By NewsOne Financial Blogger Ryan Mack:
If I gave you $100,000 today how would you spend it?
Before you continue to read, I want you to take a moment and think hard about this question. How would you put that money to work? After you have thought about it, which of the following two scenarios describes the best use of the funds?
Scenario A: Spend $50,000 on a “caddy”, $25,000 for your pinky, and the balance on a “pound of blow”. In twenty years you will have an old pinky ring and a lot less brain cells.
Scenario B: Spend $20,000 on a Honda Accord, $5,000 on a nice vacation, and invest $75,000 in your own portfolio. In twenty years you could have as much as $350,000 (with a very modest 8% return).
For those who chose Scenario A, you have agreed with famous rap star Lil’ Wayne as this scenario was taken from his lyrics in his song “Stuntin’ Like My Daddy”. I listen to rap music, but we must understand that many of the lyrics in this music were written because of their ability to make money…NOT because of their contribution to our intellectual capital as a people.
I personally agree with Scenario B and so do the majority of millionaires in this country. Half of the millionaires in America have never spent over $30,000 for a car in their ENTIRE life (The Millionaire Next Door, Thomas J. Stanley and William D. Danko).
One reason is they are so busy making money that they do not have much time to worry about self image. If you were TRULY wealthy, and like 5% of America who controls 95% of the wealth in America, would you care about what others thought about you? Another more important reason is they understand that as long as they are spending money on items that lose value instead of things that gain value they are less able to maintain and increase their economic status. This is why you will hear stories about Jim Walton, heir to the fortune created by his father Sam Walton (founder of Wal-Mart). He still drives a 15-year-old Dodge Dakota pickup despite being number 23 on the 2007 billionaire’s list. You may have also heard about Ingvar Kamprad, founder of multi-billion dollar enterprise and also a billionaire. He still drives a Volvo which is also 15 years old. Before he attained his fortune, his father gave him a very modest reward for doing well in school and what did he spend his money on…a “modest” furniture company named Ikea which reported revenues of $17.7 billion dollars in 2005.
The question that you should be asking if you do not know and have not asked already is, “What are they spending their money on if it is not consumption?” The opposite of consumption (putting your money into assets that lose value) is production (putting your money into assets that go up in value). Four of the most common vehicles that you can invest your money into are the following:
1. Stocks
2. Bonds
3. Real Estate
4. Entrepreneurship
1. Stocks
I read blog posts by Don Dodge and Glenn Kelman today about people jumping from Google to Facebook and it got me thinking about entrepreneurs.
Most people have an aversion to risk, my college economics professor told me. Which means they have to be rewarded to take on that risk. The higher the risk, the higher the possible payout has to be for people to jump.
We make risk/reward decisions every day, all day. Do I go skiing, and enjoy the rush of flying downhill even though there’s a small chance I’ll blow out a knee? Should I go to college or just get a job and start earning money now? Should I eat the high fiber and generally healthy thing on the menu, or go for the cheeseburger? Should I hit the restroom before the movie starts? Etc.
Every time we do something, or don’t do something, there’s a risk/reward algorithm being calculated in our brain.
Entrepreneurs, though, are all screwed up. They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure.
The payouts for starting a business are just terrible when you account for risk. A tiny minority of entrepreneurs ever get rich. And the majority of entrepreneurs would probably make far more money, and have more stable personal relationships, if they just worked for someone else.
In my youth I was a corporate lawyer, making a very nice salary for representing technology startups in Silicon Valley. There was a good chance I’d make partner after 7-8 years and could be earning maybe a million dollars a year by the time I was 40. All I had to do was work hard, and bring in clients. I was good at both.
But I left the law after just three years to join a startup. And the reason I did it was adventure. I wanted to be in the game, not just watching it. My parents thought I was crazy. They still have no real idea of what I do for a living, and they were, frankly, pissed off that I spent their money getting a law degree, only to throw it away before I was 30.
But I did it anyway. And then I left that company after a year to start my own company. And I’ve never looked back since then. That first company I started made a lot of money for the venture capitalists – nearly $30 million – but next to nothing for the founders. The companies I started after that varied between failures and mediocre successes. But at no point did I ever consider getting a “real job.” That felt like a black and white world, and I wanted technicolor. Also, I hate working for other people because I’m really bad at it.
When I talk to non-entrepreneurs about the startup world I often use a pirate analogy. Not because I know that much about pirates, but the general stereotypes work well as an analogy.
