Passover Business

This was in an email I got from one of the QC clubs. This email epitomizes, on a small scale, the diversity that characterizes Queens College.

This was in an email I got from one of the QC clubs. This email epitomizes, on a small scale, the diversity that characterizes Queens College.

The onset of spring break is welcomed with open arms. Everyone agrees that it marks the start of a short period of respite from being constantly inundated with work (However, even that is not entirely accurate, considering the amount of papers and midterms due once we return!) Being the highly diverse campus on which it prides itself, Queens College has a student population that celebrates various holidays that coincide with this break. Many celebrate Good Friday and Easter. I, along with many other Jews, celebrate Passover. From an Economics and Finance lens, my opinion of Passover is that it has metamorphosed into a significant business boosting opportunity for the kosher food industry-a perspective that my Jewish constituents might very well consider sacrilegious given the highly religious and holy nature of this holiday.

The contents of this Seder plate represent a infinitismal part of what needs to be purchased for Passover. My family never buys romaine lettuce, but for this holiday, we buy lots of it.

The contents of this Seder plate represent a infinitesimal part of what needs to be purchased for Passover. My family never buys romaine lettuce, but for this holiday, we buy lots of it.

Most people immediately associate Passover with Matzo, wine, and the Exodus from Egypt. Those who celebrate the holiday dread the month-long countdown.  Even though it is only 8 days and an enjoyable time spent with family and friends, Passover entails a tremendous amount of preparation and work, perhaps rival to that of what the Israelites faced in Egypt. (How fitting!) All this work requires spending a ton of money. It is not uncommon that, on a shopping excursion at Shoprite, one spends upwards of $150-and there are multiple such trips. The reason behind the tremendous expense is not simply due to the high prices of kosher for Passover food. To understand why, think about what this holiday entails: 8 days of eating nothing with leavened bread (by Jewish law, we mean that the flour has not been exposed to

For the next 8 days I will not be able to eat any spaghetti. People might not realize that I will not be able to eat my mother's special meatballs either because those contain breadcrumbs. Most people use lots of eggs and potato starch to substitute, but I am acutely sensitive to the difference in taste.

For the next 8 days I will not be able to eat any spaghetti. People might not realize that I will not be able to eat my mother’s special meatballs either because those contain breadcrumbs. Most people use lots of eggs and potato starch to substitute, but I am acutely sensitive to the difference in taste.

water, from harvest through baking, for more than 18 minutes); people have developed customs of also refraining from rice and beans. To put that in perspective, for almost my entire Spring Break, I do not eat pizza, pretzels, chips, sushi, and hummus, as well as any food made in even the same facilities as any of these items. With so many forbidden foods, a complete overhaul of one’s pantry is necessary. As a result, people must replenish their food stock entirely. Moreover, people buy even more fruits and vegetables than usual in order to counterbalance the many heavy, albeit delicious, meals. Finally, each person is required to drink 4 cups of wine at each of the 2 Seders; on average, there are more than 5 people at a Seder. That ends up being a lot of wine-and a bottle of wine is not cheap. It comes as no surprise that with a new food stockpile, tons of produce, and a new supply of wine, people celebrating Passover, even without realizing it, quickly spend a small fortune. Try as you might-and trust me, I tried-it is nearly impossible to stay below a set budget, unless that threshold is unlimited.

Available for free at Shoprite are Haggadahs that are distributed by Maxwell House.

Available for free at Shoprite are Haggadahs that are distributed by Maxwell House. Disclaimer: My family has caught many mistakes in it.

With the potential for making a tremendous amount of revenue, it comes as no surprise that many companies choose to specialize in the market for Passover items. Stores, especially on the East Coast, predict the increased demand and therefore designate special aisles exclusively with kosher for Passover foods. Additionally, in trying to connect with customers, they frequently have promotions offering free boxes of Matzo after spending a certain amount. I have noticed that, over the years, there has been a growing selection of foods available. A distinct trait of the kosher for Passover foods industry is that it is dynamic in nature. Indeed, there are the normal brands that everyone associates with the holiday that produce the classic Jewish foods, such as Manischewitz grape juice and Rokeach gefilte fish. However, there are so many more possibilities to choose from today- people might just forget the severe limitations that are imposed on them for these 8 days. There are cake mixes, cookies, and other prepared foods that are delectable. Also, there are new products on the market that will spice up any dull meal. For example, there was a great deal of excitement in the Jewish community recently when the Orthodox Union, a top kosher agency, declared that quinoa can now be eaten on Passover.  Time for a new tradition!

I predict that I will gain at least 10 pounds over Passover because of all my mother’s delicious food, but right now I am doing a ton of exercise. My house is currently hectic because of the many last minute preparations to which we must attend. Of course, I need to squeeze in some time to seek out those Easter sales at the mall, so I must go!

 

Published in: on April 14, 2014 at 6:47 pm Comments (0)

It’s True: No more $15 for Printing –> Free Printing!

Last semester, I divulged the details behind the QC administration’s decision to no longer give $15 in printing money to students who complete teacher evaluations. I was thrilled to see that blog go quasi-viral, having been shared on Facebook by many outraged students. Knowing that each time I printed something I was depleting my precious printing money, I was extremely parsimonious when it came to printing pages. As a result, I struggled to read multiple 60- page reading assignments, all of which were single spaced, from my computer screen. There was barely $6 left on my card, and I refused to use it all in one class.

About a month ago, out of the blue, a friend of mine insisted I go to the next Technology Fee committee meeting because part of the agenda was to discuss and vote on the new budget. One of the allocations to be considered was money for free printing in the library. To say I was skeptical and cynical would be an understatement. I, along with fellow student members of the Technology Fee Committee, had fought tooth and nail to reinstate the policy of rewarding students with printing money for filling out teacher evaluations. Now, they would suddenly be willing to simply allow students to print free of charge?

After some investigating, I discovered that SFC was behind this proposal. Everything clicked. This was a politically motivated move, carried out right before elections so that it would be fresh in students’ minds when they considered for whom they would vote.

At the Tech Fee committee meeting, there were two SFC members present. When the proposal came up for discussion, it received immediate backing from students, and vehement opposition from administrators. The latter alleged that funding for free printing did not fall under the Tech Fee category. Supporting our fellow SFC peers,  Tech Fee committee student members came to the defense of our SFC peers’ proposal, and cogently argued, with prior knowledge of how the committee’s funds are indeed allowed to be allocated, that the funding of free printing did directly enhance student learning through the use of technology. I even argued once I saw that this was a losing battle that at the very least the money currently on our cards should roll over to the next semester; since we were not able to get more, we should at least be able to keep what we have. Once we went through the proposed budget, it appeared that Queens College would be running a $2M deficit in 2015. We realized that certain costs clearly could not be avoided, and that the provost perceived our arguments to be tenuous, at best. I left the meeting unsurprised, and said to the dejected SFC members, “I should have warned you…”

I was shocked to receive a follow-up email barely a week later, stating that there had been some major numerical errors in the calculations, including accidentally doubling salaries. In fact, there was enough money for printing, and the Provost had decided that the Technology Fee Committee could cover it. With a long email feed in which people succinctly responded “I approve” (thus hiding my elation), free printing in the QC library had officially been implemented!

