Economic Wisdom from the Stupidity of Our Government

Learning Economic Wisdom from the Stupidity of Our Government

There’s an old saying that goes something like this; a lawyer that would represent himself has a fool for a client.  Likewise, a doctor who would operate on himself has a fool for a patient.  

The nice thing about fools is that wise people can watch their costly stupid errors and learn from them.  The wise person learns for free while the fool picks up the tab.  

In this ‘Gold Nugget of Truth’ the fools we will learn from are from both sides of the government aisle.  They are both Democrats and Republicans, and foolish beyond belief.  Of course, there is the Queen of Fools, Nancy Pelosi (D, CA) who once said, “We have to pass the bill to see what’s in it.”(Referring to Obamacare)  After making a statement of that type you really don’t need to see her brain scan to see what’s in it or not in it.  Duh. 

Politicians often have their hearts in the right place, but have their heads up their asses.  That disease is also known as ‘Craniumrectus’ and the cure for it is a ‘POPULECTOMY.’  The Populectomy got its name from the way the treatment works.  The patient suffering from Craniumrectus is pulled by the underarm area until you hear a popping sound which indicates the head is now removed from the rectum.   Since it’s a disease I invented I can also come up with any cure that suits the need.  So there.

Back in the days of the early 80’s politicians from both sides of the aisle were pushing the fact that every good hard working American should own a home.  Those well intentioned albeit stupid elected gurus encouraged banks to loosen up credit.  That encouragement gave way to Fannie Mae and Freddie Mac.  Those government started pseudo institutions led the way for more money to loan.  Easy loans with looser qualifications were becoming the rule.  Eventually rules became so loose
that you could work at McDonalds and qualify for $400,000 home loan.  Are you starting to see the flaws in this yet?  If so, you have probably just passed the IQ of the typical Senator or Representative. 

No money down, no problem.  Give money away, print more, build more homes because our economy is expanding.  It looked that way on the surface but in reality it was a false economy. 

At some point reality must set in and it did, in the form of a real estate crash.  Our elected officials would have you believe it was the banks fault, but it was the boys and girls in Washington that encouraged and backed those loans.  So those same deluded geniuses in DC decided they needed to do something.  “Hey”, said one of ‘em, “Here’s an idea.  Let’s borrow money we don’t have.  Run up the debt.  Do some kind of ‘feel good’ rescue home loan thing, oh, and spend a trillion bucks or so on economic stimulus.  You know, green projects.  That leaves us with the ‘feel good’ home thingy and a ‘look good’ environmental thingy.”  And thusly, nearly all the lemmings in Congress voted to approve it. 

Now the Man-In-Charge, who just spent a year lying to the nation about healthcare, decided to make bad loans to green companies.  Enter Solyndra, which took around $500,000,000  in taxpayer money and then went four paws to the ceiling.  That was only the beginning.  Several other companies followed suit and some of them used inside track (questionable tactics, if you prefer) to get those wonderful, screw the taxpayer, loans.  

Ah, but the best (sarcasm) was yet to come.  Obamanation decided to loan $132,000,000 to an upstart battery company called A123 Systems.  You could also call it Solyndra Junior because it too went belly up.  Here comes the good part. You see, China holds more than a trillion bucks in U.S. debt.  Much of the money for the stimulus was borrowed from China.  China, seeing a potentially good thing, swoops down and latches on to A123 for nearly nothing.  The U.S. Taxpayers are out the 132 million and the absolute worst part is we are paying interest to China on those millions I just told you about.  Yep, they get a free U.S. company and we pay them interest.  We the people…just got screwed….AGAIN.

So what’s the message in here for you?  Well, there’s three of them.  1) Paying interest never benefits you the borrower.  But there are times, specifically when you buy a home you will need that loan which leads us to #2) Live below your means.  If you can afford a $250,000 home why not settle for something considerably less expensive.  Something you can pay off early and pay less interest on the loan.  Wow, what a novel concept.  Going into debt is NEVER something you should take lightly.  Besides ‘Keeping up with the Joneses’ is so 1970’s.  3)  Think before you vote and only vote if you think.  Remember career politicians and lawyers RARELY make good Senators, Representatives or Presidents.  What we need are good common people with good common sense.  

Current office holders need not apply. 

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

2 Rules for Instant Saving

Advertising 101 - - Ways of separating you from your money and/or influence your thoughts.

Let’s start this with the simplest rudimentary definition I could come up with for advertising.

