Rx: Competition

By | 2017-07-17T16:46:20+00:00 July 10th, 2017|Global Market Update|

What’s wrong with the health care debate? Public Domain. Source: Wikipedia I don’t pretend to have a solution. Health care is complex and multi-faceted, with lots of market and non-market elements. And it’s huge: a sixth of our $20 trillion economy. But one thing that’s so disheartening about the debate is that it mostly focusses on the demand side of the equation. Health insurance, Medicare, Medicaid, exchanges – these are all ways that we get access to care. It’s as if we debated food [...]

Competition, Information, and Prices

By | 2017-07-17T12:21:28+00:00 March 2nd, 2017|Global Market Update|

What is asymmetric competition? Photo: Miguel Vieira. Source: Wikipedia Asymmetric competition is when companies are rivals but have different bases to compete from. For example, Jaguar may compete with Mercedes in the luxury auto market, but if there are no dealers that sell Jags within 100 miles of where you live, can you really say that consumers have a choice? They may be rivals, but you can’t really say that they’re competitors. The same thing happens with pharmaceuticals. A big drug company develops and [...]

The Prize Economy

By | 2017-07-17T12:21:34+00:00 December 14th, 2016|Global Market Update|

There’s a prize for that. Photo: Douglas Tengdin Increasingly, organizations are using prizes to encourage innovation. Know of a way to improve smartphone voice recognition? There’s a $10,000 price for that. Design a delivery drone? $50,000. Got a solution for how to repurpose carbon emissions to reduce the potential for global warming? That’s worth over $50 million. If you can think of a persistent, society-wide problem, there’s probably a prize associated with it. McKinsey & Co. estimates that there are over 30,000 significant prizes [...]

Trading Nations

By | 2017-07-17T12:21:41+00:00 October 6th, 2016|Global Market Update|

What effect does trade have on our economy? Diagram of US trade flows. Author: Tony Cohen. Source: Wikipedia Of all the issues raised in the current political season, surely the most overrated has been free trade. To hear the candidates talk about it, you’d think the worst issue affecting our economy has been bad trade deals with Canada, Mexico, and China. While these three countries happen to be our biggest trading partners, trade just isn’t that big a deal in our economy. In the [...]

Something Old, Something New

By | 2017-07-17T12:22:26+00:00 September 30th, 2015|Global Market Update|

What countries are the most innovative? Source: Morguefile It’s not an easy question. In addition to counting the number of patent applications, you need to examine the number of peer-reviewed articles, how widely that research is disseminated, new business formation, royalty and license fees, export revenues, even video uploads onto the internet. Innovation is important. Not only is it a key driver of economic success, but it also can improve our quality of life. In Africa, for example, access to clean water allows children [...]

Healthy Together?

By | 2017-07-17T12:22:42+00:00 July 9th, 2015|Global Market Update|

Why are health insurance companies consolidating? Source: Public Domain Pictures Aetna is buying Humana. Anthem wants to buy Cigna. And United Health wants to buy Anthem. The merger-talk among the big health insurers has a lot of people confused and worried. If all these firms combine, will we just be left with one big insurer? That’s what it feels like. Of course, the U.S. Justice Department will weigh in. If one company looks like it will have too big of a market share, they’ll [...]

Bad News or Good News?

By | 2014-05-21T09:51:08+00:00 May 21st, 2014|Global Market Update|

Are newspapers doomed? Ever since the first newsfeed appeared on the web, the traditional newspaper’s current business model was threatened. If you picked up a newspaper 50 years ago, it was filled with a lot of non-news items: real-estate listings, grocery store coupons, want-ads. Those money-making inserts were bundled with a journalistic product that focused on a defined geographic region. Distribution was limited by the cost of physically delivering this bundle of paper. Gradually, each area developed into a local monopoly, usually with only [...]

The Competitive Edge (Part 5)

By | 2014-02-21T12:33:42+00:00 February 21st, 2014|Global Market Update|

So how do you get a competitive edge? The answer is simple: you already have one. Everyone has something they’re good at. Whether it’s understanding how a store’s layout might be confusing or knowing what kind of computer games kids are playing, everyone has some kind of expertise. As we go about our lives, we all have favorite activities, favorite stores, favorite brands we use. We become experts on motorcycles, camping gear, or farm equipment. Suppose you work in a hospital; you likely have [...]

A Competitive Edge (Part 1)

By | 2014-02-17T13:25:46+00:00 February 17th, 2014|Global Market Update|

Investment is like sports. Performance can be measured, and compared with others. It’s important. One percentage point of excess return over 20 years can add 25% or more to a portfolio. The market’s return is just an average of every investor, weighted by size. For someone to beat the market, someone else has to get less than the market. It’s like a running race: each competitor has his or her individual time, but each contributes to the course average. How you do relative to [...]

Cash over a Barrel

By | 2013-07-29T11:06:04+00:00 July 29th, 2013|Global Market Update|

Why do we have payday lenders? Payday lenders provide short-term, unsecured loans, sometimes linked to a paycheck, sometimes not. The amounts are usually fairly small--$100 to $300—although they can go higher. The service is popular: over 10 million people used payday loans last year. The fees, though nominally small, can add up. For a $100 two-week advance, a payday lender might charge $15 up front. A borrower that does this 26 times over the course of a year will pay $390—almost four times the [...]