I was very excited to see that we now have free printing, but I made sure to discuss with others that this was not a free for all. Economics is the study of the allocation of scarce resources. There is a finite amount of every type of good in the world. When students were forced to pay, they were more conservative in their printing habits; they only printed when they needed to, such as for essays and documents. Now, since it is free, there is nothing stopping them from printing as much as they like. In the short run this might seem great. In this long run, though, this bears serious potential consequences. Having over 20,000 students print as much as they want is not sustainable. Queens College cannot afford to supply that quantity of toner, paper, and ink. If students continue to print so much, Queens College might very well revoke the free printing. We have seen them do it before, and they could do it again. Except the next time, Queens College might not give any money to students to fill out student evaluations. So while you should definitely be grateful for the option of free printing on campus, do not exploit it and ruin it for the rest of us!

Published in: on April 13, 2014 at 9:03 pm Comments (0)

My Most Powerful Shopping Secret, Part II: Online Shopping and Outlet Stores

A lot of my friends seem to think that Lord & Taylor is synonymous with matronly. This is certainly not the case, and I find such an insult to be a personal affront!

A lot of my friends seem to think that Lord & Taylor is synonymous with matronly. This is certainly not the case, and I find such an insult to be a personal affront! (Most of Lord & Taylor’s clothing does NOT look like the above outfit.)

Last week, I shared with you all of my secrets about how I manage to shop at Lord & Taylor so frequently, but while still conserving the contents of my bank account. Unfortunately, most people I know do not share the same positive sentiments I hold toward Lord & Taylor, a place where you can buy clothing ranging from comfortable t-shirts to fancy dresses. They say that they go there once in a blue moon, which I cannot fathom; they are simply not as enamored by the store as I am. Indeed, it is true that you cannot stock your entire wardrobe by shopping there exclusively (although they do have the perfect LBDs!). Thus, my second major shopping tip for saving money: take advantage of deals available online and go shopping at outlet stores.

A typical Black Friday crowd. Now imagine how much worse it would be if there were no online outlet for the other thousands of shoppers  to shop!

A typical Black Friday crowd. Now imagine how much worse it would be if there were no online outlet for the other thousands of shoppers to shop!

Online shopping has taken almost every economic industry by storm. Stores can no longer depend on consumers to walk into their stores, despite governmental promises that revenue and sales will rise once the economy recovers. This can be seen most visibly the numbers on Black Friday in 2013: online shopping rose 15% last year, to a staggering $1.2 B. Many people no longer feel the need to go out shopping when they can do so in the confines of their home. There is a convenience factor to online shopping, in which you can simply place an order-the rest of the work in subsequently done for you. Except, of course, for opening those boxes that are stubbornly sealed shut!

Online businesses facilitate the process of achieving better deals than can be found at brick and mortar stores. They can afford to do so because they need not worry about many costs that regular stores must contend with on a monthly basis. Indeed, overhead expenses, which are one of the largest costs for running a business, are virtually absent.

The word's most popular shoe store...and I've never even checked it out until now. What can I say, when it comes to shoes, Lord & Taylor has my loyalty.

The word’s most popular shoe store…and I’ve never even checked it out until now. What can I say, when it comes to shoes, Lord & Taylor has my loyalty.

To get clothing online, people often flock to company websites; to get shoes online, most go to Zappos. Zappos has a great business model, in which it provides free shipping as well as next day delivery. According to a friend of mine, Zappos truly keeps this promise. She was such a convincingly satisfied customer that I just might take a look there.

Before I check Zappos, though, I will stick to my method. When I buy clothing or shoes online, I go to ebay. People think I am insane for doing this; reactions range from “How do you know it will fit?” to “How do you know it’s not used?” I especially do not get any slack for the latter when I am buying shoes. My answer to these questions: I don’t. However, in my experience, descriptions of the items, as well as pictures from many angles, are accurate. For clothing, I look for the tag-it is a red flag if it is missing. Then, I either go to the store to see the item in person, or flock to the store’s website to see the official picture and retail price. Only then do I determine whether or not I want to buy the item. When it comes to clothing being sold by an infrequent ebay seller, you often can bid, leaving room for tremendous savings. However, a new trend has emerged on ebay, in which people who sell large volumes of clothing create a virtual “store”. While the prices are often fixed, the major boon of the virtual store is that you can browse for multiple items that are similar in style. In that respect, virtual stores similar to brick and mortal ones, except for the fact that you need not lug around clothing you are considering, nor must you tirelessly go through many racks. In my experience, I have had much success using both ebay forums, and I am happy to say that all the items were unused and cost far below retail. The major downside to online shopping, through, is that sellers often force you to pay more by charging outrageous sums for shipping. Really, there is no need for something, unless it is china or porcelain, to require priority mail! In some cases, I have actually decided against buying something, despite the item’s low price, because the final cost of the transaction actually exceeded the retail price!

Just seeing this sign makes me nostalgic. Daffy's motto really resonated with me, as you can imagine.

Just seeing this sign makes me nostalgic.

While shopping online is all the rage nowadays, do not forget about the opportunity for extreme savings at brick and mortar stores (in addition to Lord & Taylor). In the past, there used to be many off-price retailer stores. In places such as Syms, Filene’s Basement, and Daffy’s, one could buy various designer duds at a discount. Personally, I was not so keen on these stores, which had a tendency to sell clothing that looked rather dated. Daffy’s, in particular, was a hit or miss store. Unfortunately, due to the financial pressure from the Great Recession and the growing competition from online shopping, many were forced to declare bankruptcy and liquidate (convert all assets, such as inventory, to cash by selling them so as to pay off existing debts).

Secret: At Banana Republic Factory Store and Gap Outlet, show your AAA card to get an additional 10% off! Crazy enough, this discount doesn't apply to the regular stores!

Secret: At Banana Republic Factory Store and Gap Outlet, show your AAA card to get an additional 10% off! Crazy enough, this discount doesn’t apply to the regular stores!

With the disappearance of such stores, what’s a frugal girl like me to do? Two words: outlet stores. These stores are extensions of the original stores, carrying what was not sold. The fact that this merchandise was not sold does not indicate poor quality. It could very well be that the company manufactured in excess, and therefore selling so much at the original stores was not feasible. Prices at the outlet stores are usually substantially less than those of the original ones. But be careful of a ubiquitous trick they sometimes do. Say, for example, an item is significantly reduced at Gap. If it still does not sell, and gets moved to Gap Outlet, the price of the item might be returned to normal, or have a less substantial markdown. If you want to guarantee that you are paying less than the original price, look at the sales and clearance section-that is where I find my best deals! I love casually telling people that I paid a mere $8 for a certain skirt from Banana Republic. (I do not think it is dishonest to say this, even if it is from the outlet store, because both sell the same merchandise.) Just like the case with Lord & Taylor, you can buy quality clothing for major markdowns, but still look trendy and chic.

