The Business

Gold!

It looks nice and it offers one of the best long term returns in the market. So why doesn’t everyone invest in ETFs of this commodity? And why should you be weary of Mining stocks

From what I’ve witnessed over the past couple of years, gold has done nothing but increase in price. And with the prices of gold based ETFs being linked to the actual price of gold commodities, these stocks have been offering a great return. One of the most notable of these ETFs is SPDR Gold Trust (NYSE:GLD) which has shown a return of nearly 30% over the past year. So why not invest in this trust? Unfortunately the majority of people will only turn to gold and other precious metals during the time of a market failure, when the economy is growing strong people seem to forget that gold even exists and are happy to create portfolios of mutual funds which offer a relatively low-risk return. This, “turn to gold for stability in recessions” thinking is good for the long term gold investor and relatively inefficient for those band-wagoners as they are effectively buying high, holding for a short period then selling low when the market begins to recover. In order to properly invest in gold, buy NOW and hold till you are ready to retire, by then your initial investment will have grown into a return far beyond that which a mutual fund could provide.

A word of caution on Mining Companies: Although the prices of the commodities which the company mines do affect the stock price, the driving factor for the price of these stocks is whether or not these mines are producing anything! The price of gold could be $4,000 but if the company can’t find any new gold, the returns on these shares will not have a good outlook. To be safe, find mining shares that offer dividends and leave the rapid growth up to ETFs.

Happy Investing,
Martin

There is an old saying that goes “a good product will sell itself,” but what about the bad products? They are still out there. They have been bought and sold. So how have companies managed to take a product that is seemingly useless and added enough value to appeal to consumers? Take for example, paperweights. They have little functional use, are not overly aesthetically pleasing, yet in most gift stores you can still find these little guys. So how is enough value being added to them to allow them to be sold? Well they have chosen their target market carefully, mostly little old woman on holiday who need a trinket, then by adding a little plaque with a city name on it they have turned a peice of junk into a peice of junk that someone will pay a couple dollars for! its that easy!

Now how about this, imagine a great product, works flawlessly, is cheap and easy to produce and could save hundreds of lives! but there is a small catch…See the below picture.

This patent application is for a fresh air system for use in high rise fires. the simple design would allow the user to breathe in fresh air and avoid the dangers of toxic smoke inhalation until the rescue teams are able to evacuate the building. Only problem, this source of fresh air is in the buildings sewage system. Try explaining that to your customers without them becoming squeamish….

Advertisements have drastically changed over the years, Back in the 1960’s it was considered too risque to depict girls wearing anything less than full dress attire. Controversial Ads like the one above were often protested by many special interest groups and many never even made it past the drawing boards.
But here was the dilemma, how were companies that sold intimate or private products such as undergarments supposed to market their product without being able to show the product?
Well it took several companies to take huge risks to advertise in ways like the above image to break the mould, but once the public became used to seeing risque images in advertisements the floodgates were open. Sex became, and still is one of the best selling tools in a marketer’s belt.
Which has lead to Ad campaigns like a perfume Advertisement for Dolce & Gabbana pictured below.

Sex Sells, Simple as that.

Update:
After watching an episode of AMC’s “Mad Men” a quote the main character said seemed to stick with me,
“so you know, the people who talk that way think that monkeys can do this. They take all this monkey crap and just stick it in a briefcase completely unaware that their success depends on something more than their shoeshine. YOU are the product. You- FEELING something. That’s what sells. Not them. Not sex. They can’t do what we do, and they hate us for it.”

So according to him, sex doesn’t sell. I guess it’s up to the customer.

Readers,

With consumers becoming more and more needy, and with the whole idea of “On-Demand” services, Supply Chains are becoming more and more important. Back when there was only one general store in your small town a supply chain was not as important, as even though that store might not have the product you are looking for, there are no other companies to choose to buy from. But in the modern world, there are almost an infinite amount of substitutes. Thus, a store must be sure to have as much product on hand as to ensure that customers are not turned to other businesses. This means a company must be sure to have a constant and direct link to the suppliers and manufacturers of all the products it sells. If a seller misses a shipment due to poor communication, they risk losing many would be customers to their close competitors, and if those competitors deliver the service well, then those customers could be lost forever. If this trend continues then the company is in jeopardy of losing vast amounts of money, which could lead to possible bankruptcy. This is just one example of how the supply chain is one of the most important things to consider while investigating the world of retail.

Cheers,

Martin M

Readers,

We have all, at one time or another, heard of unethical business practices. These ranging from the recent ponzi scheme masterminded by Bernard Madoff (http://www.nytimes.com/2009/01/25/business/25bernie.html), or a simple pyramid scheme in which a product such as Xango Juice is sold along with liscences to sell the product (http://www.corporatenarc.com/xangoscam.php). One may ask themselves “is ethics in business really a necessary thing to have?” for the main goal of most businesses is to make as much money as possible, thus these businesses should, in logical terms, attempt to do this in any way possible. This includes practicing unethical business techniques. Compassion, however, is in the human nature and as such most business leaders cannot bring themselves to take advantage of others in order to make a quick dollar. I would say that business ethics are completely necessary just as ethics in everyday life are a necessity.

Cheers, Martin