Sunday, March 30, 2008

Free Advertising

With all the viral marketing that goes around the internet these days, when I first came across this website, I thought it must be another example of the technique. Then I began to realize I was surprised my own parents hadn't created the website first! To anyone who has been to a Costco on a Saturday at mid-day, it won't come as a surprise to find that the warehouse club chain can attract a pretty rabid following.

Now, there certainly are some items at Costco I've grown fond of, but when I began to work the typical 9-5 M-F business work week and only could get to Costco on nights and weekends, I lost comprehension for how Costco is able to convince its member to pay $50 a year to subject themselves to such a shopping experience (at least here in DC)!!

A typical weekend trip to Costco here consists of slowly circling a parking lot looking for an empty space while trying not to drive over the roves of customers. Once showing your paid membership card to the doorman like you're headed to some VIP club, you get to slowly try to make your way through a gigantic yet somehow packed store with a ridiculously over-sized shopping cart. At the end of course you get to finish it off with a long line at every register where every customer has hundreds of dollars worth of groceries to scan. Oh and I almost forgot the finishing touch of no bagging available--you're lucky if someone will give you some old cardboard trays to precariously pile your items in.

I guess I must be in the minority though, because somehow through an ingenious business model, Costco has managed to be so loved by their fans that they incur the type of free advertising you see at the Addicted to Costco blog. In fact it is precisely that business model and culture which made me disbelieve any notions that it could be viral. Clearly they are doing many things right in that warehouse.

Friday, March 28, 2008

Tightwads vs. Spendthrifts

The Globe and Mail reports on an interesting study that delineates not just between the behaviors of so-called "spendthrifts" and "tightwads" but the actual physical reaction between them. Tightwads, according to the study, feel an emotional pain when paying money for anything. On the flip side of the coin, Spendthrifts felt an emotional pleasure whenever purchasing something.

What makes the study more interesting than just our common sense perception of money transactions is that the pain was felt regardless of whether the person was rich or poor or whether it was an expensive purchase or a just a moderate one every day one.

It somewhat saddens me to say that I am definitely in the tightwad camp. I thought that this might get better with age as my income and financial independence increased, but alas, even weekly groceries give me a slight pang at the cashier. Fortunately, heavy usage of credit cards in lieu of cash seems to dissipate this feeling--concurring with the findings of similar study at Standford University.

What is perplexing about the findings is that even in this day and age of heavy credit card debt, tightwads outnumber spendthrifts by 3:2. What is probably less perplexing in falling in line with our cultural stereotypes is that that the number of spendthrifts among females was much higher than in men.

Wednesday, March 26, 2008

One more reason to learn about Greasemonkey

During the course of sharing a computer with someone while reading an article online, I've discovered that I am far from the only one who slowly highlights words as they read down the page. I'm not sure whether it is due to keeping my eyes focused on words like speed readers use their fingers on tangible pages or perhaps it is the eyestrain of constantly staring into a dull white lightbulb as most reading on the internet (outside of using a Kindle) tends to be--particularly those with largely a white background.

There is however one site I use on a regular basis who seems to aspire to correct this habit the way a nun would slap a pupils fingers with a ruler. The New York Times, in their infinite wisdom, introduced a feature where whenever you double click on any word in their article, an automatic dictionary pops up in a new window. Now I know the New York Times can have an educated vernacular at times, but really? Are people really needing to look up words in the dictionary on the New York Times that often? It's not exactly Tolstoy. The reason the NYT might have considered not implementing this feature (other than its realistic utility) is that everyone who reads text on the computer like I mentioned earlier (a fair percentage of users in my experience) are driven nuts by it. You would think since the Times also requires registration they might have a profile where a user could toggle the feature off, but no.

Queue the arrival of the most simple yet gratifying Greasemonkey script, the New York Times Kill Doubleclick Dictionary. Those who are neither regular users of the New York Times' website nor avid double-click readers might not understand what a relief this script is for some of us, but I assure you it is.

Monday, March 24, 2008

Stealing from the Cookie Jar?

A lawsuit recently cam out from my most recent place of residence, San Diego, coming to a surprising judgment--that Starbucks must pay over $100 million to its baristas due to tip money that went to supervisors. While at first this seems like a great victory for low-paid baristas getting their tips back from stereotypical greedy lazy supervisors--we've all had 'supervisors' in the past that took the meaning of the title a bit to literally--in actuality this was a judgment that flies in the face of common sense.

The key term that substantiates this is that these were SHIFT supervisors. These were NOT managers sitting in chairs in the back room checking their email and assigning people when to work. These were little more than glorified baristas who fulfilled all the duties of a regular barista in terms of beverage preparation, only occasionally chipping in when needed on managerial tasks like ordering supplies.

The statue cited by the plaintiffs was a state law barring managers and supervisors from obtaining a share of employee tips. This is when it really starts to become clear how messy things can get when government tries to regulate business with broad sweeping legislation. It would seem that Starbucks, combining the modern business strategy of more seamless flow between managers and employees with another modern business strategy of job title inflation to create incentives for lower employees and created the "Shift Supervisor" role which hardly fit the common term of 'supervisor', but fulfilled the previously mentioned goals of streamlining and incentivizing.

Unfortunately for those supervisors, they will now be getting paid LESS than those their supervising on some days as the judge as issued an injunction against ever sharing in future tips. Perhaps by the letter of the law the judge is correct, but clearly this was an atrociously written law by legislators with good intentions but poor foresight.

