In the early part of 2008, I began reading a book called, "Rule #1" by Phil Town (see below).
THIS TURNED OUT TO BE A GREAT BOOK! In his book, Town lays out a simple strategy for investing. Well, as I was reading, I decided to create an Excel spreadsheet and try to apply the formulas that he teaches for evaluating, buying, and selling, stocks. This spreadsheet was really just to test out the book - to see if it really worked. Since I wasn't sure yet, I DID NOT INVEST MONEY IN THE STOCKS THAT I EVALUATED USING THESE FORMULAS. Mistake? Read on.
I evaluated several stocks, but eventually narrowed my list down to 10 finalists. They are listed below along with their stock price as of March 13, 2008.
Apple - AAPL $122.25
Amazon.com - AMZN $68.32
Dell Inc - DELL $19.85
Microsoft - MSFT $28.62
Wal-Mart - WMT $50.60
China Mobile LTD - CHL $70.72
Qualcom - QCOM $40.25
Best But - BBY $40.61
Tradestation Group, Inc - TRAD $10.04
Cisco Systems - CSCO $24.95
Since March 2008, I think most people understand that markets around the world went into the tank. With that said, if I had purchased those stocks and then sold them at their high point in the last 52 weeks, 7 out of the 10 stocks above would have made money. Apple and Amazon could have made me rich. The 52-week highs for those stocks were:
Apple - AAPL $279.01
Amazon.com - AMZN $151.09
Dell Inc - DELL $17.52
Microsoft - MSFT $31.58
Wal-Mart - WMT $56.27
China Mobile LTD - CHL $59.22
Qualcom - QCOM $49.80
Best But - BBY $48.83
Tradestation Group, Inc - TRAD $8.89
Cisco Systems - CSCO $27.24
So, for every dollar I would have invested in these stocks (including the losers), I would have made .51 cents profit. That's a 51% return on investment (ROI) or put another way, a 25.5% ROI annually. Where else can you get that kind of return? Some might argue that the answer to that question is Gold, but that's another story all together.
This process doesn't happen without some work, but I'm eventually going to take the steps to evaluate more stocks based on today's financial situation. I wouldn't do it without this book though.
By the way: Rule #1 is "Don't Lose Money".
Wednesday, July 21, 2010
Monday, July 19, 2010
Take a Chance
This is a topic that I have really struggle with - Taking a chance. I've found myself having a fear of failure or a fear that people won't like my stuff. I wrote this book, "Record Breaker" LAST YEAR. I literally finished it 1 year ago, but I delayed doing anything with it. That started weighing on me because I knew I had that unfinished project. Then one day I was talking to a friend who said something that finally helped me get past myself so that I could do something successful. He said:
How many people do you know? How many people have you ever known? A thousand? More? How many of those people ever wrote a book?
You know what? I only know one other person who ever published a book and he's a PhD. So that energized me. Now, I have a meeting with a printer in 2 days. I can't wait to get this project finished up. Even if I never sale 1 copy (and I plan on selling out), I published a book and that makes me 1 in 1,000.
I'm taking a chance. I'm getting past myself and my irrational fears and doing something that will be successful. What are you holding yourself back on? What big ideas do you have that you haven't followed thru to completion?
I think everyone should take their chance. Be 1 in 1,000.
How many people do you know? How many people have you ever known? A thousand? More? How many of those people ever wrote a book?
You know what? I only know one other person who ever published a book and he's a PhD. So that energized me. Now, I have a meeting with a printer in 2 days. I can't wait to get this project finished up. Even if I never sale 1 copy (and I plan on selling out), I published a book and that makes me 1 in 1,000.
I'm taking a chance. I'm getting past myself and my irrational fears and doing something that will be successful. What are you holding yourself back on? What big ideas do you have that you haven't followed thru to completion?
I think everyone should take their chance. Be 1 in 1,000.
