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A tale of two charities

We are a country divided. Washington is paralyzed. Half the country considers our president a joke and any and all legislation is dead on arrival, according to the TV talking heads. Social media is filled with outrage and despair. As a result, Americans are supposedly wringing their hands, or worse, hiding under the covers. Don’t you believe it! read more…

FOMO fuels the markets

The fear of missing out (or FOMO) has supported the stock market averages this week. Although it appeared that the indexes simply marked time, appearances can be deceiving.   read more…

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Elder care in an age of confusion

Many Americans confess that they are confused when faced with the myriad of Medicare choices available to them. Others are simply not planning, nor saving enough to meet the challenge of health care costs in old age. In response, a whole new industry has sprung up nationwide. read more…

Markets climb higher

In the absence of any earth-shaking news, stocks tend to follow the recent trend. That trend, since the election has been up, so… The question to ask: when we can logically expect that trend to change? read more…

Are you ready for a 20% correction?

As the stock market makes new highs, investors tend to get greedy. They also begin to believe that what has happened in the recent past will continue to happen in the future. Actually, history shows the exact opposite. It is time to give the potential downside some thought. read more…

The Trump Dump


Investors were shocked this week when the U.S. stock markets fell almost 2% in one day. Wall Street blamed it on the growing scandals engulfing the White House. However, there was little follow through despite predictions that this was the beginning of the long-awaited pullback.

To be honest, much of the controversy coming out of Washington—demand for Trump’s impeachment, obstruction of justice, witness-tampering, etc.—is simply partisan politics deliberately fueled by a biased media. All of the above, which had been building for days, finally reached the tipping point for investors. As weak-kneed day traders started to sell, the program computers began to join in and the rest was history. Wednesday turned out to be the worst day of the year for stocks.

I actually think the carnage was a good thing. It furnished all of us a reminder that markets do go down as well as up. Ever since the November election, stocks have climbed. There has been little in the way of volatility and at most a mild 3% pullback in some of the averages over a few weeks. That is not normally how the stock market works.

However, we are human and the longer something continues, the more we expect it to continue into the future. When it changes, not only are we surprised but our first reaction is to cut and run. I am sure some of you did just that this week.

Over the last two days, stocks have regained about half the losses sustained on Wednesday. From a technical point of view we have at least a 50-50 chance that traders will push the averages back down to the lows that occurred on Wednesday. It’s called a retest. If we hold there (around 2,350 on the S&P 500 Index) traders will simply chalk up the event as a warning that somewhere ahead of us looms a larger sell-off.

You might ask why the pundits’ predictions of a further sell-off didn’t come true. The answer lies in how we are all being manipulated by politics and the media. The “experts” told us that all this Russian-inspired controversy, followed by the firing of the FBI director, and the creation of a special jury to investigate wrong-doing within the Trump White House would further delay what the market needs and wants. Tax reform, health care, infrastructure spending and much more would now be pushed back even further and further. It may not even happen at all if Trump were to be impeached.

And just as investors began to believe all this tripe, the White House has sent in its forces to reassure investors that all is on track on the economic reform front. Suddenly, the Trump budget will be announced next Wednesday offering all kinds of goodies to investors. At the same time,. Steve Mnuchin starts talking about 3% GDP growth again. And “The Donald” takes off for a five-nation trip, his first, today, which was sure to distract the media from its Russian witch hunt.

The moral of this tale for you and I is to continue to ignore the noise. Think of yourself as a batter who must keep his/her eye on the ball. That ball is the growth rate of the economy, (good), earnings (great), the Fed (moderate). Ignore everything else. Hang in there.



Cosmetics survive and prosper despite competition

As the clash between brick and mortar retail enterprises and the mighty Amazon escalates, the internet shopping colossus is laying waste to one store or mall after another. One of the few areas that have not only staved off the internet shopping giant, but has actually turned the internet and social media to its advantage is the cosmetics industry.

There is a combination of fortuitous developments, some peculiar to the makeup industry, and others the result of adept marketing that has allowed the beauty trade to grow unencumbered. Social media, as you might imagine, has played a big part in growing an industry that has revenues of $62 billion and climbing.

For decades, women would pay a visit to their local department store, drugstore, or shopping mall and head for the cosmetics counter. They did so because most women consider makeup a necessity of life. They received a quick lesson in cosmetics application from the clerk or salesperson. At the same time, they could also see and experience these products on their own skin. The only alternative to the beauty shop was to sign up for a cosmetology class, hire a makeup artist or rely on a girlfriend who knew her way around makeup.

Today, social media has become both the new beauty counter as well as a place to show off the results. Just check out the number of YouTube tutorials available on make-up. Now that the industry can post videos on Instagram as well, industry experts can hawk their wares easily and directly, but can also show consumers exactly how a new product is intended to be used as well.

A whole new industry has sprung up around selling cosmetics on social media. There is now what are called “Beauty Vloggers,” enterprising women who are internet businesses in their own right. Some are models or ex-models; others come out of the makeup industry and set up shop as beauty gurus. They dispense beauty advice as well as tutorials on how to apply specific types and kinds of makeup.

Another new phenomenon is the “haul girls.” These are women who take the viewers on an extreme shopping spree and explain on camera what products are ‘hot,’ while giving their opinion of the products. Today, fully 95% of consumers looking for beauty products will search out YouTube first. Some of these beauty mavens have millions of subscribers and can make or break a brand. In the beauty business, influencers like these Vloggers and haul girls carry a great deal of weight.

And with the popularity of posting photos on Facebook, Twitter and other social media, more and more women don’t want to be caught “naked” when it comes to makeup. That simply fuels more and more demand for cosmetic products.

While women use social media today for cosmetic instruction and to learn about the latest products offered, many still need to “test-and-trial” as the industry calls it. Video is fine, but how do you really know what that new blush or nude lipstick is going to look like on you? Buying many cosmetic products online is tricky. The subtlety of shades and colors abound and once it arrives in your mailbox, it is too late.

Unlike clothes or that DVD player, cosmetics, once opened, cannot be returned. This becomes problematic, especially at some of the price points these products command. Sure, some products that a woman will use over and over again can be ordered over the internet, but styles and new developments in cosmetics change rapidly.

That’s why testers and samples are a large part of any brick and mortar beauty store’s inventory. Many, if not all, of the basics undergo a revamp every so many years, so most women will check out the newest offerings on a fairly regular basis. And even your most hard-bitten internet buyer will succumb to buying a new product, especially after using the free consultation or makeup classes offered by these beauty centers. Unlike other industries, the beauty store still manages to deliver an “experience” as well as a place to buy products. Remember too, that there are no seasons in makeup, it has year-round fashion demand.

Discounts are also not high on the list of cosmetic company marketing tactics. Prices remain relatively stable, which is anathema to what usually occurs to a product once incorporated into the Amazon fold. So far, few, if any, of the luxury beauty brands have developed relationships with the internet giant. For now, the beauty business is thriving despite Amazon, and they hope that continues, at least until they can build their own e-commerce presence.

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About Bill

Bill Schmick was born in a blue-collar neighborhood of Philadelphia, just a few blocks north of “Rocky Balboa” territory where most of his Catholic schoolmates grew up to be either cops or criminals. He narrowly escaped both professions by volunteering to fight in Vietnam as a U.S. Marine... Read More


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