Archive for October, 2008

« Older Entries
Newer Entries »

The Lost Art of Buy and Hold Stock Ownership

Sunday, October 12th, 2008

Back in the day, you would buy and hold onto stocks throughout your life and as you approached retirement you would sell the stocks to cover expenses, buy that farm or retirement house in the Tropics or whatever you want. For the last twenty or so years, stock ownership has been marketed as more than ownership in a company but a way to make a quick profit.

The truth is, you can make a quick profit but you can equally make a quick loss. Fundamentals of investment point out that for every investment there is a person who makes money in the transaction and another person that loses money. How can you make a profit doing this?

One answer I like to tell people is to take the big picture. For large, well-funded multi-billion dollar firms, you need to take the long horizon view. You should buy shares in the company and hold onto them. Does that mean that you should forget about them? By all means, NO!

You should monitor the company’s progress, follow the press releases, follow any news on their industry and make your own well-researched, non-emotional choice as to what to do or not.
The problem in the last few days with the stock market is that people are reacting with their gut to non-news. Yes, some banks are going under. Yes, some businesses are having problems.

Not ALL companies are having problems. A lot of firms are being sold off because some of them were held by financial institutions that need cash, people who are short-sellers or because of fear.

If the underlying fundamentals for a company have not changed, why sell it off? Do you need the money right away? If so, do it. If you don’t, don’t. Has there been some change in the market fundamentals or if you are a charter, in the dynamics of the stock? Did you get a signal to sell?

Ultimately you make the choice, just remember that sometimes it is better to buy and hold onto to something and not respond to the knee jerk responses of the public.

Be safe and sane!

Kim Isaac Greenblatt

Kim Isaac Greenblatt asks if you know of the lost art of buying and holding a stock.

Tags: , , , , ,
Posted in Business | Comments Off

Investing in Something? Is It Scarce or Collectible

Saturday, October 11th, 2008

Are you planning on investing on something scarce or collectible?  Do you already have substantial investments in hobbies such as stamps, comic books, rare books, objects of arts, statues of puppy dogs?  As long as you are getting enjoyment from the item, great.   I use to collect comic books and I loved to read them.  Once I thought, “I’ve an idea.  I will sell comic books.  That way I can enjoy my hobby and make money.” 

Well, my business instincts kicked in early and it was a great way to get jaded into the real workings of how the then current comic business ( late 1990s and it has changed somewhat since then) operated.  A lot of comic store owners (and some today) push comic books because they will be “hot” or they will be worth a “small fortune later on” or when the movie comes out it will “go through the roof”.  That hasn’t happened with a lot of comic books though some graphic novels have sold substantially because they were considered groundbreaking – like the Watchmen, soon to made into a movie or The Dark Knight Returns graphic novel.

Just because something is collectible, it doesn’t mean it is worth anything more to anybody else.  It isn’t profitable to collect items for the purpose of making money later on.  If you are hoping to do that, rent a warehouse in the desert and everything you ever own when you are done with it, place it neatly packaged in an air conditioned warehouse.  Twenty years from now there will be something in there of nostalgia value to someone.

Scarce goods tend to have more value but it depends on the object.  In the attached video, I talk about my comic book, Wiindows 12, and it is scarce but the demand isn’t there to make it terribly valuable.  It is collectible but it isn’t as collectible or scarce as the 1940′s Shadow comic I have in the video.

Ironically, that book is somewhat available and not that scarce but still worth something more than my comic book.  Twenty years from now will my comic be worth more?  Possibly since comic books may be a dying if not dead artform in the future.  Depends if everything goes digital and we still print on paper.

In terms of investing, same rules apply with scarce items or perceived scarce items like gold, oil and other commodities.  The difference is that in most commodities markets, the items are needed for commerce where items like art objects, coins or comics are valued for nostalgia an some collectors who have money may go far beyond what you or I would pay because they really, really want that copy of Wiindows 12 that I wrote.

Well, it is a great book.

My regular non-fiction and fiction books fall into the category of informative and entertaining (well, I hope they are entertaining) but because they are available everywhere, they aren’t scarce and there is no reason to collect them just for collecting sake (unless you are Kim Greenblatt book purist in which case let me know and I will autograph my books for you).

