the next quarter cost them much more in the long run but that's what happens when a company sells it's soul in the form of stock & lose control of their own company to people who know nothing about the product or market.

J Tiers
10-16-2018, 06:06 PM
Strangely, some very large companies got that way because of objectives that were not profit motivated. We HAD a government policy of maintaining the ability to support a war effort. That required a healthy industrial base. We HAD a policy that exchanged territorial monopolies for telecommunications in exchange for high quality and low cost. Their profit? Guaranteed 3-5% based on necessary expenses. We had "non profit" hospitals and other organizations needed for the public benefit.

That worked well through most of the 20th century. I don't know why the focus changed to requiring ever increasing stock prices and profits.

The concept of "increasing shareholder value" came about.

It became a "law of business", and I believe was even used in successful shareholder lawsuits against company execs. If they did not hew to the line, they could be found to be liable for "losses".

Worst damn concept ever, in my opinion. It forces raw, naked, capitalism, and produces folks like Martin Shkreli. Could have been introduced by Karl Marx just to discredit capitalism.

mattthemuppet
10-16-2018, 07:13 PM
Strangely, some very large companies got that way because of objectives that were not profit motivated. We HAD a government policy of maintaining the ability to support a war effort. That required a healthy industrial base. We HAD a policy that exchanged territorial monopolies for telecommunications in exchange for high quality and low cost. Their profit? Guaranteed 3-5% based on necessary expenses. We had "non profit" hospitals and other organizations needed for the public benefit.

That worked well through most of the 20th century. I don't know why the focus changed to requiring ever increasing stock prices and profits.

The motives of the giant 19th and 20th century companies were most certainly profit motivated. Do you think defense companies charge what they do from altruism? The industrial base to support WW2 was both present (mostly large car and aircraft companies) and ramped up markedly to meet the demand, then got very rich off the proceeds. AT&T got fat and wealthy from its monopoly, so much so that it was forced to break up by the government. If it was such a parsimonious and profit averse company, why break its monopoly? I think that there's far too much rose tinted glasses going on with the "back in the good old days". The good old days when you could go into a factory job with no education, do a manual job and earn enough to buy a house, 2 cars, put your kids through university AND retire on a generous pension with lifetime healthcare were an anomaly that was created by the baby boomers, a cosseted economy and lack of competition. Even then, the anomaly went on for too long and the last 30 years is just a correction back to normal.


Besides the US has a healthy industrial base - it exports high value industrial machinery, medical equipment, aircraft and cars around the world! The $ value of industrial output is considerably higher now than it was 30 years ago, it's just become considerably more productive and therefore needs fewer people = less jobs.

Machine
10-16-2018, 07:53 PM
Worst damn concept ever, in my opinion. It forces raw, naked, capitalism, and produces folks like Martin Shkreli. Could have been introduced by Karl Marx just to discredit capitalism.

That "raw naked capitalism" put Sears on the map and made it into the retail icon of the 20th century. Capitalism hansomely rewards entrepreneurs who improve things and bring valuable products and services to their customers. But it cuts both ways. Within the first two decades of the 21st century, that same raw naked capitalism put Sears out of business, as it should have. Sears became bloated, misguided and out of touch with its customers. It hired a shortsighted, inexperienced and incompetent hedge fund manager, of all things, to lead its brand for years during its most vulnerable time. They completely lost touch with pleasing their customers and capitalism promptly cleansed them from the market place.

That same raw naked capitalism - along with Shkreli's criminal behavior - put his company out of business too. Same thing for Elizabeth Thanos's company as well.

