Innovative Productivity
Increasing productivity decreases cost and improves returns. Businesses which succeed not only maintain the latest technological systems and products, they invent them.

People Focused Management
At the heart of every good idea are the people who discover and implement it. Successful businesses recognized their team’s worth and unique skill sets.

Positioning
Strong business plans look beyond the immediate feast or famine. They allow companies to look for future prospects and determine future needs. Companies which positioned themselves to provide for customers as the economy began to pick up, not only stayed in business, they grew.

Larry Fluke, President of Fluke Metal Products, joined me on About Money last Friday. Listen to the podcast below to discover how Larry and Fluke Metal Products used these three characteristics to stay in business.

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“Can I Google your Wikipedia with my Palm?”

Where Have the Jobs Gone? - How Important is Your Education?

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Bubbles in the market are created by supply and demand. As the demand increases and the supply decreases, the cost rises. This is the bubble growing. But, when the demand disappears the bubble bursts and the cost drops suddenly. More than likely, it plummets.

Why, when a burst is coming, do people keep investing? Chocolate covered hand grenades! The idea, the story, the craze behind the bubble growing is so enticing people keep buying. This craze, which drives the cost up, is not based on facts and figures. It’s based on stories – on the emotional whim of the buyer. So, when the craze disappears, so does the value.

Learn more about past bubbles and discover more about bubbles to come in the podcast below.

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Stories and Bubbles

Strategic Versus Tactical Investing – Are You a Betting Man (or Woman)?

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What are blue chip companies? They are nationally recognized, well-established, and financially sound businesses. Generally, they sell high-quality, widely accepted products and services. It’s believed their size and financial backing allows them to weather economic downturns and display stable, reliable growth.

For example, General Motors (GM) used to be a blue chip company. In the 50s and 60s their sales surpassed the Gross Domestic Product (GDP) of every country but one – the United States. The, buying stock in GM was a no brainer. Would you make that same purchase today?

Disruptive technology is the result of innovation. It transforms industries and makes current products obsolete. Business which are satisfied with operating at today’s standards won’t see many tomorrows. Coming out of the Great Recession, it’s companies like Audio Control which succeed. “Changes are almost month to month. We have to be making our products obsolete ourselves. Not letting our competitors make them obsolete,” said Tom Walker, CEO of Audio Control on About Money.

Listen to the podcast below to learn more about how Audio Control’s disruptive technology redefines standards regularly.

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Crisis Breeds Disruptive Technology

Where Have the Jobs Gone? - How Important is Your Education?

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Two of the scariest books I’ve ever read were The Hot Zone by Richard Preston and Too Big To Fail by Andrew Ross Sorkin. On the surface, Preston and Sorkin wrote about entirely different topics – the Ebola Virus and the Great Recession. But, I think they were analogous.

The Ebola Virus causes a patient’s internal organs to liquefy. Eventually they bleed out of every orifice and die. How does this grotesque death relate to the Great Recession? Sorkin’s book, a behind-the-scenes, moment-by-moment account takes you into Lehman Brothers, secret meetings in South Korea, and Washington D.C. corridors. It introduces you to the most powerful men and women in finance and politics. It shows you how our economy melted from the inside out.

I can hear the pushback to my comparison. “Our economy didn’t die,” you say. “It’s recovering.”

You’re right. The books are analogous. They’re not the same. Inventive, forward thinking businesses owners survived the bleed. They’re healing, growing – succeeding. Jim Becker, CEO of Becker and Mayer, joined me on About Money to explore what makes his business successful.

Listen to the podcast below to hear what Jim had to say.

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Challenges Offers Opportunity – Will You Be The Frog?

New Manufacturing Jobs State Side?

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The financial industry and our entire world were never the same. The ability to look at massive amounts of data allowed us to analyze and quantify life events by identifying their corresponding facts and figures.

How does this work? Think about a car. The harder you press the gar pedal, the faster the car goes. Hills, windstorms and other unknowns will have some effect, but the most important variable is how hard you press the gas pedal. Mathematically this looks like:

Speed of Car = Unknown Variable + Pressure on Gas Pedal

In the financial industry, these equations are highly regarded. Most money managers rely on them to formulate their investment portfolio. This type of portfolio is called the Modern Portfolio Theory. Between 80 and 90 percent of money managers use the Modern Portfolio Theory. (From last week you’ll remember there are “top up” and “bottom down” investors. Modern Portfolio Theory investors are “top up” investors. I am a “bottom down” guy.)