Bottom line – if you are planning on investing in something because somebody tells you that the price will go up, use some common sense before purchasing.  If you are buying something because you like it and want it, do it.  If it goes up in value later on, you may not have the heart to sell it anyways.

Kim Isaac Greenblatt

Kim Greenblatt asks if you are investing, do you know what is scarce or what is collectible?

Tags: , , , , , ,
Posted in Business | 3 Comments »

Profitable Business Answers Come From Observation

Friday, October 10th, 2008

We are in an economic flux.  That is a fancy way of saying change.  It is driving people to worry too much about money instead of taking a second to step back, look around and determine what to do next.  We hope our leaders in the United States, Europe, Asia, Africa, etc are doing the same.   The other day there was a massive effort to lower interest rates around the world.  How will our financial leaders know if it works or not?  That is easy, they will do what we should be doing.

We’ll watch the economy.  We will watch what is happening with businesses in our city, our state.  After observaton comes review and analysis.  It shouldn’t be slow or it will hobble our recovery.  Maybe the best course will be to do nothing and continue forward.  At this point everybody is writing about possible scenarios but we all won’t know what will happen until we live through it.

I’ve talked about what things you might want to consider doing in previous posts, and I suggest you write the members of Congress and the candidates to tell them your thoughts.

Today, a store clerk who was bagging groceries and I were talking. He saw that I had a twenty in my hand ready to pay for my groceries. He said to me, “You know I can always tell who is a prepared and a good driver by the way that they pay for their groceries. You must be a good driver.”

“I guess I am okay,” I said.

“I look to see if they are fumbling with their wallets or purses. If they haven’t got their money ready and are waiting to the last minute that tells me that they aren’t going to make a decision till the last minute. That isn’t good driving.”

He was right. Driving courses teach you to plan your trip, we have all sorts of devices to help us. Ultimately, the devices, like the market though aren’t what is planning the trip or reacting if a car comes out of lanes too close to us or the checker in the store says “Next, please” and starts scanning your groceries.

I asked him if he could write a book. He said he has some ideas and I told him to he should write them down! Letting good observations slip away is like leaving the autopilot on in an airplane and not watching if we are coming up too close to a mountain.

We’ve had a lot of things on autopilot and because we were making money, the observation for most people was “If it isn’t broken, don’t fix it.” Hopefully, the takeaway observation these days is, “Change happens and it pays to have money saved for a rainy day.”

It also means we need to watch the economic packages as the unroll and be ready to react to them and change your actions if things don’t get better for us.

Otherwise, like my friend said, we are just potentially bad drivers.

Kim Isaac Greenblatt

Copyright Kim Isaac Greenblatt, all rights reserved. You may not reproduce or use this without permission from the author and owner.

Kim Isaac Greenblatt talks about profitable business answers coming from observation.

Tags: , , , ,
Posted in Business | Comments Off

Don’t Get Sick Over Money

Thursday, October 9th, 2008

We all go through this, especially during economic hard times.  You worry about money.  About not having enough of it.  Not being able to pay bills.  Not being able to earn money.  Worrying about if our families have enough money.  In the news you hear depressing stories about people taking their families lives and their own from frustration.

Try to maintain a sense of balance through this.  It may take deep breathing, it may take seeing a counselor.  It is important that you make money but man and womankind have survived with less for millenia.

If your health goes because you are worrying too much about money you won’t be in any shape to help anybody.  Take care of yourself first.  Take some time to relax.  Enjoy the outdoors, go for a walk.  I am big on physical exercise because it gets you out of your head.

It may take some time, but financially things will get better.  You will need patience, if you have savings, you will need that and more to try and stay profitable.  Keeping your money and priorities straight is very important.

Don’t let the little things get to you.  Be thankful that you have you are alive.  There are people who are in worse shape than you.  There are people who don’t understand how they have gotten into the situation that they are in. 

As I’ve stated in the beginning of one of my books, “We are all in this together”.

Talk to politicians, talk to clergy and above all keep communication open with family.  If you have children explain to them what is going on without going into graphic detail.  Kids are generally pretty smart and can figure things out if you get them away from video games.

