MONEY 111 - SALES

THIS IS MY 111 BLOG ON UNDERSTANDING MONEY TOOLS

With this blog we are back to sales and corporate structure with the hopes of giving you a better understanding of “what the current system is” so that you can better work around it, or with it.  In previous blogs we discussed sales more thoroughly.

I have part time associations with two large public companies. Similar flaws are obvious with both, so I thought I would give a bit of background as to how we got here, and what you could do to make your work life better.  I love to analyze companies and finance, therefore relating my experiences to hopefully make life better for others.  Sometimes this frankly comes down to avoiding today’s work life, knowing all to well in advance you are heading in a poor direction!  There is healthy stress, where you have control of your life. There is also unhealthy stress where you don’t have control over your life, and that will result in health problems.

The first thing that astounds me is the massive amount of paperwork that is required of these companies and employees. It is so extensive that people can’t direct the needed time to their positions, let’s say sales, to make sales.  The computer was to make life easier, it hasn’t; it has only created another step in the internal workings of companies. Yes, there are good reasons for computers! One is saving data and files, and two, expediency in transferring information.  I blame many issues on the government, lawyers and accountants who meddle in the business sector and have it all screwed up.  With banking and any industry related to finance including real estate, blame it on the Dodd Frank Act and the financial debacle of 2008.

Let’s talk sales.  Most good sales people are “people” persons, they hate paperwork.  We are not giving sales people what they desire.  First, most people spend about 1/3 of their life working, easily with overtime hours required in recent decades.  You better like what you are doing!  Sales people should be happy, and most I see are not, this rubs off on the customer. I see negative, stressed-out employees. As so much retail has gone on-line, you better be good at what you do to save your livelihood!

Simply put, what do I defer to as the make up of a good salesperson? 

-       A combination of right brained and left brained.  A good salesman for technical and financial sales will be more left brained.

-       Observant and a good listener.

-       Will use a combination of verbal skills along with mental skills and “heart”.  True connection to the customer, so he/she knows you sincerely care about his/her needs and wants.  I see few sales people and managers who care about “heart”.  They could care less as long as a sale and sale’s quotas are made.  The younger the people are generally the worst.

-       A happy, content individual.  Many buyers want a pleasant, if not fun, experience through the process as long as professionalism and good products are adhered to.  Many customers are so used to poor sales people they don’t remember the experience; should be fun!

In sales you have only a few seconds to make a very good first impression.  Believe it or not, physical impression is greater than the verbal.  After the first impression you have only another minute or two to create a more lasting positive impression through your mental and verbal skills.  Selling is a skill both inherent and learned.

Today, if a corporation gives sales training I see it more as company policy and procedures than true training.  Sales training needs to incorporate psychological training for skills and role-playing under difficult circumstances, especially for more expensive products.

How did we become robots setting poor standards for the future?  I’m not sure if Sam Walton, who started Walmart, would be proud of his company today.  The same goes for the four founders of General Electric, Edison, Coffin, Thomson and Houston.  Then on the other hand, I have read some unfavorable things about Thomas Edison, so not sure.

I keep hammering the position that Wall Street has forced businesses to become what they are and it is not pretty, all bottom line.  Everything is cause and effect and eventually it will catch up to them.

And then again, we are in a New World Order.  Baby Boomers who related to good salesmanship are dying off, Millennials followed up by Generation Z (the Founders) relating more to on-line order taking, technology and people speaking with strong foreign accents. Perhaps good salesmanship is no longer needed or respected today.

MONEY 110 - STUFF

THIS IS MY 110^TH BLOG ON UNDERSTANDING MONEY TOOLS

In this blog we are going to hit upon a few financial issues that affect everyone so we will call the blog “stuff”.  Please don’t forget I write this blog to the layman and keep the information in simplistic format so it is understandable, and yet you hopefully learn something from it.

On December 14^th,  2016 the Federal Reserve raised the discount rate 25 basis points, which means 1/4%.  Does the economy deserve that rise?  My answer is not really in terms of the health of the economy and average worker, but they needed to in order to halt inflation and show a rise in rates. Rates have been too low for too long only assisting big corporations and the wealthy.  The older generation that used bank savings and fixed income investments like bonds have really been penalized the past 6-7 years.

