To All The Mall Vendors Out There: Here's A Better Way To Sell Your Hair Curlers

I was in the mall the other day and started to notice the zigzag pattern I tend to walk when making my way through the mall. Its not because I can't walk in a straight line, its because a straight line in the mall is almost sure to be full of vendors trying to clear your face up, curl your hair, or even (I'm not making this one up...) sell you an oxygen mask...



There's nothing wrong with being a go-getter and having been in retail sales I know that vendors need to move their product. However, its an unwritten law of the universe that when you chase something, you ultimately end up driving it even further and further away. Hmmm...I think even I just realized something right there!

I can't count how many times I've seen and experienced mall vendors annoy, offend, and even intimidate passerbys in the mall. I guess what I'm trying to say is there is a better way to do it, mall vendors.
First of all, drop that default line, "Hey, can I ask you a question?" The answer will always be no. Why? Because you asking for value before you have given any. Instead, move away from your display, about 10 feet away and just smile and greet people, be a diplomat! Just say "Hi, how you doing?" and nod your head as they walk by. You'll actually start to see them slow down and perhaps look at your stand, some might even stop. Give it a try, you'll see it works...

Why does this work? Because you are doing a few subtle things. First, by greeting people and smiling, you are GIVING value first rather than asking them for it. Second, by putting distance between you and your display, you are allowing people to look at your products without fear of being 'sold'. And third, it will allow you to see who your customers really are as they slow down, because chances are while you were chasing someone who wasn't interested you might have missed someone who actually was.

As people stop, you can slowly move in from the side as they browse and ask a genuine question: "so what are you shopping for at the mall today?"...start a conversation and go from there.

For Steve: Why Restaurants Only Give You 2/3 of the Diet Coke

So I get this text from my friend Steve the other day: "Guy...you should write an article about how ice is a scam. Restaurants put it in and it fills up a third of the volume, then you really only bought 2/3 of a soda." So Steve, this one's for you, here's the financial underwriting of restaurant cokes...

Let's say the restaurant sells 45 cokes a day (conservative for most) and it costs them 20 cents a coke, assuming of course they buy in bulk or are mixing their own syrup through the gun at the bar. That's 1,350 cokes a month, costing the restaurants $270. If they charge $1.75 for the coke, their coke revenue is $2,362.50 and their operating profit is $2,092.50.

This is assuming we live in a normal world where when you buy a coke at a restaurant they give you the whole coke, but we don't and they don't, they give you 2/3 of the coke and load the rest of the glass up with ice.

So therefore, though they are selling 1,350 "cokes" they are only 2/3 full, which means they only need to buy 891 of them. That costs them only $178.20 versus $270, saving $91.80 per month, which adds up to an annual savings of $1,101.60. That's ends up being probably more like $800 after taxes, which goes straight to their bottom line.

So how's an extra $800 sound, Steve?

A table on stage at Royale and you're paying? Well alright, I'm not gonna argue with you, just stop yelling at me about it, people are starting to stare...

Pharmaceuticals: Why Are You Even Bothering With Television Advertising?

So I think everybody has seen a commercial advertising a new prescription drug, whether its to quit smoking, birth control, or even those ridiculous Viagra commercials of men doing manly things like changing their oil or saddling up a horse...because real men own a horse, but can't get it up for the little lady.

Part of the requirements of the FDA for prescription drug advertisements on television is that all side effects of the drug must be disclosed in the commercial. But I think we all know the stereotype of how the side effects always seem worse than the original ailment.

I just saw a commercial for a new birth control, Mirena, and distinctly remember exclaiming out loud "Jeez!" One of the side effects included "pregnancy that may occur while on Mirena could cause death or loss of fertility." Which leads me to start to think, at what point does advertising actually start to hurt a product's sales rather than help it? It seems that there's a belief somewhere in the advertising world that any advertising is good advertising when this is clearly not the case. Case in point, girls would you be comfortable taking that pill everyday just knowing that one side effect, nevermind the string of other painful ones they also mention?

The whole point of advertising is to anchor a good feeling to your product in the eyes of your target market. This good feeling creates brand equity when your potential customer sees your product in the store or hears about it from their doctor because they have now become familiar with the product and feel comfortable about it.

If your target market walks away from your advertising scared and thinking "um, no thanks," have you really achieved your goal? Something is broken here...

A Quick Note on New Year's

New Year's is a funny thing really. It's one of the only days out of the entire year where everyone is both positive and goal-oriented, hence New Year's resolutions. People are all amped up about the next year and all the things they want to do and accomplish. Then comes January 2nd and everybody has an excuse to go back into their foul grumpy moods because after all, New Year's was yesterday!