Advertising – a presentation designed in part or whole to create a predetermined desired response.

Now let me break this down a bit further for you.  The presentation of an ad can be in a nearly endless variety of forms.  You can have newspaper, radio, television, internet, magazine, billboard, word of mouth, direct mail, and testimonial ads, just to name a few. 

Ads are designed to appeal to you on one of two different levels:  emotional or intellectual.  Please note, most ads are emotional with only a very very small percentage going for an intellectual appeal.  Of the few that do go for an intellectual appeal, most of those ads are still driving you for an emotional response.

You probably have no idea how much research goes into marketing a product.  Demographics, packaging, color, shape, even down to a product release date all go into the final mix. 

Professional product and ad people along with focus groups, study, inspect, digest, dissect, analyze, and scrutinize, everything involved with the product and its collateral just to come up with the perfect winning combination.  The sad part is regardless of time and money spent there is no sure fire way to guarantee or predict a winner.  There have been times when companies have spent hundreds of thousands of bucks only to have the ship of their dreams sink more disastrously than the Titanic.  Then there have been those totally goofy-assed, totally insane ideas that defied all logic only to become million dollar babies.  

Let me name some name of some losers.  Before I do let me add this, you may not recognize some of these because they are losers, but at one time they did exist.  Here goes – Libby’s Fruit Float, Wine & Dine, Soakee (Bubble bath), Yucca Dew (Shampoo), Waterford (Cigarette), RCA 8 Track Quadraphonic Player, Bowmar Calculators, 4 Track Tape Players, Betamax, Laser Disc players, Soybean Hamburger Extender, Polaroid Big Shot Camera, McDonalds Hula Burger, McDLT, Arch Deluxe, McLean Deluxe, Edsel (automobile), The Baconeer, PSSSSSST (spray dry shampoo in a can), Action Detergent, and this list could go on.

Now here are some products that became big winners, regardless of sensibility – Troll Dolls, Mood Rings, The Pet Rock, Beanie Babies, Snuggies, just about any Ronco product (Splatter Screen, Pocket Fisherman, Smokeless Ashtray, etc.), Instant Coffee, Breeze (Detergent), Oxi Clean, Duz (Detergent), and I’m sure you’ll think of a lot more.  

You could spend hours analyzing each of the above winners and losers to determine what went right or wrong with the product.  Actually some would require very little thought, like PSSSSSST.   If I remember correctly you sprayed it on, rubbed it around, combed your hair and it was supposed to be clean.  Yeah, this works how???  Oh, I add more crap to my already dirty hair, comb it and it’s magically cleaned by who?? Houdini??

I saw an ad on TV the other day advertising a flashlight with a magnet attached. At one point in the ad it claims to be “as bright as daylight”.  Really?  I’d love to know how that works.  

Oh, when you get that 25 foot “Shrinking Garden Hose”, be ready to open the box and see a hose that’s only a little more than 8 feet long.  Just add water and expands to 3 times its length.  So you just paid $19.99 + Processing and Handling for an 8 foot garden hose.  But wait; add some more money for processing and handling and we’ll include a second 8 foot garden hose for free.  Hell, we may even through in the ‘Old Brooklyn Lantern’ (you know, with the ‘Authentic Antique Globe’ – Think about that line of BS), and if you call within the next 10 minutes we may throw in a ‘Slap Chopper’ plus an AMAZING anywhere light bulb (which is really just another flashlight because it produces light and is battery operated) and we’ll also start sending you advertising cards in the mail that are never a standard size so they stand out and make you want to read them (usually this is reserved for political hacks trying to get into office so they don’t have to work for a living), but if you email right this very minute we’ll include a Lint Lizard which will prevent you from having a ‘DANGEROUS Dryer Vent Fire’ (as opposed to a non-dangerous dryer vent fire??).  Oh, but remember you must pay additional processing and handling.  That used to be called S&H or shipping and handling until they marked up the shipping so much that consumers were getting wise to the gimmick.  Thus, change the name and change the game.  

So there you have it.  If you want to save money there are only 2 things you need to know:

1             1)    The difference between a want and a need.  Example – People often want a 

                     new car, but do they really need one?  Often the answer is no.  Always live

                     by needs and not wants.

2             2)   Keep emotions out of EVERY purchase.  When emotions creep in, money 

                     drains out.

Congratulations – you are a wiser consumer.

 © Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

The End Game and How To Get Exactly What You Want

The End Game and How To Get Exactly What You Want

Life can be full of disappointments.  Maybe your career wasn't exactly what you hoped it would be.  Maybe a marriage or two didn't work out the way you had hoped.  You get the idea, life doesn't always live up to your expectations.  The life of possible problems is almost endless.  It doesn't mean you had a horrible life, but it just wasn't what you had hoped for or wanted it to be.  

I'm not trying to be funny as I write this, but I am being sincere.  If you find some humor in this, that's okay, but please think about what you are reading.  

Back to where I started, so life let you down.  You're not alone.  Everybody, EVERYBODY has had their share of 'not so great' moments.  Shouldn't you deserve....No, don't you deserve.....No, YOU DESERVE to get at least one shot of perfection.  By that I mean perfection on your terms.  Perfection, not the way everybody else thinks it should be, but exactly the way you want it to be.  I'm about to let you in on how to make that happen.  Follow what I'm about to write here and in the end, the very end, you will get something exactly the way you want it.  Not only will you get what you want but it will last and last and last. 

The end game I'm talking about it death.  If you are breathing today you will eventually face the end game.  I'm constantly amazed at how many people plan everything in their lives but ignore what will eventually be a very permanent arrangement.  After all, the final plans of your funeral and interment are just that - FINAL.  Not only are they final, they are forever.  

Not only are they final and forever, but you, yes you, can have total control of this event.  Yep, total control.  You can have it your way - TOTALLY.  You can pick what you wear, where you will be planted, and even some of the smallest details.  What I am talking about here is a prearranged funeral and I'm going to give you the basics to get you started on your final journey. 

Oh, there are two more even better reasons to prearrange your funeral.  The most vulnerable time to be screwed out of money on needless expenses is at the time of a loved ones death.  An unscrupulous funeral director knows how to play on emotions and run up a bill in the process.  Here's another great reason to think ahead and out of the box.  Let's say you prearrange your funeral today and live another 20 years before you kick, the price for your final bash is locked in the day you set it up (provided no major changes are made to the arrangements).  If the cost of that funeral goes up 3000% in 20 years it won't cost you a dime more.  Hey, just because your dead doesn't mean you have to be dumb.  PRE-PLAN!

I'm sure I'll get some funeral directors that will disagree with what I'm about to tell you, however, I would not prearrange my funeral before at least the age of 30.  During your 20's most people haven't settled to the point of mostly knowing where and how you are going to spend the rest of your life.  Even in your 30's you run the risk of moving to a different area and having to rearrange what you've prearranged.  Which brings me to my next point.  Be sure any prearranged funeral plans are transferable to another funeral home in another location.  The funeral home where you make the arrangements can help you with that.  At its very basic element, a prearranged funeral is an insurance policy that pays the funeral home a preset amount in the event of your demise.  The funeral home determines the amount the policy needs to be based on what you decide for your funeral.  These arrangements include the cost of cremation or embalming, urn or casket, services, death certificate(s), plot, memorial cards, etc.  Finally, and I do mean finally, at least one thing in your life will go the way you want it.  Of course, it will be the very last thing. 

Earlier I mentioned making sure the plan you buy is transferable.  Here's why.  Let's say you live in Blue Ball, Pennsylvania and you prearrange your final arrangements at Frans Funeral Farm at the age of 35.  Thirty years later you retire and move to Freedom, Florida and being shipped back to Blue Ball for burial is something that no longer appeals to you.  With a transferable prearranged policy it's not much of a big deal, however, please note you will have to pay additional expenses for the transfer of the policy and associated costs.  Let's say that you still want to be planted in Blue Ball.  Your estate will incur the additional costs of prepping the body in Florida and shipping it to Blue Ball.  The rest of your expenses at Frans Funeral Farm are still prepaid and complete.  Even with the add-on costs it will still save you money over not having any prepaid arrangements. 

If you prearrange your funeral properly when you check out all your loved one has to do is call the funeral home where the arrangements were made and let them know where to pick up the body.  Done properly, the rest is all taken care of.

Summing this up with a prearranged funeral - Your loved ones have less stress because all of the arrangements are made - You saved money - At the final curtain call, You get exactly what you want.

One final thought, pick a nice casket or urn.  You'll be there for a very long long long time.

The End. 

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

Do you have what it takes to be successful?

Do you have what it takes to be successful?

This time around I’m going to applaud some successful business models and business people.  I’ll also share with you some of the reasons for their respective successes.

