Thom Hogan on the hows and whys of companies which are doing fine in the current recession, and to a suggestion that "Apple is pretty much the only company that continues to do well":
No, they're not. There are plenty of companies that continue to do well. From Walmart to Verizon. Even though Microsoft posted lower revenues, they're still enormously profitable and have no debt. And that's part of the thing people don't get when they read the headlines of company failures: many of the problems have to do with over leveraging the company. Even the NYT got caught in this one. If you're dependent upon debt to finance your company's current situation, the econalypse just bit your butt big time. You've got no way to refinance that debt, you have no way to boost sales to get more cash, you can't issue new bonds or stock, the list goes on. The whole crisis is about over leveraging, from subprime mortgages to buying CDS as insurance to leveraged buyouts turned sour (e.g. Chrysler). It's all overextension. Over extend and you're in trouble. Be in control and yes your sales may be down, but you'll survive. If the econalypse had hit five to ten years ago, Nikon would have been in trouble, as their debt load was much higher then and probably would have been unmanageable in a severe recession. Today, they're in much better shape, probably good enough to survive an extended downturn.
References:
- Apple
- Walmart
- Verizon
- Microsoft
- The New York Times Company
- Chrysler LLC
- Nikon
- Subprime mortgages - the crisis, what is it?
- CD (Certificate of Deposit)