Capitalism works perfectly. It deletes corporate corruption and incompetence - if it's allowed to function unfettered by political cronies and govt intervention. Sentimentality aside, the death of Sears is a necessary thing based on how they handled their last 30 years of existence.

flylo
10-16-2018, 07:57 PM
I'm glad Sears is about gone, they always took good names & had them cheapened up like Atlas lathes that had Timken bearings but Sears had them made with plain bearings (bushings). I remember I bought a 5hp (yea right) 30 gal air compressor & told my wife I was goig to hate myself but I'm cheap & it was on sale & I had coupons. I was working 60+ hours a week & running a gun shop so busy from 5AM to 11PM & used it maybe twice. A week after the warrenty expired it broke a rod & they wouldn't do a thing. Same with a new riding mower, it kept bending blades & I was on the 3rd mower & had to take the store manager out the door & point to the big gokd letters saying "Satisfaction Guaranteed" & ask him if I looked satisfied. Good riddance! You guys reminince all you want I'm glad it's almost gone

J Tiers
10-16-2018, 08:09 PM
Naw....

"Raw naked capitalism" is the Shkreli approach. The total disregard of anything but absolutely maximized profit... The "robber barons". "Money makes right".

It was tempered for several generations, until its rebirth in the 1950s through the real breakout in the 1980s when it was proclaimed as a law.

The "raw" version cannot be tolerated in any decent society. The tempered version is fine.

A.K. Boomer
10-16-2018, 08:20 PM
That "raw naked capitalism" put Sears on the map and made it into the retail icon of the 20th century. Capitalism hansomely rewards entrepreneurs who improve things and bring valuable products and services to their customers. But it cuts both ways. Within the first two decades of the 21st century, that same raw naked capitalism put Sears out of business, as it should have. Sears became bloated, misguided and out of touch with its customers. It hired a shortsighted, inexperienced and incompetent hedge fund manager, of all things, to lead its brand for years during its most vulnerable time. They completely lost touch with pleasing their customers and capitalism promptly cleansed them from the market place.

That same raw naked capitalism - along with Shkreli's criminal behavior - put his company out of business too. Same thing for Elizabeth Thanos's company as well.

Capitalism works perfectly. It deletes corporate corruption and incompetence - if it's allowed to function unfettered by political cronies and govt intervention. Sentimentality aside, the death of Sears is a necessary thing based on how they handled their last 30 years of existence.

I like what JT wrote but instead of "raw naked capitalism" I would have stated "morally exempt capitalism"

and no it does not work "perfectly" some injustices can never be "undone" (Monsanto) and some corporate corruption and incompetence actually gets rewarded at the higher levels and all on the backs of the little guys and it goes on and on, keep in mind we only hear about the ones that get caught - and the stuff that makes the news,,,
it's getting worse and worse except it's inbreed now even on an individual basis as people will do anything for monetary gain, it's what they equate "happiness" with now, we have lost our value system of what's important - and we teach or children by example - so is it any wonder why things are actually getting worse and worse.

"value" in living used to actually be being "valued" by others,,, now it seems quite the opposite, screw what people think of you - as long as you can be a level higher then them in your puny little way of thinking what's important...

going to get a whole lot worse before it gets better....

capitalism works great when people are sincerely focused on quality and building good product and caring for everything in between - but it's your worse nightmare when people go about it for all the wrong reasons, welcome to America today and in fact it's the very root of how our wonderful political system is functioning today ... it's all bought and paid for and i got news for you - by some of the worst scum of the earth... don't mind the maggots - shedubie

J Tiers
10-16-2018, 08:27 PM
Ak "gets it".

We see this crap all the time, even in traffic.. "I drive a more expensive car than you, so that means I can just run the light, or pull out in front of you, and you better watch out, because with my money I can bury you in lawsuits and bankrupt you, so get the f... out of my way".

And if a repair or construction person has been in the house, that means they "own" every problem that occurs, even if totally unrelated.

I have known at various times some folks whose families have had money for a couple hundred years. Pretty much all very nice people, nothing to prove. You might meet them and not even know they are worth hundreds of millions of bucks.

These folks who just made a pot of money? Their money just sticks out all over them, seems like they can't let anyone forget they are rich.

rzbill
10-16-2018, 08:58 PM
The concept of "increasing shareholder value" came about.