One thing for sure every success has at least, to some varying degree, one or both of these elements – Devine guidance and/or plain dumb luck.  But that is just part of the story.

Company #1 is the single most successful story of a business in my lifetime – Apple.

Let me first say, I am not an Apple fan.  Admittedly I own an IPod and have ITunes on my computers, but that’s where my love affair with Apple products ends.  Notice I said with Apple products and not the company.  

Apple as a company has my undying respect.  Any company that can run its stock up from $2 to nearly $675 per share in just around 30 years sincerely WOWs me.  For the companies first 18 years as a publicly traded stock it rarely got above $30 a share.  It seemed like nearly every year during the first 15 years the company existed someone was talking about its demise.  I’m not saying Apple has done everything right, but the very few wrongs and misses they have had were, like most companies, in their formative years and they managed to recover beyond what anyone could have imagined.  

What attributes to Apples success?  I would have to say first and foremost its illustrious and imaginative former leader Steve Jobs.  Jobs was shear genius.  He hired people that were his equal or smarter than him.  He listened.  He learned.  He observed trends and got in ahead of the curve.  He watched for and seized opportunities.  He developed solid, well designed, innovative, and useful products exclusive to his software, cornering both the hardware and software development of the Apple line.  Of course, what I mentioned in the last sentence also gave him total price control.

First Apple established a niche market with a computer and software that became a graphic artist’s best friend.  Then it established strong branding.  This was followed by new product development and the rest of the company’s success is now, as they say, history. 

KUDOs to Apple.

The next company I’m about to gush over has so many interests and sidebar operations I don’t know where they all exist.  Owner of television stations, a television network, films, television shows, themed amusement parks, and it all started with a dream and a mouse.  It’s the ‘House that Mouse Built’ – Disney.

Walt Disney had a cartoon/fairytale idea and turned it into a mega-reality.  The Disney business model may have led to the Steve Jobs business model because there are so many similarities.  Listening and learning, like Jobs, Disney hired the smartest “Imaginers” he could find.  In the early days of television he chose to market to the youngest generation, children.  He appealed to the families, and was one of the early pioneers in bringing color to, what was then, black and white television.  

The Disney brand and Disney collectables are worth billions and billions of bucks and to think this empire all started with a black and white cartoon mouse.  Thank God for the genius of Walt Disney.

This last business is a family owned and operated film franchise that has made billions of $$ due to near perfect branding, smart business decisions, taking on varying degrees of risks, but most of all knowing one very basic and cardinal rule – “If it ain’t broke don’t fix it.” 

 

Albert “Cubby” Broccoli also knew if it was broke to fix it fast and always protect the franchise which in his case was “Bond, James Bond.”

In the early days, and it took a while, for Broccoli and Harry Saltzman to get the rights for the Ian Fleming James Bond stories.  Together, and for around $1,000,000 Broccoli and Saltzman brought Flemings spy character to life on the big screen with Dr. No.  Who knew in 1962 that 50 years later the Bond formula films would still be alive and well, long after Saltzman sold his rights to Broccoli and long after Cubby Broccoli died?  

Broccoli taught his daughter and ex son-in-law well.  Don’t mess with the formula.  The formula is fairly simple.  Make a film that gets the audience to the edge of the seat before the opening titles, use exotic and great locations, have a bevy of beauties for both bad and good, sex sells, the title song should be sung by a strong and current recording artist, there must be obligatory car chases, Bond must always be in danger until the bad guy is dead, a big finish action scene is a pre-requisite, explosions must be big and frequent along with shoot ‘em up action, the James Bond theme and variances of the theme song must be used throughout in the background, sell product placement ads in the films, and even though bruised and injured in the end our hero must live to fight another day.  

Make no mistake about it, the Bond business is big business to the tune of billions for many others besides the Broccoli family.  There have been spin-off cottage industries and mostly because of strong and very intense “BRANDING.”  There have been toys, model cars, lunch buckets, after shave, clothing lines, trench coats, ties, watches, champagne, trading cards, books, magazines, BMW cars, 7-up, tickets to locations where Bond films where shot all have been sold because of the Bond brand.  

Every time a license is issued to a product in the name of Bond, the Broccoli family can afford to eat Beluga Caviar.  So now you know that champagne and caviar go with Broccoli. 

