Month: October 2010

Barbie with diamond choker sells for record price

Last week, in an auction in New York, a Barbie was sold for $302,500 (USD) to an anonymous bidder and the proceeds will go to the Breast Cancer Research Foundation. This broke the previous  world auction record – $17,091, for a Barbie in 2006.

Stefano Canturi, an Australian Jewelery designer, used four weeks to design every details of this doll from her dress, to hairstyle and makeup. She wears a black strapless evening gown with a choker featuring an emerald one-carat pink diamond. Although the price was at the lower end of the estimate, it is still the most expensive Barbie ever sold in the world.

For those who are willing to pay a piece of auction product like the Barbie in this case, the buyers either buy it out of extreme interest or of unconventional investment. Since polished diamond prices are showing large gains when comparing September 2010 to September 2009 according to the data released from International Diamond Exchange, it is not surprised that the buyer of the Barbie is a investor. However, diamond is not as liquid as gold, so I think this kind of investment yields relatively risky returns (a concept learned in class).

For the Love of Cardborad

Amazon has been trying to persuade its suppliers to get rid of those “annoying, hard-to-open” plastic packaging and put consumer goods in simple cardboard boxes instead. Based on the data provided by the New York Times, companies which have switched into the use of cardboard boxes, have resulted in 73% decrease in negative feedback on Amazon.

It is crystal clear that consumers like cardboard boxes better than plastic. Aside from the ease of opening, consumers like them better also because they are more eco-friendly than plastic. Sustainability is another major element that consumers nowadays would pay attention to before making a buying decision. I believe that any business which incorporates the idea of sustainability has huge growth potential. Since being environmentally friendly is becoming a common social responsibility of businesses, most products that come in heavy packaging, will soon have their packages redesigned.

Often, changes made to increase user-friendliness bring up the cost of production. However, it is the opposite in this case. Businesses which use cardboard boxes instead of plastic have lower cost because paper cardboard is cheaper. Therefore, I think it is certainly a good idea to use cardboard as the packages.

Each year in Canada, there are 40,000 lightning-related insurance claims, totalling between $500 million and $1 billion. Insurers find the need to verify past strikes from a trustworthy source instead of relying on the adjusters to “recreate events that literally happened in the blink of an eye”.

Here’s the good news to the insurers. The Weather Network is now monitoring a new data base that reflects the strikes record since 2007. Although the information about strike locations is not 100% accurate and precise, it help adjusters in determining the legitimacy of claims.

After learning about the basic financial concepts from Mr. Murray Carlson, I realized that insurance is a type of investment.  In simple words, to invest is to give up some current wealth to the counterparty in the investment contract in order to acquire future profit that may be safe or risky. In insurance, policyholders are investors who make regular payment to the insurers, so as to obtain possible payments in exchange to the risk of a loss. However, some people tend to make money by setting frauds. Thus, the insurers are always looking for ways to prevent frauds, just like the request of the strikes data.

Source of the article: Maclean’s

Launched last year with initial $27.5-million-investment from Sprott Resource Corp., One Earth Farms now administrates 93,000 acres of farmland in Alberta, Saskatchewan and Manitoba. It aims at creating the biggest farms in the world by building stable long-term relationship with the First Nations who control 2 millions acres of land in three provinces.

Image 1

According to the Maclean’s article on 23th Sept, 2010, this second largest farm corporation is not yet profitable. Some critics point out that big farms are less flexible than smaller farms. The Fishbone diagram below summarizes the major issues that impact the early revenue of the corporation.

Image 2

However, based on the clarification made by an investor in Sprott Resource Corp, the One Earth Farms doesn’t actually own the land. Instead, it leases from the natives. Also, the labour costs and the input cost are reduced due to economies of scale. In addition, it have crop insurance and can even apply for government aid if needed. Therefore, it seems to me that One Earth Farms have the potential growth in the market.

Source of Image 1: http://www.oneearthfarms.net/