Above all, watch your health because once that is gone, it is sometimes hard to get it back!

Be healthy, be profitable and of course, be happy!

Kim Isaac Greenblatt

 

Kim Isaac Greenblatt advises you to don’t get sick over money.

Tags: , , , , , , ,
Posted in Business | 2 Comments »

Profitable Price Points or Piracy Means Free

Wednesday, October 8th, 2008

I’ve touched on this before but the huge brouhaha about Securerom protection that has surfaced again, the question of “Do we own our are we just leasing our software?” leads me to revisit making profitable price point decisions to discourage piracy.

The problem is that when manufacturers and distributors sold unprotected software (or replace that with movies, music, or games), people would make copies of it for their friends.  Is that the same as shrinkage in a store when a shoplifter steals a game from the shelves and runs home with it?  It is.

Change the statement around – are you making a backup, archival copy of your software in case your original is destroyed by a fire, earthquake or stampeding horses?  That should be allowed.

Is the price that a company charges (or you charge), fair?  Does it reflect a reasonable mark-up for the time, effort and start-up costs that you have paid?  Is it steep because you know that people will want to have it and it is a must have game or library of music?

There is nothing that can beat the price of free and once something is let into the wild, there are people with the equipment, talent and skills who will work at cracking protections and getting the product released into the wild.

Movie studios understand this and are working on distribution models and changes to try and prevent this.  If a hit movie like The Dark Knight is out and has a limited time to make money before it is pirated and shows up on the Internet and peer-to-peer sharing, what about something that didn’t make millions and just ends up not being bought?

Education for morality only works a little bit, especially when you dangle the word “Free” in front of somebody.  Should the person who gets free software be imprisoned or fined?  Though the answer is yes, the reality is the same with real shoplifting and store shrinkage.  Most court systems and police agencies are overwhelmed with more serious cases and the issues get prioritized depending on the cities, states and nations that the crimes take place in.

Internationally, the US can try but it cannot change the world.  Other nations have to do their part as well or we will have to continue to accept software “going into the wild, untamed and free” as part of our lives.  It looks to be that way for the next few years.  Some nations turn a blind eye to piracy and once something has been received and pirated, the Internet allows for almost instantaneous distribution.

One of the prices we pay as business people for a truly world wide web, is instantaneous communication and the resulting distribution.

If you, as a business person, can keep reasonable non-intrusive protections in place and have a reasonable price point (what the market will bear), you might encounter less piracy.  If your product takes off and is a hit, it hopefully shouldn’t matter and you will be able to afford better legal teams to help police copyright infringements.

The two sides will always be in our brave, new and improving technical world:

1. Business will try to make something profitable and protect their investments.

2. Human nature in most people is that if they have something that they like/love/need will they will want to share it with somebody else.  Look at the explosion of social networking sites and you will see that I am right.  If the person who is sharing also wants to make out that he or she is a great friend, etc they give their friend a copy of the software, song or even photocopy the recipe for making Mint Chocolate Chip brownies from the book on cooking recipes they bought twelve years ago from the remaindered section of the bookstore.

My own opinion is that there will always be shrinkage, piracy, etc and the way around it is to minimize it by education, selling products at reasonable price points to make reasonable profits and make the customer feel special so he/she will stick around or if he/she goes, they will come back and buy some more stuff!

Thoughts and alternatives are always welcome!  Just a reminder that I only take comments for about a week or so to give the blog that “minty fresh chocolate chip cookie feeling”.

 Kim Greenblatt

 

Kim Greenblatt talks about profitable price points and free piracy in his blog, profitable.

Tags: , , , , ,
Posted in Business | Comments Off

Things That Might Sell Well This Holiday Season

Tuesday, October 7th, 2008

I’ve touched briefly on seasonal sales and it can get brutal for other times of the year when a business isn’t profitable. The problem is that this year, it is anybody’s guess (or everybody will guess correctly-sales will be down) as to how sales will be going. With business problems in the news, housing issues starting to get addressed, and the upcoming election, it might be rough for sales.