The stories of Jobs, Disney, and the Broccoli family all have very common threads.  They were willing to take a chance, were good listeners, were willing to learn from both success and failure, understood the value of a strong brand, understood what to fix and what not to fix, knew how to hire skilled and quality co-workers, and knew to think big and dream even bigger.  

You really have to respect that kind of drive and the success which results from it.

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

The Big "M" or A million ways to sell you something

The day I turned 16 I started my first job and I was fortunate enough to work with a retailing genius.  His wit and wisdom will never be lost as long as I am alive.  He once told me this gold nugget of truth, "Everything ever made is designed to do one thing - SELL."  Ben Sansom was his name and he added more to this gem of truth.  "Selling is not always about a cash transaction.  Sometimes the sell is to get you to buy into an idea or concept, whether it is right or wrong, good or bad."

Let's explore this deeper.  Everything leading up to that sale is "marketing."  I took some time to study marketing and, wow, it would take volumes to put down in writing all there is to know.  

This time around, I'm going to share with you some of the little nuances and tricks designed to separate you from your money.  

Marketing happens in several different ways.  There's what is sometimes referred to as the 'shotgun' approach.  That's when you distribute massive pieces of marketing materials either by mail, print media (newspapers, magazines, etc.), electronic media (radio, TV), or social media (Internet) and hope to capture that small piece of the pie that should belong to you.  

Another concept is 'Target' marketing.  This is when you understand the core of people you are trying to reach by demographics and apply your ads to that group.  

Following that concept is 'Micro-Targeting'.  With this approach you are shooting for a niche group within the demographic layer.  

Even with all of the above just mentioned, we've just scratched the surface of how business hooks you into the product they create.  

Marketing involves packaging, size, color, smell, font, overall appearance, texture, price, etc.  

Did you know 2 of the worst colors you can use as base colors for a product package are yellow and black?  I've heard several theories as to why these may be the worst colors but I've never heard a reason that is total concrete proof.  

Sometimes a product comes along that breaks all of the rules of marketing and becomes a huge success.  In the 1960's and into the early '70's a car wax did just that.  The product was "Kit" car wax.  Packaged in a tuna sized black can with yellow text, Kit was a huge success.  By all accounts it should have tanked, but it made millions.  It was the king of car wax until Turtle Wax moved into the market in the late 60's and kicked Kit out of the #1 spot.  

Colors that work on a product include reds, white, blues, greens, purples, and just about all bright colors that are well coordinated.  If you doubt what I'm telling you just open the cupboard where you keep your groceries and look at the packages.  Now look under the sink at your cleaning products.  Ah, you see I'm right, huh?

Now I'll share with you a story of a product that had the right package but nearly died within 2 years of being introduced.  It was a great product with plenty of market research to back it up.  The price was equal to that of it's nearest competitor, but still it nearly died.  The product was Zerex antifreeze by E.I. DuPont.  Introduced in the early 1960's in a round white can with red letters all indications were it should have been an instant success.  It wasn't.  DuPont struggled to find the answer until one day when a sales rep was in a store taking to the manager.  The store manager gave the sales rep the ultimate answer.  "Why don't you just ask someone about to buy antifreeze which one they would buy and why?"  The sales rep did just that and the answer was so simple it was nearly unbelievable.  The customer told the sales rep he would by Prestone over Zerex because Prestone was permanent antifreeze.  It was printed right on the can.  Zerex made no mention of it.  The sales dude went back to corporate and the very next year Zerex had "Permanent Type" in big print on the can.  Every new add pushed it as permanent antifreeze.  Within 2 years Zerex tied in sales with Prestone and for years after as well.  The word PERMANENT made the difference.  

In a grocery store vendors bargain for space on the end of the aisles.  It's a great spot to generate sales but not always a great spot to find a bargain.  The smaller sized item is always on the left, with the largest size always on the right.  The reason.  People are predominately right handed and will pick-up the larger size whether it's a good buy or not.  Sometimes it's not a good buy.  

Not to long ago this was started and some stores still do this.  They will spray a "Fresh Made Baked Goods" smell in the bread aisle.  Using your sense of smell to encourage a purchase.  Disneyland and Disney World have a fan located on the popcorn carts to blow the smell around.  It works.  