I hope this blog will further help you save money when you go shopping for clothing for Spring Break! It might be tempting to splurge on the new arrivals for the summer, but I beseech of you to not give in!

Published in: on April 3, 2014 at 4:17 am Comments (0)

My Most Powerful Shopping Secret: How to Shop at Lord & Taylor for Cheap

When you see the sign for Lord & Taylor, you should not be intimidated by the artificially high prices of new inventory. The possibilities for major savings are infinite!

When you see the sign for Lord & Taylor, you should not be intimidated by the prospect of artificially high prices on new inventory. The possibilities for major savings are infinite!

As someone with a reputation for being able to buy anything and everything at rock bottom prices, I am often inundated with requests to join friends in their shopping excursions. With a few rare exceptions, I go shopping solo, to the chagrin of many. I do this not because I am anti-social (I frequently chat with store employees and friends whom I bump into), but rather because I feel that my slow perusal of all the racks will bore them and make them impatient. To everyone’s surprise, myself included, I find the best bargains (or as I say in Hebrew, metzias) at Lord & Taylor. The other day I had an incredibly successful trip there, paying barely 10% retail. Having critically analyzed Lord & Taylor’s business structure, I have uncovered a foolproof way to exploit maximum savings.

Lord & Taylor markets itself as being glam and too expensive for the layman. Who goes around looking like this?

Lord & Taylor markets itself as being glam and too expensive for the layman. Who goes around looking like this?

When I tell people who are on a tight budget to try Lord & Taylor, I am met with severe skepticism. The public perception is that it is an upscale chain geared toward the Upper-Middle class. Lord & Taylor promotes this image by selling luxury labels and formal attire. Moreover, you often see well-off, middle-aged women shopping for a cocktail dress for the new season. But then, of course, there’s me, looking disheveled in a graphic t-shirt and a messy bun, and on the prowl for a good deal.

Lord & Taylor facilitates the bargain hunting process. However, you must be willing to exhibit self-control. No matter how much you fall in love with something from the new season’s shipment, you must resist buying. Paying the original, full price is antithetical to the fundamentals of bargain hunting, and it pains me to know that the store can successfully take complete advantage of you.

Don't worry if you forget to print it-you can get Lord & Taylor to automatically text it to you!

Don’t worry if you forget to print it-you can get Lord & Taylor to automatically text it to you!

In order to maximize savings, it is critical that Lord & Taylor is both having a sale and is circulating a coupon; if you go when only one is true, you will not achieve the absolute best deals. The possible coupons issued are 15% off regular priced items, 20% off sale and clearance, and, my personal favorite, $20 off $40 or more. (You can even combine the latter with one of the former coupons!)  My theory for why Lord & Taylor began issuing the money bonus coupons is to increase the cash flow in the stores; even with a loss of $20, it will still increase its cash on hand by at least $20, if not more (it is often difficult, but certainly not impossible, to spend exactly $40). But be careful, as sometimes you are not able to use the savings pass on their special Anniversary Sale, which is currently going on. In order to get the biggest bang for your buck, flock to the clearance rack and use these coupons- you will get savings on top of the discounted prices. Clearance often has a stigma attached to it. However, in Lord & Taylor, with its selection of fancy clothing and shoes, this section is of the same quality as the rest of the store, albeit a bit messier.

This is another good deal I got. Unfortunately, the employees were very anal about the minimum purchase price being $40; $39.99 was too little. Not to be deterred, I headed to the clearance section in the socks department. That put me over the minimum required balance, and I got the sweater for around $16. A good deal, considering the fact that it is Cashmere(so soft)!

This is another good deal I got. Unfortunately, the employees were very anal about the minimum purchase price being $40; $39.99 was too little. Not to be deterred, I headed to the clearance section in the socks department. That put me over the minimum required balance, and I got the sweater for around $16. A good deal, considering the fact that it is Cashmere(so soft)!

This plan sounds good in theory, but does it work? Yes. Recently, I bought a dress that, on clearance, was $30, but with a 20% coupon, cost $24. On Friday, I returned to Lord & Taylor and found a nice shirt for $10. A light bulb went off in my head. I returned the dress and rebought it with the shirt, for a total price of $40. I had a $20 off $40 bonus coupon as well as the 20% coupon, and ultimately paid $16-paying less for 2 items than what I had originally paid for just the dress. Did I mention that the dress is Ralph Lauren and originally retails for $135? If that isn’t proof enough, then I do not know what will convince you!

Part of the appeal of Lord & Taylor is that shoppers can have a shopping experience in a neat, relaxed ambience. By having so much clothing, Lord & Taylor often gets cluttered and messy. An aesthetically unappealing store will deter customers, guaranteed.

Part of the appeal of Lord & Taylor is that shoppers can have a shopping experience in a neat, relaxed ambience. By having so much clothing, Lord & Taylor often gets cluttered and messy. An aesthetically unappealing store will deter customers, guaranteed.

The reason I am able to get such good deals is not only due to my penchant for perceiving them from a distance. Lord & Taylor in particular has a terrible business model, which makes bargain hunting extremely easy. The main reason Lord & Taylor is not growing like its competitors is due to a major flaw: excessive inventory. Lord & Taylor gets far too much clothing and shoes, much more than it can possibly sell. Consequently, it is often forced to sell them at the end of the season at a loss.  One would think that a chain that prides itself on its exclusive ambience would try to distinguish itself from Target, which often suffers a similar problem. The only difference, though, is that Target has a high inventory turnover rate, meaning that the goods do not stay on the shelves for very long before being bought. This is not the case with Lord & Taylor, where a pricy item will linger on the rack. And forget about trying to clench an extra discount by pointing out that something is ‘Defective Merchandise’. Normally, stores do not want such inventory, and are willing to sell it at a discount because people will otherwise not buy it. Lord & Taylor corporate policy, on the other hand, is now not to give discounts for such items, but rather to ship them back to headquarters. Not only do they make a loss by not selling the good, but also they must pay even more to transport it again. Another bizarre policy I have noticed is of returning clearance priced items back to the original price (if the same style is reissued for the new season). Suddenly, my Sperry’s that I bought for $24 scan for $80!

I am afraid that these bad policies will lead to the demise of my favorite store. I love getting a terrific bargain, but I would be upset if Lord & Taylor were forced out of business due to mismanagement. Regardless of the corporate policies, it would behoove you to immediately take advantage of the possibility for extreme savings!

Published in: on March 30, 2014 at 4:38 am Comments (0)

Facebook Fiasco: The Acquisition of Whatsapp

You are deluding yourself if you say that you do not see this name at least thrice a day.

You are deluding yourself if you say that you do not see this image at least five times a day.

