Keep Marching

Life and that other thing that follows it are mysterious in many ways. Perhaps the biggest mysteries are the timing and ultimate cause of one's death. If you spend too much time anticipating your demise, you will only hasten it. Military veterans who were wounded in battle frequently die from a very civilian disease. Those who concentrate on nutrition, fitness, and wellness may reach their end through an unforeseen accident. As I see it, the only comfortable way to look toward the thing that comes after life is to avoid looking toward it at all. Like those old vets who follow the color guard in the Fourth of July parade, just keep marching. We all know there's a big IF in l-IF-e, but don't concentrate on the risks. Be creative and accomplish something for as long as you possibly can. Those veterans have the right idea.

Chicago Bears - What Are the Odds?

Yesterday, when the Chicago Bears played the Jacksonville Jaguars, two of their defensive players, Charles Tillman and Lance Briggs, intercepted passes and ran them back for touchdowns. Not only that, but these same two players intercepted passes and ran them back for touchdowns in the Bear's previous game against the Dallas Cowboys. I'm told that this is the first time that the same two players have ever done this in two successive NFL games. What makes the tandem of Charles Tillman and Lance Briggs even more unusual, is that they both wear double integer numbers (33 for Tillman and 55 for Briggs), and they both have double consonants in the spelling of their names. All of these extremely unusual facts suggest that whenever we are facing a task with the odds stacked against us, we should remember that even when the odds of success are very small, they are never zero. If you have enough priority and incentive to warrant tackling such a task, go for it. Charles (Peanuts) Tillman and Lance Briggs have shown that ridiculous odds can be overcome. Maybe they'll even do it again!

Restaurant Pricing

Did you ever notice that when you go to a restaurant the bill is roughly constant? My wife and I tend to go to moderate family restaurants, and the bill is almost always about $20.00 for the two of us before tax and tip. Restaurants of all types design their menus around the amount of money they wish to receive from each customer. In a typical family restaurant where we live, you can purchase an egg/pancake dish for $7.95, a sandwich plate for $7.95, or a dinner special for $7.95. To be sure, you can shave the price slightly by ordering only one egg or get a better dinner for a few dollars more. In addition, the pricing is biased by whether you order drinks, side dishes, or desserts, which are higher profit items.

Restaurants today are businesses which happen to serve food as their product, rather than hospitality centers where the main goal is to impress the guest with the quality of the food and service. The primary approach is to attract and process through as many customers as possible at a certain average dollar value per customer. This is usually done by compressing the range of prices on the menu as discussed above and by streamlining the process in order to get as many customers as possible through in a given period of time. The latter approach is the fast food philosophy.

It will be interesting to see whether the restaurant business starts to introduce some cost-reduction innovations now that gasoline prices are getting higher every day. The easiest way to compensate for the higher cost of gasoline is to eat at home, saving both the costs of driving and of the restaurant. Some restaurants are now packaging menu items as frozen entrees that you can purchase at the supermarket and eat at home. Is this the best of both worlds?

How Many Robins?

I have a bird feeder which I fill with the usual wild bird seed mixture. I do confess that I tend to fill it in good weather rather than in the middle of a snowy winter when the birds really need it. Anyway, it is a rite of spring to get some seed mix into the bird feeder and watch for the birds to come back to my yard after the winter. I'm sure that many of you do the same thing. I don't talk to the birds, but sometimes I bet on them. Right now I am ready to bet on the number of robins that will eat at my bird feeder today. My bet is zero. The reason is that robins don't eat grain; they very capably find and eat worms. They are meat eaters. (Just as there were diet differences among the different types of dinosaurs that were ancestors of the birds.) The point of this discussion is not to show what I know about birds but to remind you that in placing any bet or making any decision you will have better chance of success if you bet on something for which you have prior knowledge. It is always better to own stocks of companies for which you know something about their businesses rather than companies that you know by name only. Likewise, you are better off starting up a company in a field in which you have worked or which you have studied rather than a business which sounds interesting but about which you know nothing. Knowledge is power, and that's why you hear the expression, "The smart money is betting on ______."

Can You Walk on Water?

The New Testament of the Bible says that Jesus walked on water to reach his disciples who were in a boat. Can you walk on water? I'm sure that the vast majority of you will say "No!" and think that I am crazy for asking. However, you have to remember to consider all of the possibilities and all of the facts when you are faced with making a decision. In many cases we jump to conclusions or reach a decision without considering all aspects of the problem...I'm pleased to announce that I can walk on water - in January and February. I did it today.

Do You Hedge Your Bets?

Last year as baseball teams were starting to report for spring training, a furniture store in Massachusetts was developing their marketing plan for a tie-in with the widespread enthusiasm for the Red Sox. They came up with a promotion linked to how well the Red Sox would do during the new baseball season. The furniture store offered every customer who bought furniture during a certain spring period a complete refund (Their furniture purchase would be free.) if the Red Sox won the World Series. The odds against such a win were huge, so it was highly unlikely that they would ever have to pay off on this offer. However, they were smart enough to hedge their bet by taking out an insurance policy against this possibility. As we all know, the Red Sox won the World Series (Yea!), and the furniture store had something like 30,000 purchases which would have to be refunded. However, because they had hedged their bets with the insurance policy, the insurance company paid for those refunds. The store not only avoided the repayment by hedging their bet, but due to the popularity of the promotion they sold far more furniture that would have been the case without this marketing plan. It is not always possible to make a risky decision and still protect yourself against its possible consequences, but you should study all risk aspects to see if there is a practical way to offset at least part of your risk exposure before you make a commitment.