People will be holding onto whatever cash they have, some may have been laid off and others are waiting for the hammer to fall. Money will be tight.

My own take on the situation is that the following things might sell well this year for the holidays:

1. Anything under $40 for kids that is the next big thing or at least this season’s big thing, er except for tech items (I talk about tech later on in the post). People will still splurge for something if it is reasonably priced for their kids.

2. Popular video games that are sequels of hits that already have sold well or anything that is part of a popular licensing franchise (Barbie, Star Wars, etc). People find money for things that they want.

3. Chocolate. Anything made from chocolate will sell, unless the people who are getting the gifts have diabetes, are trying to lose weight (they still will take the chocolate – trust me), or are allergic to chocolate.

4. Things to help people cope with financial anxiety, tax preparation or making money. This will be true if whatever it is that is being sold is under $25. That seems to be a magic price point at the holidays.

5. Big screen monitors and tvs that were last year’s models. If the prices have dropped a lot, people will still find some money to buy things that they really don’t need but want to buy because they will be feeling better. Nothing fits the bill better than big screen tvs. Do people really need to spend between $800 and $4000 for a movie experience in their house if they are having a hard time making their mortgage payments? Of course not but that won’t stop them from blowing their cash on it anyways.

6. Inexpensive vacations. The price of gasoline has dropped a little bit here in the United States and some people are driving a little more. People still will be flying at holiday time (though not as much) and it could be some people will head for warmer climates or other countries if the price is right.

The next item isn’t really an item but a generalization:

7. Incoming tourists from other countries might do a lot of shopping here. Because the valuation of the dollar is low, we are getting a lot of Canadians, Europeans and Asians who are starting to come back here to shop. Unique items that are not available elsewhere or discount name brand items might sell well.

8. Clothing if it is priced inexpensively. Clothing can be reused (unless it has a Christmas Santa on it or a Hanukkah menorah) year round and is always a crowd pleaser if you can nail the fashion sense for the purpose who is the recipient of the gift.

9. Electronic gear. I am lumping new cell phones, iPods, and the latest tech in this category but the caveat going with it is that I don’t think people will upgrade as quickly to the latest tech because their wallets are tight. There are others though who always must have the “latest and greatest”.

I am sure there are other items. What can you think of?

Let me be the first to wish you one of many Early Happy Holidays and try to save SOME money!

Kim Isaac Greenblatt

Kim Isaac Greenblatt explains some things that might sell well for the holidays in his blog, profitable.

Tags: , , , , , ,
Posted in Business | 4 Comments »

Inexpensive Marketing Gifts for Trade Shows and Clients

Monday, October 6th, 2008

Ah, the good old days of trade shows where companies would give you t-shirts, teddy bears, inflatable beach balls, designer wines – anything they could engrave or inscribe their name and product on. Because of rising costs, a lot of cool marketing freebies are a thing of the past.

In order to become profitable, it is a sad fact that you almost end up spending money.  One of the ways to attract business is to attend a trade show.  For a lot of people, in the current economic client that may not be a good way to spend your money but it is a great way to network and if you are looking to hit as many potential distributors or customers as you can, it may be money spent profitably.

In the attached video, I touch on the same information that I will talk about here.  I attended a special needs expo in Los Angeles today and they gave out pens and the wristbands that seem to be hot these days.  You know, the elastic plastic bands that mention the cause or company they are supporting.  The pens they were giving out promoted different agencies and had their phone numbers.  Two of the wristbands I received were interesting.  One was from Special Children’s Art, a group being directed by a Rett father who Sharren and I know where he goes out to schools and organizations and has children make murals, etc incorporating special needs children to interact and be part of the creative process.

I also received a wristband that was yellow, green, blue, red and violet promoting eating fruit.  Wild! It actually makes sense because kids will remember to eat one of every different color fruit to get all the different vitamins they need. Great marketing idea!

You basically don’t want to go nuts giving out marketing items for clients even though they could be considered a tax deduction.  Remember you still have to layout the cash to get the items and that is money that is out the door. Longtime readers know also that I am not a fan of running up meaningless deductions because the name of the game is to make money, not concentrate on tax deductions that really aren’t helping at best and raising red flags at worst.

