Limited Budgets

I am in the business of selling advertising space. I approach businesses and say "Hey, place your ad in our product." (my exact words...perhaps I could change my wording...)

Seth Godin made an amazing point (albeit 19 months ago) in his post Do Ads Work?

How Will You Measure Your Life? by Clayton M. Christensen

Great inspirational talk by Clayton M. Christensen from the Harvard Business Review.

Great quote: "Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success."

I also like the bit about staying out of jail.

YOU Benefit from Govt. Spending

Minions, my last post painted me in a way I refuse to be viewed. The devils advocate in me compels me to see and give an alternative view - as there are merits on either side.

The problem with cutting spending is that we all benefit from it.

I challenge you to tell me that you don't enjoy:

• these nice paved roads. Then you complain when there is a pot-hole: "That’s what you get with government spending!"
• public education system. Someone has to get those brats out of your hair.
• firefighters. They weren't originally government jobs, they were paid by the insurer of the burning house. No fire insurance? They would just pass on by your burning house.
• police. Despite those dang speeding tickets.
• public detention centers (prisons). You have to do something with those who wish to take away your unalienable rights (looks funny spelled out).
• public libraries. The wife My beautiful and amazing wife and I have recently taken advantage of this resource.
• public parks. I hear Central Park is nice...
• the natural beauty of national & state parks. We should all thank John Muir for his activism toward the "nationalization" of America's beauty.
• museums. I hear things get interesting at night...

A few of my favorite touchy ones:

• national security. At least I don't fear a missile attack leaving my house.
• Medicare. Old people pop some expensive pills.
• Medicaid. Say what you will, but if you are down on your luck you would be thankful.
• Social Security. Well I certainly wouldn't want them breaking a hip while mowing my lawn.

I'm sure there are plenty more.

Yahoo News spells out the real problem: Everyone hates the deficit - but likes the spending. My favorite quote: "Cut spending, but not if it takes money from what's nearest and dearest to me."

I'm Good for the Money

Fictitious Case Study. Facts:
1. My name is James Smith.
2. My yearly income is about $14,600 a year.
3. I owe $13,500 in debt.
4. This basically means that I owe about 92% of every paycheck.
5. I use new credit sources to pay down old debt.
6. I have no reason to expect a strong increase in my income anytime soon.
7. Thinking the market had bottomed out, I invested heavily in real estate, and risky stocks.
8. A few of these risky stocks are going down in flames - so I invested more borrowed money to prop them up.
9. I expect my kids to tighten their belts and deal with the negative consequences of my reckless spending habits.
10. I expect this, despite knowing that the outlook is bleaker than 40 years prior.
11. I don't know why, but I still get about 5 credit card offers sent to me in the mail everyday - I just keep filling them out.

Factual case study. Facts:
1. My name is the United States of America.
2. My national "income" (Gross Domestic Product or GDP) is about $14.6 trillion a year.
3. I owe $13.5 TRILLION in debt (let me say that differently: I owe $13,500,000,000,000.00).
4. This basically means that I owe 92% of ALL transactions made in the US in a year (GDP).
5. I use new credit sources to pay down old debt.
6. I have no reason to expect receiving a strong increase in my GDP anytime soon.
7. To stem another potential depression, I invested in real estate (Freddie Mac, Fannie Mae), and risky stocks (GM, Chrysler, AIG, Citigroup, etc.).
8. A few of these risky stocks are going down in flames (AIG) - so I invested more borrowed money to prop them up.
9. I expect future generations to tighten their belts and deal with the negative consequences of my reckless spending habits.
10. I expect this, despite knowing that the outlook is bleaker than 40 years prior.
11. I don't know why, but when people get scared of losing money in bad investments - they always invest in treasury bonds (basically extending my credit limit).

Sounds like a safe bet to me...

US Debt Clock

Insight on the Prius

I have wanted to post on this subject for some time (sorry for the delay).

Toyota executed a supreme (yet ugly) job on the Prius. Toyota found a way to engineer and profit from hybrid cars.
Essentially, Toyota saw that a type of consumers needs were not being met. Namely: people who are open to a hybrid AND people who liked hatchbacks. There aren't a whole lot of that type of consumer out there, but that doesn't matter because Toyota hit that combo out of the park.
Along comes Honda: "Hey, we want that success too!" Then comes their execution…or lack there of. They release a fake Prius with a Honda symbol on it (well actually they released the Honda Insight, but it is essentially a carbon-copy of the Prius). Take a look at the image below. Just try to tell them apart.

Honda could have said: "Ok, well Toyota has the hybrid/hatchback lovers, lets go after the hybrid/[insert: sedan, coupe, mini-van, SUV, crossover, truck, motorcycle, etc.] lovers." No. Instead they decided to play catch-up and try to steal market share from Toyota's Prius. Honda could have made its own mark in the hybrid wars by differentiating from the competition, but it took the easy (not to mention the less successful) way out.

My personal preferences: I wouldn't mind having some of the benefits of a hybrid (fuel efficiency, decreasing our oil dependency, etc.), but I HATE hatchbacks. There just aren't enough good sedan hybrids out there (or perhaps auto makers haven't done a good job marketing them to me).

[Image: 2010 Toyota Prius (left), 2010 Honda Insight (right)]

The Block went Bust

Today we saw an industry leader fall prey to new comers (who were still wet behind the ears). Blockbuster has filed for Chapter 11 bankruptcy protection (CNN news story).