You may have gotten one of those ads from a car dealership inviting you in for a "special event" and, of course, there is a car key enclosed because they are going to give away a new car.  Here's the rub.  Generally this event is set-up by a company that specializes in this type of promotion.  Several dealerships are involved in several different areas.  These are mass mailed and the promo company knows the demographics of the people offered this promo.  They also mail out 1 car key to someone in the demographic that is highly unlikely to respond to the ad.  In addition, the promo company takes out an insurance policy to cover the cost of the car in the unlikely event it gets given away.  The cost of the car is only equal to the cost of the insurance premium and the only ones getting stung are the consumers that end up with a bad car deal.  

A Las Vegas casino called Palace Station was one of the first businesses to get good information on players for Micro-target marketing.  That information came by the way of a players card.  Using a players card gives the casino tons of information about you.  How often you play, what you play, day of the week you play, how much coin in, how much you win, a theoretical value for the casino of your play, your birthday, your anniversary, etc.  The idea is to get this information and pseudo-reward you for your play and loyalty.  I call it a pseudo-reward because you are actually paying for it.  And you thought you were getting something for free.  WRONG.  There is a cold reality for casinos.  Fact is, most are not very good at using the information to get a positive return.  Casinos are the worst at it because of the many layers of bureaucratic management involved in marketing decision making. 

It didn't take long for other businesses, like grocery stores, drug stores, and pet stores to realize the value of getting good consumer information and now many stores offer "Loyalty" programs.  Grocery stores are probably the best at it.  They can see how much of an item sells each week and can target ads and specials to appeal to the largest groups.  

I believe every consumer should take a few courses in marketing.  Once you understand how you are played in the business marketing game you build a wall of resistance to some of the games and gimmicks which separate you from your hard earned $$s.  

I am extremely skeptical of nearly all marketing.  Okay, with one exception, my sense of smell.  Do I smell popcorn?  Yummy buttered theater popcorn??

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

The Customer is NOT Always Right

Contrary to Popular Belief - The Customer is NOT Always Right

I know this flies in the face of things you have been told over the years, but what I am saying here is absolute truth.  There are times when the customer is simply WRONG.  This applies to every business.  Years ago, and I'm referring to the 60's so maybe I should say decades ago, the incorrect or wrong customer was clocking in at about 1%.  Now, with a bad economy, a negative shift in public sentiment toward business, and a lowering of moral standards, the number trends greater than 3% and some estimates show it could easily be as high as 5%.

So what are these wrong customers doing?  Some are stealing, you know, shoplifting.  Others are returning used items.  Some buy things on sale then try and do a return at regular price.  There are those that are writing bad checks.  There are those that claim faulty merchandise and then take legal action.  We can't forget the ones who are drunk and/or stupid.  

I've been both a business owner and a consumer and I know what's on both sides of this fence.  In defense of Joe Consumer, it's only fair to point out that a very small percentage of businesses are operating on shaky ground.  A bad business is no better than a bad customer.  

Here are some true stories about a very small percentage of people I know. 

This first one is a family story.  I'm sure their kids are grown now and I haven't seen any of them since 1983.  This family had no moral compass.  The parents taught their kids how to shoplift.  Worse still, they bragged about it.  When it was time to go back to school shopping, the went 'back to school shoplifting'.  The five finger discount was a way of life for them.  In this case the customer is not only wrong, but criminal.  When bragging about their theft, they would justify it by saying they only stole from big chain stores, like K-Mart.  Hummmmmmmmmmmm?

I was working in a department store and became part of this next story.  Actually, I'm part of several stories I'm going to tell here and this is one of 'em.  This department store had a record area and sold both 45's and albums.  Everyday after school the record department got swamped with school students and a few of them were up to no good.  We caught a 14-year old girl stealing a 45 record one Friday.  We prosecuted her and ended up in Juve Court.  Her parents, who weren't with her at the time of the theft, verbally defended her by saying, "Our daughter wouldn't do that.  She goes to church every Sunday."  I said to the judge and her parents, "We're not here about her going to church on Sunday.  We're here because she steals things on Friday."  There were three witnesses to the theft.  The parents lost and had to pay $.79 plus court costs.  This wrong customer was barred from the store.  

At one time we owned a waterbed store.  We had a vendor write us a bad check.  In this case the vendor became a customer.  Correction, the vendor became one of those wrong customers.  The check was for 300 plus dollars and I never screw around with anybody that ever wrote me bad paper.  I simply go after them - legally and with everything I can.  It took a while because this jerk tried every trick he could think of to beat this.  Eventually, I got a judgement against him and put a lean on his house.  