On both our smartphones and our computers, Facebook dominates our lives. It plays a major role in society, whether we would like to admit it or not (I will admit it. But I am not addicted-I swear!) Thus, it makes sense that anything Facebook does causes a major stir among investors. It bought Instagram nearly 2 years ago for $1 Billion (a genius move considering Instagram’s popularity among both people and companies alike) and, as I previously discussed, it went public. Most recently, Facebook made headlines when it announced that it would be acquiring Whatsapp for a staggering $19 Billion. (“Leora, let me guess, your next blog is going to be about Facebook’s acquisition of Whatsapp, right?” asked a friend of mine. Just to prove him wrong, I am writing about this event now, a few weeks later, after having followed the latest developments. I refuse to be predictable!) This pricey business move, which involves two widely recognized companies, speaks volumes about the nature of mergers and acquisitions, and will have a tremendous impact on Facebook as we know it.

In the investment world, and especially the young and highly unpredictable technology field, $19 billion is a significant sum. Facebook will be acquiring Whatsapp in a combined deal of cash and equity: $4 billion cash and $12 billion of stock (the rest over the course of 4 years). Obviously, Facebook is not carrying out this deal entirely in cold cash; having so much free cash flow would actually be disconcerting, for it would indicate that the company is not wisely investing its money in developments and market securities.

There are so many social media platforms nowadays. Facebook felt the pressure to make it sure it remains on top. It doesn't want to end up like Myspace. Who uses Myspace nowadays? Exactly.

There are so many social media platforms nowadays. Facebook felt the pressure to make sure it remains on top. It doesn’t want to end up like Myspace. Who uses Myspace nowadays? Exactly.

Why did Facebook decide to acquire Whatsapp? Simple: it wants to dominate the social media market. Beforehand, it faced little competition. Now, it must contend with various other social media outlets/communication platforms that take away its users. It is not uncommon to hear people, especially hipsters, proclaim that they are done with Facebook and have deactivated their account. (Ironically, these same people post filtered pictures on Instagram ad nauseam. Facebook owns Instagram, remember?) Facebook noticed that its popularity was waning, especially in comparison to Whatsapp. The truth lay in the numbers: Facebook has 100 million users, while Whatsapp has 450 million users. While I am not part of the latter statistic since I do not have a smartphone, I was aware of Whatapp’s strong presence. Facebook was, too, and decided to be proactive about this competition.

Based on the graph, it is clear that Whatsapp has exploded in popularity. Yet when determining the price, one must analyze various metrics-ie EBITDA, P/E ratio, ROE, ROA...

Based on the graph, it is clear that Whatsapp has exploded in popularity. Yet when determining the price, one must analyze various metrics, such as EBITDA, P/E ratio, ROE, ROA… These are some simple metrics that are important to know if you consider investing in the stock market.

 

Getting rid of the competition before it is too late is a wise business move. But at $19 billion, did Facebook overpay? Granted, Whatsapp is a ubiquitous feature on many a smartphone. However, the acquisition price must reflect a number of factors. When calculating the purchase price, the buyer must consider yearly profits, the target’s total debts, the industry multiple, and goodwill, to name a few factors. Purchasing a technology company for so much money conjures up memories of the early ‘00s, during the dot com bubble-and the subsequent crash. Companies paid exorbitant amounts to acquire other target companies, anticipating that the value of these companies would continue to appreciate in value; unfortunately, most were forced to ultimately declare bankruptcy. This leads me to wonder: is Facebook so confident in its future success that it believes it can avoid the same fate as those of many top-performing companies nearly a decade ago?

Mergers and acquisions are frequent in the airline industry. This definitely has something to do with teh fact that the airline industry is a money losing business, for they have high fixed costs but are always concerned with covering the marginal costs by filling that last seat right before takeoff. Unfortunately, fewer companies means less competition, which results in higher prices.

Mergers and acquisitions are frequent in the airline industry. This definitely has something to do with the fact that the airline industry is a money losing business; they have high fixed costs, but are always concerned with covering the marginal costs by filling that last seat right before takeoff. Unfortunately, fewer companies means less competition, which results in higher prices.

 

While mergers and actions occur often, we only hear about them when they involve large companies (Note: acquisitions entail one company swallowing up another. Mergers involve combining companies into a distinct, new one, and it is usually marked by a name change.) Not only is there more publicity because people are interested in fate of their shares, but also because the government may choose to get involved. Since America has a mixed economy, the federal government might get involved when companies try to merge or acquire one another in order to prevent monopolies from forming. Monopolies do not allow for any competition, thereby enabling businesses to charge whatever price they wish. In this instance, the government’s role is to protect the people from being exploited by callous businessmen. (Next time, though, try exhibiting more efficiency. Government shutdown, anyone?) There are many laws, such as the Sherman Anti Trust Act and the Clayton Anti Trust Act, that were put in play about a century ago to do just that. Clearly, the more things change, the more they stay the same: the fact that these laws are still so relevant proves that business is still business, no matter the era.

I personally think that the acquisition of Whatsapp was a mistake. Not only do I think that Facebook overpaid, but I also think that the companies will not work well together. Whatsapp is inherently private, while Facebook is marked by its public space. Such fundamental differences will breed major problems in the future. After all, an important determinant of a successful merger/acquisition is that the company culture and ideals mesh well. In this case, Whatsapp will ultimately sacrifice its unique identity for the sake of bolstering Facebook’s popularity. One thing is certainly clear: once this acquisition is carried out, Facebook will surely metamorphose into Worldbook.

Published in: on March 18, 2014 at 2:57 am Comments (1)

JP Morgan Trip with Queens College

In addition to being in charge of NPP, Professor Miller is also a professor in the BALA program.

In addition to being in charge of NPP, Professor Miller is also a professor in the BALA program.

About two weeks ago, I had the incredible opportunity to participate in the New Professional’s Program event entitled “Day on Wall Street”. For those of you who do not know, New Professionals Program is a recently established student service that provides various methods of training and preparation for entering the job market. Since there is so much competition when applying to a job, you should definitely take advantage of this invaluable resource. Veterans in the business world, Professor Denise Miller and Ms. Diane Shultz are responsible for NPP’s instant success; it baffles me how Queens College students survived without having their guidance! But I digress. The goal of this event, which took place at JP Morgan, was to give students who are contemplating a career in finance a glimpse into what the job entails. Though I was there for only 7 hours-a fraction of any employee’s workday- I gleaned a tremendous amount in a day packed with information.

After waking up at 5:30 AM (on my day off!) and bracing the biting cold, I arrived at JP Morgan ready for what lay in store. The first item on the itinerary was the Morning Call, in which a panel of about 4 individuals explained, discussed, and analyzed the contents of a confidential handout that listed industry trends, different companies, and business strategies to the audience of employees. Sitting in the back row with my fellow Queens College peers, I looked around the room and noticed a pattern. Besides for the fact that JCrew or Banana Republic seemed to be the popular choice of attire, almost everyone carried a Starbucks venti coffee. I pride myself in never drinking coffee, but I was not surprised to see this, considering the long day in store for them!