Friday, July 16, 2010
15 Car Buying Tips to Keep you From Getting Hosed
1. Shop around to see what other dealers and private sellers are selling cars for. Get a working price range before you talk to any sales people.
2. Have a list of car choices. Don't put yourself in a buying corner by limiting yourself to a single choice because. . .
3. Don't fall in love with a car. If you fall in love with a vehicle, you will lose objectivity, and you will get hosed.
4. When talking to a salesman, be disinterested in even doing the deal at all. In fact, be a little uncomfortable with the whole idea of changing cars because you are. . .
5. In love with your current car. It's going to be tough to get you to trade up or out of your current car. Let the salesman see that for you, buying a car is not an emergency. You're in no distress. You can take it or leave it and you know what? You just might want to leave it since you love your car so much anyways.
6. Handle only 1 deal element at a time. Deal elements include: total sales price, financing / interest rate, monthly payments, trade-in value, and the kind of car you might purchase if you do the deal. Start with the total sales price of the vehicle and don't move off of that subject unless or until you are satisfied with the price. No deal is good if it costs too much. So forget monthly payments, interest rates, and trade-ins. There's plenty of time to get to that because. . .
7. You are willing to close the place down if that's what it takes. What time does the dealership close? 9pm? That's OK. I cleared my schedule so I can take as long as it needs to take. By the way, would you be helping those people over there if we were already finished up here? Make the salesman uncomfortable about losing the commissions from all of the other customers he could be helping if he would just quit giving you the run-around.
8. Know your credit score and debt to income ratio before going to a dealership. Remember, financing is irrelevant to you until the other deal elements are worked out anyways. When you know how good your credit is, you'll already have a pretty good idea of how good of a financing deal you are going to get.
9. Make them show you the Black Book. I know this thing exists, but has anyone ever seen it besides the dealers. I had a guy tell me that they don't use Blue Book values. They use the Black Book. So, I said, "fine, bring me that book so I can see it too." For some reason, he agreed to my price instead of showing me the book. I thought that was interesting.
10. When the salesman starts to make too many trips up into the manager's office, just demand to talk directly to the manager. You don't need a middle-man to get this deal done. That middle-man's not on your side anyways, so try to get rid of him and go straight to the decision maker.
11. Make a ridiculously low offer to get started. If you know the average sales price of a particular vehicle is $20,000, then offer $15,000. This anchors the negotiated price range lower and certainly closer to the average sales price. Otherwise, the dealer is going to start high and then you'll be forced to work too hard. Make the dealer work instead. And if the dealer makes a ridiculously high offer, let him know that it's ridiculous. Don't be scared to speak your mind. It's your money.
12. Never offer to split the difference - ever. That's the dealer's job You're not willing to settle for the difference anyways, so don't bother. However, if you want to pay $18,000 and the dealer is stuck on $24,000, but offers to split the difference, then guess what? The dealer's new number is $21,000 (splitting the difference of $6,000 lowered his price to $21K). Now, you're only $3,000 apart and you say, "well, we're only $3,000 apart from what I want to pay and what you're willing to accept. Surely there's some way we can make this deal work." You'll probably end up paying $20,000, but you only had to go up $2,000 and the dealer went down $5,000. That's a success!
13. Be ready and willing to walk away. You're not in love with a car and certainly not with the deal. So, when you hit an impasse, just walk away. This is very powerful because believe me, they don't want that, especially after you've spent the last 3 hours of his time working a deal only for him to lose it along with all those other customers he couldn't help because he was giving you the run-around.
14. Be reasonable, but keep it to yourself.
15. Recognize the right deal when it presents itself and take it. At some point, the dealer has really done all that he can. You need to recognize that and make a decision.
2. Have a list of car choices. Don't put yourself in a buying corner by limiting yourself to a single choice because. . .
