Year: 2012

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Big Box Retailers Taken to Court by Quebec

BestBuy, Costco and Walmart operate under the same name from Canada to China; however, Quebec’s language watchdog have taken these big box retailers to court for not providing french labels and french versions of its brand names. These companies have built up brand recognition for years, and to force these companies to change its name, is equivalent to changing the face of the company.

Brands such as these do not need a brief description or a translated label. Countries in like India and China have not forced these companies to change labels even though English is not an official language. All of these products come from the same factory, and for a large company to change the labeling would not only create a hassle, but it would create extra costs to produce the product. The English-French labels costs the Canadian several billion dollars each year.

These extra costs are passed onto consumers, and then consumers wonder why the same products in America are cheaper than in Canada. Economies of scale of another factors come into play, but costs of a change to the label are passed onto consumers. If the government wants these changes, should they not pay for it?

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University Students Advise Struggling B.C. Town

Small towns across B.C. have struggled to maintain population and economic stability. Many of these towns heavily rely on the forestry industry that has struggled to maintain capacity, particularly during the American housing recession. Five students from Sauder are currently working on a marketing strategy for Port Alberni, a small town on the west cost of Vancouver Island.

These students have gathered input from businesses, and people from the town, and have worked on developing a plan over a semester long marketing class. This is a great opportunity for these students to work on a real life case study, interact with real businesses, and ultimately try to fulfill the goal of the city to increase the population.

Located on Highway 4, Port Alberni is the last town before Uclulet and Tofino. The city has tried to benefit from tourists travelling through the town on the way to Long Beach. The students have also taken on the challenge to attract these travelling tourists, to stop in Port Alberni and contribute to the economy. This case study outlines just one of several B.C. towns that have struggled with the economic downturn that has affected the entire world.

 

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Alternative Investments in an Uncertain Market

Investors for decades have said, gold is the investment safe haven. During the 2007 recession, most investment advisers told clients “cash is king.” Even while the markets try to recover, fiscal cliff and other economic worries have dragged down the market, not even exempting technology powerhouse Apple Inc. that has fallen more than 20% from the September peak.

From these uncertain times in the market, investors have taken to alternative forms of investments such as art, real estate, and alcohol. Recently in B.C.’s flagship liquor store located on Cambie street in Vancouver, wine lovers and connoisseurs alike flocked to the store for a chance to purchase a 2009 Bordeaux. It is speculated that this year could be the greatest vintage ever. This is a perfect example of the chances alternative investors are taking. A bottle of 2009 Bordeaux will set you back anywhere from $29 to $4,000!

As well, one of 88 bottles of a rare scotch priced at $33,500 is currently exclusively available at the Cambie store. A large percentage of alternative investors are Chinese that are not only investing in fine wines and whiskeys, but have driven the Vancouver real estate market for years. In a risky market, these investments may be the new safe haven.

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17 Year Old Super Genius Raises 250 Million

At 15 Nick D’Alosio created a the company now known as Summly. Nick found a gap in online media, that forces customers to purchase articles based on the first few sentences of an article. Through a logarithm, the Summly app is able to intelligently summarize an entire article, highlighting all of the main points and issues, all fit to the size of a consumer’s device.

Now 17, Nick has raised 250 million in financing from billionaires such as Li Ka Shing and celebrities like Ashton Kutcher. As an entrepreneur, Nick has dedicated all of his time to this revolutionary technology. He has left school, and works full time with the company and its investors.

With the technology sector growing so fast, there are ample opportunities for young entrepreneurs like Nick to make a difference. Entrepreneurs that are as young as Nick are more in touch with the market and they are able to utilize developing technologies to create a new need. Similarly, Mark Zuckerberg a young Harvard student was able to create Facebook from an idea that developed after a night of drinking with friends. These Silicon Valley entrepreneurs are the future. The future of technology, and again the future of the market.

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Trudeau Round 2

When Justin Trudeau announced his campaign for Canadian Liberal Party leader, many old enough to remember, reminisced upon Trudeaumania that swept across this nation in 1968. Although Pierre Trudeau ran such an influential campaign and remains in the hearts’ of many Canadians, Justin has tried to separate himself from his father’s history and actions.

Few are able to meet influential celebrities and politicians from across the world. Justin was able to grow up among these high stature individuals and now has the opportunity to use these experiences to lead an ailing party. It has arguably been 44 years since an even like Trudeaumania has affected Canada, and during a time in which the consumer confidence is low and the economy continues to recover, Canada could greatly benefit from a revitalizing young man.

Justin stated in a Huffington Post article, “our challenge, simply put, is to restore the simple promise to Canadian society.” Justin may be the perfect candidate for Prime Minister, even though he is premature compared to other candidates. Canadian politics needs a new face. During the recent American election, many voters stated they were voting for the least bad candidate. We don’t want this to happen in Canada. Vote Trudeau!

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It’s All About the Money

 

The financial crisis that started in late 2007 started the fall of many economies across the world. Positions were liquidated, mortgages were left unpaid, and jobs were lost. Not only has the downturn affected individuals, it has hurt new, developing companies from receiving financing.

