Holden Advisors Blog

As I went to pick up my morning coffee this week, I saw a sign that made me chuckle. In the window of a Dollar Store was an advertisement for steak – a full steak for only a dollar! Would you buy steak for a buck? Would you go for all-you-can-eat sushi for the low price of $10? Any takers? No one?

Automakers are very happy with their September results as sales hit their briskest monthly pace in a year.¹ Along with higher fleet sales and replacements for vehicles damaged by recent hurricanes, Labor Day discounts are touted as a reason for celebration. According to the WSJ, average incentives in September are now $4,048, up 5% from March of this year.

Last week, big city mayors across the US received the kind of news they dream about: Amazon is looking for a second corporate headquarters, with the promise of billions of dollars of investment and a potential of 50,000 new jobs.¹

When is a price war, not a price war?

With astonishing speed, Uber has disrupted the taxicab industry. Others have looked at their success and dreamed of emulation. The strategy often touted for Uber’s success is surge pricing; charging higher prices at times of high demand. Surge pricing is an example of dynamic pricing, where the price fluctuates depending on one or more factors, like the demand for ride service.

As I work, I generally enjoy having music in the background. My favorite local station here in Minneapolis is The Current, a contemporary music station with a more eclectic mix than the local commercial stations. As a service provided by NPR, The Current had a member drive in the run up to Memorial Day, asking listeners to donate money to keep the station light on advertisements, high on value. While they are quick to point out the risk of closure if they do not receive enough donations, they made it clear that if you couldn’t afford to give, that was fine, and they were happy to have you as a listener anyway.

In an article in the Wall Street Journal last week, columnist Andrea Fuller detailed her journey through the frustrations of trying to find out the fees (read: price) she pays her financial advisor. Due to conflicts of interest, the WSJ does not allow reporters to invest in individual stocks, so she has a blend of mutual funds and Exchange Traded Funds (EFTs) managed by a leading financial advice firm (she didn’t reveal which one). During her ordeal, she was told she was paying a $125 fee by someone at a call center, then promptly told by her advisor that in fact this wasn’t the case; she paid no fee, but the advisor took 0.85% of her investments. When she delved further into the fees charged by the mutual funds themselves, they could only give her a ball park amount; she’s still waiting for the final answer.

Commentary by Richard Harrington

From: “Bursting the CEO Bubble” by Hal Gregersen hbr.org, March/April 2017

Car Makers Spend More on Discounts than Labor on a Car