It became a "law of business", and I believe was even used in successful shareholder lawsuits against company execs. If they did not hew to the line, they could be found to be liable for "losses".

Worst damn concept ever, in my opinion. It forces raw, naked, capitalism, and produces folks like Martin Shkreli. Could have been introduced by Karl Marx just to discredit capitalism.

Yes, I tend to agree with the shareholder issue being a problem.
I have worked for companies with the 'hydra' of a board. Ugh.
Some years ago, I joined a sole ownership manufacturing company.
No shareholders or board and NO DEBT.

It has been a breath of fresh air.

The staff guidelines for daily production decisions are simple.
1) Do what is right for the customer.
2) If #1 is satisfied, do what is best for the company.

We are far from the cheapest in our market, but our product quality, service and innovation makes our brand the 'go to' brand which easily fills the coffers with cash without trying to cheap our way to profitability.

Yes, we are international, including the far east. BUT....... we are not there for cheap production. We are there to manufacture items FOR THAT MARKET.

The point of course is that it is possible to operate well in a paradigm other than satisfacton of shareholders.

BudB
10-16-2018, 11:20 PM
Many years ago I worked for Sears. Not a lot of happy customers in the early 80's when a customer with a lifetime warranty electric drill returned it to the store only to have it replaced with a 1 years warranty. But my question is "Where will I get replacement parts for my Sear's 100 bushel corn crib?"

J Tiers
10-16-2018, 11:30 PM
I expect the Sears parts biz will be sold.... there is just too much out there to let it drop, and creditors like to be paid.

You might still be OOL about that corn crib.

thaiguzzi
10-17-2018, 12:22 AM
Ak "gets it".

We see this crap all the time, even in traffic.. "I drive a more expensive car than you, so that means I can just run the light, or pull out in front of you, and you better watch out, because with my money I can bury you in lawsuits and bankrupt you, so get the f... out of my way".

And if a repair or construction person has been in the house, that means they "own" every problem that occurs, even if totally unrelated.

I have known at various times some folks whose families have had money for a couple hundred years. Pretty much all very nice people, nothing to prove. You might meet them and not even know they are worth hundreds of millions of bucks.

These folks who just made a pot of money? Their money just sticks out all over them, seems like they can't let anyone forget they are rich.

You mean modern money. The Greed is Good folks.
Back in the day, the Quaker type businessmen in Britain were decent people making serious money but also having morals and interest in the welfare of their 100's or 1000's of employees, building schools, medical care centres, even pubs and recreational activity areas. The Cadbury's of this world etc...
These days, you just have to look at Germany and their family run firms making top quality products the whole world wants. From small 10-20 employee family firms making truck parts to BMW selling millions of cars & m/c's.. No shareholders to be seen... All private family run.

flylo
10-17-2018, 07:52 AM
Ak "gets it".

We see this crap all the time, even in traffic.. "I drive a more expensive car than you, so that means I can just run the light, or pull out in front of you, and you better watch out, because with my money I can bury you in lawsuits and bankrupt you, so get the f... out of my way".

And if a repair or construction person has been in the house, that means they "own" every problem that occurs, even if totally unrelated.

I have known at various times some folks whose families have had money for a couple hundred years. Pretty much all very nice people, nothing to prove. You might meet them and not even know they are worth hundreds of millions of bucks.

These folks who just made a pot of money? Their money just sticks out all over them, seems like they can't let anyone forget they are rich.

The part about the cars is BS. I drive older used cars & can get away with alot because they drive nice new cars & don't want them scatched or dented especially by a ZZ Top looking reject with pro gun stickers on the old truck. Sometimes you just have to have a little fun.:o

flylo
10-17-2018, 07:56 AM
You mean modern money. The Greed is Good folks.
Back in the day, the Quaker type businessmen in Britain were decent people making serious money but also having morals and interest in the welfare of their 100's or 1000's of employees, building schools, medical care centres, even pubs and recreational activity areas. The Cadbury's of this world etc...
These days, you just have to look at Germany and their family run firms making top quality products the whole world wants. From small 10-20 employee family firms making truck parts to BMW selling millions of cars & m/c's.. No shareholders to be seen... All private family run.