Why did some people way back in the 17th century, or whenever, become pirates? The likely payoff was abysmal, I imagine. There’s a very small chance you’d make a fortune from some prize, and a very large chance you’d drown, or be hung, or shot, or whatever. And living on a small ship with a hundred other guys must have sucked, even for the captain.
But in my fantasy pirate world these guys just had really screwed up risk aversion algorithms. Unlike most of the other people they actually lusted after that risk. The potential for riches was just an argument for the venture. But the real payoff was the pirate life itself.
Also, it was nearly impossible to be an entrepreneur back then.
Now it turns out that most people in Silicon Valley are actually normal risk averse types. They carefully calculate the potential rewards of a startup before they join, taking into account stock options as well as salary. And also the resume value of a company.
Some of the richest people I know aren’t really entrepreneurs. They worked at HP and then moved to Netscape when it got hot. They made a fortune and then jumped to Google and made another fortune. And now they’re jumping to Facebook.
They may be very good engineers, or sales people, or marketing, or execs. But they ain’t entrepreneurs. They’re just resume gardening and they’re really no different from everyone else.
I don’t care if you’re a billionaire. If you haven’t started a company, really gambled your resume and your money and maybe even your marriage to just go crazy and try something on your own, you’re no pirate and you aren’t in the club.
That thrill of your first hire, when you’ve convinced some other crazy soul to join you in your almost certainly doomed project. The high from raising venture capital and starting to see your name mentioned in the press. The excitement of launch and…gulp…customers! and the feeling of truly learning something useful, you’re just not sure what it is, when the company almost inevitably crashes and burns.
Now that person is interesting. That person has stories to tell. That person is a man who has been in the arena.
There are lots of things that I will probably never experience in this life. Military combat. Being dictator of a small central American country. Dunking a basketball. Being a famous rock star. Or walking on Mars.
But one thing I have been, and will always be, is an entrepreneur. And damnit that feels pretty good. Because if I was a lawyer right now, even a rich lawyer, I’d always have wondered if I had what it takes to do something a little more adventurous with my life than work for someone else.
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
By NewsOne Financial Blogger Ryan Mack:
If I gave you $100,000 today how would you spend it?
Before you continue to read, I want you to take a moment and think hard about this question. How would you put that money to work? After you have thought about it, which of the following two scenarios describes the best use of the funds?
Scenario A: Spend $50,000 on a “caddy”, $25,000 for your pinky, and the balance on a “pound of blow”. In twenty years you will have an old pinky ring and a lot less brain cells.
Scenario B: Spend $20,000 on a Honda Accord, $5,000 on a nice vacation, and invest $75,000 in your own portfolio. In twenty years you could have as much as $350,000 (with a very modest 8% return).
For those who chose Scenario A, you have agreed with famous rap star Lil’ Wayne as this scenario was taken from his lyrics in his song “Stuntin’ Like My Daddy”. I listen to rap music, but we must understand that many of the lyrics in this music were written because of their ability to make money…NOT because of their contribution to our intellectual capital as a people.
I personally agree with Scenario B and so do the majority of millionaires in this country. Half of the millionaires in America have never spent over $30,000 for a car in their ENTIRE life (The Millionaire Next Door, Thomas J. Stanley and William D. Danko).
One reason is they are so busy making money that they do not have much time to worry about self image. If you were TRULY wealthy, and like 5% of America who controls 95% of the wealth in America, would you care about what others thought about you? Another more important reason is they understand that as long as they are spending money on items that lose value instead of things that gain value they are less able to maintain and increase their economic status. This is why you will hear stories about Jim Walton, heir to the fortune created by his father Sam Walton (founder of Wal-Mart). He still drives a 15-year-old Dodge Dakota pickup despite being number 23 on the 2007 billionaire’s list. You may have also heard about Ingvar Kamprad, founder of multi-billion dollar enterprise and also a billionaire. He still drives a Volvo which is also 15 years old. Before he attained his fortune, his father gave him a very modest reward for doing well in school and what did he spend his money on…a “modest” furniture company named Ikea which reported revenues of $17.7 billion dollars in 2005.
The question that you should be asking if you do not know and have not asked already is, “What are they spending their money on if it is not consumption?” The opposite of consumption (putting your money into assets that lose value) is production (putting your money into assets that go up in value). Four of the most common vehicles that you can invest your money into are the following:
1. Stocks
2. Bonds
3. Real Estate
4. Entrepreneurship
1. Stocks
I read blog posts by Don Dodge and Glenn Kelman today about people jumping from Google to Facebook and it got me thinking about entrepreneurs.
