A fine line exists between a succesful advertisement campaign and a bad advertisement campaign. More often than not companies waste large quantities of money on advertisements that net them no return. Many companies have looked to commercials or online campaigns with big names to revitalize their lagging business as seen below.
This above ad came out last year mid summer 2011. Take a look at where the stock is today compared to last summer at that time. Yeah. Kenny Powers got his check and K Swiss got a ghetto shoe to the face. The above campaign can be taken as a prime example of what not to do, how to waste money on a failing endeavor. The campaign did lead to a increase in online sales of shoes shortly thereafter, though a faltering business can not be saved in a few sales. “Kenny Powers” could also have just not been a big enough star to get the money spenders going. Either way, this campaign was uh… horrible.
Taking a different approach we can take a look at Dos Equis. We are going to take a look at this company because their ads are nothing short of amazing. Yes Dos Equis does not front a real celebrity, but due to pure marketing genius they have created their own celebrity to give them a bump. The most interesting man was able to increase sales off Dos Equis in the United States while other foreign beers dropped dramatically due to the economy. Now that’s good business.
If you watch any television as of late you will have noticed that Burger King has been taking your screen by storm. These advertisements are cute? They have put to work some big stars to sell the healthy options at their stores. An obvious attempt to take on McDonald’s perceived healthier menu. The burger King advertisement campaign may be the key to moving the momentum their way. It is nowhere near as creative as the Dos Equis commercial, by the same token Burger King also has a product that’s actually worth selling, unlike K Swiss. With such good earnings last quarter and a possible celebrity bump coming soon Burger King may be the king you want to put your money with.
No matter if you are a bull or bear on Burger King, one thing remains true, a good celebrity advertisment can change the landscape for a company. Though Dos Equis created their own celebrity in a sense, many other companies have come leaps and bounds with celebrities. Look around you and heed the celebrities because more often than not that is where the consumers money is headed. If the advertisement campaign is done correctly and the product can actually be sold (unlike K Swiss), then the campaign will net profits.
Here is a good piece by The New Yorker on the guy who plays the most interesting man.
Taking a look first at GDP, we see the same weakness as was at first anticipated. The second quarter does not suggest much improvement either. Being one of the huge barometers for our economy we can only hope that other macro news outweighs the negativity surrounding the GDP.
The housing situation remains inconsistent overall. We have had two back to back gains in the pricing index, though this is a meager movement after an overall horrible few years. Early last year we had a head fake that had the market tricked into thinking things were substantially better. Hopefully if we continue this positive trend we may see a more stable housing market which will bode well for the financial markets and our ‘Merica economy. Pending home sales also dropped dramatically and were in harsh negative territory, though at the same time new home sales were looking chipper. These pending home sales may be a blip on the radar but should be something to definitely keep an eye on.
When it comes to jobs, things are once again hazy. We seemed to be moving in good territory for quite some time, though it seems we may look to test that key 400k number once again. Some of the upward movement has been and can be attributed to seasonality. Though, at this stage of the recovery the market and myself expects a much better number and if we keep moving in the direction of 400k I will be squirming in my trading chair. Keep an eye out for the big number Friday it will answer many of my questions concerning our jobs situation.
Since we live in such a consumer based society, we cannot forget the importance of how our consumers are currently feeling. The consumer has had a change of heart. Initially these indexes could be seen as a support for potential spending in the coming months. The public sees the news out of Europe and questions their job situation and current spending habits. When looking at the consumers we do see a continued plus, the price of oil. With lower fuel cost we hope to see increased spending over the summer vacation months.
What is Macrohead Monthly?
Here at CapitalOverlook we are trying to consolidate information for the masses. Being that a majority of you are too lazy to compile the information yourself. We wish to streamline the macro situation of the economy into just a brief post. By looking at the past month we can see what to expect for the next month and invest accordingly. In this monthly post we will cover the macro data points that have the most bearing on your money and we find most significant.
Photo by Double-M
In the spirit of this hot southern summer weekend one cannot help think about being out on the water. One of the necessities for any boater comes in the form of a GPS. Even though many see Garmin as a dead company, those fools overlook the potential of the many other aspects of their company. Garmin does not merely make automobile GPS, though this is a major portion of their earnings, around 50% to be exact. The Garmin earnings sheet also consist of outdoor, fitness, marine, and aviation.
I see the most potential in both the avenues of marine and aviation for one simple reason, potential. Both these portions of the Garmin company are geared up to make moves. These are both discretionary spending items, no question, just like automobile GPS systems. Though, automobile GPS are a dying breed being replaced by the boatload of smartphones being sold. When it comes to boating and flying GPS are not an accessory but rather a necessity that will no time in the near future be replaced. As we see Americans go back aggressively to spending on high end pastimes, such as marine and aviation, Garmin will set to benefit.
When looking at Garmin one cannot overlook the fact that they have held up nicely in the lackluster automobile GPS market. With the potential for growth in many other aspects of their company they look like an overall great company that was once thought to be the next RIMM. An example of their commitment to the future can be found in their new product like the Garmin Swim, a device designed for training swimmers to track their workouts and drills in real time. Whichever way you look at Garmin they are compensating for their weakness in automotive and handling the challenges of the current economic situations well.
What is Sunday Funday?
We are all headstrong and egotistical. We all would not have gotten to the point in our lives where we can put money in the markets if we had failed at all the endeavors we had set out upon. Reality speaks a hard truth, the market doesn’t care about your previous successes, be that in the market or out of it. That is why many traders fail, many investors lose money and do so through their own negligence. Many will claim fault on exterior forces but the facts remain that you, the man (or woman) in front of the screen pressed the button, called the buy or sell. Not at all am I suggesting that I am immune to mistakes, I have made some costly ones, but through trial and error I have learned a key to my future success:
If you listen to fools you are nothing more than a fool.
Aligning yourself with the right team, be that news sources, bloggers, tweeters, your mother (I watch what she buys like a hawk to judge the masses) is crucial to successful trading or investor. Below is a clip from one of my favorite shows, Boardwalk Empire. The background is that Chalky White is a man of his people, a supporter of his community. By looking out for those around him they look out for him. The comparison I am drawing is that aligning yourself with quality people in trading or business will benefit you extensively.