A Penchant for Quality and your Weekly Update

These days, we hear plenty about the concept of quality. All of us know it when we see it and we also know when we don’t.

Remarkable entrepreneurs throughout American history have differentiated their businesses and, to use a modern term, “supersized” their profit margins by focusing on quality.

So in addition to the market news of the week, this Update explores an interesting example of quality we think you’ll readily relate to… and enjoy.

All the best,
Lee and Jeremy

PS— Speaking of quality, we welcome your feedback on the quality of the services at J.L. Davis and invite your ideas on how we can deliver an even better wealth management experience to you. Please take a moment to jot us your thoughts and comments! -L & J



This Week’s Quote

“Quality is not an act, it is a habit” – Aristotle

Many years ago, at a burger joint in Waco, Texas, one of my college buddies from California lamented that he couldn’t wait to get back home to get an In ‘N Out burger. His passionate description made me really want one.

Fast forward a few years later and I experienced what he meant. On a trip to Los Angeles, Kathy and I stopped in for a Double Double (me), a shake (her) and some fries (me again). The squeaky clean red and white décor was similar to that of a 50’s diner. The menu was simple with very few items. They were served by red and white uniformed teenagers who smiled profusely, said please and thank you, even to each other, and appeared to be having fun while working their tails off. The food was great. I was a customer for life.

Fast forward again to last week. I had purchased tickets for Kathy and I to see Jackson Browne in concert at the Orpheum Theater in Phoenix… the evening before Valentine’s Day. On the way there with friends, we stopped by In ‘N Out for a quick meal. The experience was identical to that of decades ago…outstanding. The place was sparkling, the kids were having fun, working hard, polite, and serving great food.

In ‘N Out was founded in 1948 by Harry Snyder. As the story goes, Harry visited the local meat and produce markets before dawn daily to buy the freshest ingredients for his restaurant. Prompt, polite, first class service was the rule. His wife Esther handled the books. Business boomed.

Some 65 years later, the company is still in the family with more than 280 locations. Harry and Esther’s granddaughter Lynsi is CEO. A billionaire, she’s one of the richest women in America. In spite of recent management challenges, per store profit is among the very highest in the fast food industry. The future looks bright.

Just like In ‘N Out, many of our great clients who run their own businesses or professional practices are intent on quality and continuous improvement. Their profits seem to be growing quite nicely too, in many cases. Their future looks bright as well.

So the next time you’re in an area served by In N’ Out, stop in for a treat. Maybe even take a moment to reflect on the way quality, simplicity, and fun run hand in hand with nice profits. Oh, yes, and enjoy the burger!

http://www.in-n-out.com/


Market Week: February 19, 2013

The Markets

Equities markets generally spent a second week digesting January's strong gains. The Dow continued to flirt with the 14,000 mark, while neither the small-cap Russell 2000 nor the S&P 500 have had a negative week so far this year.

Last Week's Headlines

• U.S. retail sales bumped up 0.1% in January, according to the Commerce Department. Excluding autos, which slipped 0.1%, the monthly increase was 0.2%, with nonstore retailers and general merchandise stores performing the best. The increase put overall retail sales, which are not adjusted for price changes, 4.4% ahead of last January.
• Optimism about the European Union's economy got a reality check when the region's statistics agency reported that the eurozone's GDP fell by 0.6% in the final quarter of 2012 and was 0.9% lower than a year earlier. For all of 2012, the eurozone's economy shrank 0.5%.
• U.S. industrial production was down slightly in January; the Federal Reserve said a 3.9% decline in auto manufacturing contributed to the 0.1% drop. However, industrial production was still 2.1% ahead of a year earlier, though it's still only at 98.6% of its 2007 average.
• The Group of Seven industrialized nations issued a joint statement saying that members' monetary policies should not devalue currencies simply to bolster an individual country's economy by encouraging exports. European leaders have expressed concern about a rising euro, and Japan recently increased bond-buying efforts that resemble the U.S. Federal Reserve's and that have reduced the yen's value.
• American Airlines and United agreed to merge, forming the largest airline in the world, and Berkshire Hathaway (in conjunction with a private equity firm) announced plans to acquire H.J. Heinz.


Eye on the Week Ahead

In a holiday-shortened week, minutes of the Federal Open Market Committee's most recent meeting could shed light on members' thinking about winding down the Fed's bond-buying activity. Housing and inflation data also are on tap.

Key dates and data releases: wholesale inflation, housing starts, FOMC minutes (2/20); consumer inflation, home resales (2/21).


Data sources: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2013