Categories

Investing Liberty Investor Alert Observation & Opinion

Tools

  • Economy & Politics
  • Investing
  • Personal Finance
  • Related Posts


    Look Out Below, Copper’s Falling
    Where Oil Prices Go From Here
    Take Out A 7 Year Car Loan To Buy Stocks, Really?
    Mark Cuban Warns: This Bubble Is Far Worse Than The Tech Bubble Of 2000
    The Chinese Buy Billboards Announcing The Renminbi As “The New World Currency”
    Who’s Isolated Now? Kazakhstan Authorities Announce Plans To De-Dollarize Economy
    11 ‘Healthy Stocks’ Catch A Cold
    Wall Street Keys Off ECB QE And Big Pharma Deal
    Woman Protests Uber’s $100 Bodily Fluids Fee
    Canada Urges Trekkies: Stop ‘Spocking’ Bills
    GoPro’s Woes Are Great For This Company
    McDonald’s Bans Chicken Treated With Human Antibiotics
    Sorry Consumers, Companies Have Little Incentive To Invest In Better Cybersecurity
    Netflix’s Newest Debut Proves It Might Be The Modern Sitcom’s Last Hope
    People Are Finally Worrying About Online Privacy — And Tech Firms Are Cashing In


    Garbage In, Garbage Out: The Challenge Of C-Suite America

    There’s no doubt we’re in the throes of the Technology Age.

    Some people find themselves stuck somewhere between the bygone days of secretaries and Selectric typewriters and the reality of the smart phones and social media optimization of today. They have a problem: They are being left behind in in today’s technologically savvy workplace.

    We’re seeing this happen with the global displacement of lower-skilled labor, but it’s also happening up the corporate food chain — even in boardrooms. Companies that don’t oust their technologically ignorant leaders are finding it increasingly difficult to function as they did in the lower-tech world.

    In today’s high-tech world, a leader who cannot interpret certain data or who doesn’t know what to cull from it will not make good decisions.

    Tip-Top Tech Illiterates

    Recently, the Financial Times put out a report that confirms our worst (but begrudgingly accepted) fear: Digitally illiterate C-suites (the corporate suites, the leaders) are damaging business in major corporations.

    The article in FT discusses how ensconced CEOs and their ilk are behind the times and having trouble understanding the new cyber-connected world we’re in.

    One of the most interesting stories I’ve seen on how technology has surpassed the mindset of some of our institutional systems happened recently in England.

    In 2011, Nicholas Webber began serving a five-year sentence for running the Internet crime forum GhostMarket, which allowed motivated readers to create computer viruses and to share stolen IDs and private credit card data.

    Webber had been arrested for using fraudulent credit card details to pay for a penthouse suite at the London Hilton on Park Lane. He ran up a bill of about $20 million before he was caught.

    Once in prison, Webber signed up for a computer class and was allowed to participate. And then he hacked the prison computer system, including payroll. Oops. The computer teacher was fired, but the prison C-suite was in the clear.

    Fly The Unfriendly Skies

    A more recent example happened to me and my family on the way back from vacation last week.

    We had dropped a fair amount of change for airline tickets to Jamaica on USAirways (LCC). On the way out, we had a five-hour layover in Charlotte, N.C. On the way back, however, we had about an hour to get through immigration and customs, recheck our bags, go through security again, and get to the gate.

    We told immigration our issue. (We were hardly alone). They said it wasn’t their issue and that once we were through customs, we should talk to a USAirways representative. Miraculously, we got up to the security checkpoint with 20 minutes to spare. It was next to a USAirways desk that was unoccupied with no sign of an airline representative.

    We ran to the gate (as did another family of four and a pregnant wife and her husband) — at least 10 of the passengers that were to board a turboprop that held 48 passengers. In other words, we were a significant proportion of the plane.

    We made the gate with five minutes to spare, only to be told (for the first time) that the gate closes 10 minutes before the actual departure time and that we were stuck. What’s more, this was Saturday evening, and the airline couldn’t get us out on another plane until Monday.

    Unacceptable, we said. But we had to find an alternative. The airline could get us to an airport 100 miles away from our home. We would have to get a rental car and lodging. (The flight arrived after midnight).

    Annoyed as we were at all that, assuming the airline had the technology and knowledge that about 20 percent of their passengers may get tied up in customs, we bit our tongues and hedged our bets, getting standby on the next flight into our city and also booking on the flight that was headed 100 miles away.

