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Wednesday, May 14, 2014

Panera Bread Replaces Workers with Technology

 It looks like I nailed another global trend ... 

Technology is now replacing "would you like fries with that" accelerated by SOARING demands for higher minimum wages and SOARING costs to provide health insurance (maternity leave, etc.) for these low skill jobs.

Bruce Horovitz, USA TODAY 4:43 p.m. EDT May 13, 2014
Panera Bread may be on the brink of changing the way customers order fast food.

The trend-setting dining chain is combining several technologies -- from store kiosks to online and mobile ordering -- that will cut the number of cash registers at most stores when the changeover is complete in late 2016.

The fast-casual chain could play a serious role in fundamentally changing the way consumers order fast food . For decades, the $200 billion fast-food industry has relied on a system that often results in long lines at cash registers and at drive-thru windows. Others fast-food giants -- from Domino's to Pizza Hut to Chipotle -- are experimenting, too. But Panera appears to be one of the most ambitious combinations of technologies geared at speeding-up service.
"Our mission is to never have a customer wait," says Panera founder and CEO Ron Shaich, in a phone interview. He's acutely aware of -- and frustrated by -- the current series of lines that customers must often stand in to order; pay for and pick up food in most of Panera's 1,800 restaurants. "It's like a game," he says.
Bull crap... their mission is to make money and they are making the change as the cost to employ zero skilled workers with little incentive to improve is pushing them to technology faster than before.
That's about to change big-time. The most visible change: ordering kiosks are being phased in at Panera stores nationwide, even as the number of cash registers is being reduced. Most stores will get four to eight kiosks. At the same time, an unspecified number of cash registers will be removed.
In a new twist for Panera: food orders will be delivered directly to tables. Some employees who worked at registers will, instead, move to delivering or preparing food, says Shaich. There will be no jobs cut, he says.
Customers also will be able to order from their mobile phones or laptops while in Panera. And they'll be able to place "to go" orders via mobile or online up to five days in advance -- and pick up the orders at a pre-set time.

Kiosks are now in some Panera's in the Boston and Charlotte markets and will expand to another 150 locations this year, Shaich says.
It is NOT a coincidence that Boston has a high, living wage mandate... From
The Living Wage Ordinance was passed by the Boston City Council and approved by the Mayor on September 4, 1998. The purpose of this Ordinance is to assure that employees of vendors who contract with the City to provide services earn an hourly wage that is sufficient for a family of four to live on or above the poverty line.  
The current Living Wage is $13.76 an hour and will stay in effect until June 30, 2014. The living wage is subject to an increase each July 1.
It makes sense they also test the new technology in a similar city with a low minimum wage like Charlotte so they can accurately gauge savings.

The minimum wage is $7.25 per hour for most employees in North Carolina, with exceptions for tipped employees, some student workers, and other exempt occupations.
.... The tech upgrades will cost about $125,000 per store, he estimates.
The technology can run 24x7 so for places open 7 days a week, you could easily eliminate 10 jobs with a couple of lines to take orders.  These places have high attrition so they can reduce hours of workers and have them deliver to tables until normal attrition solves the no layoffs goal as they phase in these changes.
Panera is on the cutting edge with the system. One restaurant industry consultant says that faster service -- particularly via mobile ordering -- is the single most talked-about issue at industry conferences. "The smart phone is now your wallet," says Dennis Lombardi, executive VP at WD Partners.
They can spin it all they want but higher costs are accelerating the move to replace low skilled workers with technology.  Just look at how they tested it first in Boston where it saves them the most money on labor.

Monday, May 12, 2014

Ticker Sense Blogger Sentiment vs S&P500 Chart - May 2014

This graph shows the weekly close for the S&P500 index graphed vs. the weekly reading of "Ticker Sense Blogger Sentiment" (note 1) as of 5/12/14.

"Ticker Sense Blogger Sentiment" (details below) is short term market outlook for the next 30 days.

During the the last three years of charting this data, the market rallied sharply after every time my blue line of "bulls over bulls plus bears" fell below 35%.  Will this time be different?

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Today's Sentiment Data:

Note 1:  From
Ticker Sense Blogger Sentiment Poll is a survey of the web's most prominent investment bloggers, asking "What is your outlook on the S&P 500 for the next 30 days?" Conducted on a weekly basis, the poll is sent to participants each Thursday, and the results are released on Ticker Sense each Monday. The goal of this poll is to gain a consensus view on the market from the top investment bloggers -- a community that continues to grow as a valued source of investment insight.

Saturday, May 10, 2014

The Stock Market is like The World Series of Poker

This comment was posted on one of many trading boards I follow.  I think it says well, in terms everyone can understand, something about who is in the stock market now and why I believe we have plenty of upside ahead of us.

This are the KEY comments:
  • When the secular bull really kicks in you'll see more and more old faces... then you'll see new ones, then more new ones... then you'll know its GAME ON!
  • Right now its pretty much pros against pros, & pros against algos. But it's heating up
I think it explains why the weekly sentiment survey of newsletter writers is so bullish while the survey of amateur investors is quite often and currently bearish.

Today's San Jose Mercury news, the paper for the Silicon Valley, has the business section buried inside Local News.  It starts on page B7.  You would think with all the IPOs of local companies like Tesla, Twitter and Facebook (FB) plus the huge success of "older" local companies like Apple (AAPL) and Google (GOOG) that business news would be its own section like it was in 2000, but it was moved inside the paper some time back as people lost interest in the stock market in general.

New Series I Bond Rates

On May 1 the Bureau of the Public Debt announced earnings rates for Series I Savings Bonds and Series EE Savings Bonds, issued from May 1, 2014 through October 31, 2014.

The rate for newly issues iBonds is 1.84%

The rate for I bonds issued in the last six months will be 1.94%

For rates for older Series I Bonds, see 

I bond fixed rates are determined each May 1 and November 1. Each fixed rate applies to all I-bonds issued in the six months following the rate determination.
 New Rates for Current and Older I Bonds
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 1.94% earnings rate for I bonds bought from from May 1, 2014 through October 31, 2014 will apply for the succeeding six months after the issue date.

The earnings rate combines a 0.10% fixed rate of return with the 1.84% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 234.149 in September 2013 to 236.293 in March 2014, a six-month increase of 0.92%

  • Fixed rate = 0.10%
  • 6 month Inflation rate = 0.92%
  • Composite rate =[fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)]
  • [0.0010 + (2 x 0.0092) + ( 0.0010 x 0.0092)]= 0.0194 = 1.94%

==> Thus, the current I Bond Composite Earnings Rate is 1.94% with a fixed rate of 0.10%

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