Fads, Trends, and Brands

For those with an entrepreneurial spirit, trends and fads are fun to spot, but it's extremely important to distinguish the two. Fads come and go reasonably quickly, with a small window of profitability. Obvious examples are pet rocks, pogs, and Pokemon cards. Trends mirror or exploit large-scale socio-economic shifts, and offer varied and sometimes repeating profit life cycle opportunities.

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Categories: Marketing | Entrepreneurialism | Investing | Competitive Advantage

10 comments - Posted by Paul Orfalea at 3:31 PM

Interest Pays Dividends

Randall W. Jeffs of Progressive Capital Managers included this story in the May issue of his "Greed & Fear Monitor" newsletter:

"As little as five years ago, I thought that virtually all older people knew quite a bit about investing. But I was startled to learn that most I spoke with knew virtually nothing. Maybe I shouldn't have been surprised. When at USC, I once had an ancient finance professor, who put a question on a test: Name Three Stocks on the New York Stock Exchange. Virtually the entire class went into a tizzy. They proclaimed that such hadn't been covered in class. The old guy half smiled and half chuckled. He said I don't know, I kinda thought that senior business students at USC should know the answer to that question without it being covered in class."

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Categories: Education | Finance | Economics | Investing

1 comments - Posted by Paul Orfalea at 3:22 PM

Seeing What Isn't There

I'm often accused of bitterness when I write about the decline of Kinko's after Clayton, Dubilier and Rice displaced the founding partners, but I think incredulousness is closer to my true emotion. I'm a student of business, and I simply cannot believe how many mergers and acquisitions fail because the new owners do not bother to understand -or choose to ignore - the key success factors of acquired companies. Kinko's is the case study with which I am most familiar, so of course I refer to it often.

Here's one example. In the mid 1980s, Kinko's advertised that we offered copies, binding, and passport photos. And every ad promoted the fact that we were open early, open late, and open weekends. Our extended hours constituted a competitive advantage over the quick-print shops offering similar services.

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Categories: Marketing | Corporate Culture | Customer Service | Leadership | Investing | Competitive Advantage

3 comments - Posted by Paul Orfalea at 1:59 PM

Three Quotations to Consider and Discuss

By Dean Zatkowsky

1. "The business of America is business," said President Calvin Coolidge, justifying his administration's laissez faire policies. Then he handed the White House keys to Herbert Hoover in 1929 and slipped out of sight as the economy collapsed. And yet, one still hears Coolidge's words repeated as gospel. Do you believe that business is the business of America?

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Categories: Entrepreneurialism | Economics | Ethics | Investing | Optimism

7 comments - Posted by Dean Zatkowsky at 9:39 AM

Bubble to Bubble

By Lance Helfert

Satirical newspaper The Onion ran this headline in July 2008: "Recession-Plagued Nation Demands New Bubble to Invest In." The joke works because it's true, and because investment bubbles of the last fifty years were so frequent, so frenzied, and so well documented. The history of economics - and progress - has been a history of bubble and bust economic cycles.

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Categories: Finance | Economics | Investing | Optimism

0 comments - Posted by Dean Zatkowsky at 8:28 AM

Shelter from the Storm

By Lance Helfert

Many financial journalists wrote about bear market opportunities long before our current recession achieved official recognition. Back in December 2007, Tim Middleton wrote about "Recession-proof ways to make money," noting that "Consumer spending, which accounts for two-thirds of gross domestic product, is weakening. But some forms of spending do not weaken as much as others. Addicts will buy cigarettes at almost any price. When factories are emptied, saloons fill up. People don't stop going to the doctor or paying their electric bills."

Companies like Molson-Coors (NYSE: TAP), Johnson & Johnson (NYSE: JNJ), and Kimberly-Clark (NYSE: KMB) seem to fit in with this set of "everyday purchase" companies, and they also meet the three criteria of the so-called "recession playbook" of large-cap stocks with safe earnings and international exposure.  Portfolio Manager Chris Orndorff told US News & World Report that recessions create opportunity as well as upheaval: "There are always ways to make money, even in a recession."

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Categories: Economics | Investing

0 comments - Posted by Dean Zatkowsky at 10:05 AM

There's More to the Housing Market Than Homes

Every discussion of "The American Dream" revolves around home ownership, although many would argue that the quest for universal home ownership contributed to our current financial crisis.

When politicians and the press talk about housing today, they invariably talk about homeowners at risk of foreclosure, and heaven knows that's an important topic, particularly for the people affected directly. But there's more to the housing market than primary residences.  Many Americans own a rental property in addition to their own home, and many investors devote a significant proportion of their portfolio to real estate holdings.  For better or worse, real estate prices depend on these people's actions too.

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Categories: Finance | Economics | Investing

0 comments - Posted by Paul Orfalea at 5:00 PM