E-motions: Vol. No. 1, Issue No. 13 Brought to you by California News Tech (OTC BB: CNTE)

By: Tai Nicolopoulos E-Motions Writer 10/27/2005

The Franco-American Conflict: Healthy Economy vs. Healthy Culture

 E-Motions Podcast

1. Emotions in Focus: The Market Effects of Leisure and Life Style

     Around the world, a predominant stereotype about the United States is that Americans are aggressive, greedy, over-weight workaholics with no taste or culture. On the American side, they stereotype the French as fashion and leisure-obsessed laggards who stay uncannily thin on a diet of the world’s richest and most delicious food. Regardless of the degree of truth in either stereotype, and of the negativity of either of these characterizations, each party wants what the other has.

     While Americans do not have universal employment, they work harder than any other nation in the world, but the trade off is that they eat on-the-go at chain restaurants. Furthermore, more and more studies show that Americans’ schedules lead to poor health in a wide variety of ways, including rising rates of obesity, inactivity, sleep disorders, and depression. In short, Americans’ industrious society has a serious health-related and emotional cost, and they are getting increasingly unhappy with it. Cultural phenomena like the popular diet book French Women Don’t Get Fat highlights a level of jealousy Americans feel in regards to France’s leisurely high-quality meals and other luxuries, even if they do not like France’s politics or work-ethic.

     Meanwhile, the French model keeps the vast majority of the population employed, with shorter work days, more vacation time and better benefits. The French are fitter, more relaxed, more elegant, and have more fun. The tradeoff, however, is that there are many under-paid under-employed people, forced to work part time for lower wages with less opportunity for career advancement. The long-term consequences of this system are starting to stack up; companies do not run efficiently as they could and much of the European corporate sector worries that the French economy will not be able to keep up. Everyone wants to get a head and capitalize on globalism, so business leaders in France, despite a certain degree of disgust, are starting to have to think like Americans. Ultimately, the message seems clear; the French way of life is going to have to change.

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2. The Big Movers and Why

     On October 20th Heads Up™ reported on two Big Mover stocks, one move epitomized the American socio-economic model, and the other epitomized the French model. The first company was Rare Hospitality (NASDAQ: RARE), a Georgia-based chain of steak houses with high calorie grease heavy all-you-can eat menus and convenient locations. RARE went up +11.45% on a positive earnings release, emphasizing the increased demand for the restaurant chain’s steaks and fried dishes. Meanwhile, AptarGroup, Inc. (NYSE: ATR), a company that manufactures dispensers for fragrances, lotions, beauty products, went down 9.19% after it released its earnings statement. Investors lost confidence in the face of massive layoffs in the French production plant necessitated by the excess of part time employees with expensive benefits. Each case illuminates differences between American and French business and culture. In the American model, quantity and convenience trump quality and healthfulness for busy people going out for dinner after a long day at work. In the French model, Aptar’s employees work less with more benefits, but the reality is that their situation may not be economically sustainable. Furthermore, the company is part of the beauty and fragrance industry, which, in and of itself, may not be, as lifestyles change, the stable giant of the French economy that it once was.

3. How to Use the News

     As the majority of the American work force gets older and more worn down from their stressful lifestyle, there is money to be made anywhere where companies are adapting to meet their needs by offering health management for weight, stress, and other issues. Ageing Baby Boomers will discover that they cannot retire as early as they would like with fewer governments and rising cost of living, and as the quality of life decreases selling a sense of leisure, beauty and well-being will become very profitable. In the United States, services more in the French model that offset American’s stressful lifestyle may be the next smart business trend. As a long term investment, American-based companies offering health and luxury are definitely something that invite a closer look.

     At the same time, in France the opposite may become true. As the French busy themselves with the struggle to change their economic structure, many of the conveniences and habits that are typically American, such as eating a drive-thru burger at your desk for lunch, may become increasingly prevalent in France. Investing in de-socializing France and the rest of Western Europe has become a smart bet. As much as the French may hate it, chains like McDonald’s have a permanent foothold in their country. In the future, smart investors should be able to spot companies looking to expand in Europe with chain stores and longer work hours.

4. Last Week in Media Sentiment

     Recent correlations between MediaSentiment.com's thumbs up / thumbs down recommendations for Heads Up™ rated companies and subsequent next day highs and lows show a strong relationship. The correlation between ratings for MediaSentiment.com selected stocks and their nextday highs and lows is 94%. Therefore, this week, MediaSentiment™ gave an edge up to 94% to smart investors who used Heads Up™ recommendations to trade on intraday day prices!

     All figures reflect all MediaSentiment Heads Up™ recommendations for the week of October 16, 2005 through October 20, 2005, rating companies on the day of their quarterly earnings releases correlated with their stock highs, lows, closing prices and daily volumes for the subsequent day.

5. Links you can use

Six Hour Work Day Does Not Work
Overworked No More
Employers Fail To Address 'Metabolic Syndrome'

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