Just to avoid a lawsuit, I blacked out the names of the people who met with us. As you can see, it was a packed day!

Just to avoid the possibility of a lawsuit, I blacked out the names of the people who met with us. As you can see, it was a packed day!

Following the Morning Call, we headed off to a pristine business room where we were treated to a delicious breakfast. Now that we were fully awake, we heard from a variety of speakers. There had been a great deal of thought put into planning this event, and it showed. The order of the speakers went up the ranks of employees, from analysts to associates to bankers. The progression reflected the JP Morgan culture; as you work there longer, you get promoted to a higher position.  After each group of speakers, we had a ‘break’, which functioned as time to network with the speakers one on one. In my opinion, these networking opportunities were the most invaluable part of the day: we were able to converse with the employees and get personal advice. At first, the prospect of networking with so many successful businesspeople intimidated me, but soon enough I was comfortable, knowing that these individuals were just human, and had once started out in my position, too.

Over the course of the day, there were certain themes and lessons that were reinforced. Firstly, all the employees emphasized the importance of being a team player. I was initially skeptical, given JP Morgan’s indelible label as being cutthroat. However, as I thought about it, I realized that being extremely driven and being a team player are two characteristics that are not mutually exclusive. Rather, they are ingredients that together result in maximum success.

Achieving success, and ultimately getting places, is impossible to do on your own; nobody gets anywhere by themself. A second important lesson was that networking is crucial. It happens everywhere, whether you realize it or not. Furthermore, connections you foster must be maintained; it is not enough to simply strike up a conversation with someone, never to speak to them again. You want people to remember you.

JP Morgan and Morgan Stanley. Both have a similar name, but are NOT to be confused.

JP Morgan and Morgan Stanley. Both have a similar name, but are NOT to be confused.

Lastly, they emphasized the importance of being scrupulous. They mentioned instances of reading cover letters in which people write about Morgan Stanley, which is an automatic X. When applying to many places, it is easy to get mixed up. However, companies as prestigious as JP Morgan seek excellence and perfection. An application is a reflection of you, and therefore any egregious mistake indicates that you are an unqualified candidate.

By the time I left JP Morgan, I felt that I had had an extremely worthwhile, enriching experience there. Unlike many others I have attended, this business event remained true to its title. It was informative, engaging, and interesting, and I look forward to going to another one in the near future!

Published in: on March 12, 2014 at 2:06 am Comments (1)

SAT Inc

Achieve more? Give me a break.

Achieve more? Give me a break.

The SATs. Just the mention of that three letter term (it is no longer an acronym) sends shivers up and down my spine. For most people, talking about the test evokes terrible memories of a difficult time in high school that have been tucked away, unsuccessfully, into oblivion. With so many people having taken it, there are a handful of discernable SAT archetypes that I have identified:

  1. The Overachiever: Preparing since the womb, this stressed individual carries vocabulary flashcards in one hand, and an SAT review book in the other.
  2. The Oblivious One: There is always that one person who forgets something vital the day of the test, such as a calculator or a #2 pencil. While fellow test takers shower this person with sympathy, they secretly think, ”At least it did not happen to me!”
  3. The Underdog: Completely under the radar, this person surprises everyone by doing well. Diligence and/or tutoring helps.
  4. The Braggart: The one who goes around and makes sure that everyone knows his/her impressive score.
  5. The Hated One: The person who barely puts any effort into studying, and gets the highest score. In the ensuing weeks, admirers swarm him/her, while secretly spewing venomous hateful comments in sheer jealously.
  6. The Holy Grail: Someone who manages to balance studying and relaxing, and ultimately succeeds on the test without compromising their sanity. Disclaimer: this individual does not exist.

The SAT plays a crucial role in our society by contributing stress to high school juniors as well as to the overall college application process. Recently, College Board announced that it would be implementing several changes to this standardized test. Though ostensibly innocuous, these changes reflect the true nature of the SAT. This test is not a way to gauge the intellectual capabilities of students; rather, is a money-making scheme.

Atticus Finch was a man of courage and integrity, both inside and out. College Board promotes itself as a company dedicated to higher learning for students, but in reality is seeking profits-just like any other business.

Atticus Finch was a virtuous man of courage and integrity, both inside and out. College Board promotes itself as a company dedicated to higher learning for students, but in reality is seeking profits-just like any other business.

Significant changes have not been made to the SAT since 2005, when the highest composite score was raised to 2400 from 1600 due to the addition of the essay section. Now the scores will return to being out of 1600. The optional essay will be focused more on expressing experiences and opinions, rather than answering prompts. So much for using the tried and true formula of using one literary and one historical example as support-Atticus Finch and the Civil War never let me down. Words deemed too obsolete will also be replaced with jargon more often used in college. Additionally, math concepts will be more focused, with some sections not allowing the use of a calculator. My jaw dropped, though, when I discovered that there would no longer be a ¼ point penalty for wrong answers. This is not the SAT that I had come to hate.

Why is it that the College Board decided to make such drastic changes? College Board is echoing arguments that teachers have been making for years: the SAT is disconnected with the work of high schools. Many of the words that students memorize, not learn, for the SAT are neither used in the classroom nor are part of everyday vernacular. In the math section, questions are often characterized as being “SAT” in nature, and never actually covered in a school curriculum.

In reality, though, I think College Board is trying to make the SAT more attractive because it recognizes that the ACT is a serious threat. While the SAT costs $51 to take and penalizes for the wrong answer, the ACT is $50.50 and allows for guessing without penalty. With people finding the ACT to be more manageable, as well as colleges now accepting it as a substitute for the SAT, more students are registering for this exam instead. College Board now sees that where it once held a firm monopoly, it now faces legitimate competition. Seeing that its current testing policy was unpopular, College Board, like any company desperate to reverse a downward spiral, decided to spice things up.

Every year there is a new official SAT study guide book. Not only does College Board make money from the registration fees, but also from the preparation that goes into taking the test, too.

Every year there is a new official SAT study guide book. Not only does College Board make money from the registration fees, but also from the preparation that goes into taking the test, too.

Of course, everything about the SAT is about making money; the registration fee is simply icing on the cake. There are pricy “new” SAT books that must be updated every year. Once you have the books, you must also hire a tutor. The SAT is notorious for not testing intelligence, but rather for testing the ability to take the SAT-a skill that no teacher can ever impart to a student. (When I volunteered as an SAT math tutor, people could not fathom why I would give up the change to do the exact same thing, except for at least $80 an hour-the starting rate for a novice SAT tutor.) Clearly, this puts underprivileged kids at a disadvantage when they do not have the financial means to gain access to unlocking the code to conquering the SAT. Furthermore, by giving the option of score choice, College Board is favoring students who can afford to take the test multiple times. Also, did I mention that there are fees for sending SAT scores to colleges? By the end of the entire SAT process, parents can easily fork down $3000. Is $1000 a letter really worth it?