That was my point in another post. When a company goes public & sells stock it sells it's soul & has to answer to someone who's only concern is buying stock to make money off the coat tails of others. I wish the stock market never existed as well as the federal reserve which is not part of the government in any way.

A.K. Boomer
10-17-2018, 09:09 AM
totally agree about the stock market - one of Gandhi's 7 blunders that plague mankind "Wealth without work"

believe me - somebody's going to end up "paying" for it, and that generally means its the people who are still left working...

Mcgyver
10-17-2018, 09:19 AM
That was my point in another post. When a company goes public & sells stock it sells it's soul & has to answer to someone who's only concern is buying stock to make money off the coat tails of others. I wish the stock market never existed as well as the federal reserve which is not part of the government in any way.

No you don't.

1) How would you propose to finance a good sized business, that makes say cars or phones or computers?

2) How would you propose to manage monetary policy? No thinking person would want that to be government controlled.

Dan Dubeau
10-17-2018, 09:45 AM
No you don't.

1) How would you propose to finance a good sized business, that makes say cars or phones or computers?

2) How would you propose to manage monetary policy? No thinking person would want that to be government controlled.

Set up a go fund me or Kickstarter... :)

J Tiers
10-17-2018, 10:37 AM
No you don't.

1) How would you propose to finance a good sized business, that makes say cars or phones or computers?

2) How would you propose to manage monetary policy? No thinking person would want that to be government controlled.

Of course you are both right.

It is a fine way of financing, and a way for me to make money without running 50 different businesses.

It CAN also bring a heavy-handed bunch of bean counters to second guess every move, and start inserting themselves into the business.

Those things go together, large investors should have influence. The problem arises when the large investors are really just looking to extract the value out of the company, without concern for the future, or maybe even for what the company does, which is likely what Flylo refers to.

One may as well hate banks, because they may have to foreclose good loans to rebalance their holdings.

Mcgyver
10-17-2018, 11:20 AM
Of course you are both right.

It is a fine way of financing, and a way for me to make money without running 50 different businesses.

It CAN also bring a heavy-handed bunch of bean counters to second guess every move, and start inserting themselves into the business.
.

Not all directed at you, but lets dispel some false premises. Your view that there is something wrong with a how business is run has nothing to do with who owns the shares. It may have to do with the size of a business and certainly there is a correlation between bigger business and being public, but the mere fact of being public is a red herring. As a logical proof, take a look at the 1000's sleepy little businesses that are public listed who's results never make the news, and tell me how you think they are managed differently than private companies.

Next, this notion that big firms and investors are only looking out 90 days. Baloney. Anyone who reads annual reports will see the capex. There maybe too much emphasis on the quarter, but you are misreading the situation if you concluded its only the quarter. If that were the case, there'd be no capex. Real value comes from a steady stream of growing earnings and real business know that requires capex - and you don't have capex if you not looking out long term.

Next lets get rid of the BS that things are all messed up in the current era and were so much better in days gone by when businesses were privately held by kindly old benevolent gents. Like Scrooge maybe? Or the Robber Barons? Nostalgic fantasy land horse crap. Business always has been about maximizing shareholder value. Think it ever has been or will be different is naive. Business is for profit and will move toward the dynamic that maximizes that given the constraints. And capitalists, every thinking person for that matter (except we know that means capitalists lol) knows there must be constraints - its laws that made business abandon child labour, the whip and combines, business's primary drive, profit, has not changed.