If you are thinking about using flyers to paper car windshields you better check with local zoning first and the same thing with going door-to-door or getting permission to hand out flyers at malls.  If you are lucky you will get 1% sell through and out of that the people who call you may not use your goods or services.  Most of the time the flyers end up on the street aggrevating the parking lot attendants, the mall people but delighting officers who want to cite you for littering.

Magnets work great – they stick on the fridge and most people will remember you at tax time.  Calendars work well except after the year is over, some people toss the magnet or they start ignoring what is on it and it gets used to hold up their kid’s spelling test results.

Here is the video that goes along with this post.  Hope you enjoy it!

httpv://www.youtube.com/watch?v=tFV0qzb3JcU
Kim Isaac Greenblatt

You are reading Kim Isaac Greenblatt’s blog, profitable, and checking out inexpensive marketing gifts for customers and trade shows.

Tags: , , , , , , , , , , , , ,
Posted in Business, special needs | 2 Comments »

Hey Don’t Forget That Your Tax Extension Deadline is Oct 15 and almost here

Sunday, October 5th, 2008

One of the benefits is also if you haven’t filed to get your economic stimulus check, this is your last chance to make a profitable decision.  Please make sure that you file and have everything done by Oct 15 2008.

If you have been putting off the inevitable, take a deep breath and with a level head, go through your paperwork, call your tax pro (or break out the software) and start working.  Remember if you are late you will be subject to penalties.

You might be surprised if you run your own business or have finally gotten together all of your receipts that you might end up getting a refund instead of owing money.  It happens so don’t think that it is all doom and gloom.  There may be other credits that you didn’t know that you could take.

If you know that you are going to end up owing you have reached the end of the line.  You probably have already paid whatever it is you thought your estimated tax liability was that was outstanding and now you just have to take the time to get the documentation prepared to substantiate the money.  Hopefully you are already on it, if not, there is still time.

Take advantage of the reminder now to get photocopies, web print outs of statments, whatever it is you were missing or needed to complete your tax return.  You can do it, I know it.  I also know it is the day of rest and prayer for some people so enjoy the day and after sunset promise yourself that you will get busy!  You can do it! 

Okay, I will stop cheerleading.

Er, is it safe though to say to you to have a good and perhaps profitable planning  Sunday? 

Kim Greenblatt

You are reading Kim Greenblatt’s profitable blog-don’t forget the Tax Extension Deadline is Oct 15.

Tags: , , , , , ,
Posted in Business | Comments Off

Good Emotions, Bad Emotions

Saturday, October 4th, 2008

I almost want to write a book and call it “Good Emotions, Bad Emotions” similar to my book, “Good Tax Idea, Bad Tax Idea“.  There are a lot of emotions that can hit and at times almost overwhelm you in business as well as your personal life.  The best advice I can give is to try and stay calm.  It may not be possible but more times than not, going ballistic or melting down isn’t the profitable way of solving a problem.  I’ve touched on his before and it doesn’t do much good to freak out over things that you can’t control but at times you may need to do some kind of release.  If you get wound up over things, take five minutes at lunch or at break time and go somewhere to stretch your neck muscles, relax, take deep breaths.

Your job may be on the line or a serious relationship may suffer if you don’t take at least one step to think about your reactions.

Go somewhere the opposite of where you were at.  In other words, if being alone was making you sad or angry, go somewhere where there are people and try to interact if you can.  If you were with people and they were the cause of the grief, try and figure out what was going on and if need be, excuse yourself.

There is a lot of craziness in the news with the economy, the elections, global issues, etc.  The best thing you can do is try and avoid the bad emotions.  In the long run they won’t help your physical or mental well-being.

Bad emotions include apathy at times, exhaustion and depression. Please, if you can, do not make business decisions when you are feeling bad. The result is that you may not make the best decision you can at that time.

Good emotions are emotions that make you feel great, inspire you, make you happy (though most people are not happy all the time), anything that can make you feel at peace (which is different than happy) or anything that brings you joy.  If you have a hobby, maybe dancing, express yourself.  I don’t have to tell you this if you love your work or if you are the type of individual who finds that they can get lost in their hobby.

