Bringing back the morning numbers tweet

Posted by Christopher S Penn on May 22, 2010 in Metrics, Money | 5 comments

Bringing back the morning numbers tweet

A long time ago (by Internet standards, anyway) I used to tweet out a bunch of financial indicators, in the days when I did a financial podcast. After making the move to Blue Sky Factory and the the world of email marketing, I lost touch with some of the day to day market numbers, and I’m finding that my ability to understand the world – especially the news headlines – is diminished.

So I’m bringing back the financial morning tweet, for my own benefit if not for everyone else’s. Every morning that I do #the5 (see this post for what #the5 is all about), I’ll do the numbers as well.

Now, if you’re not at all interested in financial data, this sort of tweet will be uninteresting. Just skip it.

Here’s what it will look like:

DJIA -81 SPX -11 VIX 40 TED 35.7 LIBOR91 51 OIS 22 MSCI 1074 BDI 3844 30yr 4.87 BCF 71.24 GLD 1183.40 RR 12.25 #econ

If you’re interested in financial data but have no idea what any of this means, let’s take a cruise through it.

DJIA: The Dow Jones Industrial Average. While it’s not the be-all/end-all of the state of our economy, the Dow is the most popular and well known indicator in the press and media, so it’s included for its psychological impact. Measured in dollars, and in the mornings, it’ll be listed as the futures, or what investors are predicting will happen the moment the markets open up.

SPX: The Standard & Poor 500. One of the better measures of the overall economy, the S&P 500 includes the stock prices of 500 companies from around the business nation. Measured in dollars, and in the mornings, it’ll be listed as the futures, or what investors are predicting will happen the moment the markets open up.

VIX: The Chicago Board Options Exchange Volatility Index. One measure of seeing how confident investors are. When the VIX is low (under 20), there’s not much volatility in the market. When the VIX is high (over 30), it means there’s a lot of volatility and not a lot of confidence. Measured in basis points; 100bp = 1%.

TED: The TED spread. This is the difference between 3 month Treasury bill rates and the 3 month LIBOR (London Inter-Bank Offered Rate). The TED spread indicates credit risk in the economy – when the spread is wide (more than 50), it means that the banking system is in trouble. Measured in basis points; 100bp = 1%.

LIBOR91: 91 day, or 3 month London Inter-Bank Offered Rate. LIBOR indicates the cost for banks to borrow from each other. LIBOR indicates how expensive money is to borrow, and higher LIBOR rates will correspond to higher borrowing rates for businesses and consumers. Measured in basis points; 100bp = 1%.

OIS31: 31 day or 1 month Overnight Indexed Swap rate. OIS measures how much liquidity – cash – is in the financial system. Higher OIS means less cash is in the system, while low OIS means lots of easy money is floating around. Measured in basis points; 100bp = 1%.

MSCI: The Morgan Stanley Capital International. The MSCI is an index of 1,500 world stocks from developed nations, giving a broad overview of the world’s corporate performance. As MSCI goes up, so do the world’s economies. Measured in dollars.

BDI: The Baltic Dry Index. BDI measure the cost of shipping bulk dry cargoes. This is important because unlike speculative investments, BDI measures the price of actual goods in transit. You don’t buy space on a cargo ship unless you have something you’re selling and shipping. Higher BDI indicates more demand for shipping and means the economy is growing. Measured in dollars.

30yr: The 30 year fixed mortgage rate as published by Bloomberg. The most standard kind of mortgage, mortgage rates go up when the cost of borrowing money goes up and vice versa. Measured in percentage points.

BCF: Brent Crude Futures, the price of a barrel of Brent crude oil. BCF tells you how expensive oil is on the market. Oil fuels your car, heats your house, and indirectly impacts consumer goods (since most everything is made of some plastic), as well as food prices – most fertilizer in agriculture is derived from oil. Interestingly enough, if you divide the BCF number by 25, you get roughly the price at the pump in a few weeks. Not a hard and fast rule, but a useful forward-looking indicator. Life gets more expensive when oil prices go up – but pollution and consumption goes down. Measured in dollars.

GLD: The price of a troy ounce of gold. Gold is one of the world’s benchmarks for inflation. As a currency inflates or as an economy deteriorates, people buy gold as a hedge, a way to protect themselves from loss. Gold itself isn’t really useful – it’s just a lump of metal – but it doesn’t lose physical mass sitting in a vault in the same way that a stock can lose value rapidly on speculation. Measured in dollars.