Where there is room for debate is time frames. On that we'd probably agree - decisions made for longer term profits are probably better for society. How do you influence this? Obvious to any economists in the room, fiscal policy.....like say lower taxes on capital gains, accelerate depreciation....put incentives in place for greater capex as the level of capex is the metric of what time frame you're concentrating on.

mattthemuppet
10-17-2018, 01:14 PM
I agree with all of that McGyver except for one thing - how can you fit all that on a bumper sticker?

softtail
10-17-2018, 02:17 PM
There are many large privately held companies.

AD5MB
10-17-2018, 04:09 PM
my #1 concern is how much of my pension fund is invested in big retail.

I go with this theory: what we call capitalism is the result of centuries of experiment and failure and success, and if you think you can come up with better off the top of your head, thinking is not what you do best.

softtail
10-17-2018, 08:37 PM
It was all down hill since hunting and gathering.

Mcgyver
10-17-2018, 09:59 PM
It was all down hill since hunting and gathering.

well, except for mini bikes and big green felt hats

flylo
10-18-2018, 06:39 AM
Of course you are both right.

It is a fine way of financing, and a way for me to make money without running 50 different businesses.

It CAN also bring a heavy-handed bunch of bean counters to second guess every move, and start inserting themselves into the business.

Those things go together, large investors should have influence. The problem arises when the large investors are really just looking to extract the value out of the company, without concern for the future, or maybe even for what the company does, which is likely what Flylo refers to.

One may as well hate banks, because they may have to foreclose good loans to rebalance their holdings.

Look at the gun maker in florida KelTec. They refuse to go into debt but have grown into to huge concern & there product usually is in short supply just like Harly's used too be & bring a premium to people who "Have to have one" This isn't the best article https://blog.full30.com/kel-tec-unicorn-guns/

A.K. Boomer
10-18-2018, 09:55 AM
well, except for mini bikes and big green felt hats

I did not realize that sears created some downright pimpin cloths. lol

and that mini-bike is the cheapest looking POS iv ever seen! look at those shock tubes, I think it's just pipe that kinda fit into other pipe and they called it good.

thaiguzzi
10-18-2018, 10:06 AM
Not all directed at you, but lets dispel some false premises. Your view that there is something wrong with a how business is run has nothing to do with who owns the shares. It may have to do with the size of a business and certainly there is a correlation between bigger business and being public, but the mere fact of being public is a red herring. As a logical proof, take a look at the 1000's sleepy little businesses that are public listed who's results never make the news, and tell me how you think they are managed differently than private companies.

Next, this notion that big firms and investors are only looking out 90 days. Baloney. Anyone who reads annual reports will see the capex. There maybe too much emphasis on the quarter, but you are misreading the situation if you concluded its only the quarter. If that were the case, there'd be no capex. Real value comes from a steady stream of growing earnings and real business know that requires capex - and you don't have capex if you not looking out long term.

Next lets get rid of the BS that things are all messed up in the current era and were so much better in days gone by when businesses were privately held by kindly old benevolent gents. Like Scrooge maybe? Or the Robber Barons? Nostalgic fantasy land horse crap. Business always has been about maximizing shareholder value. Think it ever has been or will be different is naive. Business is for profit and will move toward the dynamic that maximizes that given the constraints. And capitalists, every thinking person for that matter (except we know that means capitalists lol) knows there must be constraints - its laws that made business abandon child labour, the whip and combines, business's primary drive, profit, has not changed.

Where there is room for debate is time frames. On that we'd probably agree - decisions made for longer term profits are probably better for society. How do you influence this? Obvious to any economists in the room, fiscal policy.....like say lower taxes on capital gains, accelerate depreciation....put incentives in place for greater capex as the level of capex is the metric of what time frame you're concentrating on.

BMW and a 1000 other family run firms seem to be doing quite well in Chermany without shareholders.

Mcgyver
10-18-2018, 10:58 AM
BMW and a 1000 other family run firms seem to be doing quite well in Chermany without shareholders.

Agreed there are doing well.....but

What company doesn't have shareholders?

I haven't said being private impairs a company or that being public was some big advantage, my point was its a false premise thinking being listed as the cause of the problems.