Did computers really change the game or are they simply another tool? I think they’re a tool. Computers cannot consistently predict unknown variables. People, not computers, recognize the intangibles of their business. These intangibles separate the companies that survived the Great Recession from those which didn’t.

Dale Leman, CEO of Glass Eye Studio, understood the intangibles of his business. Despite the balance sheets working against him, he was able to persevere. Listen to the podcast below to find out how.

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The Value of Compounding

401(k) – How’s Your Retirement Looking?

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Are You Invested in Chocolate Covered Hand Grenades?

Investing in Disruptive Technology

Ebola Virus and the Great Recession

Computers Revolutionized Investing, but Didn’t Change Everything

Visionary or Dumb Luck?

Moving (3.23.2012)

401(k) Facts and Stats (3.16.2012)

Crisis Breeds Disruptive Technology (3.9.2012)

401(K) Developments (3.2.2012)

Sixteen Tons (2.24.2012)

Pigs At The Trough – Hidden 401(k) Fees (2.12.2012)

4 Reasons the United States Won’t Double Dip (2.10.2012)

Challenges Offers Opportunity – Will You Be The Frog? (2.3.2012)

How Will the PIGS Affect Our Economy? (1.27.2012)

Making the Most of a War of Words (1.20.2012)

Strategic Versus Tactical Investing – Are You a Betting Man (or Woman)? (1.13.2012)

History Rhymes (1.6.2012)

Who is an Adams Financial Concepts’ Client? (12.30.2011)

Productivity Eliminates Jobs (12.9.2011)

It’s Almost Tax Time (12.16.2011)

New Manufacturing Jobs State Side? (12.2.2011)

The Value of Compounding (11.25.2011)

Thankful for Local Businesses (11.18.2011)

401(k) Changes (11.11.2011)

Homebuilding Creates Jobs (11.4.2011)

401(k) – How’s Your Retirement Looking? (10.28.2011)

Technology Transforms Medical Research (10.21.2011)

Relevant Jobs in a Technology Driven Market (10.14.2011)

Innovation (10.7.2011)

“Can I Google your Wikipedia with my Palm?” (9.20.2011)

What’s Food Got To Do With It? (9.23.2011)

Slapped by the Invisible Hand: The Panic of 2007 by Gary Gorton (9.16.2011)

FEAR – Will There Be A Double Dip? (9.9.11)

Big Questions – Whose Best Interest Is It Really? (9.2.11)

Stories and Bubbles (8.26.2011)

Costly Healthcare (8.19.2011)

Assumptions (8.12.2011)

What Do You Control? Affecting Change as an Average Guy (or Gal) (8.5.2011)

The New Currency – Bartering Goes Modern (7.29.2011)

Where Have the Jobs Gone? – How Important is Your Education? (7.22.2011)

I am a firm believer in strategic investing over tactical. Why? Because tactical investing is like predicting the weather. Is it going to snow? Yes. When, is the question, and I don’t have the answer.

The buy low and sell high intent of tactical investing is attractive. In reality, tactical investing typically leads to buying high and selling low. Tactical investors often miss the best trading days. With strategic investing, you ride the ups and downs, hitting all of the best days.

My belief is based on studies such as Carla Fried’s analysis of the Standard and Poor’s 500 Index (read more about it here) and my own analysis of five of the top investment advisors when I first began in securities in 1986. These men were: Warren Buffett, John Templeton (with the Templeton Funds), T. Rowe Price (with the Rowe Price Funds), Philip Fisher, and Peter Lynch (with the Magellan fund).

While all five men had different approaches to investing, they had one commonality – strategic investing. They were interested in stocks they could hold onto for more than six months. This is my tactic as well.

Successful long-term investment isn’t dumb luck. Companies which succeed are run by visionaries who can look at the future and plan for the bumps and changes to come. Jim Duthie, CEO of Standard Steel Fabrication, showed this kind of vision. During the Great Recession, he refused to lay off employees and continued to make important renovations to Standard Steel Fabrication’s plant. The result? When jobs came, they had the men to do them. When the state issued new regulations for Storm Water Control, their plant was up to code. Jim’s vision for the future and his strategic planning allowed them to weather the down so now they can ride the up.