3. Don't fall in love with a car. If you fall in love with a vehicle, you will lose objectivity, and you will get hosed.
4. When talking to a salesman, be disinterested in even doing the deal at all. In fact, be a little uncomfortable with the whole idea of changing cars because you are. . .
5. In love with your current car. It's going to be tough to get you to trade up or out of your current car. Let the salesman see that for you, buying a car is not an emergency. You're in no distress. You can take it or leave it and you know what? You just might want to leave it since you love your car so much anyways.
6. Handle only 1 deal element at a time. Deal elements include: total sales price, financing / interest rate, monthly payments, trade-in value, and the kind of car you might purchase if you do the deal. Start with the total sales price of the vehicle and don't move off of that subject unless or until you are satisfied with the price. No deal is good if it costs too much. So forget monthly payments, interest rates, and trade-ins. There's plenty of time to get to that because. . .
7. You are willing to close the place down if that's what it takes. What time does the dealership close? 9pm? That's OK. I cleared my schedule so I can take as long as it needs to take. By the way, would you be helping those people over there if we were already finished up here? Make the salesman uncomfortable about losing the commissions from all of the other customers he could be helping if he would just quit giving you the run-around.
8. Know your credit score and debt to income ratio before going to a dealership. Remember, financing is irrelevant to you until the other deal elements are worked out anyways. When you know how good your credit is, you'll already have a pretty good idea of how good of a financing deal you are going to get.
9. Make them show you the Black Book. I know this thing exists, but has anyone ever seen it besides the dealers. I had a guy tell me that they don't use Blue Book values. They use the Black Book. So, I said, "fine, bring me that book so I can see it too." For some reason, he agreed to my price instead of showing me the book. I thought that was interesting.
10. When the salesman starts to make too many trips up into the manager's office, just demand to talk directly to the manager. You don't need a middle-man to get this deal done. That middle-man's not on your side anyways, so try to get rid of him and go straight to the decision maker.
11. Make a ridiculously low offer to get started. If you know the average sales price of a particular vehicle is $20,000, then offer $15,000. This anchors the negotiated price range lower and certainly closer to the average sales price. Otherwise, the dealer is going to start high and then you'll be forced to work too hard. Make the dealer work instead. And if the dealer makes a ridiculously high offer, let him know that it's ridiculous. Don't be scared to speak your mind. It's your money.
12. Never offer to split the difference - ever. That's the dealer's job You're not willing to settle for the difference anyways, so don't bother. However, if you want to pay $18,000 and the dealer is stuck on $24,000, but offers to split the difference, then guess what? The dealer's new number is $21,000 (splitting the difference of $6,000 lowered his price to $21K). Now, you're only $3,000 apart and you say, "well, we're only $3,000 apart from what I want to pay and what you're willing to accept. Surely there's some way we can make this deal work." You'll probably end up paying $20,000, but you only had to go up $2,000 and the dealer went down $5,000. That's a success!
13. Be ready and willing to walk away. You're not in love with a car and certainly not with the deal. So, when you hit an impasse, just walk away. This is very powerful because believe me, they don't want that, especially after you've spent the last 3 hours of his time working a deal only for him to lose it along with all those other customers he couldn't help because he was giving you the run-around.
14. Be reasonable, but keep it to yourself.
15. Recognize the right deal when it presents itself and take it. At some point, the dealer has really done all that he can. You need to recognize that and make a decision.
Wednesday, June 30, 2010
Metric Decision Making
One thing that I've come to understand about management is that it is far too easy to get caught up in emotions and "gut feelings" and when decision making comes from those things, it's very easy to get it wrong. Take firing someone as an example. I'm a top manager and as such, I've had more than my fair share of people who have taken shots at me. I've been insulted and undermined. I've dealt with passive aggressive individuals who were smiling to my face and stabbing me in the back. I've even worked with plenty of people who I just didn't really like very much. I can't just fire everyone that I don't like or who doesn't like me. Sure, if I give a directive to someone who understands and agrees to my face, but sabatoges me or my business when I'm gone, I'm absolutely going to send that guy packing. We need our team members to act like team mates and not like enemies. I think that's pretty well understood.