What impact will this rise have?  In a brief answer, 1/4 % won’t have much affect. The Feds say they may raise interest three times in 2017, we will see. This has caused our US dollar to further increase in relation to other world currencies.  Our large corporations exporting goods will see some sales slowing.  It will be more expensive for other countries to purchase American made goods, e.g. China lowered the Yuan, the Euro is drifting lower as Italy has major governmental problems and debt issues they don’t know what to do with.  France has continuing problems, and their elections possibly going conservative and to the right will prove interesting for Europe and the EU.  For people here it is a benefit with foreign travel and purchasing goods made elsewhere.

What affect will the increase in interest rates have on real estate mortgages?  Here I will give you only facts, not suppositions.  The average US home buyer holds their home 7 years, so the rates are more related to the 10 year bond and perhaps 30 year.  Yes, it is better then to go for a 30 year mortgage if you are now a buyer before rates go up.  If we slip into a recession which I have seen coming for a few years now, rates won’t go up, and you could look at a 5 year ARM (adjustable rate mortgage) as the rate is lower than a 30 year mortgage and you have 5 years to determine what you want to do.

Stock markets?  Insanely high and only gone higher with the election of Mr. Trump.  The raise in rates pulling the normal money out of stocks and more into new bonds hasn’t happened.  I have a far better financial and analytical background than most, and this is all crazy and confusing. There is no such thing as traditional analysis of an income statement and balance sheet. As mentioned before the markets are all driven by volume, trends and trading using computers with fraction second trading.  (I am not sure most people realize that when you buy a stock with something like an 80 price to earnings ratio, P/E, it means it will take 80 years to pay back the original investment!  Better have incredible growth potential.)  In general, with a strong dollar look at companies doing business here on staple goods with high/strong history of dividends, not US companies selling into international markets.  The younger generation is still bouncing in and out of high tech companies, good luck if you have a software program that can parallel the best or beat Wall Street.  If you have been in currency ETF’s (Exchange Traded Funds) holding US dollars you probably saw a conservative return between 4 and 5% this year, which isn’t bad.

Next on to Globalization, which I am not an advocate of.  I will give you my pro’s and con’s.  Many say it is here to stay and will come about no matter what.  Let’s keep this in short statement format.

Con’s:

-       Average worker pay in the USA and top G-20 countries will be lowered significantly.  I had to do some research on these figures, but here is what I came up with.  1/3 of the world’s workers make less than $2.00 per day. I don’t want to work for that!  Another group in a pay-scale above that one would be $1200-1400/month in G-20 countries, however you need to look at the varied degrees of cost of living around the world. That figure will not go far to live on in the USA and European countries.

-       Diseases.  Once many diseases that no longer existed in the G-20 countries like TB are now back with the influx of immigration.  Same for drug resistant bacteria strains.

-       As the world has become more global with manufacturing and trade since the 1960’s inequality around the world has only become worse, not better.

-       Globalization is really being pushed by the “propaganda machine” of the big corporations and wealthy.  Once outside the USA and Europe your work standards and legal repercussions for safety, health, hours worked are essentially eliminated.

-       Total “fat cat” and “big brother” controls worldwide. It has already started with Google and Facebook and will only get worse. You are being tracked and monitored every hour of the day.

-       World control by the world’s wealthiest 1/2% of population and large corporations.  Total political control to the dominating wealthy.  Sounds like an old James Bond movie!

-       No longer unique cultures and nationalism.

-       More intermarriage will create one race in the long term.

Pro’s:

-       More global economic growth.

-       Commercial trading done quickly and easier e.g. currencies, borders.

-       Easier access to products.

-       Rise in incomes for the poorest, providing the wealthy feel the social need to share!

-       Easier travel and between borders.

-       Better world mass communications.

-       Less chance for wars, as the wealthy and large corporations control the world.  There will always be the young, under 30 years old who have the energy, to rebel and seek changes.

If you can refer to the European Union as a mini-example of Globalization you can see how financial disparity doesn’t work.  The Euro is falling apart; first Greece, Britain’s exit and now Italy’s governmental and financial problems.  Perhaps France next.

I tend to favor my roots and uniqueness from my grandparents and before, so hope I will not see Globalization for the reasons I mention above.