    When we asked the gate attendant what the likelihood of getting standby on the next plane was, she let it slip that the airline actually has a computer program that alerts them to possible connection conflicts. That means they knew 20 percent of their passengers were going to be scrambling to make the connection and that they would be iced out of getting home for two days if they missed the flight.

    The airline’s solution?

    Too bad.

    My point here isn’t to engender sympathy. It’s to point out how the social contract is being poorly managed by big corporations that use technology but use it poorly. Perhaps it’s a management issue, where digitally semi-literate managers make a call without understanding the human implications on the ground or perhaps the same managers side with the data at the expense of their customer base.

    Either way, it’s bad business and one more problem with airline stocks. Why be loyal if you know the airline cares about profits more than passengers? Technology is obviously more a club than a scalpel in most of their hands. And if U.S. Airways (LCC) is this bad, imagine how bad American (AAMRQ) was.

    The Alternatives

    The best way to play airlines is by buying airplane stocks.

    The two that show the most promise globally are Bombardier (TSE: BBD.A, BBD.B) and Embraer (ERJ).

    Both have unique niches beyond the fact that they both make smaller, more fuel-efficient commercial aircraft that all carriers are adding to their fleets.

    Canada-based Bombardier also has a rail division, which means it’s also a play on transport firms upgrading their rail cars and systems. And the company also has a strong business aircraft division as owners for the Learjet brand.

    Brazil-based Embraer has established itself as an international commercial brand, and now it is seeing more business in the South American market both in the commercial division and in defense.

    Brazil is beefing up its military capabilities and using its homegrown defense industry as much as possible; and many neighboring nations are opting for a local producer than getting involved with U.S., Russian or European defense players.

    I like Bombardier a bit more due to its diversification, which confounds analysts; but either is a good choice.

    — GS Early

    Discuss this Story:

    Comment Policy: We encourage open discussion. Comments including racist statements, profanity, name calling or spam will be removed at our discretion. We use filters for spam protection. If your comment does not appear it is likely because it violates the policy.

    Get In On These Healthcare Stocks Now Before Key Obamacare Ruling In June
    The Only Natural Gas ETF To Own As Prices Rebound
    How To Tell If A Stock Hitting Yearly Highs Is Still A “Buy”
    Uber Just Bought Mapping Startup DeCarta
    Futures Climb After Two-day Fall; Initial Claims On Tap
    Brent Tops $61 As Iraq, Libya Offset U.S. Stockpile Jump
    Euro Hits 11-year Low Before ECB, Stocks Edge Higher
    Costco’s Quarterly Profit Tops Estimates On Tax Benefit
    AbbVie Boosts Cancer Drug Pipeline With $21 Billion Pharmacyclics Deal
    Citigroup Sells Stake In Turkey’s Akbank For $1.2 Billion
    Apple Delays Larger IPad Production Until September
    Citigroup’s Past Losses May Have Helped It Win Costco Business
    Banks Brace For Fed Capital Buffers Inspection
    Huawei, Intel Expand Tie-up Amid China’s Rising Scrutiny Of U.S. Tech Firms
    9 Things We Learned From Etsy’s Handmade, Artisanal, Brooklyn IPO
    How Online Lenders Could Take Billions Of Profit Away From Big Banks
    6 Very Risky Investment Mistakes Warren Buffett Says You May Be Making
    Oil Prices Rise As ISIS Attack Iraq Oil Pipelines
    A Match Made In Subprime Hell
    Crude Parallels: A River Of Denials
    Aussie Gold Production Surges To Its Highest Since 2003
    These 11 Big Firms Paid NO TAXES In 2014
    Street’s March Madness: 5 Things To Watch
    Skully Funding Proves The Right Wearable Computer Still Excites
    Apple Hits $1 Trillion When THIS Happens
    Alibaba Teaches Investors Painful Lesson
    Apple Tops Samsung In Q4 Smartphone Sales
    Only 9 ‘Cheap Stocks’ Left As Market Soars
    CEOs More Optimistic On Sales, Not Jobs
    Exploit Oil’s Current Low
    Read more from Investing...

    Liberty Investor Digest

    Get today's most important
    financial headlines all in
    one place by email!



    Sources


    close[X]

    Sign Up For Liberty Investor Digest™!

    Get Liberty Investor Digest FREE By Email!

    Input your name and email address in the fields below and get today's most important financial headlines sent straight to you inbox!

    Privacy PolicyYou can opt-out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.