It is scary to think that these filled in bubbles can play a significant role in the college you attend.

It is scary to think that these filled in bubbles can play a significant role in the college you attend.

Ultimately, there is a fundamental issue with the SAT as well as the ACT. Why is it that a significant determinant for most Americans to get accepted into college is a test compiled by 2 private companies? College Board feigns sympathy for the test takers by having a Question of the Day, but in reality, it exploits them. Perhaps having a government mandated test, rather than one made by an arbitrarily powerful one, would fairer? New York City has regents, why can’t there be a national version of this?

Published in: on March 6, 2014 at 2:37 am Comments (3)

Shrinking Products, Increasing Prices

So does this mean that the original was of subpar quality? This phrase often unnerved me, rather than pleasing me as companies intend.

So does this mean that the original was of sub-par quality? This phrase often disturbs me, rather than making me excited as companies intended.

Companies are constantly trying to spice up their products in order to keep current customers interested, as well as to reach out to a broader consumer base. New flavorings and new packaging are two examples as to how expansionary marketing tactics are implemented. Recently, I noted that the size and portions of many items on the shelves have been shrinking. You should definitely take note of this trend because it will affect your spending habits. At first you might not notice the subtle difference, but over time you will be keenly aware of the fact that you are spending significantly more.

As you can see from the diagram, there are a few steps between production and actually reaching you, the consumer. The more steps, the more hikes in price.

As you can see from the diagram, there are a few steps between production and actually reaching you, the consumer. The more steps, the more price hikes.

Why is it that items are suddenly shrinking in size? Based on the cell phone market, one would think that companies are all thinking that bigger is better! When creating a product, there are various parts that go into production. Labor, equipment, and ingredients all cost money. When pricing a good, companies add up their expenses and then decide on a price that both covers their costs and leaves room for a profit. (Actually, a middleman gets involved between the manufacturer and the store. By the time the item reaches your shelf, the price has been marked up significantly.)  If the cost of any of these inputs goes up, the company transfers the burden on the customer. It makes sense: if the price of an input rises, then the value of the final good is greater than it was before; therefore, a new price is needed to reflect the appreciation in value. Businesses cannot continue to charge the same amount when it costs more to produce-otherwise they would soon go out of business. And since there is inflation, prices have continuously risen over time. However, because wages have gone up at the same rate, people normally do not feel such a pinch on their bank accounts.

Of course, this normally happens in a healthy economy. As I have mentioned in past blogs, the US economy is still very fragile. While it is indeed expanding, growth is very tepid. Businesses are afraid to do anything too drastic, lest they set off a negative response and cause sales to plummet. Knowing that increasing prices is not the appropriate tactic in this scenario, they chose a creative and discrete method in order to offset the rising cost of inputs.

A graph depicting the Law of demand. As the price (on the y axis) goes down, the quantity demanded (the x axis) increases.

A graph depicting the Law of demand. As the price (on the y axis) goes down, the quantity demanded (the x axis) increases.

         Their solution: shrink the size of their goods, but keep prices the same. That way, they would actually be charging customers more, but in such a subtle way that many would not notice. Psychologically, they reasoned, people are more likely to notice a price hike of $0.20 than to notice that an item is 0.5 ounces smaller. This way, they successfully circumvent a fundamental rule in economics, the Law of Demand, which dictates that demand decreases when price increases. Furthermore, by using a new shape, a company appears more modern and dynamic, thereby attracting more attention. Genius!

A conspicuous example of shameless shrinking is evident in the new Chobani yogurts. For a while, I was ecstatic with this Greek yogurt company. Its products are yummy, healthy, and cheap (using this coupon which often doubles). Did I mention that their key lime pie

It might not have as fancy a facade as the brand name, but it tastes just as good. Never judge a book by its cover-in the case of saving money and getting more, the generic brand is a win-win.

It might not have as fancy a facade as the brand name, but it tastes just as good. Never judge a book by its cover- by paying less overall and getting more for what you paid, the generic brand is a win-win.

flips are to die for? The American market shares similar positive sentiments about Chobani, as it has become the latest official craze. Unfortunately, what was originally sold at 6 ounces is now only 5.3 ounces. How did Chobani divert attention from the smaller size? It began labeling the new containers as being “under 100 calories” because it knew that its health conscious audience would respond well to the lower calorie content. Though I eat healthy for the most part, I did not view this positively. As someone who is capable of eating A Lot, I realized immediately that fewer calories mean less volume. (I figured this out with my brain, though, not my stomach.) Unfortunately, many people are not so acutely sensitive to being ripped off; many people I asked did not realize that the Chobani yogurts were smaller. Looking at the shelves in Shoprite, I noticed that the generic Greek yogurts were still the original 6-ounce sizes. Thus, they are not only cheaper than the brand name at face value, but also proportionally, as they cost substantially less per ounce.

The original shape and size of Chobani yogurts. This is 6 ounces.

This is the original size and shape of Chobani yogurt. It is 6 ounces.

This is the new shape you might have begun to see on shelves. New features include a more defined rim, a claim of being 100 calories, and 5.3 ounces label.

This is the new shape you might have begun to see on shelves. New features include a more defined rim, a claim of being 100 calories, and 5.3 ounces label (bottom left).

 

 

 

 

 

 

 

 

 

 

 

Not all foods are shrinking, though. Since the 1970’s, fast food portions swelled in size.  A sad reality in a world struggling with

And we wonder why people are struggling to maintain their weight in today's society...

And we wonder why people are struggling to maintain their weight in today’s society…

an obesity problem, and probably an important contributing factor, value sizing is a way to make consumers feel like they are getting the biggest bang for their buck. The food is already dirt cheap, so companies can afford to increase the portions.

Why is it that some companies are decreasing portions while others are increasing them? I have two possible answers that are based on two different economic concepts.

Firstly, everyone tries to maximize his or her own utility, or happiness. For people who eat healthily, their utility will not be greatly impacted if there is less Chobani. They are trying to maintain their weight and realize that eating this Greek yogurt, no matter how much, is still good for them. People going out for fast food, on the other hand, are concerned with buying food at a low price. The more they get, the greater their utility. Imagine if, at a drive-thru, you get an order of fries that is half the size it used to be. You would not be happy.  Companies realize this discrepancy and act accordingly. Not only does the utility of fast food eaters go up more if the size increases, but also the cost of doing so is significantly cheaper.

blog 5.8 hipster healthy

Hipsters, notorious for being a part of a wealthier demographic, are willing to spend more to eat healthily.

Cost affects consumer behavior as it does business behavior. Elasticity is the degree to which supply or demand is sensitive to changes in price. In the case of changing portion size, elasticity clearly manifests itself. When Chobani changes the size of its product, thereby making it more expensive, demand is highly inelastic- people will continue to buy it despite it costing more.

Ever seen this at a local Drive-thru? Probably not, because people buying there are most likely on a strict budget.

Ever seen this at a local Drive-thru? Probably not, because people buying there are most likely on a strict budget.