Why do we choose only to make resolutions on December 31st when there are 364 other just as valid days in a year? Why do we feel so positive one night out of the year when the only difference between that night and other nights is that we are watching a clock and counting backwards??

It seems like one of the best resolutions one could make this year is to treat every day like its New Year's. To be able to wake up and say "it's a brand new day, this one's going to be even better than the last" could give us so much psychological momentum, it would be amazing the experiences we'd have. To consistently start our days with a list of things to do and check them off as we go along could reinforce such a can-do attitude that all of a sudden that mountain of debt doesn't look so daunting, or that weight loss program too hard, or that promotion so far off as you thought!

New Year's isn't just an event, it's a state of mind we can have year round. So if I see you in June and I wish you a Happy New Year, you might not think I'm so crazy after all, right?

Ehh, let's not push it, John...

;O)

P90X Results and What I Learned

So I finally finished my three month commitment to P90x and here's a final picture of my results:

All in all the whole program was amazing and was more than just a weight loss program, it was a total change in lifestyle going forward. Though the physical results I achieved through it are great, what was the most valuable aspect of the program is the mental durability you acquire. I noticed that from Day 1 you aren't just training your body, you are training your mind to a level it hasn't yet achieved. The complete transformation happens throughout the program between mind and body until by the end they match each other in leanness and durability.

I can't tell you how much the program has not only advanced my fitness a hundred fold, but the mental discipline I acquired from it will stay with me forever. I'm fully confident that nothing in the business world can break me down now ever because of the mental durability I now have. I stand by the fact that if you can do this program, you can do anything you put your mind to.

If any of you decide to try the program, let me bestow some words of advice. First of all, buy all the equipment needed. The total investment will probably cost you upwards of $300, but trust me if you want the change its worth it. If you torrent the program or if you just borrow the equipment from someone you have nothing invested in the program and it will make it easier for you to quit. Anytime I felt like not working, I'd remind myself of the money I just wasted and that was a huge motivation to get off my ass.

Second, follow the nutrition plan to the 'T'! If you do not you will be supremely disappointed. If there's one thing I realized from this program is that exercise & nutrition go hand in hand...having one without the other is the equivalent of a boxer going into the ring and using only one hand. Cut out the high glycemic index carbohydrates, refined sugars, and bleached flours.

Third, and I know this is going to be a tough one for a lot of people, is alcohol consumption. I did consume alcohol on the weekends, however, I changed my drinks of choice to bacardi and diet cokes, vodka w/ Fresca, or vodka and Sprite Zero. This way even though I was taking in extra calories from the alcohol, I wasn't having a ton of carbs with it to store those empty calories as fat. Even still, I wonder what my results would've been if I had cut it out completely and I'm starting to taper it down even more because I still want to take it to the next level (six pack baby!).

Fourth, you are going to be in A LOT of pain the first two weeks because you will not be used to working out at this intensity level. Just remember to push through it because the first two are the hardest, especially for Ab Ripper X. I've played every sport known to man up through high school, did seven years of jiu jitsu and mixed martial arts, and am a certified trainer through ACSM and I can still honestly say that this was the hardest training program I've ever done out of everything else.

I do recommend that you invest in some supplements to ease the pain and help with muscle rebuilding including creatine monohydrate, a whey protein powder, casein protein powder for before bedtime, and glutamine (either powder or pill form). If I didn't have these I can't imagine how much more painful the whole program would have been, so make the investment.

Another couple tidbits stick to complex carbohydrates and try to keep them in the morning at breakfast and after your workout. Cut out the cheese and substitute either fat free cheese or Laughing Cow Light spreadables (only 3 grams of fat). And after 8pm, no more carbs!

Anyways if you ever have any questions or just need some advice should you decide to do the program, just send me a message and I'd be glad to help you out.

Using Thanksgiving To Thrust Yourself Forward

First of all Happy Thanksgiving to everyone, if you're reading this I congratulate you on a) not being in a carb induced coma and b) reading on a day of rest.

Thanksgiving is a day when people hang back and relax with family and friends, eat a lot, watch football, and fall asleep. All these things have their place at some point during the day and should be enjoyed thoroughly, but I'd also like to suggest something wholesome and developmental.

I've been looking at the day like this: today we unwind and maybe throw the diet out the window for a day, but its also a great opportunity to reflect and map some stuff out. All the everyday garbage is out of our heads and we can now see the road ahead objectively, and that's a huge advantage that shouldn't go to waste!

To use a crude metaphor, we're both the cast-iron and the metalworker working on it...today's the day to remove yourself from the flame and allow yourself to cool to see what shape has taken form. Make some decisions as to what you want to become and then thrust yourself back into the fire. 

