Photo Credits: gee

This is not a blog about personal finance, but given the events of the last few days I feel compelled to chime in and say a few words especially to our youngest readers, since they are the best positioned to ride out these complicated times and come out ahead.

I really believe that what happened in the stock market these last few days has been a gross overreaction. I was just checking some large, world class companies with dividend-paying stocks (like BP, ATT, Kraft, etc.) and some of them are now selling so cheap that their dividends are yielding 6%, 7%, 8% or more per year.

If I were a 25 year old with $10,000 to invest I would pick three or four of these great companies, buy some shares and earn a hefty ROI (while waiting for the share price appreciation that will almost inevitably occur as we snap out of this recession).

Difficult times like these are when you find the best business opportunities, but taking advantage of them will require that you have cash available to move in quickly when opportunity knocks. This is the time to get your financial house in order. Develop a budget, stick to it, and get in the habit of saving and investing your money wisely. Buy only things that appreciate in value or that give you a return on investment.

Times like these, when everybody’s running for cover, are also a very good time to start a business: it is easier to get help, there are better deals for marketing and advertising, and less competition. I’ve been around enough to know that the individuals and companies that stick around during tough times are the ones who reap the best rewards when things come back to normal.

There is no bigger risk than postponing or trading what you really want to do for a “safe” alternative like a job (unless that job is what you really want, not have, to do). Job security is an oxymoron in today’s business environment (just look at those 60 year olds that thought they were playing it safe, now standing in shock as their retirement plans evaporate). So don’t be afraid. If you have a calling in life and feel there is something you were really meant to do, don’t delay and start today.

Good luck and let me know how are you doing.

Photo Credits: willpalmer

While both sides of the aisle keep coming up with their own reasons why the $700 billion financial industry rescue package failed, there is one angle that nobody’s talking about: that one of the reasons the proposal failed is because of poor salesmanship.

First, the package proponents didn’t pay a lot of attention to the name of their “product”. When the press started calling it “bailout”, they didn’t think it was important. The word “bailout”, however, has many negative connotations: it can be equated with expense, giveaway, enabling bad behavior, etc.

If they had framed their product as a “buying opportunity” instead of a “bailout”, they would have made it easier for congressmen to sell the package to their constituency. Names are important. That is why the auto industry didn’t call SUVs station wagons, why Apple calls their earplugs pods, or why Kentucky Fried Chicken prefers to be called KFC.

The second problem was the pitch. Imagine if they would have explained the package like this: “The government will take advantage of buying grossly undervalued securities for pennies on the dollar, hold them for a while, and then sell them at a profit, which it will then give back to the American people. In the meantime, banks will have money to lend, the stock market will hold up, and you’ll have a bigger chance to keep your job”.

Instead, what we got was pretty much this: give us $700 billion of your hard earned money right now so we can help the big, rich banks or else the sky is going to fall on you.

Bad Product Name + Bad Pitch = Bad Results

Another piece of bad salesmanship was the lousy choice of spokesperson: President Bush, with his 69% disapproval rating, hit the airwaves pushing for the package. Is he the best person to try to sell this proposal to the American people right now? Would you be glad to order an expensive dinner from the same waiter who has been messing up your orders lately? Doubtful. You may want a different waiter this time. President Bush should have stayed on the sidelines, since his direct involvement probably made matters worse.

And what about Nancy Pelosi? After a strenuous week of tough negotiations, she finally had a deal, but she couldn’t resist bashing the Republicans one more time, right before the vote. Imagine that after a long and extenuating negotiation, a salesman hands you a contract for you to sign. Then, just when you’ve taken out your pen, he says: “Wait a second Mr. Customer, before you sign, I just want to remind you how stupid you are for having bought the competition’s brand in the past.” Great salesmanship indeed…

Ahhh, our wonderful politicians… They sure know how to smile for the picture, but they need to learn a thing or two about marketing.

Photo Credits: Stephen Witherden

Last Monday I traveled overseas and, while at the airport in Miami, I observed the behavior of two people working there. One was a food stand attendant and the other one a security agent for the TSA (Transportation Security Administration).

The food stand attendant was taking a personal phone call while serving customers, holding the phone with one hand and reaching for the customers’ money with the other. In the meantime, the line kept getting bigger and customers were getting impatient. There were breadcrumbs and dirty napkins lying on the floor around her, the shelves were missing product and the whole place looked untidy and neglected.

When there were no more people on the line I decided to buy a bag of chips, but before I could hand her my money she just walked away, leaving the stand completely unattended for around three minutes. During that time, customers who wanted to pay left their food and walked away.

The TSA agent was completely different. This guy was walking through the crowd lined up before the security checkpoint, acting like a rock star, greeting everybody and making jokes: “How you doin’ today sir? OK? Good! And how about you ma’am? Good? I’m glad… Happy passengers, that’s what I want…. New York Jets? New York Jets? You gotta lose that cap, buddy!….How are you, sir?….. OK folks, if the guy in front of you is not moving, kick him! …..How you doin’ sir?” He would then pause for a few minutes and repeat the performance with another group of newly arrived passengers. He even had some cool jazz music playing close bye.

Going through airport security ranks high as one of life’s most dreaded experiences (up there with getting a root canal or watching politicians apologize in public for their character flaws). However, this guy alone, with his positive attitude and personal touch made the whole experience different and almost enjoyable.

I don’t think it’s a matter of money. The difference in salary between these two people can’t be more than a few bucks an hour, however, one cared and the other one didn’t. It’s a matter of character and pride.

This episode made me think about Jim Collins’ remarks in his classic book Good to Great , when he talks about the need to “get the right people on the bus” first. What he means by that is that people are more important than org. charts and job descriptions, and that you should make sure that you hire the right people before you do anything else.

He is right, and under that perspective the TSA guy would get hired over the food stand attendant any time.