MONEY 109 - NEWS FACTS

THIS IS MY 109^TH BLOG ON UNDERSTANDING MONEY TOOLS

There has been quite a bit of news lately on “fake” or false news.  What can we believe?  The media reports and I will include information from Facebook and Twitter may have very distorted facts.  The simple answer is that we can no longer trust what we hear and read, and unfortunately it is only going to get worse.

Along with misinformation, stands “half truths” to slant the results of the news.  In light of this I want to bring attention to the news that came out  around December 3^rd from the Bureau of Labor Statistics.  As I write commenting on what I believe to be accurate facts to assist people in better understanding of money, this is duly warranted.  The main employment headlines were that new hires accounted for 170,000 new jobs, thus lowering the unemployment rate from 4.8% to 4.6%.  I don’t mind giving Mr. Obama kudos as he leaves office, but let’s tell the American people the whole truth.

Just before this release of new jobs it was reported that 268,000 Americans filed for first time unemployment claims.  Then, added to this discouraging news was that Americans who are working age between 18 and 63 and “not working” went up from 94.600,000 million to 95,050,000.  I like to use the word “wow” so I will again here.  2 plus 2 is adding up to 5!  If the media is going to report, report accurately and the whole facts.  Another material fact to note is that wages went down, not up.  This indicates part time service work at lower hourly wages. Don’t forget that if you have two or three part time jobs to make a living you are counted as two or three employees in this statistic.

As I have said before I think Mr. Trump will do as good a job as any businessman or politician.  What he can’t do is realistically improve the employment rolls without reaching into the environmental concerning industries like coal and oil.  Why?  We may build new factories, and place a higher tax as a penalty for those companies leaving, however factories in the future are going to be very automated and robotic requiring few employees.  What are we going to do with all the people? What is the world going to do with all the people?  No one has any ideas, especially good ones. History recounts the ways we have eliminated people in the past with wars and disease…..not good.

Our unions and lawyers have created a very difficult situation and not what we refer to as “business friendly”.  Our corporate liabilities are sky high as with unemployment and workman’s compensation insurance. Doctors will concur that the main reason people don’t go back to work after an injury and remain in therapy or out of work is they prefer to continue collecting money from disability insurance. The system is broken.  In corporate lawsuits lawyers many times tend to go for neurological injuries as they are very difficult to prove in medical testing and in court.

Our educational system is abominable and needs revamping.  The results of international academic testing was released this week.  This included 70 countries.  We scored 37^th in the world in mathematics.  Reading and science were a bit better.  Now pause, and try to think of 36 countries that scored better than us.  Tough to think of 36 countries, isn’t it?  As we all know, our children were born with average or better intelligence, however look what our environment has done with their mentality!

One last point for this blog.

Here is my opinion on investments: 

Stocks:  Insanely overpriced. Has not made any sense for a couple years.  Investment firms like BlackRock and Wells Fargo Money Management are tending more to automation for investment decisions versus human analysis.  The reason being no rationale; market based on momentum theories and trading.  The markets went higher recently because Mr. Trump was elected president, this is not substantial reasoning and does not reflect improvement of corporate earnings.

Bonds:  When the Federal Reserve raises interest, perhaps this month, market values for bonds will come down to equate to market interest rates. If you can hold on to bonds for the duration of the bond, okay.

Real estate:  Most markets are very high or close to a bubble.  Mr. Trump being a real estate businessman may favor real estate which would include protection in tax law.

Gold: Current price has been pretty stable around $1,200/ounce.  It is a hedge against inflation, or bought during trying times.

Cash: Perhaps the place to be.  The dollar has strengthened from it’s already strong position. 

MONEY 108 - BUSINESS GAMES

THIS IS MY 108^TH BLOG ON UNDERSTANDING MONEY TOOLS

In this blog I will comment on some of the games businesses use today, and then as usual make comment on some other issues, like the economy. It’s an eclectic blog!

As in most industries today there is greater supply of workforce than jobs available. Ironic that we want Globalization! The main reason, of course, is pay the employees less.  You see this conflictive reporting daily in the news; unemployment down, tremendous job situation.  94.6 million Americans not working!  You watch segments of the news and so many college graduates unable to find any work except minimum wage and still living at home with their parents.  Yes, student loans are over $1 trillion and without good paying jobs these college grads will never pay down their loans let alone want to get married and be able to afford a home.