The larger question is whether government should have any sort of role in this part of business. As someone who has worked in a restaurant I might argue that a fairer law would be forcing servers at restaurants to share tips with cooks in the back of the house. As it stands, there's no real way for restaurant patrons to tip the cook when they have a delicious meal when in fact many assume that tips will be shared (since they sometimes are) and furthermore, I'm sure I'm not the only one to tip more when a meal is particularly outstanding even when the server might have had nothing to do with it.

Saturday, March 22, 2008

Gas prices from around the world

Every so often as gas prices continue to rise across America, it is important to remind ourselves that we actually have it pretty damn good here--at least in terms of gas prices. did a great spread comparing what we pay to the rest of the world. The clear conclusion is that the rest of the developed countries continue to pay a substantial amount more than us Americans. Large oil-producing countries in the developing world on the other hand at least seem to get low prices on gas although given the terrible strife usually associated with those places, I won't argue that it's a fair trade.

What this layman's survey of gas prices doesn't factor in of course is that Europeans' high gas (or should I say 'petrol') prices are most attributed to the high taxes the governments place on each litre for roads and other vehicle-related government expenditures. I have to say though, I envy the Europeans' approach to these taxes. Not only does this method seem to make sense from a fairness standpoint--the more you drive, the more taxes you have to pay proportionally--but also from an economics standpoint, a consumption-based tax would add incentives to driving less and investing in alternative energy technology which would be beneficial for a multitude of environmental and political reasons.

Saturday, March 08, 2008

Business Attire

Just how important is appearance in the business world? From a micro level, when I look around offices I've been in, it seems absurd that the people in positions of power were there due to their physical appearance. Furthermore, when you look to someone like Bill Gates, certainly he did not get where he is today from debonair looks . The problem is, when you look at these questions from a micro level, you miss out on the more subtle (and perhaps subconcious) large trends. Sure when it comes down to a qualified applicant with some skin blemishes versus a bumbling Fabio, the former will win out, however, when the field has been narrowed down to a sparse number of candidates, as is often the case, our primitive instincts will likely play a part.

Studies have found a direct correlation between BMI and wages over a lifetime. Of course this has to be taken with a slight grain of salt as the correlation might not be a causation, but rather a symptom of being poor. For example, rich people are often able to afford healthier fresher food while the poor will often survive on unhealthy but cheap starches and processed food. Furthermore, there are other correlations such as being able to afford a gym membership, being educated about about nutrition and for many, more spare time to devote to staying healthy. Or it could be a simple correlation that healthy people are more likely to have a strong work ethic that leads to career success in the same way that it keeps them healthy rather than the latter causing the former. And yet, I don't think it requires too much of a stretch to imagine that attractiveness has some sort of effect on hirings and promotions.

Along those same lines of the BMI correlation, studies have shown that CEOs of Fortune 500 companies are almost universally over 6 feet tall. Now for those of us such as this writer destined to a life of looking up to those people in an unfortunate literal sense, that might seem disheartening. However, the lemonade one should make from those lemons is that appearance can most certainly play a big part so it is important to pay close attention to it in the business environment.

For me who seems to perpetually live on a budget, work clothes has always been something I've scrimped on. Interview clothes were the only exception--I understood the value of a first impression, but after that, I always figured 'why should I concern myself with wearing particularly smart clothing for my co-workers who seem like they could care less? As long as I followed the dress code, is there really much of a point to spending money on work clothes versus a more comfortable bed, a fun night out with friends, or other goods and services that I seem to derive much more pleasure out of?

In light of these recent studies though, it's been a bit of an eye-opener of something I really shouldn't look past as much as I do. Now that doesn't mean I need to take a trip up to 5th avenue and buy some Armani, but perhaps I should earnestly look at revamping a lot of my wardrobe as a form of investment rather than a merely a vein frivolous expenditure.

Monday, March 03, 2008

Euro update

Well its been a difficult past few months trying to trade the Euro. The strategy of one-directional trading has an obvious weakness and that is when the market begins ranging. Since I began employing this strategy back in November, the market had been stuck in a range (at least on the 4 hour and daily timeframes) for most of the time. Although I caught I nice trade I mentioned on the blog back in December, January and the first half of February on the other hand were pretty rough as I kept getting stopped out when the market would range and doing a lot of give and take. In addition to that, the 50 pip trailing stop doesn't seem to be what it used to be. You can follow the daily average true range and see that it has been steadily over the past couple of years. I imagine this is mainly due to the increased trading of this currency by the major banks and institutions as the Euro cements itself as the major currency pair of the world.

Had I been trading this currency a year or two ago, the 50 pip trailing stop was truly a 'set-it-and-forget-it' type of trade. It could easily take several days before the trade was closed. Recently however, I've been finding myself more and more checking the charts throughout the day to watch the trade, watching it nervously as the Euro could easily plummet 70+ points with little notice. I am beginning to consider increasing the distance of the stoploss.

Granted of course there is an obvious downside to doing this--my position size would be cut in half (those 50 pip wins won't be quite the bonus to my account), however, I think trading would be more relaxing than it currently is. I think I would have much more of a feeling that I'm jumping in a steady current than now where it is beginning to feel a bit like a whitewater rafting adventure as I hope not to crash into rocks along the banks. Buying on dips would be less stressful as well since I could misjudge when the trend will resume by up to 99 pips and still catch the catch a hold of current.

Of course, I need to stay realistic as my optimism is certainly aided by the recent surge of the Euro as it finally burst through the 1.5000 ceiling and hardly looked back. A market correction is certain, but as long as the US government continues borrowing and spending like drunken sailors and Bernanke lowers those interest rates, I see no reason to believe 2008 won't be a successful year for my portfolio (undiversified though it may be)!