To eat healthily, they are willing to pay more. However, when it comes to unhealthy food, demand is extremely elastic. Increase the price by even a small amount, and a large number of people will stop buying. The appeal in this type of food is, after all, in its cheapness; it certainly is not heart healthy. The only way to appeal to more consumers in this case is either by decreasing the price or by increasing portion sizes. Since we live in a time of rising prices, the latter is the more plausible method.

Because of external influences such as store promotions, sales, and tax hikes, prices are always in a state of flux. Since the subtitle of this blog is “financial advice from yours truly”, I feel that it is my responsibility to enable you to legally acquire things for the cheapest price. The first way to do this is by being on the lookout for business tactics that trick consumers into paying more than they need to. Be conscious of prices, but more importantly in this case, beware of the shrinking sizes!

Published in: on February 23, 2014 at 6:28 am Comments (0)

Internships: Paid Slave Labor or Legitimate Learning Experience?

The fact that you can even see one car in this picture is surprising, given the sheer quantity of snow that has fallen in the past few weeks.

The fact that you can even see one car in this picture is surprising, given the sheer quantity of snow that has fallen in the past few weeks. At this rate, they should start offering  internships for snow related professions!

Snow might be covering everything as far as the eye can see, but I know what most of you have on your minds: your plans for the summer. As college students, you can no longer dawdle during your vacation. Ask anyone and they will say that they have applied to a number internships. Internships have exploded in popularity recently and play a critical role in the job sector of the economy.

Apprentices often bring to mind early America (think Benjamin Franklin), when teenage boys worked alongside men in various professions. Internships are the 21st century version.

Apprentices often bring to mind early America (think Benjamin Franklin), when teenage boys worked alongside men in various professions. Internships are the 21st century version.

What exactly is an internship? It is similar to an apprenticeship, but not quite. An apprenticeship is job specific and usually involves working alongside an expert in the field. An internship, on the other hand, is much more broad in nature. It is an opportunity to be exposed to a field in which someone is potentially interested. A successful internship is a learning experience and gives the intern a thorough idea of what a particular job or line of work entails. Since it is an experience, though, it has slowly been transforming into fodder for padding one’s resume. As a result, having one internship in which you actually do meaningful work is often perceived as less impressive than having a plethora of internships in which your main function is to organize a pile of papers. That, then, begs the question: quality or quantity?

Potential interns wait in line and are treated like they are part of a slave auction: they are cheap labor with little to no rights.

Potential interns wait in line and are treated like they are part of a slave auction: they are cheap labor with little to no rights.

Of course, hiring someone to work as an intern raises the issue of money. An intern clearly does not have the title of employee. Do they legally need to be paid? If so, must they also be paid at least minimum wage? At first, I thought the answer was obvious: working as an intern without receiving any form of monetary compensation is akin to slave labor! Legally, as always, the issue is much more complex. There is a six factor test issued by the Department of Labor that dictates the following 6 criteria that qualify an internship to be unpaid:

  1. The internship is similar to training which would be given in an educational environment. (You actually learn something from it!)
  2. The internship is for the benefit of the intern. (The company provides you with the opportunity to be exposed to the field you applied for, and not be forced to do meaningless, unrelated work.)
  3. The intern does not displace paid employees. (The company cannot make you do something in place a current employee so as to avoid having to pay the hired worker.)
  4. The company provides the training and derives no immediate advantage from the activities of students, and, on occasion, the operations may actually be impeded by the training (The company must train you as to what to do, and it cannot use you for worthless tasks, such as fetching coffee.)
  5. Students are not necessarily entitled to a job at the conclusion of the training period. (The intern knows that s/he is not guaranteed a job at the end.)
  6. The employer and the student understand that the student is not entitled to wages for the time spent in training. (Both parties involved know that this is free labor. The company knows that they are getting a good deal, and the intern knows that s/he is getting the short end of the bargain- but is still willing to do so.)

Companies obviously want to avoid having to pay interns at all cost (pun intended) and therefore want to fulfill these criteria. Realistically, though, it is almost impossible for them to do so; most do not care about the intern’s learning experience. As a result, they frequently stretch the truth as to the nature of the internship. Most likely, they lie. You should be well aware of the fact that even a lunch or transportation stipend still does not legally cover the requirement for receiving a wage. Simply put, most unpaid internships are illegal.

Outrageous internship demands have been immortalized in The Devil Wears Prada.

Outrageous internship demands have been immortalized in The Devil Wears Prada.

Many people believe that internships are ethically problematic on multiple levels. One major issue is that of wages. Companies will pay either abysmally or, if possible, nothing at all. In their eyes, the intern is simply cheap labor. Unlike employees who commit to a company, interns come and go. Accordingly, they are viewed as worthless and are given meaningless, tedious work that is unrelated to the job. Companies are notoriously cavalier when it comes to intern exploitation; they have no qualms about asking interns to do petty favors, such as fetching a cup of coffee. It becomes rather difficult, almost impossible, to glean insightful experience about the job when you have no active exposure (except maybe to slave labor)!

 

This is JP Morgan Chase's CEO Jamie Dimon. Recently JP Morgan has come under fire for hiring the children of many Chinese elite in order to win business with their parents.

This is JPMorgan Chase’s CEO Jamie Dimon. Recently JP Morgan has come under fire for hiring the children of many Chinese elite in order to win business with their parents.

Besides for the actual institution of internships, there is also a great deal of controversy regarding those who are actually accepted. There are a plethora of internships available, but because companies sense student desperation, they continue to be selective. You can find them by searching online, or, more specifically, on LinkedIn. Applying is the easy part; the real battle is getting a nonautomated response. The best way to circumvent this annoying roadblock is by getting an internship through a connection. I have frequently witnessed people who get an internship through a family member or a family friend. This method has a higher rate of success in terms of getting a legitimate internship. However, it is very unfair because it reinforces the age-old problem of nepotism. People can will lounge around and passively wait for an opportunity to head their way. Laziness is condoned, while ambition is unrecognized. C’est La Vie.

In economics, the concept of barriers to entry is discussed in relation to the various types of market structures. In a perfect, or pure, competition, no participants have enough influence to be market takers and influence the price of the items. There are many companies that sell the same product, and it is therefore easy for another company to join the market. However, in a monopoly, where there is one party that controls the market of a certain item and consequently, the price, it is nearly impossible for a company to join the market that is already completely dominated.

In economics, the concept of barriers to entry is discussed in relation to the various types of market structures. In a perfect, or pure, competition, no participants have enough influence to be market takers and impact the price of the goods. Every item is practically identical and therefore costs the same. With  every company selling the same product and bearing the same amount of influence, it is easy for another company to join the market. On the other hand, in a monopoly, there is one party that controls the market of a certain item and, consequently, the price. As a result, it is nearly impossible for a company to join a market that is already completely dominated.

