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<blockquote data-quote="TylerDurden" data-source="post: 734652" data-attributes="member: 11212"><p>In my opinion, it's not Wall St. who has the obsession w/ quarterly results. Wall St. in and of itself isn't anything...it's what the exchange facilitates--the efficient allocation of capital. Investors...especially institutional investors which hold the bulk of the UPS public float...understand that long term value isn't measured by "a" quarterly number. Investors will penalize an asset's price if the value proposition looks to be eroded. UPS competes (again...just my opinion) in a very undesirable industry. The core of its operations--US-based small package--is a declining margin business. When margins decline in your biggest money-maker, then you're eroding value no matter how many benefits you strip you out...no matter how long you stop merit pay increases...and no matter how many office supplies you don't buy, etc.</p><p></p><p>If investors saw that there were tangible signs of value creation... i.e. that UPS gets its act together in running the Forwarding business efficiently, etc... then even if you had a few quarters of below expectation earnings, the overall stock price would reflect the future value increase.</p><p></p><p>OK... that was more of a diatribe than response...my apologies.</p></blockquote><p></p>
[QUOTE="TylerDurden, post: 734652, member: 11212"] In my opinion, it's not Wall St. who has the obsession w/ quarterly results. Wall St. in and of itself isn't anything...it's what the exchange facilitates--the efficient allocation of capital. Investors...especially institutional investors which hold the bulk of the UPS public float...understand that long term value isn't measured by "a" quarterly number. Investors will penalize an asset's price if the value proposition looks to be eroded. UPS competes (again...just my opinion) in a very undesirable industry. The core of its operations--US-based small package--is a declining margin business. When margins decline in your biggest money-maker, then you're eroding value no matter how many benefits you strip you out...no matter how long you stop merit pay increases...and no matter how many office supplies you don't buy, etc. If investors saw that there were tangible signs of value creation... i.e. that UPS gets its act together in running the Forwarding business efficiently, etc... then even if you had a few quarters of below expectation earnings, the overall stock price would reflect the future value increase. OK... that was more of a diatribe than response...my apologies. [/QUOTE]
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