JH>I know there is a lot of competition, but I think the below post from
JH>Klahn should be a strong contender for the "Stupid Post of the Year
JH>Award."

JH>-=> On 11-17-08 05:45 BOB KLAHN wrote to TOM WALKER <=-

JH> BK>>JB>>Someone needs to do the math for him on the
profit margin in
JH> BK>>JB>>the oil industry.  Then compare it to other
industries.  On
JH> BK>>JB>>second thought, wh bother ?

JH> BK>> TW> True An Absolute TOTAL waste of time. His mind is closed
JH> BK>> TW> Tighter the a Steel Trap.

JH> BK>> Tom, you are the one who refused to do the simplest math. Yet,
JH> BK>> you are still far more reasonable than any of those you are
JH> BK>> agreeing with.

JH> TW> That is becausew I am trying VERY Hard to give you the
JH> TW> Benifit of the Doubt and perhaps give you soem slack
JH> TW> because we may be talking Apples and Oranges.

JH> BK>  I have been trying to point that out.

JH> TW> BUT when you Hardheadly look at "ONLY" the Dollar Value of
JH> TW> the EXXON Sales and totaly "Ignore" ALL other costs of
JH> TW> doing business I get frustrated.

JH> BK>  Why? That's no more wrong than looking only margin of profit. I
JH> BK>  am looking at the cost of putting the product on the market and
JH> BK>  the sale price against that cost.

JH> BK>  Many years ago there was a widespread disatisfaction with food
JH> BK>  costs, that tended to focus on the supermarkets. So the
JH> BK>  supermarkets turned out a PR campaign, much like the oil
JH> BK>  companies are doing, where they publicized the fact that they
JH> BK>  only made a profit of 3 cents on the dollar of sales.

JH> BK>  That managed to settle down a lot of the discussion, until
JH> BK>  someone soon pointed out that supermarkets tend to turn over
JH> BK>  their stock relatively fast.

JH> BK>  So, turn over your complete inventory every week, and that 3%
JH> BK>  is a weekly profit. A weekly profit every week is 52 weekly 3%s
JH> BK>  per year. And that's a lotta money.

JH>Estupido.

JH>Get this - - he doesn't realize that the total profit remains 3% of
JH>the total revenues, based on the total of 52 weeks of both. This
JH>fellow thinks this would be 156% profit, or something. Even in view
JH>of his idiosyncratic opinion as to how profit should be determined,
JH>his analysis here is pure nonsense.

Absolutes or percentages, just mix and match at will.  


JH> BK>  Even every month is't 36% /yr, which ain't half bad.

JH>This is totally clueless. It doesn't require a whole lot of education
JH>in math or accounting to realize that 365 days, or 52 weeks, or 12
JH>months, or 4 quarters of profits at 3% of revenues results in a
JH>yearly profit of 3% of revenues, not some multiple thereof.  The
JH>inventory turnover period is irrelevant to calculations at this
JH>level.

That is some creative financing.  Good thing they don't compute compound 
our taxes this way.


JH> BK>  Apply that to the oil companies, how often do they turn over
JH> BK>  their stock?

JH>Per the most recent "This week in Petroleum" report from the EIA,
JH>current US petroleum industry stocks are about 21 days supply of
JH>crude oil and 22 days supply of finished gasoline.  This dolt seems
JH>to be trying to tell us that if the industry were to cut its stocks
JH>in half, thus halving the inventory turnover time, they could double
JH>their profits.

Maybe if they doubled their production capacity but not this way.


JH>Based on the level of ignorance he has shown in this post, it is
JH>clear that _everything_ this fellow has to say about economics,
JH>finance and accounting should be viewed with a very high degree of
JH>skepticism.

Well done.  I agree that this one is right up there near the top of the 
most ignorant economic posts of the year.  


Jeff

CMPQwk 1.42-21 9999 
Stop the Democrat party oil embargo ....

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