RR: Rough Rice. This is the world price of a bushel of rough rice, or rice just harvested from the fields. 20% of the nutrition of all humanity comes from rice, so when the price of rice goes up, it’s effectively a tax on the world. If the price of rough rice goes really high (above 15) you will see headlines in the world news about food shortages and hunger with greater frequency. Measured in dollars.

What does it all mean?

Individually, each indicator tells you something about how the world is doing financially. Some indicators tell you about banks and governments. Others tell you about commodities, raw materials, or corporations. Put together, they’re a very diverse view of the world economy and can even predict the future a little bit.

For me, I look at them to see how the world is doing. What’s in the headlines very often has financial underpinnings. If you know from these indicators what’s happening financially today, you’ll know what the news will be in a few days or weeks ahead.

If the price of oil skyrockets, you’ll see changes in the news and daily life. Seeing BCF spike now will tell you that those changes will be coming in 4-6 weeks as that barrel of oil eventually works its way into finished goods that consumers use.

Seeing the price of rough rice spike today and stay consistently high for a month will tell you that poor countries who are dependent on rice as a nutritional staple will be headed for famine if the price doesn’t come down.

Seeing the VIX skyrocket as it did a few years ago gave insiders advanced notice of the major stock market crashes long before the general public knew. Way back in the day, I saw the VIX leap above 30 and stay there in the summer of 2007. I dumped my entire retirement portfolio into a money market account in reaction to it. While I made almost no money in the following two years, I managed to completely avoid the market crash, too and saved my retirement from disaster.

I’d encourage you to not just pay attention to these numbers or tweets, but to also pick your own indicators, your own interpretation of what’s important in the world. You’ll know long before your friends and colleagues what’s going to happen if you study the numbers and learn what they mean.

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

Photo Friday: Morning sunrise

Posted by Christopher S Penn on May 21, 2010 in Photography, Photoshop fun | 13 comments

In an effort to remind myself to take and post more photos, we’ll have a little fun called Photo Friday.

Click for a larger version

This is a sunrise I’ve been waiting to take ever since starting to work for Blue Sky Factory email marketing. It’s a reservoir near my house, not too far from I-90, and there’s a relatively unsafe
place to park on the side of the road that during regular traffic hours would be stupid to park in, but you can get away with it at sunrise because there’s not much traffic on the road at 5:30 AM.

I took three exposures, -2, 0, and +2 with my D90 and merged them in Photoshop.

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

The marketing pitch cookie

Posted by Christopher S Penn on May 19, 2010 in Marketing | 18 comments

The marketing pitch cookie

Have you ever heard of the fortune cookie joke where you add “… in bed” to every fortune?

For example, these standard-issue fortunes become much funnier:

“You are talented in many ways.”
“Any rough times are behind you.”
“Decide what you want and go for it.”
“Many a false step is made by standing still.”

Try applying this – silly as it is – to your marketing copy. For example, try “… in bed” with these well-known marketing slogans:

“Simply the best.” (Toyota)
“Can’t beat the real thing.” (Coca Cola)
“Thousands of possibilities. Get yours.” (Best Buy)
“Just do it.” (Nike)

If you don’t have billions of dollars to expend on an advertising blitz to back up a meaningless marketing slogan, chances are it will fail to be memorable or move the needle at all.

If your marketing slogan just gets confusing or makes no sense with “… in bed” appended, you’re on the right track. If, on the other hand, it’s downright funny, then your marketing copy is far too vague and unfocused.

Try it and see how it works for you…

… in bed.

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

How you sold me at triple price

Posted by Christopher S Penn on May 18, 2010 in Sales | 14 comments

How you sold me at triple price

I’ve been in the market for an arborist – a tree professional that can take care of some dead wood and pruning in my yard on some very old trees. I’m far more capable when it comes to pruning databases than I am dogwoods, so I solicited bids from local arborists.

Three contractors came by the house and did their sales pitches. As with all things, I pay attention not just to the pitch content but how well trained the salesman is. Here’s what I got.

Contractor #1: Came by the house, presented me with a very direct, upfront list of what he’d do. Prune here, trim there, cut down some saplings – all very efficient. He presented his credentials, demonstrated a certificate of insurance, and gave me a price quote with no hassle: $697.