Most people have an aversion to risk, my college economics professor told me. Which means they have to be rewarded to take on that risk. The higher the risk, the higher the possible payout has to be for people to jump.
We make risk/reward decisions every day, all day. Do I go skiing, and enjoy the rush of flying downhill even though there’s a small chance I’ll blow out a knee? Should I go to college or just get a job and start earning money now? Should I eat the high fiber and generally healthy thing on the menu, or go for the cheeseburger? Should I hit the restroom before the movie starts? Etc.
Every time we do something, or don’t do something, there’s a risk/reward algorithm being calculated in our brain.
Entrepreneurs, though, are all screwed up. They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure.
The payouts for starting a business are just terrible when you account for risk. A tiny minority of entrepreneurs ever get rich. And the majority of entrepreneurs would probably make far more money, and have more stable personal relationships, if they just worked for someone else.
In my youth I was a corporate lawyer, making a very nice salary for representing technology startups in Silicon Valley. There was a good chance I’d make partner after 7-8 years and could be earning maybe a million dollars a year by the time I was 40. All I had to do was work hard, and bring in clients. I was good at both.
But I left the law after just three years to join a startup. And the reason I did it was adventure. I wanted to be in the game, not just watching it. My parents thought I was crazy. They still have no real idea of what I do for a living, and they were, frankly, pissed off that I spent their money getting a law degree, only to throw it away before I was 30.
But I did it anyway. And then I left that company after a year to start my own company. And I’ve never looked back since then. That first company I started made a lot of money for the venture capitalists – nearly $30 million – but next to nothing for the founders. The companies I started after that varied between failures and mediocre successes. But at no point did I ever consider getting a “real job.” That felt like a black and white world, and I wanted technicolor. Also, I hate working for other people because I’m really bad at it.
When I talk to non-entrepreneurs about the startup world I often use a pirate analogy. Not because I know that much about pirates, but the general stereotypes work well as an analogy.
Why did some people way back in the 17th century, or whenever, become pirates? The likely payoff was abysmal, I imagine. There’s a very small chance you’d make a fortune from some prize, and a very large chance you’d drown, or be hung, or shot, or whatever. And living on a small ship with a hundred other guys must have sucked, even for the captain.
But in my fantasy pirate world these guys just had really screwed up risk aversion algorithms. Unlike most of the other people they actually lusted after that risk. The potential for riches was just an argument for the venture. But the real payoff was the pirate life itself.
Also, it was nearly impossible to be an entrepreneur back then.
Now it turns out that most people in Silicon Valley are actually normal risk averse types. They carefully calculate the potential rewards of a startup before they join, taking into account stock options as well as salary. And also the resume value of a company.
Some of the richest people I know aren’t really entrepreneurs. They worked at HP and then moved to Netscape when it got hot. They made a fortune and then jumped to Google and made another fortune. And now they’re jumping to Facebook.
They may be very good engineers, or sales people, or marketing, or execs. But they ain’t entrepreneurs. They’re just resume gardening and they’re really no different from everyone else.
I don’t care if you’re a billionaire. If you haven’t started a company, really gambled your resume and your money and maybe even your marriage to just go crazy and try something on your own, you’re no pirate and you aren’t in the club.
That thrill of your first hire, when you’ve convinced some other crazy soul to join you in your almost certainly doomed project. The high from raising venture capital and starting to see your name mentioned in the press. The excitement of launch and…gulp…customers! and the feeling of truly learning something useful, you’re just not sure what it is, when the company almost inevitably crashes and burns.
Now that person is interesting. That person has stories to tell. That person is a man who has been in the arena.
There are lots of things that I will probably never experience in this life. Military combat. Being dictator of a small central American country. Dunking a basketball. Being a famous rock star. Or walking on Mars.
But one thing I have been, and will always be, is an entrepreneur. And damnit that feels pretty good. Because if I was a lawyer right now, even a rich lawyer, I’d always have wondered if I had what it takes to do something a little more adventurous with my life than work for someone else.
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
eric seiger
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
By NewsOne Financial Blogger Ryan Mack:
If I gave you $100,000 today how would you spend it?
Before you continue to read, I want you to take a moment and think hard about this question. How would you put that money to work? After you have thought about it, which of the following two scenarios describes the best use of the funds?
Scenario A: Spend $50,000 on a “caddy”, $25,000 for your pinky, and the balance on a “pound of blow”. In twenty years you will have an old pinky ring and a lot less brain cells.
Scenario B: Spend $20,000 on a Honda Accord, $5,000 on a nice vacation, and invest $75,000 in your own portfolio. In twenty years you could have as much as $350,000 (with a very modest 8% return).
