Great fortunes, much like the seasons, are transitory. One generation may amass wealth, while the next squanders it. The key difference lies in whether individuals think short-term or long-term.
Do they reserve some of their bounty for future seasons, or do they consume it all in one extravagant celebration? Clearly, those who set aside resources tend to grow their wealth, while others succumb to immediate gratification.
Some individuals take reckless risks with family wealth. Instead of safeguarding their capital, they deplete it with reckless schemes in pursuit of excessive gains. These stories of riches lost are often the most captivating.
The June 21 edition of Forbes Magazine narrates the Stroh family’s methodical ascent and rapid fall from the beer industry. “It took the Stroh family over a century to create the largest private beer fortune in America,” begins the Forbes article titled, How to Blow $9 Billion. “Yet, it took merely a handful of poor decisions to lose it all.” Continue reading
What’s happening? Have U.S. consumers, the main driver of economic growth, become indifferent? Recent data suggests just that…
According to the Thomas Reuters/University of Michigan’s early July index reading, consumer sentiment stands at 81.3. This is below the anticipated 83 and lower than June’s figure of 82.5. While sentiment has dipped, it has remained relatively stable. What does this imply?
“The most striking feature of recent consumer confidence trends is its remarkable stability despite negative GDP and positive job growth,” survey director Richard Curtin noted. “This steadiness should support continued consumer spending growth but doesn’t indicate a surge in spending beyond 2.5 percent.”
It’s important to remember that consumer spending represents 70 percent of the economy. Taken at face value, as consumer spending rises, so does economic growth. Continue reading
Few professions lack clearly defined performance metrics. In today’s corporate environment, there’s an obsessive focus on linking various metrics to success. From gross margins and operating margins to net profits and numerous other measures, there’s a metric for everything.
How does a company measure its performance relative to plans? What trajectory is it on? Are profits increasing? What about expenses? What percentage of the budget has been used compared to completion? Where are costs disproportionately allocated?
In our view, the overwhelming emphasis on metrics has diminished the enjoyment of business. There’s little room left for creativity or calculated risks when entire days are consumed with tracking performance. Continue reading
In Brisbane, Australia, temperatures plummeted to their coldest in 103 years, with temperatures dropping to 36o F, far lower than the seasonal average of 53o F.
Meanwhile, summer is in full swing in the United States, though some regions might not feel that way at the moment. According to meteorologist Megan Glaros, a “polar vortex” is expected to bring a surge of cold air, potentially resulting in record low temperatures across large parts of the Midwest and upper Great Plains, affecting Illinois, Indiana, Wisconsin, Iowa, Minnesota, Michigan, and Ohio.
For long-time readers of Economic Prism, this aligns perfectly with our 2014 prediction of global cooling. While we may not always be spot on, we occasionally get it right; naturally, we take pride in those moments.
However, in terms of the stock market, it seems our forecasts were off. We previously predicted that the stock market would face a downturn before summer. Continue reading