Contractor #2: Came by the house, apologized immediately and in advance for being a poor speaker and a poor salesman. Said he’s been working in landscaping for years, but just can’t speak well. He gave a brief overview of his services, what he’d do, and gave a $600 price quote which he said was firm no matter how much the scope of work changed. He made an additional point that no matter what other price we were quoted by competitors, he’d match or beat it.

Contractor #3: Came by the house and asked what we wanted, what we were trying to achieve. Asked whether we were looking for more sunlight, hazard reduction, etc. Noticed and pointed out some spots of rot on two of our trees that other contractors had missed and said that while there wouldn’t be a big impact for at least 10 years, eventually the rot would cause trouble down the road. Went into the front yard, which we griped about because the town’s trees on the sidewalk are never trimmed. Contractor mentioned that the law about trees is abundantly clear: if it hangs over your property, you have the right to trim or prune it without asking permission even if the trunk is on someone else’s property. He did a great upsell to his day rate, unlimited trees for $1900, and then explained how the trees would look in 1, 5, 10, and 30 years. He also said his insurance company would send us the coverage policy and paperwork with the written quote, which he’s not allowed to touch due to the possibility of fraudulent insurance.

If I were motivated solely by price, contractor #2 would have won easily. However, while price was definitely a factor, quality of work and expertise outweighed it. Contractor #3 won my business even at triple the price because he demonstrated expertise above and beyond just pruning trees – knowledge of the law and botany, expertise that indicates to me that he really knows what he’s doing.

Why is this so powerful that it justifies such a premium price tag? Unlike commodity widgets or generic chewing gum, trees and landscaping are very long term projects. There’s no undo with a chainsaw – once you do the work, it’s done. I was unwilling to leave my yard – which I value greatly – to the lowest bidder because, as in many things in life, you get what you pay for. I’m ready, willing, and able to pay for expertise if you can demonstrate your mastery before asking for the sale.

If your first instinct as a salesperson is to cut prices and focus only on the money, you will alienate the premium buyer who is willing to pay more in order to get more. Start with demonstrating service and expertise before the sale and you may make the sale without price ever becoming an objection.

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

Fighting slander with a champion

Posted by Christopher S Penn on May 14, 2010 in Marketing | 5 comments

Fighting slander with a champion

At the recent NEDMA conference keynote, an audience member asked a very insightful question:

In an age when the power of a single voice can be amplified so loud that it can take down a company or a brand, what recourse do we have?

What a powerful question, and certainly one on the minds of a lot of people. While the speaker’s answer – that the wisdom of the crowd is inherently self-policing – has some validity to it, it’s probably not an answer that’s going to satisfy someone in the corner office.

My take: first, you do need to legitimately not suck. That’s the hard part. If what you’re doing, what you’re creating in the world is worthwhile, valuable, and ethical, then you’ve got your best long-term insurance against trial by the court of public opinion…

… but that’s not enough. What you need on your side are champions. Not athletes, but in the truest medieval sense of the ideal, knights who will step up to battle for your cause. Bear in mind, we’re not talking about armed physical combat (but boy, wouldn’t that shut some critics up really fast), but having champions who are well-respected members of their community defend you in that court of public opinion.

Recruiting champions is very much a conscious effort. As you do business in your community, look for the folks who are the hubs of your niche. Get their attention and help them understand who you are and what you do, why your business, organization, or personal cause is worthy of their attention. Once you do, support your champions in any way you can. Help promote their causes, what they believe in, what’s of benefit to them and their community.

When the time comes – and it will if you’re successful – that you need to defend yourself against innuendo or false claims, summon your champions to your side and ask them (usually privately) to help stop the momentum of whatever issue you’re facing as long as you’re in the right. Don’t ever ask someone else to put their reputation on the line for you if you’re in the wrong – fix what’s wrong instead and own up to it.

If, however, you’re facing someone trying their damnedest to execute a smear campaign against you, if you’re facing unwarranted criticism or unjustified slander, your champions are your best defense in a court of public opinion. One last tip: the more successful you are, the more champions you’ll need in your stable, because there will be that many more people gunning for you.

Now ask yourself this: who are YOUR champions? Who will go to bat for you?

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.