For those who chose Scenario A, you have agreed with famous rap star Lil’ Wayne as this scenario was taken from his lyrics in his song “Stuntin’ Like My Daddy”. I listen to rap music, but we must understand that many of the lyrics in this music were written because of their ability to make money…NOT because of their contribution to our intellectual capital as a people.
I personally agree with Scenario B and so do the majority of millionaires in this country. Half of the millionaires in America have never spent over $30,000 for a car in their ENTIRE life (The Millionaire Next Door, Thomas J. Stanley and William D. Danko).
One reason is they are so busy making money that they do not have much time to worry about self image. If you were TRULY wealthy, and like 5% of America who controls 95% of the wealth in America, would you care about what others thought about you? Another more important reason is they understand that as long as they are spending money on items that lose value instead of things that gain value they are less able to maintain and increase their economic status. This is why you will hear stories about Jim Walton, heir to the fortune created by his father Sam Walton (founder of Wal-Mart). He still drives a 15-year-old Dodge Dakota pickup despite being number 23 on the 2007 billionaire’s list. You may have also heard about Ingvar Kamprad, founder of multi-billion dollar enterprise and also a billionaire. He still drives a Volvo which is also 15 years old. Before he attained his fortune, his father gave him a very modest reward for doing well in school and what did he spend his money on…a “modest” furniture company named Ikea which reported revenues of $17.7 billion dollars in 2005.
The question that you should be asking if you do not know and have not asked already is, “What are they spending their money on if it is not consumption?” The opposite of consumption (putting your money into assets that lose value) is production (putting your money into assets that go up in value). Four of the most common vehicles that you can invest your money into are the following:
1. Stocks
2. Bonds
3. Real Estate
4. Entrepreneurship
1. Stocks
I read blog posts by Don Dodge and Glenn Kelman today about people jumping from Google to Facebook and it got me thinking about entrepreneurs.
Most people have an aversion to risk, my college economics professor told me. Which means they have to be rewarded to take on that risk. The higher the risk, the higher the possible payout has to be for people to jump.
We make risk/reward decisions every day, all day. Do I go skiing, and enjoy the rush of flying downhill even though there’s a small chance I’ll blow out a knee? Should I go to college or just get a job and start earning money now? Should I eat the high fiber and generally healthy thing on the menu, or go for the cheeseburger? Should I hit the restroom before the movie starts? Etc.
Every time we do something, or don’t do something, there’s a risk/reward algorithm being calculated in our brain.
Entrepreneurs, though, are all screwed up. They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure.
The payouts for starting a business are just terrible when you account for risk. A tiny minority of entrepreneurs ever get rich. And the majority of entrepreneurs would probably make far more money, and have more stable personal relationships, if they just worked for someone else.
In my youth I was a corporate lawyer, making a very nice salary for representing technology startups in Silicon Valley. There was a good chance I’d make partner after 7-8 years and could be earning maybe a million dollars a year by the time I was 40. All I had to do was work hard, and bring in clients. I was good at both.
But I left the law after just three years to join a startup. And the reason I did it was adventure. I wanted to be in the game, not just watching it. My parents thought I was crazy. They still have no real idea of what I do for a living, and they were, frankly, pissed off that I spent their money getting a law degree, only to throw it away before I was 30.
But I did it anyway. And then I left that company after a year to start my own company. And I’ve never looked back since then. That first company I started made a lot of money for the venture capitalists – nearly $30 million – but next to nothing for the founders. The companies I started after that varied between failures and mediocre successes. But at no point did I ever consider getting a “real job.” That felt like a black and white world, and I wanted technicolor. Also, I hate working for other people because I’m really bad at it.
When I talk to non-entrepreneurs about the startup world I often use a pirate analogy. Not because I know that much about pirates, but the general stereotypes work well as an analogy.
Why did some people way back in the 17th century, or whenever, become pirates? The likely payoff was abysmal, I imagine. There’s a very small chance you’d make a fortune from some prize, and a very large chance you’d drown, or be hung, or shot, or whatever. And living on a small ship with a hundred other guys must have sucked, even for the captain.
But in my fantasy pirate world these guys just had really screwed up risk aversion algorithms. Unlike most of the other people they actually lusted after that risk. The potential for riches was just an argument for the venture. But the real payoff was the pirate life itself.
Also, it was nearly impossible to be an entrepreneur back then.
Now it turns out that most people in Silicon Valley are actually normal risk averse types. They carefully calculate the potential rewards of a startup before they join, taking into account stock options as well as salary. And also the resume value of a company.