What does Chapter 11 mean? Basically, it’s a way to decrease your debt and restructure the business quickly. They will now owe the people who lent them money a lot less. Does that mean Blockbuster will go the way of the dinosaur? No, they could make a strong recovery (depending on their leadership).

What happened? Blockbuster was the titan of movie rental after all. No one else came close (Hollywood Video, Shmollywood Video). They got too comfortable, they felt indestructible. Competition saw an opportunity (two opportunities actually) to give customers added value that they didn't even know they needed. They saw something that Blockbuster could have easily seen, but neglected and overlooked.

Lately, I have read a number of blog posts by Seth Godin (an amazing and insightful writer). Upon hearing the news this morning, one in particular blog post stuck out. The post is titled Learning from Singer. To sum it up: "The best marketing strategy is to destroy your industry before your competition does."

Question Everything (part 3)

Opinion (or was it news, I always forget)

Opinion is hard to see at times - because it is often sold as truth. Perhaps that is why I don't like watching the talking heads on 24 hour news networks. Lets be honest, when a channel has to turn 86,400 seconds everyday into riveting genius, its a tough sell - on over 11 channels mind you (C-SPAN1, 2, & 3, CNBC, CNBC World, Fox News, Fox Business News, CNN, CNN Headline News, MSNBC, Bloomberg - to name a few). So, what do they do? They throw in a healthy dose of speculation, political beliefs, and greed under the guise of news - it sells a lot better than facts. Check out this Harvard study (long).

News:

- is "just the facts."

- is unbiased.

- is fair and balanced (for reals).

- allows the viewer the ability to make up their own opinion.

- is not being spoon fed opinion, while being told it's news.

Don't get me wrong - opinion is important. Perhaps this is why Mohamed El-Erian's father (from part 1) chose to read from 4 different newspapers a day. So that he could glean truth from all the distortions and formulate an opinion of his own.

I have my opinions on health care, freedom of speech, the second amendment, abortion, the economy, business regulation, etc. It comes from my personal beliefs and how I view the world. But it is mine, and it is not to be manipulated by salesmen (or as we like to call them, pundits & correspondents).

"But you don't have to take my word for it…"

PS: The shows I REALLY like are the ones who pit two talking heads from opposite political spectrum's against each other. Let the loudest and rudest one win! Unless the host cuts them off....

Question Everything (part 2)

"But what of faith?"

From part 1, you may have suspected that I am advocating relative morality - that whatever a person believes is good and right for them but what I believe is good and right for me. I assure you that I am not. I strongly believe there is a right and a wrong, truth and error. But as you may recall, I advocated "questioning everything" - and therefore if everything is open for discussion and debate there must be no universal truth. Lets separate "everything," in my "question everything" mantra, into two categories: truth and opinion.

Truth

Truth is unchanging, it stands the test of time, and often times it is not seen but felt. I'd like to specifically talk about religious/eternal truth. I believe that questioning and seeking after faith will lead one to this truth. I have been raised in a religious home where I was encouraged to question what I was taught, search for answers, and to believe in things that I found out for myself (not just what my parents believed). Most importantly, I was taught that the only true answers I would ever receive was from the source of all truth. I believe that there is absolute truth. The bickering amongst religions is due to man's opinion getting intertwined with truth.

Opinion to follow...

I'm selling my car

Hello minions, I know I have not posted in a while. I've been busy.
I just graduated, got a real job, and am now trying to sell my car.

It saddens me that I must part ways with it, it is a very nice car. But its time to let go.

Minions, you know I don't ask you for too many favors...but I need you all to pitch in and purchase my car - OR you could just tell everyone you know and have them buy it. The choice is yours.

I WILL eventually write real posts, but first things first.

"Please buy my product."

http://saltlakecity.craigslist.org/cto/1561250918.html

Question Everything (part 1)

I have always tried to live by a certain standard: "Question everything." This stance has raised an eyebrow or two. In fact, even my wife dislikes my "devil's advocate" stances. So I will defend it here.

While reading a FORTUNE magazine article titled The Best Advice I ever got (here) I was reminded of how important and powerful this stance can be. Fortune interviewed titans of their spheres (Warren Buffet, Bill Gates, Tiger Woods, Colin Powell, Eric Schmidt, etc.) to glean wisdom from their experience. One such interviewee was the CEO and Co-Chief Investment Officer of PIMCO, Mohamed El-Erian, a man you would have never heard of unless your into finance. PIMCO runs the worlds largest mutual fund, and a total of $756 billion of assets under management. Basically ... he's a big deal.

The advice El-Erian gave was this:

"We were living in Paris, back when my father was Egypt's ambassador to France. Each day we used to get at least four daily newspapers, from Le Figaro on the right side of the political spectrum to L'Humanité, which was the newspaper of the Communist Party. I remember asking my father, Why do we need four newspapers? He said to me, 'Unless you read different points of view, your mind will eventually close, and you'll become a prisoner to a certain point of view that you'll never question.' … There's a tendency for everyone to operate in a comfort zone and to want to read what is familiar to them. But if you are just used to following one person or one news­paper, you will miss these big shifts."

He applied this advice to understanding the financial markets, but I think we can internalize it in a broader sense. I have known many people in my life that subscribe to only one point of view (or newspaper) and refuse to even consider the merits of another view. Views may come in the form of politics, religious convictions, future financial performance, self-esteem, whatever. If we stay open and aware of all views within that sphere we are more apt to make better, rational judgments and avoid becoming "a prisoner to a certain point of view."