754
10-18-2018, 01:03 PM
Looks like the Ford family still holds 40 percent voting power. But I could be wrong..

gellfex
10-18-2018, 01:35 PM
The concept of "increasing shareholder value" came about.

It became a "law of business", and I believe was even used in successful shareholder lawsuits against company execs. If they did not hew to the line, they could be found to be liable for "losses".

Worst damn concept ever, in my opinion. It forces raw, naked, capitalism, and produces folks like Martin Shkreli. Could have been introduced by Karl Marx just to discredit capitalism.


No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970.

The Origin Of 'The World's Dumbest Idea': Milton Friedman https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/#67faa33e870e


The hardest part of "modern business" for a us mere mortals to understand it that low debt is bad. For a public company, it makes them a target for vulture capitalists who will buy them with debt, then borrow in the company's name to pay themselves back plus profit. This is what killed Toys-R-Us, paying for their own leveraged buyout acquisition by KKR.

Mcgyver
10-18-2018, 02:05 PM
The hardest part of "modern business" for a us mere mortals to understand it that low debt is bad. .

what you ideally want as a shareholder, whether you're the single or there are thousands, is the right level of debt. One that matches the business risk. The right amount of debt is not a modern thing. Consider how early trading ships were financed or how railways bought rolling stock. I dislike answering to weenie commercial bankers a lot more than I dislike debt lol

I think a lot of M&A is ridiculous and done for the wrong reasons....there was a study that tracked M&A and concluded that on average accretive value to shareholders was about nil. Nevertheless whether I think any particular M&A makes sense is just a judgement on my part, others (with the dough and the shares) disagree and deals happen. If they're wrong they or their lenders will lose money which you'd expect would be self correcting

On M&A, where the problem lies imo is agency risk, the conflict of interest the CEO faces between the $20MM bonus the CEO will get for completing the deal and whether the deal will create shareholder value. I'd agree that regarding agency risk especially around M&A, the owner/operator should be a better decision maker - its not a conflict when you are the CEO and shareholder. Being both the CEO and (significant) shareholder doesn't depend on being public or private however

J Tiers
10-18-2018, 02:08 PM
McGyver:

Theoretically, you are correct on all points. Businesses have shareholders, and businesses exist to make a profit.

In reality it becomes different.

There are VC firms who buy out small companies they think are undervalued, or have upside potential. They acquire a controlling interest, and install their own board and CEO.

They do not want to hold these companies, they really want to "pump and dump", to put it bluntly. Some do that in a non destructive way, and can actually build up the company. Others are more interested in speed, and they tend to quickly offshore all they can, with the goal of short term stock gains, and a selloff.

Some combine companies, cut all the "duplication" as fast as possible, offshore as much as can be done, and escape after the stock goes up.

There is fundamentally nothing different between that and buying wheat futures, then trying to manipulate the market for your benefit. They could do either, and have no interest in the businesses they buy other than how much profit they can get from fiddling with them. What happens once they cash out is unimportant.

Traditional capitalists had an interest in, a connection to the business they were in. And an interest in making sure that the products were good, not just that they sold at a good price point.

They were much less likely to "kill the cash cow" just for a profit, as those VC firms are known to do.

I have seen a "pump and dump" from the inside. It was ugly.

Mcgyver
10-18-2018, 03:04 PM
McGyver:

Theoretically, you are correct on all points. Businesses have shareholders, and businesses exist to make a profit.

In reality it becomes different.

There are VC firms who buy out small companies they think are undervalued, or have upside potential. They acquire a controlling interest, and install their own board and CEO.

They do not want to hold these companies, they really want to "pump and dump", to put it bluntly. Some do that in a non destructive way, and can actually build up the company. Others are more interested in speed, and they tend to quickly offshore all they can, with the goal of short term stock gains, and a selloff.

Some combine companies, cut all the "duplication" as fast as possible, offshore as much as can be done, and escape after the stock goes up.