For more financial planning insights, join me next Friday on About Money.

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Strategic Versus Tactical Investing – Are You a Betting Man (or Woman)?

Relevant Jobs in a Technology Driven Market

Next Friday, March 30 Mike Adams’ program will become About Money. It will have its first broadcast on KKOL 1300 am. While moving is always exciting, it makes me nostalgic. For over three years, KKNW has been a fantastic home. As the market recovered, we explored changes in policy, investment questions, the value of patience, and much more.

As we move homes, About Money will remain committed to bringing you the latest financial news and insights so you can make informed decisions for your financial success.

Our New Home

KKOL – WALL STREET BUSINESS NETWORK is a Seattle business radio station. They deliver business news and information about personal finance, investments, real estate and mortgages, commodities, small business, and more. About Money will join an impressive schedule of over 15 specialized business shows that are broadcast live on the air and over the web. Find more information here.

401(K) Retirement Expectations
The average 401(k) plan balance of current retirees is $144,000. This means they receive an average of $400 – $500 a month.

Hidden Fees
The Department of Labor (DOL) estimates 401(k) plan participants incur up to 17 hidden fees for things like marketing, legal, accounting, investments, and insurance.

Fiduciaries or not?
Business owners who are plan sponsors are fiduciaries.

CPCP
The Department of Labor’s Employee Benefits Security Administration (EBSA) formed the Contributory Plans Criminal Project (CPCP) in 2010. The CPCP is designed to, “combat criminal abuse of contributory benefit plans,” says the DOL. As of March 31, 2011, the CPCP obtained 41 indictments with 15 guilty pleas and restored $1,147,304 in assets.

New Agents
In 2009, the DOL was authorized to hire 1,000 enforcement agents tasked with identifying noncompliant 401(k) plans and plan sponsors. The DOL says 77 percent of all 401(k) plans are out of compliance.

For additional 401(k) information listen to the podcast below.

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Innovation

The New Currency – Bartering Goes Modern

China’s “Barefoot Doctors” Inspire Healthcare Reform

Parallels are often drawn between the Great Recession and the Great Depression. While there are many similarities, the United States has experienced other significant economic crises. During these times, disruptive technology speeds up. Ideas become new inventions.

For example, the financial crisis in 1837 was created by over speculation in cotton and land. During the same time, Samuel Morris developed the Morris Code (a way to send sound through wires using dots and dashes). By 1838, Congress allocated $30,000 to stretch a wire from Baltimore to Washington DC. Thus, the telegraph was born.

In 1874, the United States experienced our worst financial disaster in history. When the economy crashed, there was no government bailout. For 30 years, we experienced times like we did in 2008. Businesses failed. Banks went under. Unemployment skyrocketed to 20 percent. Meanwhile, Alexander Graham Bell built the first telephone. The first long distance call was placed in 1877. By 1904, there were over 3 million telephones in the United States. The West and East Coasts were connected in real time.

When the stock market and real estate market crashed in 2008, we entered into the Great Recession. What disruptive technology are we now seeing? Across the United States, traditional business approaches are being transformed or replaced with less expensive, more efficient options. For example, growing healthcare costs are a significant concern. MobiSante, a Seattle based company, developed a mobile ultrasound. Utilizing smart phones, this hand held device can travel anywhere. It allows medical professionals to practice better medicine and reduce costs.

MobiSante’s concept of mid-level professionals providing basic care in less expensive settings was inspired by China’s “Barefoot Doctor” principle. These “Doctors” were China’s response to a failing medical system following the Chinese Revolution. “Barefoot Doctors” were educated by the government with the most basic hygiene and general care knowledge. Placed near rural villages, they provided previously untreated patients care and improved infant mortality rates.

Improving this principle with technology, MobiSante helps medical professionals detect problems early and cut costs. Sailesh Chutani, CEO and Co-founder of MobiSante, joined me On The Money last Friday. Learn more about their developments in the podcast below.

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Costly Healthcare

What’s Food Got To Do With It?