It's the emotional things that I really want to focus on though. If you don't particularly like someone, you might just have to get over it. Number 1: we dont make decisions based on likes and dislikes - period. Number 2: what if you get rid of a top-performer based on something personal and/or petty? What if you don't even realize that person is a top-performer? What if you don't even know what would define a top-performer? That's a serious problem.
You need metrics to help guide your decisions. You need to know how your employees perform compared to other employees in your company and to other people in other companies within your industry. This starts by knowing how your company performs compared to other companies. Do you know how much revenue each of your employees should generate in a work day. Do you even know how much they are generating at the present time? If not, that's a problem. You need to figure this out.
What about ratios too? Do you know how many people it takes to run your operation? Well, how many customers does each of your employees help per hour? 1? 2? 10? How many dollars does each of your employees generate? How many dollars per hour? Now, what if you don't particularly like someone because your personalities seem to always clash or because that person doesn't seem to want to do things "your way"? What if that person generates $1,000 per hour compared to your average employee who's doing it "your way" and generating $750 per hour? If that's the case, I think it's just about time for you to suck it up buddy.
Your not going to make decisions based on emotions and gut feelings when you can do a little work and find out some really solid metrics to help guide you. Without those metrics, you're going to lose someone who outperforms the rest of your team by 25% when you should be looking at the guy who produces $350 per hour instead.
This way of thinking will save your butt over and over again. It will help you decide which customers to dedicate most of your time to and which customers to stop spending time with at all. It will show you which products are selling the best, even if you don't particularly like them (which won't matter with metrics). As I've clearly shown you here, it will help you make smart hiring and firing decisions so that you don't lose valuable people and poor-performers. If you use your own numbers and compare them as many ways as you reasonably can, you'll be around a lot longer to keep making those smart decisions.
Metric Decision Making > Emotions & Gut Feelings.
It's the emotional things that I really want to focus on though. If you don't particularly like someone, you might just have to get over it. Number 1: we dont make decisions based on likes and dislikes - period. Number 2: what if you get rid of a top-performer based on something personal and/or petty? What if you don't even realize that person is a top-performer? What if you don't even know what would define a top-performer? That's a serious problem.
You need metrics to help guide your decisions. You need to know how your employees perform compared to other employees in your company and to other people in other companies within your industry. This starts by knowing how your company performs compared to other companies. Do you know how much revenue each of your employees should generate in a work day. Do you even know how much they are generating at the present time? If not, that's a problem. You need to figure this out.
What about ratios too? Do you know how many people it takes to run your operation? Well, how many customers does each of your employees help per hour? 1? 2? 10? How many dollars does each of your employees generate? How many dollars per hour? Now, what if you don't particularly like someone because your personalities seem to always clash or because that person doesn't seem to want to do things "your way"? What if that person generates $1,000 per hour compared to your average employee who's doing it "your way" and generating $750 per hour? If that's the case, I think it's just about time for you to suck it up buddy.
Your not going to make decisions based on emotions and gut feelings when you can do a little work and find out some really solid metrics to help guide you. Without those metrics, you're going to lose someone who outperforms the rest of your team by 25% when you should be looking at the guy who produces $350 per hour instead.
This way of thinking will save your butt over and over again. It will help you decide which customers to dedicate most of your time to and which customers to stop spending time with at all. It will show you which products are selling the best, even if you don't particularly like them (which won't matter with metrics). As I've clearly shown you here, it will help you make smart hiring and firing decisions so that you don't lose valuable people and poor-performers. If you use your own numbers and compare them as many ways as you reasonably can, you'll be around a lot longer to keep making those smart decisions.
Metric Decision Making > Emotions & Gut Feelings.