There is fundamentally nothing different between that and buying wheat futures, then trying to manipulate the market for your benefit. They could do either, and have no interest in the businesses they buy other than how much profit they can get from fiddling with them. What happens once they cash out is unimportant.

Traditional capitalists had an interest in, a connection to the business they were in. And an interest in making sure that the products were good, not just that they sold at a good price point.

They were much less likely to "kill the cash cow" just for a profit, as those VC firms are known to do.

I have seen a "pump and dump" from the inside. It was ugly.

Traditional capitalist? What's that? A capitalist is someone who believes in the profit motive, private property and states protection of it and free markets.

Perhaps you meant a business executive? or owner? or??? Its conjecture prejudice and imagination. There were scoundrels in the past and scoundrels today. People wrecking business in the past, people wrecking them today, through poor management or whatever. A pump and dump btw was a bucket shop overly optimistic stock promotion to the unsuspecting while selling out the back door and is illegal, something the unsavory would do. I do not doubt the unsavory are still at it, but I don't think its unique to the modern era

But say you are right. The fact is if you act on a really bad idea or approach to management you'll destroy value....and that's self correcting. You won't be given another chance (unless your government bails them out, but every capitalist knows corporate welfare is wrong)

End of the day what you or I think does not matter. Businesses need to be free (provided its not impeding competition) to do deals based on the fact that success is rewarded and failure is punished. If all these parties you have a hate on for really are so negative to business, it'll self correct. Meanwhile its neither universal (else you'd be the worst economy instead of the best), or within our control or frankly up to us....I don't want to live in an economy where I'm not free to strike bargains as I want and grant them the same.

I'm not suggesting there are no wrongs, there's lots. But its not all wrong, its not because its listed, and by its nature, it self corrects; the business moves you make either produce sustainable profitability or they don't

gellfex
10-18-2018, 04:32 PM
the business moves you make either produce sustainable profitability or they don't

I think you miss the point by thinking they think long term. What about the scenario where the "investor" can make more in one shot by selling off a company's equipment, land and IP than by running the profitable business for 10 years?

Mcgyver
10-18-2018, 05:05 PM
I think you miss the point by thinking they think long term. What about the scenario where the "investor" can make more in one shot by selling off a company's equipment, land and IP than by running the profitable business for 10 years?

If they are not thinking long term why are they comparing what it'll make in 10 years to liquidation value? Are you saying an owner should act contrary to their economic interests and keep an under performing business going if the face of a better scenario?

The scenario you paint is a business that is under-performing. First thing I do is assess whether it can be fixed. Business don't get shut unless the conclusion is the value via DCF (which is as long term) is less than its net liquidation value...in which case present a compelling argument as to why they shouldn't be shut down? Shutting down businesses for a living is not something I'd have the stomach for, but its not clear to me why its not valid option

What about a business you own with a million in sales, it only makes $1000 profit and has for 10 years. The property it sits on is a $10MM condo site - are you going to sell it for 4000 as a multiple or earnings? Or do you do close and sell it for $10MM?

I'm all for charity, but I wouldn't expect it from the other guy in a deal.

gellfex
10-18-2018, 05:23 PM
If they are not thinking long term why are they comparing what it'll make in 10 years to liquidation value? Are you saying an owner should act contrary to their economic interests and keep an under performing business going if the face of a better scenario?

The scenario you paint is a business that is under-performing. First thing I do is assess whether it can be fixed. Business don't get shut unless the conclusion is the value via DCF (which is as long term) is less than its net liquidation value...in which case present a compelling argument as to why they shouldn't be shut down? Shutting down businesses for a living is not something I'd have the stomach for, but its not clear to me why its not valid option

What about a business you own with a million in sales, it only makes $1000 profit and has for 10 years. The property it sits on is a $10MM condo site - are you going to sell it for 4000 as a multiple or earnings? Or do you do close and sell it for $10MM?