I believe Donald Trump will be a good president and attempt to bring through badly needed changes. Will he get the old line in Congress and the Senate to go with him?  First off, lowering taxes should benefit all although in the short term raise our US debt.  The lowering of the highest corporate rate to 15% should help prevent companies from leaving the US.  Building new manufacturing plants here with incentives is very important. The reality is we can prevent companies from leaving and start producing more here, however new companies and renovation of existing plants will provide for more automated and robotic plants.  Technology will be needed but not a large labor force as we needed 20-30 years ago.

One common trend employers and human resource departments are using is requesting managers to low-ball employee evaluations.  This serves two purposes: 1) to keep employees on their toes and get them to work harder and better, and 2) leave justifications to terminate an employee so the employee has little legal recourse against the company.

Silicon Valley is screaming for more HB-1 workers (as we have discussed these are foreigners with working visas).  The tech companies are not that compassionate, they want cheaper employees.  It has been a while since I got the latest figures, but India was graduating 6 times the number of engineers that we were here in the USA, mostly in technology.  India has over 1 billion people, but the ratio of engineers to the population is still very high.  Our American companies will replace American workers at the drop of a hat.  They even go to the extent of sending people over to these countries and train to their specializations.  It is similar in the medical and pharmaceutical fields. Hospitals and drug stores hiring from Pakistan and India.  These people have to have attended schooling and then pass state boards?  For most, the schools they went to are not nearly as good as in the USA.  Secondly, what they do is go to a training school in the USA that teaches how to pass the boards.

I have been watching the news about fast food chains hiring more workers; most of these jobs are at minimum wage.  What is happening especially in the Southwest is that they are replacing current staff and hiring people who are bi-lingual in English and Spanish.  With the influx of people from Mexico and South America many who eat inexpensively at fast food restaurants the employees need to be able to communicate in both languages. The push for $15/hour wages. I see it just expediting the automation of fast food restaurants, corporations working leaner.

No matter who won the presidential election it didn’t really matter as I believe we have already started into a recession.  Americans just don’t realize it.  There has been a temporary bullish blip because Mr. Trump was elected.  Look at corporate earnings. Only a few companies are carrying the markets.  Wall Street controls the companies and it is all bottom line.  No long-term outlook.  Wall Street tells companies what they want and how to accomplish it; also, who to hire and in what positions for higher management, accounting firms and law firms.  The game now is for Wall Street to lower expectations in advance, and then announce a company has met or beaten expectations sending the price of the stock higher.  On average, corporate earnings haven’t increased since 2006 and yet the inflationary spiral has hit the stock markets and real estate the most.

Over the long term presidential decisions will benefit or hurt our country.  Interest rates are creeping up.  It is more likely the Feds will raise interest rates at long last this December and this is going to have a negative effect on bonds.  The longer-term effect of all the money we printed is coming to roost with inflation.  Raising interest rates will affect the world.  Our exports will be diminished; currency wars. As most noted, China just lowered their Yuan for it’s trading benefit.

When George W. Bush was elected we knew oil and gas was going to be the industry as Mr. Bush was going to protect the family assets. Oil prices went up significantly.  Similarly I am guessing Mr. Trump will protect the real estate industry.  Right now we are peaking with very high real estate prices in most of the populated areas in the country, especially those cities within a 100 miles of the oceans.  In real estate, know your buyers.  For foreign buyers of residential homes currently 27% are Chinese buying homes that average just under $1 million, and many are cash buyers.

Oil investments?  OPEC has just agreed to limit production.  My opinion is why invest in a product that has more supply than we will ever need?  The price can only go up because of cartel or futures trading manipulation, and that can give way at any point.  Too many oil-producing countries do not get along, and too many are in dire financial need to sell all the oil they can get to pay debt.  The IMF and Central Banks loved to get these countries into debt, then will force them to sell off assets to the wealthy to pay debt; Greece is a fine example of losing control of assets. The other problem I see here for unification of OPEC’s controls is that similar to the European Union there is far too great a disparity of country wealth to hold a unification together for very long.

So much for this blog!