Wednesday, January 27, 2010
Relationship Marketing
Everyone has heard the saying, "If it was fun, it wouldn't be called work". Why does that need to be true? The #1 job of a business is to get new customers. That's pretty fun isn't it? It can certainly take hard work too. Relationship marketing guarantees that the job of getting new customers gets to be fun. It's fun because you begin developing a network of marketing friends to work with every day. Who doesn't want to spend every day working with their friends?
The other thing about working with your friends is that friends usually want to help each other out. I know if I have an opportunity to help a friend, I'm going to do it every time. In marketing, working with friends can and should mean being able to share business referrals and contact lists among friends. If I know 5 people (friends) that could work well with my other friends, then I'm going to introduce those 5 friends to my other friends, and all of those friends would do the same thing for me. These friends get to know those friends and I get to know the friends of those friends, and then we all figure out how we can help each other because we are all friends now and we all want to help our friends while those friends are all helping us.
I know many of you reading this are saying to yourself, "but this is just networking, it's not a new idea." I agree that it's not a new idea, but you would be shocked to find out just how many people aren't thinking about it. I've had an opportunity to present this idea to some of my friends lately and most of them had not thought about it in this way before. I'm offering to do 2 important things for them: 1. I'm offering to do business with them myself. 2. I'm offering to open up my rolodex to them so they can develop business friends with people they never knew before. The key thing here is that they aren't having to do any cold-calling. Instead, they get to pick up the phone and honestly say, "Chris Helms told me I should talk to you." And, because it's a friends of mine, the answer will just about always be YES because friends like to help friends.
In exchange, I get access to the rolodexes of all of my friends, then eventually to all of their friends' rolodexes as well. It's so much easier to do business with friends than with complete strangers. So, create friend-business relationships and do business with your friends every single day. The first step is to share this idea with your friends and get them on board. Next, exchange rolodexes and get to work.
Who are your current friends that you work with? Which of those friends could help some of your other friends? Start thinking about and referring to your current business contacts as business friends. Then, build that relationship up accordingly. Go out with your friends to do some joint marketing to your list of contacts and theirs. If we all help our friends and all of our friends help us, then we will have an exponentially greater opportunity for success.
The other thing about working with your friends is that friends usually want to help each other out. I know if I have an opportunity to help a friend, I'm going to do it every time. In marketing, working with friends can and should mean being able to share business referrals and contact lists among friends. If I know 5 people (friends) that could work well with my other friends, then I'm going to introduce those 5 friends to my other friends, and all of those friends would do the same thing for me. These friends get to know those friends and I get to know the friends of those friends, and then we all figure out how we can help each other because we are all friends now and we all want to help our friends while those friends are all helping us.
I know many of you reading this are saying to yourself, "but this is just networking, it's not a new idea." I agree that it's not a new idea, but you would be shocked to find out just how many people aren't thinking about it. I've had an opportunity to present this idea to some of my friends lately and most of them had not thought about it in this way before. I'm offering to do 2 important things for them: 1. I'm offering to do business with them myself. 2. I'm offering to open up my rolodex to them so they can develop business friends with people they never knew before. The key thing here is that they aren't having to do any cold-calling. Instead, they get to pick up the phone and honestly say, "Chris Helms told me I should talk to you." And, because it's a friends of mine, the answer will just about always be YES because friends like to help friends.
In exchange, I get access to the rolodexes of all of my friends, then eventually to all of their friends' rolodexes as well. It's so much easier to do business with friends than with complete strangers. So, create friend-business relationships and do business with your friends every single day. The first step is to share this idea with your friends and get them on board. Next, exchange rolodexes and get to work.
Who are your current friends that you work with? Which of those friends could help some of your other friends? Start thinking about and referring to your current business contacts as business friends. Then, build that relationship up accordingly. Go out with your friends to do some joint marketing to your list of contacts and theirs. If we all help our friends and all of our friends help us, then we will have an exponentially greater opportunity for success.
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