I'm all for charity, but I wouldn't expect it from the other guy in a deal.

Your "case study" is obvious. But some point on the spectrum from that to the profitability of Apple is the choice of short term vs long term. Financial operators tend to look more short term than industrialists. The banking and insurance sector has now grown to 20% of GDP. That affects all sectors of the economy.

J Tiers
10-18-2018, 05:37 PM
No hate on for them, aside from the fact that they have, as you say, been destroying companies for decades, for over a hundred years.

"traditional capitalist"? Read what I said.... started the company to make money providing a product or service. Believes as much in the company as in the profit, and considers that they go together. Someone perhaps not unlike you. Typically NOT out to extract all the cash possible, wants to grow the company to make more money.

The VC companies "use" companies like poker chips, and, as I mentioned, could as well be speculating in wheat. The "value" of the company to them is purely in how they can buy-in, make changes, and get out at a profit. WHat actually becomes of the company is not a consideration.

The issue is that it IS self-correcting... there are more of these now than there used to be, because it CAN be very profitable to gut companies for profit. It is a good strategy to be a parasite, even one that kills the host, so long as you do not run out of hosts. Look at many diseases that are nearly always fatal.... they should die out, but they never seem to.

RB211
10-18-2018, 07:29 PM
My boss beats a drum to a different tune. Fiercely independent, does everything in house, owns everything outright, and takes crap from no one. He's a legend in the racing and airplane financing worlds.
He pays well, offers industry leading healthcare, and turns everything he touches into gold.
Connie Kalitta.


Sent from my SM-G950U1 using Tapatalk

Machine
10-18-2018, 09:40 PM
Here's some food for thought from the US's greatest industrialist...

http://www.mbiconcepts.com/henry-ford-crushes-shareholder-first-and-foremost.html
https://www.thehenryford.org/collections-and-research/digital-resources/popular-topics/henry-ford-quotes/

754
10-18-2018, 09:53 PM
Lets talk about Sears..

J Tiers
10-18-2018, 10:19 PM
Any company, any corporation, exists, not by the hand of God touching it, but rather by the society in which it exists ALLOWING it.

The society provides the legal structure, it provides the physical infrastructure, it provides the workers, and it provides defence, patent protection, law enforcement,etc, without which the corporation would be severely handicapped, perhaps unable to operate.

What corporation can so puff itself up, as to end by the owners believing that it has a right to exist, that it need provide no benefit, that it may safely be amoral, even immoral or anti-social in its actions?

When a corporation ceases to provide a benefit to society, or becomes a menace, it is fair to ask why society should continue to support and allow this beast to continue snapping at the hands that feed it, to hide under the cloak of "legality", and to assert some inherent right to exist. A criminal is, after all, a human, not lightly to be killed. A corporation is a paper creation, having its existence through papers, reports and so forth. It may be as easily cancelled as created.

I do not propose that the foregoing quote should apply to Sears. But it seems to apply to some of the discussion.

flylo
10-18-2018, 11:59 PM
The onl constant is change & Sears failed to do so & that's what did them in, simple. Malls are dying & Sears dropped the catalog & added a website that sucked, sold inferior products for years like cheapening Atlas lathes, etc. Everything I bought I regretted & they just kept giving me more credit. 30 years ago $20k if I remember. Glad they'll be gone. Textbook case on how not to run a business.

thaiguzzi
10-19-2018, 05:41 AM
So.
Last time i was in Cambodia on holiday, with my Thai Missus and English Dad, i bought a bunch of Viet army caps (similar but not the same as a baseball cap) in Viet army khaki.
Nice Commie Red Star on the front. My Dad thought they were brilliant and insisted on taking a couple back for friends in England.
Any takers?

3 Phase Lightbulb
10-19-2018, 11:01 AM
Sears had the same chance of becoming Amazon as it would have becoming the next Microsoft or the next Intel. Amazon has always been a technology company, and sells things on the side.