By Candi Munroe
I love to shop. Since I have started investing for myself I have noticed something else: I observe things. They may seem like simple things, but they are really indicators of something much bigger. This is what I see at the mall – you can test them out this Holiday season for yourself.
1. Supply and Demand – This is the most basic economic principle. A product that is in great supply or has too much supply is cheap. A product that is rare or in short supply is expensive. The most drastic example of this is Apple. Think about Apple stores with the long line-ups of people eagerly awaiting the latest Apple iPad or iPhone. Meanwhile, Wall Street boasts of the great margins Apple is getting. Their stock has also experienced an explosion in price. From its 2008 price of $90 to today’s price of around $550 (which is already down 20% off the high), the stock has impressed.
2. Fads vs. Classics – The mall always has the latest fashions deemed ‘in’ this year. This is not unlike Wall Street. Yes, analysts study the numbers, but then they make estimates on what they think will sell this year and make recommendations accordingly. These companies and their stocks are hot and everyone wants to own them. A more classical girl, I like buying good quality products and wearing them year-to-year. I would never buy a fad and expect to wear it into retirement.
3. Are there job openings? – When the economy is better more people have jobs. When the economy is depressed, people lose their jobs. I recently vacationed at a hotel where I had vacationed the year before. This year it was much harder to be served. I waited in line more often and the staff were agitated and overworked. This tells me that the staff has been reduced to save money in a bad economy. So when you are at the mall, look around. Are the stores well staffed? When you eat out, are there plenty of waitresses and waiters? If so, this is a sign that the economy may be on the way up.
4. Are the stores well run? Are they concerned about their brand and reputation? This is more about individual companies. Which companies take care of their employees? Starbucks give their U.S. employees health care and opportunities to invest in the company’s stock. The employees I encounter there are happy and engage the customers. Good hiring? Good management? Solid Policies? Probably a bit of each.
5. Are people buying at or near full retail prices? Observe the shoppers in the stores. Do they have lots of bags? Are the bags large? (Discount the effect if the discounts are high.) Many people out shopping puts money back into the pockets of businesses and is a good sign that better days are ahead.
Do not let these simple observations pass you by in the Christmas haze. Keep in mind that these general indicators tell us how people feel about their job security and how much optimism they have about the year ahead. They can also help guide you to products and ideas that are good targets to research and invest in yourself. And this is fun! After all, ladies, aren’t we all about multitasking?