What's the retail value of your stocks?

If you’re shopping around for a new or used car it’s good to know the retail value of the vehicle so you’ll know if you’re getting a good deal or paying too much.  Wouldn’t it be nice to know the retail value of your stocks?  Some people think this number is the market capitalization, or the number of shares outstanding times the stock price, but this doesn’t take into consideration a company’s debt or its available cash.  A better way to gauge the price of a stock is too ignore the hype around a company’s stock price and focus on the company’s underlying value, or the Enterprise Value.

Enterprise Value is what you would pay if you were taking over a company. It’s the equity value of the company + the market value of its debt + minority interest (if applicable) – the market value of associate companies + the market value of preferred equity – cash and cash equivalents. Read the rest of this entry »

Learn how to analyze stocks like a pro

Ever wonder how the stock market gurus come up with their stock picks? Stock analysts don’t use a Magic 8 Ball, consult with psychics, or letter combinations from their Alpha Bits cereal to pick stocks.  Not that what they do isn’t a little arcane, they divine the future price of stocks by rearranging different number combinations related to the performance of companies.  These number combinations are financial ratios and something you’ll fully understand once you’ve read this series of articles.  By using these ratios yourself you’ll be better able to make your own stock purchase decisions and minimize your risk, just like the pros. Read the rest of this entry »

Learn how to define your marketing mix

In part 4 we talked about how you develop your marketing strategy by creating objectives and setting goals based on the results of your SWOT analysis.  All that’s left now is to develop programs for implementing your new marketing goals, the controls you’ll put in place to ensure your programs are effective, and profit and loss (P&L) statements.

The first step to implementing your marketing program is to decide on a budget.  Companies typically set their marketing budget as a percentage of their sales goal, and allocate more money to marketing if they’re seeking more market share.  The budget is then split between the different parts of your marketing mix, product, price, place, and promotion (the four P’s). Read the rest of this entry »

Set clear objectives and goals

After you’ve completed the SWOT analysis we discussed in Part 3 you should have identified market opportunities you’re ready to go after.  You should develop financial objectives based on those opportunities which will then be converted to marketing objectives.

An objective is simply something that you set out to achieve, and goals are the things that help you meet your objectives.  Objectives are broad and general, and goals are the steps you need to take to meet your objectives.  Goals need to be SMART – specific, measurable, achievable, relevant, and time based.  One of your objectives may be to increase your rate of return on investment (ROI) by 10% this year, which could be done by increasing profits, reducing the amount of invested capital, and/or reducing expenses.

Each one of these ways to meet your objective could be turned into a goal, as long as they meet the SMART criteria.   If the ROI of 10% equated to $100,000, and you wanted 25% of that goal to be met through reducing expenses, you could set a goal of reducing expenses by $25,000 this year or roughly by $2,000 each month.  Read the rest of this entry »

It's not easy being green

I had the misfortune of hearing the end of the EPA’s administrator Lisa Jackson’s speech to the United Nations Climate Change Conference in Copenhagen, Denmark on Public Radio International the other morning.  When I heard her say “we are seeking” for the fourth time she had me seeking another radio station.

It’s rubbing salt in a festering wound to hear bad news poorly delivered, and the bad news the EPA had was that they would begin tracking major producers of green house gases the same way they track major polluters.  The EPA now considers greenhouse gases a danger to public health which makes them subject to federal regulations under the Clean Air Act.

As a result the EPA can begin to impose fines on more than 13,600 coal-burning power stations, crude oil refineries, metal smelters, and many other industrial facilities.  The EPA’s goal is to not just let companies purchase carbon credits and upgrade their plant equipment on their own schedule but to force them to use the “best available technology” when applying for permits for any new construction or modifications that would affect greenhouse gas emissions. Read the rest of this entry »

I said "SWOT"

In the previous two articles we talked about identifying your target market and business competition, planning product distribution, and pricing strategies.  The most important thing to take away from both of these articles is the importance of gathering data about your target market, customers, and sales.  You don’t have to be a statistician or marketing analyst to do this, just track your sales and get to know your customers.

The next step for your marketing plan is to do a SWOT analysis, an overall look at your company’s strengths, weaknesses, opportunities, and threats.  Identifying strengths and weaknesses requires you to look within your company, and opportunities and threats can be found outside your company.   Read the rest of this entry »

Name your price

In my last post on how to develop your own marketing plan we talked about how to size up the market you’re trying to break into and how to write an executive summary.  The next step is probably the most important part: how are you going to make money?  You could have the most brilliantly executed marketing strategy in the history of marketing strategies but if you didn’t price your products or services correctly it won’t matter.  The first step is to determine your pricing objective – are you setting your prices for maximum current profit, maximum market share, maximum market skimming, product-quality leadership, or just for survival.   Read the rest of this entry »

The Marketing Department

If you’re ready to expand your business or product line or have never formalized your marketing strategy then it’s time to develop your marketing plan.  And let me save you some time, a marketing plan is not something you can buy off the internet or have software automatically generate for you.  But don’t worry about that because I’m going to walk you step by step through the basics of everything you need to do to develop your own marketing plan using simple, easy to understand terms.

- This is the first of a series of five articles.

A marketing plan has eight sections:

1. Executive summary and table of contents
2. Current marketing situation
3. Opportunity and issue analysis
4. Objectives
5. Marketing strategy
6. Action programs
7. Projected profit-and-loss statement
8. Controls

Today we’ll focus on the first two sections, the executive summary and table of contents and the current marketing situation. Read the rest of this entry »

Gold is becoming widely accepted as being a bubble, just like real estate and internet stocks once were.  Some of the criteria for being a bubble are an irrational valuation, lots of hype, and no clearly defined price ceiling. Interest rates are down, money is cheap, and the Fed is not giving any indications of touching interest rates any time soon which is helping to fuel gold’s price run.  Gold broke the $1,000 barrier many people thought it would never see again and there’s talk of gold going to $2,000 – $3,000.  And we’re now enjoying infomercials and commercials hawking the wealth building prowess of gold.

So I would say gold meets the technical definition of a bubble.  That doesn’t mean I don’t think it’s a good short term investment, but I would watch it closely and start taking money off the table when it hits $1,300 to $1,400.  So if gold is currently a bubble this begs the question what’s the next bubble? Read the rest of this entry »

Going to waist

I just read in The Economist the average American wastes 1,400 kilocalories a day in food that is either thrown away or never makes it out of the grocery store.  According to a report in the Public Library of Science from the National Institute of Diabetes and Digestive and Kidney Diseases this amounts to 150 trillion kilocalories a year for the entire country or about 40% of the food supply, up from 28% in 1974.

So what’s the big deal if we don’t clean our plates?  The report goes on to say this wasted food accounts for more than one-quarter of our consumption of fresh water and about 300,000 barrels of oil a year.   Read the rest of this entry »