Decoding the Wall Street Journal: Midweek Stock Market Decoding

Front Page: “Unemployment Scars Likely to Last for Years” So suddenly unemployment is being compared to a scar we got when falling in the dirt as a child? Such dramatization! Every month the local newspapers plaster the unemployment rate on the front pages. It would seem that a number with a percentage sign next to it is easy to grasp. Think again. There are reasons that unemployment could either be or low or high (sound smart: high unemployment is a number above 10%), for instance less of a burning passion by consumers to buy things they don't need which requires fewer workers at the makeup counters at Macy's (sound trader smart: the ticker symbol for Macy's is M). The Front Page article in the WSJ tries its mightiest to shed light on the never-ending unemployment problem in the country, except the editorial board assumes you know how the tangled web known as economics works. One bolded heading that's stated is that "long-term unemployment may be a bigger problem than higher unemployment." The WSJ is quick to offer two follow-up thoughts that badly require deciding. First is this notion of a "jobless recovery", or when the economy is growing but not many are actually back to work. Hard topic to visualize, we know. How this happens though is through a miracle known as productivity, which resembles a company squeezing blood from their workers (think whipping a horse so they run harder). More goods produced with the non-verbal threat of a pink slip hanging over one's head: boom growth in an economy. Second decodable moment is this thought of "long-term unemployment." All this means is that laid off people are anxiously at home for six months or longer, collecting unemployment checks, because their jobs have been shipped to India or China or no longer technically exist (traveling salesman have since been replaced by Amazon). The longer a person is without a j-o-b the more their skills and contacts erode, making landing a new job that much more difficult. Marketplace: "Sara Lee, Campbell Shuffle Ranks"

Right off the bat, yes, Sara Lee SLE is the same company that sells cake in the supermarket and Campbell CPB is short for Campbell's Soup. What are these companies doing in the WSJ? Simple, both are publicly traded companies, which is the same as saying you could buy their stock with a flick of a mouse on TD Ameritrade. It's not that this particular story was overloaded with decodable items, instead more under the radar investing concepts that have to memorized. After all, knowledge is power to a point; in the stock market knowledge has to be applied to eventually buying a stock. A couple decodable investing concepts: First, is the "selling-off" of a business. Generally, this is a good maneuver by a company as it brings cash (sound smart at a portfolio manager banquet: "monetizes an asset") into the company, rids it of an unproductive business, and focuses the attention of management on core lines of business. For Sara Lee, it will now fix its attention on its tea and coffee business, with it shedding its meat business (that would be Jimmy Dean sausage). Concept two is when a company buys a "high growth" business to complement its more boring business. The old, boring company will tend to pay a pretty penny to get access to the sexy business, but over time it's expected that being exposed to sexiness will pay financial rewards.