A former professor of mine raised another issue. I knew he would have an opinion on the matter, and he did not disappoint! He argues that the institution of internships ultimately serves the upper class. For one, the wealthy have more pull and connections with top companies. On a more economic level, those who are not financially stable cannot afford to take off from their paid job and spend a few months as an unpaid intern.  The opportunity cost of missing a paycheck is far greater than the experience they could potentially gain from an internship. Furthermore, there is an economic concept called the Time Value of Money, which states that a given amount of money at the present moment is worth more than the same amount in the future. There are a few formulas for calculating future and present value, but the basic gist is this: by saving your money now and investing it, you can make more money. If you spend it, you lose that money plus any interest you could have made on it. Similarly, even if an internship increases the prospects of landing a well paying job in the future, the paycheck you receive now is, in comparison, more valuable. An internship, which is supposed to be an opportunity for learning and growth, therefore services to a privileged demographic. Furthermore, barriers to entry (exactly what it sounds like- something that prevents you from entering) exist for people trying to enter all job fields. However, barriers to entry acutely impact members of the lower class, who lack the many opportunities that are available to the wealthy. Therefore, by not partaking in any internships, they further lose out on experience necessary to break through the barriers to entry of a particular industry and to get a good job.

Because of the unpredictable nature of the economy, it is important to get internships. Granted it is disgusting the way in which many companies are exploiting young workers; often, they use interns as a way to circumvent the cost of paid employees. In fact, I read a recent article in which college graduates could not land a job, but they were hired, time and time again, as interns. It is a sad reality that the competition for internships now is not among college students and their peers, but also rather with recent graduates who should be in the pool of employed workers!

I could have made a fortune as a private SAT math tutor. Instead, I helped underprivaleged high school students who could not afford $100 an hour tutors. In that way, I helped even the playing field of those taking the SAT, so they had just as great a chance to do well as the wealthy students who hired private SAT tutors.

I could have made a fortune as a private SAT math tutor. Instead, I helped underprivileged high school students who could not afford to pay $100 an hour. As a result, I helped even the playing field of those taking the SAT; my students were as prepared to take the test as the wealthy students from private schools.

Last year, I applied ad nauseam to many positions, only to get rejected by all of them. Instead of getting bogged down, I chose to volunteer at Let’s Get Ready instead. I had to work hard (I also took 2 summer classes!), but in the end, the experience was rewarding. I felt that I had truly accomplished something- I had impacted people’s’ lives. Of course, an extra bonus was that I could add that experience to my resume. Future employers would see that I am not just ambitious, but also altruistic. Internships are an important part of any college student’s resume, but do not forget that there are other options, too!

Published in: on February 17, 2014 at 9:17 pm Comments (1)

$hmalentine’s Day

 

I cannot tell you how many times I witnessed a scene like this , in which a couple takes up an entire bench. It would be cute if the scenic view were not Powerdermaker Hall. Not exactly what I would call 'picturesque'.

I cannot tell you how many times I witnessed a scene like this , in which a couple takes up an entire bench. It would be cute if the scenic view were not Powerdermaker Hall. Not exactly what I would call ‘picturesque’.

 

Wherever you go on campus, you will inevitably spot a young couple that is unapologetically in love, especially one on the cusp of engagement. I hope you exhibit more self-restraint than I do by refraining from staring and making a disgusted face; in my defense, they are everywhere! The romantic ambience will only become more visible, or more unbearable, on Valentine’s Day. The fluffy teddy bear, the bouquet of roses, and the box of chocolates are all indelible markings of the painfully cliché, Hallmark sponsored holiday. The good news for all of you single folk is that you can cash in on the many available sales that companies market to all those who are love-struck.

Obligatory Forrest Gump quote: Momma always said, 'Life was like a box of chocolates. You never know what you're gonna get'".

Obligatory Forrest Gump quote: Momma always said, ‘Life was like a box of chocolates. You never know what you’re gonna get’”.

Like on Halloween, chocolates on Valentine’s Day are on sale. The difference is that on Valentine’s Day, they are wrapped in quaint, heart shaped pink boxes. While they are intended as gifts for a significant other, there is no reason why you cannot treat yourself to some high quality chocolate. If you are content being single, they will serve as an effective pick me up snack; if you are miserable as the third wheel-a situation that I personally find awkwardly amusing-you can pretend that a lover gave you the gift.

Random fact: this ubiqutous logo actually depicts Lady Godiva, who, according to legend, rode around on a horse nude in midday in order to persuade her husband to ease the tax burden on the people.

Random fact: this ubiquitous logo actually depicts Lady Godiva, who, according to legend, rode around nude on a horse in midday in order to persuade her husband to ease the tax burden on the people. Fascinating story? Yes. Fitting for chocolate? Not so sure.

If you want to indulge on a little bit of fancy chocolate at no expense, look no further than a Godiva store. While the franchise promotes itself as an elite chocolatier for the upper class, it is in fact accessible to everyone. By joining its membership club, which simply entails giving your email, you are allowed one free chocolate a month. No catch at all! Note, though, that the freebies do not roll over and accumulate. As someone who does not quite know the concept of self-restraint when it comes to eating chocolate, I find this policy to be the perfect way to indulge my sweet tooth without feeling guilty afterward. Of course, Godiva is not doing this in order to befriend customers. Rather, the prospect of free chocolate entices people to enter its stores; once there, they are more likely to buy something. I admit that getting the chocolate from the cashier and simply walking out is often awkward. However, one look at the astronomical prices allays my uncomfortable sentiments.

Last year on Valentine’s Day, I saw people pay full price for roses. I was curious as to what would happen to the supply afterward. As I suspected, prices were slashed the following day. Unlike other holiday specific goods that go on sale, flowers die relatively quickly and do not last. The lower prices reflect sellers’ desperation to get rid of something that can only temporarily remain a part of their inventory.

blog 3.4 tulip graph

The price of tulips kept rising and rising, until it suddenly plummeted, just like what happens with every economic bubble.

The sharp decline in the value of roses after Valentine’s Day reminds me of another floral related event that impacted the economy: the Tulip Mania in Holland. In the 1600’s, the price of tulips skyrocketed, and people invested heavily in these popular flowers. Predictably, the bubble soon popped and the value plummeted, thereby leaving many people devoid of life savings and property. While a long line for a bouquet of roses on Valentine’s Day is not quite the same as the Dutch craze for tulips, both events show that even a relatively simple commodity such flowers can have an impact on the economy on a grand scale.

Valentine's Day "specials" are really just a way to lure in customers to spend money.

Valentine’s Day “specials” are really just a way to lure in customers to spend money.

While there are no general sales in honor of Valentine’s Day, you still have the opportunity to save money. Now that the semester is in full swing, you undoubtedly need something saccharine to counteract your bitter cup of coffee. Through some simple cost-benefit analysis, I would suggest that for a college student strapped for cash, a discounted box of chocolates is a much more worthwhile investment than is a teddy bear or a bunch of flowers.

Published in: on February 11, 2014 at 1:56 am Comments (1)

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