It is also not not a good nor profitable idea to make business decisions if you are ecstatic, high or on medications. Your judgment could be impaired as much as if you were in a state of anger or depression.

The secret to feeling better is to lose your sense of self.  If you can do that with something that produces genuine and not harmful-in-the-long-run emotions, do it!

The secret to making good business decisions with profitable results is to take the good feelings and try to make a well-thought decision. You want to make a balanced decision, regardless of the good or bad emotions.

Kim Isaac Greenblatt

 

Kim Greenblatt talks about Good Emotions, Bad Emotions. Really, he does.

Tags: , , , , , , , ,
Posted in Business | 2 Comments »

AMT-Alternative Minimum Tax, The Invisible Tax System

Friday, October 3rd, 2008

Possibly by the time you are reading this article, the AMT system, the Alternative Minimum Tax system may be fixed for the so-called middle class.   Personally I think if there is a middle class it has, as a friend of mine has said from her sociology class, been shrunk to the size of a bottleneck between the rich and the poor.  But I digress.

What is the AMT Tax?  It was an attempt at trying to get people who didn’t pay taxes to pay them.

It was enacted as part of the Tax Reform Act of 1969 to target the rich.   Sadly, the Congressional leaders that implemented this forgot to adjust for inflation!  Okay, you ask, but inflation is DOWN now, so how can it affect me?  Well, it really isn’t down.  Without adjustments, each year, the alternative minimum tax affects people who make less and less money.  Once, it was set for people who made “a lot of money”.  Now, it can affect people in some cases from $75,000 and up!

The Alternative Minimum Tax was built as an invisible tax system that runs parallel with the calculated federal income tax and checks it to ensure that that the people in higher tax bracket don’t evade paying any taxes through loopholes.

That means that most tax deductions are disallowed.  I will say it again – that means that most tax deductions are disallowed.  So that means things that you might take for granted on your Schedule A may be limited or disallowed entirely.  In some cases exemptions may be limited.  Some examples that come to mind are:

If you claimed the standard deduction for regular tax purposes, the deduction is disregarded when figuring AMT liability. You also must disregard the personal exemptions claimed for regular tax purposes.

Mortgage interest and property taxes are also capped if not disallowed.

I haven’t even started with Medical deductions.

It is not pretty and for the middle class in some cases, it just isn’t fair nor profitable.

Back in 1969, the minimum tax was a 10 percent flat rate.  AMT has mutated over the years to include corporate AMT, and it has continued to grow.

AMT was originally introduced to help fund the Viet Nam war.  It was implemented because in 1967 there were around 155 people who had incomes over $200,000 who did not pay ANY federal income taxes.   Around twenty of them were considered millionaires.  They basically used every legal loophole they could and the media caught on.  The public went crazy.    It took from the Johnson administration (the closing years) into the Nixon administration to implement AMT.  Over the years it was reformed and reformed again.

For the last few years, Congress has been putting a temporary band-aid by imposing stop measures that froze AMT from hitting more people.  Hopefully they will address it head on by the time you are reading this post. 

Remember that the government makes a lot of money from calculating AMT.  I am not entirely sure how it will be “fixed” and at the same time help keep income coming to keep our government and the infrastructure.  Can an individual still be profitable and pay a reasonable amount of taxes?  I think so but we need to think it through.

 

UPDATE AS OF OCT 1 2008 1:06 PM PACIFIC TIME from the AP:

The tax plan passed the Senate last week on a 93-2 vote. It included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewable energy incentives and extensions of expiring tax breaks. All told, it would cost about $112 billion over five years. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions, but does have revenue offsets for part of the energy and extension measures.  

So it sounds like the House of Representatives has to vote on it.

Er, how are we going to cover the shortfall for the AMT and disaster provisions?  Maybe there will be more news later!

Any thoughts or comments, dear readers?

Kim Isaac Greenblatt

 

Kim Greenblatt, in his blog, profitable, talks more on AMT.

Tags: , , , , , ,
Posted in Business | 11 Comments »

« Older Entries
Newer Entries »