Some of the richest people I know aren’t really entrepreneurs. They worked at HP and then moved to Netscape when it got hot. They made a fortune and then jumped to Google and made another fortune. And now they’re jumping to Facebook.
They may be very good engineers, or sales people, or marketing, or execs. But they ain’t entrepreneurs. They’re just resume gardening and they’re really no different from everyone else.
I don’t care if you’re a billionaire. If you haven’t started a company, really gambled your resume and your money and maybe even your marriage to just go crazy and try something on your own, you’re no pirate and you aren’t in the club.
That thrill of your first hire, when you’ve convinced some other crazy soul to join you in your almost certainly doomed project. The high from raising venture capital and starting to see your name mentioned in the press. The excitement of launch and…gulp…customers! and the feeling of truly learning something useful, you’re just not sure what it is, when the company almost inevitably crashes and burns.
Now that person is interesting. That person has stories to tell. That person is a man who has been in the arena.
There are lots of things that I will probably never experience in this life. Military combat. Being dictator of a small central American country. Dunking a basketball. Being a famous rock star. Or walking on Mars.
But one thing I have been, and will always be, is an entrepreneur. And damnit that feels pretty good. Because if I was a lawyer right now, even a rich lawyer, I’d always have wondered if I had what it takes to do something a little more adventurous with my life than work for someone else.
eric seiger
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger eric seiger
eric seiger
eric seiger
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
big seminar 14
BENTONVILLE - Wal-Mart Stores, Incorporated [NYSE Ticker: WMT] reported sales figures for the four-week periods ending February 27, 2009 and February 29, 2008. The strong results are both the mark of a company that has fought to remake its dowdy image - while embracing its roots as a low-cost retailer.
Wal-Mart is one of the few remaining stalwarts to actually expand business amidst today's financial carnage and the glowing statistics are not to be mistaken for a grandiose harbinger of U.S. economic vitality.
Net sales at the world's largest retailer increased from $29.2 billion to $30 billion during the month of February over the last year. The 2.8% increase would have been even more stellar if not for a stronger dollar and currency exchange rates that adversely affected international sales by 20.7%. Overall, Walmart February U.S. net sales surged by 8.1%.
Adjusting for plunging gasoline prices that have slashed fuel revenue, Wal-Mart, Inc. same-store sales have ramped up by 5.1%. The comparable store statistic designates locations that have been open for more than one year and is a critical indicator of retail success.
Again, we would strongly advise against analyzing Walmart reports as a benchmark of the overall economy. Counter intuitively; the findings are attributable to worldwide economic carnage. Per Bentonville management:
"Customers continue to focus on necessities and avoid purchasing discretionary items in home, apparel, and shoes. Customers come to Walmart because they trust our price leadership."
This does not bode well for retail at-large.
Obviously, the consumer has pulled back, and is content to purchase the most basic of items. Higher end retailers are being crushed, while penny-pinching shoppers that have downgraded to Wal-Mart adversely affect mid-level stores.
Nordstrom released a miserable February report detailing a 15.4% decline in same store sales; and heated, cheap-chic rival Target is feeling the heat with a 4.1% downdraft in comps. Although the world economy is currently under siege from a wretched real estate bust, credit debacle, and stock market rout - we must speculate that a New Era has indeed, dawned.
Frivolous, grandstanding waste is not cool.
Even P. Diddy is foregoing The Bling and abandoning his private jet.
Walmart February Same-Store Sales Sources:
Target Corporation, Target February Same Store Sales, http://investors.target.com
Nordstrom, Inc., Nordstrom February Same Store Sales, www.nordstrom.com
Walmart, Walmart Reports February Sales (PDF), www.walmartstores.com
www.walmartstores.comwww.target.comwww.nordstrom.comwww.walmart.com
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
The Buffalo News updated every day with news from Buffalo, New York. Links to national and business news, entertainment listings, recipes, sports teams, classified ads, death notices.
Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
Fox <b>News</b> Ratings on Election Night Beat Networks - NYTimes.com
The Fox News Channel's midterm election coverage attracted more viewers than any of the broadcast networks' coverage, according to the Nielsen Company.
Lindy guarantees it, or did he? - Sabres Edge - Blogs - The <b>...</b>
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Facebook Wins Another <b>News</b> Feed Patent
When Facebook originally filed for the patent in the fall of 2006, it was just a month before the company launched its news feed. It argued at the time that as more and more users joined the social network, the amount of information it ...
eric seiger
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