I was manager of a video duplication business and one our occasional customers wrote us a bad check.  I immediately went after her.  The check was less than $75 bucks and anything that small gets back burner treatment.  I waited patiently knowing my time would come and it did.  After a couple of years she came back to get some additional work done.  I accepted her master tape, completed the work and told her she not only had to pay for the work in cash, but also pay for her bad check and processing fees.  She was livid.  She informed me her husband was a lawyer.  I told her if that's the case she should know not to write bad checks.  She screamed at me.  I didn't care.  She told me she would take her business elsewhere.  I told her to please do that.  I laughed.  She got more angry.  Bottom line - this wrong customer paid up and went away, never to come back again.  

Chalk this next case up to drunk and stupid.  A person I, at one time, worked with was drinking in a bar one snowy Pennsylvania January.  His bills from Christmas were coming in and he was short on money.  He was also very drunk.  He wanted a fight more than he wanted money and he THOUGHT he figured out a way to get both.  He had bought a Sears Craftsman lawnmower during early spring and decided on this cold winter night to return it to Sears and demand his money back because  he said it didn't run correctly.  He went home, got the mower, and it was off to Sears.  Even though he was drunk and stupid wrong, he was determined.  He went into Sears with the mower and without even questioning why, Sears refunded his money.  Of course he was looking for a fight and that made him super mad.  He went back to the bar and got his fight.  Oh, he also got hauled to jail.  

My wife was managing a nationally known woman's clothing store.  One of her customers bought a dress on Friday and returned it Monday saying she decided she didn't like it.  Unfortunately there were sweat stains on the armpits showing it had been worn.  That wrong customer did NOT get a refund.

The department store I mentioned earlier had a customer try and return a special order item that we never stocked or even ordered.  In addition to arguing he bought it there, he insisted that the fact he was a dentist somehow proved his honesty.  Of course, he didn't have any sales slip.  He ended up writing the company telling them I should be fired for not refunding his money.  He told them I was rude and arrogant.  I had a meeting with the owner of the business and I went over our entire inventory and special orders for the time period in question.  I proved we never stocked nor ordered that particular item.  I had drilled holes in his argument for a refund.  I kept my job and he NEVER got a refund.  Customer - Wrong. 

Now here's a true story where I am the customer and you could make the case that I am WRONG.  Let me tell you the story and you tell me - Am I Correct or WRONG?

This happened six years ago and I have not been back to this business since the incident.  A local casino gives points for your play on what is called a players card.  These points are good for play, food, and things like that.  Neither my wife or I are big players and it takes us quite a bit of time to build up points.  Over the course of several years she built up around 3500 points, which is less than the amount needed for one Sunday Buffet Brunch.  The casino in question decided to build a parking garage and messed up most of the outdoor parking in the process.  While they were building the garage we didn't visit the property because the parking situation was such a mess.  During the build-out she got a letter telling her she hadn't visited in quite some time and if she didn't visit within X number of days her points would be relinquished.  The parking lot was still a mess so we didn't visit.  After the parking structure was finished we visited and inquired about the points.  We were told they expired and we were out of luck.  I explained the only reason we hadn't visited was because of the messed up parking.  They didn't care.  Long story short, if they didn't care about an issue they created, we no longer cared enough to play there.  We haven't been back in more than six years.

Now for the big question - Is my boycott of that casino justified or am I just another wrong consumer?  Comment and let me know what you think.

© Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.

Is Gold Right For Me?  - or - The Gold Nuggets of Truth on Buying Gold

You've probably seen the commercials and are familiar with the company names like Goldline, Merit Financial, Rosland Capital, Lear Capital and all of those other hucksters of precious metals.  You've heard those amazing pitches like, "And you can't print gold."  Of course, you can't print gold - gold comes from a mine.  Likewise, it could be said, "And you can't mine paper currency", because it's the reverse of the 'can't print gold' statement.  I love this next quote, which is totally inaccurate, "And gold has never been worth zero."  Wrong!  Before it was discovered and used as a precious metal it had zero value.  

Okay, now I'm getting somewhere.  Let me expose the myths of investing in gold.