Use today to look at how far you've come and what you've done great these last few months. Similarly, look at what you've done not so great. Start to see how both the good and the bad have contributed to your current quality of life. Are you where you want to be? If not, are you on the right path? How do you know? What indicators have you chosen to let you know at this point?

If these are things you haven't considered in the past, its never to late to start! What to you want to do by, let's say, January? Why do you want to do it? What will you have gained from it? How do you think that will make you feel? What are you willing to do (or not do!) everyday to succeed? How do you know you've achieved it? And most importantly...how will this enhance the quality of life for you forever once you've got it? After all, nothing is worth accomplishing if the effects are only temporary or unsustainable.

These types of questions really help to strip back the layers of bologna when we are trying to make a change, but really aren't committing to it. If anything these types of questions can help realize just how unimportant something is to us! A lot of people have weight loss goals but find their only motivation is to look better. That's just the surface! They never considered how they'd feel about themselves, what they'd learn from it, why its important and how their success will enhance their lives beyond the goal itself.

These types of layer-penetrating questions can help us reach deeper levels of desire for success so that we are completely aligned with our goals for transformation. Wishing the best of holiday weekends to you, your families, and your friends!

Why Small and Micro-Cap Companies Are Better For Your Portfolio

I have MSNBC on in the background and they just mentioned that Cisco (CSCO) may now be undervalued due to its recent drop. A quick earnings power calculation using an 8% cost of capital due to their financing mix shows actually that they're pretty fairly valued in my opinion (plus or minus a dollar) which got me thinking about market prices in general.

A lot of investors, especially value investors, like to purchase companies selling for less than what they think they would be sold for. However, the inherent error in this thinking is that it leads one to believe that the market is pricing companies at how much they are truly worth, when its clear that it is pricing companies as a going concern. What does this mean? It means that the market price is only reflective of the expected future earnings power of the companies assets, not its buyout value.

In other words, let's say I have a unique lemonade machine that makes the greatest lemonade ever and I can make $10 a year with it by opening a lemonade stand. Assuming I have a 10% cost of capital (for a lemonade stand, I know this is ridiculous but just to prove a point!), the earnings power of that lemonade stand would be $100 ($10/.10). This $100 would be the reflected market capitalization if my stand was publicly traded. If however, you came along and offered to buy me out, it really wouldn't make sense for me to sell it to you only for a $100.

But that's what it's worth right? Well yes, but its worth that much assuming nothing changes (as a going concern!). However, if you come in and offer to buy, suddenly the perceived value of my stand increases. As the owner I start to think "this is greatest lemonade stand in the world, they'll make a killing...and what about me? The only thing I know how to do is sell lemonade. Where can I find a stand of equal value once I sell? Nowhere! They better pay up then." So we have a small element of reflexivity coming into play here.

In a way, this happens in all acquisitions, that the very premise of an acquisition being proposed ups the perceived value of the entity from a going concern to a total buyout value. This is why when a potential acquisition is announced, the stock price jumps.When a possible acquisition manifests, suddenly book value and intangible asset value get factored in along with earnings power, which puts a premium on the original market price.

The positive outlook one could take from this then is that technically all public companies are undervalued to what they are really worth. The bad side about this is that "buyout" value will not justifiably manifest unless someone comes along to buy the company (it could manifest from market gyrations, but there's no fundamental basis to support this). With this in mind, what do you think the odds are of someone coming along and buying, say, Exxon-Mobil? ZERO!! Its one of the biggest companies in the world, who would even have the money to do so?

Which leads me to my premise that the individual investor has a better shot at having value realized by investing in smaller companies. Not only because smaller companies have a better chance at being acquired (that's a crapshoot, don't start trying to predict that stuff), but because less market participants are paying attention to them. If 10,000 CFA's are watching CSCO and valuing it accordingly so that the market prices it at around $19, what are the odds that all 10,000 CFA's and all the other market participants are wrong?

In the book The Wisdom of Crowds by James Surowiecki, he makes a point about this using the popular game show "Who Wants To Be A Millionaire." He noted that when someone Phoned a Friend, on average they received a correct answer about 65% of the time (actually seems pretty high to me!). Compare that to the Ask The Audience lifeline, which yielded a correct answer about 91% of the time. What does this tell you about market prices? They are usually right when lots of people are looking at them.

However, the less people looking at a company, the more of chance it could be unfairly valued. Perhaps only 100 CFA's looked at a particular small company, and because their priorities lie in getting through a ton of small caps and micro caps to move onto bigger and better projects, they might have overlooked crucial information. And that is where the individual investor's edge comes in. Those who are willing to do their homework and find value where a small amount of people were too rushed or lazy to look will get the payoff when the fundamentally supported value manifests in the price.

Something to think about...