Wade Larson, Co-Founder and Executive Vice-President of UrtheCast came into our lecture to talk about the company’s revolutionary imaging system connection images from space to information on the internet. Wade outlined the UrtheCast’s difficulties of trying to put together a final round of financing. To me it seemed difficult to understand how a company, with innovative imaging technology and access to real estate on the space station, is struggling to fulfill capital requirements.

In a Bloomberg Businessweek article, angel investors reported a 54% decline in investments during this period, stating economic conditions, taxes and regulations that created unfavorable environments for investors. During the US election, the role small businesses play in the economy was continuously focused, on however, the investors themselves are saying there is no incentive to help these companies! Canada and the U.S.A. will need to quickly change regulations and  realize the small businesses are the key to increasing private sectors jobs, and eventually reviving the economy.

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Don’t Get too Close to the Edge

Since the economic downturn in 2008, the U.S. Federal Reserve has been helping the market with stimulus that is injected into the open market each month. More recently, the Federal Reserve and Ben Bernanke have created a monetary policy called quantitative easing. This policy injects money into mortgage backed securities, with QE3 allocating an additional $50 billion per month into MBS.

Now that 2013 is fast approaching, the theory of a Fiscal Cliff is emerging. The start of the new year will mark the reduction in the budget deficit, tax increases and spending cuts. Many economists including Michael Aneiro, a blogger for Barron’s, believes investors are sitting on this cliff unsure of what the actual effects will be. Hedge fund and investment managers have stated to their clients, accounts should be liquidated in order to prepare for the implementations of new policies if President Obama is re-elected.

Not only will this potential cliff have an effect on investments into the financial markets from within the U.S., but it is also believed the cliff will have an impact on the U.S. dollar; therefore, foreign investments have also slowed in the last month. The total effect of the cliff will be anyone’s guess.

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Don’t Kick Them, They Aren’t Down!

Often there is a misconception about the relationship between the status and health of a particular company and its’ share price. Ryan Un in his blog recently noted that as Facebook’s share price has nearly halved since its IPO, the company’s revenue’s have also fallen. This could be farther from the truth. Investors had difficulty valuing Facebook, because simply another company of its size, and in this sector of the market does not exist.  P/E ratios and profit margins are difficult to compare with other technology companies such as Google and Apple, as they are entirely different.

Facebook’s marketing customers have re-evaluated the relationship, and company’s including General Motors dropped Facebook. General Motors has now come back to Facebook to negotiate a new deal. Since the IPO Facebook has actually increased revenue, and better positioned itself to grow in the future. A new mobile app platform has allowed Facebook to tap into mobile advertising revenue. As well, Facebook most recently launched a gift service that allows users to send items to others users. This service allows Facebook to compete with Amazon and others. Facebook does not need to recover, the company has only bettered itself internally since the IPO!

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Small World, Huge Consequences

Questcor Pharmaceuticals Inc. (QCOR) dropped as much as 48% in intraday trading on Wednesday. Health insurance provider Aetna, decided to stop covering Questcor’s Acthar Gel, that makes up all of the company’s revenue. After the dust settled, Questcor revealed Aetna’s coverage of its only drug, accounted for only 5% of its’ overall revenue; however, Questcor lost nearly half of its market capitalization in one day!

Traders in today’s market have the ability to demolish a company in nearly minutes. No longer do investment firms conduct research and create long term positions; instead, a new era of high frequency trading incorporates programs that run algorithms to react to changes in the market and automatically make corresponding trades. The power of this technology has created an unfair playing field for other traders, both professionals and amateurs. Executives from these firms have confirmed that they would like to see the U.S. Securities and Exchange Commission regulate the practice, which as of now is completely unregulated. Until the Commission does something to minimize the effects of high frequency trading, drops of 40% or more in a trading day, may become regularities in the markets of today.

CNBC Jim Cramer: Questcor Has Had An Incredible Run

 

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Success Story Turned Insider Trader


Raj Rajaratnam, the American Dream success story. Working his way up as an immigrant from Sri Lanka, Rajaratnam fought his way into the ruthless finance industry, and eventually became one of America’s most successful hedge fund executives; however, the billionaire soon became caught up in greed. At the forefront of many securities fraud related issues concerning Rajaratnam, leaked information about an investment by Warren Buffet into Goldman Sachs during the peak of the 2008 financial crisis, captured the attention of media across the world.

Working as an analyst during the 1990’s, and eventually making a majority of his wealth during the 2000 technology bubble, Rajaratnam made many connections that would ultimately lead him into the insider trading scandal. During the investigation, phone conversations, text messages and in person meetings were documented by the FBI. Rajaratnam paid handsomely for tips, ranging upwards of two million dollars, but in the end some of his most trusted colleagues including Galleon Group hedge fund partner, Rajat Gupta, testified against him. Rajaratnam was sentenced to eleven years in a federal prison.

The Wall Street Journal Article – Trader Draws Record Sentence: http://online.wsj.com/article/SB10001424052970203914304576627191081876286.html

The entire Rajaratnam story documented in depth by American Greed featured on CNBC: https://www.youtube.com/watch?v=DQCb5hV7idk

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