Let me start with a history lesson.  During the late 1970's (I know, you weren't alive then.), Jimmy (the Peanut Farmer or Peanut Brained President) Carter was running the Oval Office.  It was during his lackluster years that we had hyper-inflation and interest rates on mortgages shot upwards of 13% or more.  Gold went on an upwards price run and it seemed like the balloon was never going to land.  If nothing else, Newton's Law should have reminded everybody that what goes up must come down, but when everything around you seems not to make sense, as it happened during that period, logic goes out the window.  There was an Arab Oil Embargo and lines to buy gasoline started building.  Then there were those nasty price increases along with a form of gas rationing.  Grocery prices went up and pay increases were hard to get.  We added soy to hamburger to get more of a yield per pound.  Oh, those good old days. 

Let's get back to that gold thing I mentioned.  In 1970 gold was trading at around $36. per ounce.  By 1/2 way through the Carter administration (1978) gold had shot to a high of $196 + change per oz.  Fear continued to run rampant while Carter was in the White House and by the end of his 1 term gold was trading at a record high of more than $615.

I had a friend that got caught up in the fear of that decade and the gold frenzy.  He took his life savings, which at that time was around $35,000 and sunk it all in gold.  I'm thinking, 'Don't do it.  Dumb move.  Gravity.  Gravity.'  When he jumped in with all he had gold was at the $600 mark.  Then along came a new president with a new vision and interest rates settled down, the Carter recession was in reverse, gas prices leveled, the nasty hostage crisis in Iran was resolved, unemployment went down, and it seemed as if all was right with the world.  Oh, except the world of gold, which took a dump.  A very hard dump.  By 1981 gold had dropped to $460.  By 2001 gold was trading at $271.  My friend continued to hold the gold.  By early 2007 gold was back to $615.  So after a 27 year investment in gold, my friend, due to a combination of fear and/or greed ended up with a measly 3% profit.  I doubt he could have made a worse investment. 

In May of 1985 Apple Computer stock sold for less than $2 a share.  As I write this it's trading for $615.  If my friend would have invested in Apple in May of 1985 he could have bought 17,500 shares which would have netted him a cool $10,762,500 during that 27 year period of time.  Who knew?

So before you plunk your hard earned bucks in precious metals what do you need to know?  These are the relevant terms - 1) the Ask 2) the Bid 3) the Spread.

When you call a gold broker, the ask is the price you pay.  The bid is the price the they will pay for your gold.  The spread is the important number.  It is the % difference between the ask and bid.  It's the area where the gold broker makes profit.  The higher the price of gold the more profit there is for the broker.  Get this - the spread varies often between 20 to a whooping 35%.  Oh, and there is usually a 1% broker fee on any sale.

Oh, another hidden gem in all of this is some brokers will try to get you to buy specialty gold coins with even a higher mark up.  These are called gold collectables which are highly profitable for the broker and of questionable value for YOU.  Buyer beware.

Let me simplify all of this for you.  Let's say for this equation gold is selling for $1500 and you buy 1 oz.  With the addition of the 1% brokers fee paid on both the buy and sell you would be paying $1515.  If you then decide to sell it back you'll be selling it for (using a 30% spread + 1% broker fee totaling $465) $1035.  For you to sell the gold back and make only a $3 profit (that profit would = 2/10 of 1%) that same gold would have to jump in price to $2200 or nearly a 48% increase over the initial price of $1515.

So then how long does it take gold to move that much?  Between 1850 and 1933 it moved about 48%.   Oh, quick math will tell you that 83 years.  It moved that much again between 1933 and 1968 or 35 years.  It only took 4 years to climb 48% after 1968.  Between 1972 & 1973 there was another 48% gain and again between 1973 and 1974.  There were some crazy upward trends between 1975 and 1980 and then El Crapo met El Bladeo (the s#^t hit the fan) and the plunge was on. 

By 2006 the trend was upward again and all of the gold hustlers, much like termites, were coming out of the woodwork.  2006 to 2009 saw a 48% jump and between 2009 and early 2012 it happened again.

Keep in mind it's not the short times of gold prosperity to watch for but the long times of inactivity that hurts.

As of late gold buyers have been heading for the exits, again.

Oh, and all that glitters with those brokers is not gold.  Scott Carter the spokesperson for Goldline of which he was a major part, got in trouble with the FTC last year and had to pay back millions in refunds.  Some how, some way these same players keep resurfacing.  Carter is now the front man for Lear Capital.  And the game continues.

The new gold is now silver.  You are now hearing that push but it's still the same game and the same rules apply.  Beware of the spread.  Read the fine print (always!).

One final thing to remember - "You can't print gold."  LOL

 © Krystalco LLC 2012  Any publication or reuse of the information on this blog, in part or whole, without express written consent is prohibited.