RS-2 A Billion Dollar Bet

As I listened to the podcast by Planet Money about the Herbalife company and the possibility that it was a pyramid scheme I began to think.  Herbalife seems like a very successful company due to the fact that they have a good stock and their annual numbers always seem well above the average.  What is not to like about this company if you are looking got invest in it?  You would assume that if this company, Herbalife, is on the New York Stock Exchange that it is a legitimate company especially after hearing that it has been around for thirty years.

And if this company really is a pyramid scheme, how have they gotten away with this for such a long time.  They could have just recently been starting the pyramid scheme because their business is on the downfall or they have been this way from the start.  I personally have never heard of the product so I think it seems very strange that they have such high income with very little advertisement.  Unless it is a popular product in another country this is just very hard for me to believe that what Herbalife is doing is  actual and not a pyramid scheme.  This wouldn't even be a conversation topic if people had actually heard of the product.  But in reality Ive never seen or heard abou the product so I believe Bill Ackman is right with his claim.

The one thing I do not understand is that the short bidding on this company. What does it entail? and how do you do it?

In all honesty I would not doubt that other companies are doing the exact same.  Last year my roommate and few other kids on the floor were involved in a company that seemed to have the same setup as Herbalife.  The company was called Send out Cards,  the owner was a graduate from Sacred Heart if I remember correctly.  But the people would earn commission for everyone they recruited.  It seemed like nobody made any money compared to the top guy, who was a millionaire while my roommate was lucky to make a few bucks here and there after buying a membership that allowed you to do certain other tasks that eventually never panned out to anything.  It just didn't seem right that the guy at the top made profit off of every sale while my roommate was only profiting by selling a card to someone personally.

To me this all just does not seem right and by Ackman doing what he did made the population realize that investing in this company will eventually lead to you you personally losing all your money.

EC-203 RS1

 David Dobbs wrote an article called How To Be a Genius: It really is 99 percent sweat, to prove to people that you’re average Joe can become just as talented as someone born with a special talent. His article states that being a genius takes time and effort, he talks about what characteristics will help you rise above the others in your field, and why hard work can either make or break you.

   Dobbs clearly states throughout the article that to become a genius you have to put in the time and effort, blood, sweat and tears.  Nothing in life comes easy, especially to become masterful at something.  Dobbs claims being a genius is not something you are born with, its something that is developed through time.  In his article Dobbs states that "scholars of elite performance to speak of a 10-year rule: it seems you have to put in at least a decade of focused work to master something and bring greatness within reach."  Just use Tiger Woods as an example, he was born with a talent to golf but he did not get where he is today without hard work and practice.  Tiger was recognized as a premier golfer at a very young age and continued to impress with his progressively increasing talent. Even today after all he went through with his ex wife, he has pushed through and is still an elite golfer with tremendous work ethic that will carry him to many more championships.  To develop such talents you need to hold certain traits that can aid you to your success.

   To become an elite in your field of expertise you need other characteristics to help aid in the development of your field so you can rise above the others.  The obvious answer is hard work.  Without the effort you put in you would get nowhere. You need to be dedicated to pursuing your goals. Set the bar high and do not give up when you are put down, strive on through.  Another characteristic you may need is to become a good listener; reason being is because to learn everything you need to know on your way to the top is to get mentors.  The example Dobbs uses is "music students that attended New Yorks elite Julliard School compared to those who attended other schools.  The students who attended Julliard received one on one relationships with mentors who prepared them for challenges they would face after their studies ended." The other students who attended other schools lacked the one on one attention from mentors and faded off the map because they never were taught to deal with challenges they were to face after school. This clearly shows me that to get to the top you have to allow the people around you to teach you things that they have learned through their years of practice. Hard work requires a lot mentally and physically and can can make or break you.

    Hard work can encourage you or it can overwhelm you. To Bill Gates, Tiger Woods, Babe Ruth and The Beatles hard work encouraged them to keep going and become the best they could be at their personal fields.  They never gave up and when they found themselves stuck in an obstacle they would push through and persevere. All of the people I listed above are where they are now because they took their talents and pushed themselves to the limit. They never quit and they pushed themselves because they knew with their hard work they would be at the top of their game.  Unfortunately for some hard work overwhelmed them and caused them to fall off. They may have had the talent to become something but they did not have what it took to put it to good use.  A perfect example for this would be the 2012 Boston Red Sox.  If you look at the team on paper they have a very talented team and if you look at their record they look as if they are a very below average team.  The team has talent but they aren’t putting in the hard work needed to become the team they should be.  An example is the Red Sox pitching staff last year; they were eating chicken and drinking beer in the clubhouse.  They did not treat themselves well enough to perform to the fullest.  In life it comes down to who wants it and who doesn’t.

   Becoming a Genius takes a lot out of you, but it is rewarding in the end.  You need to be willing to do whatever it takes to perform at your absolute best.  Dobbs gave us characteristics that you need to aid yourself in rising to the top, he proved that hard work can either encourage you or overwhelm you, and he stated that being a genius takes time and effort.

UPDATE:

    As I getting more and more used to being a college student, I have notices several life changes I have gone through.  They may not be anything drastic but none the less the changes I have made in my were necessary to be a college student here at Sacred Heart.  I have developed skills where I can live on my own and take the initiative to get things done without having someone there to tell you what to do.  And if you cant handle your work and your social life you will most likely not survive college. You learn to manage your time, you learn to open yourself up socially because for the most part people go into college their freshman year not knowing many people or in my case not knowing anyone.  As time goes by your skills get better and better. But as I stated in my original post you cannot master anything until you have experience with it.  If you look at the seniors at this school you can tell they are more mature, they are independent people ready to enter the real world of full time jobs and moving out of your home into an apartment or a small house.  Your life changes drastically in the four short years you are here at school, and you dont have a lot of time to adjust to being independent, which is such a major component to your life once you graduate.  


-Pat Plant

  

RS 9 Coke for a nickel

     In this podcast by Planet money they discussed how Coca Cola's price of five cents per can lasted seventy years.  From 1886 to the 1950's Coca Cola never changed in price because of a deal that was made to companies that bottled it.  The deal was that Coca Cola would sell a certain amount of syrup to the bottling company whenever they needed it a certain price. The problem was that the contract had no expiration date so it never ended.  

     With Coca Cola stuck in this contract they had no leverage over companies to change their prices.  So Coca Cola took the jam they were in and made it a profit through several strategies they put in place.  They started off by advertising everywhere, with the five cent per bottle ad.  Doing this in my eyes showed to the population that Coca Cola was an affordable drink and that it was made for anyone to have.  And the consistency of the price showed to the customers that it was a stable product that was worth investing in.  

     Coca Cola then began to use the vending machine to sell their product where still the price was five cents.  The company had hundreds of thousands of vending machines dispensing their product.  Coca Cola then finally created new contracts with the bottling companies allowing them to change the price of the syrup but they continued to stay at five cents per bottle of coke.  To me this was a smart move by the company because not only did they gain control of the contract to price as they please but they kept the price the same because it was working so well but gave them the ability to increase the price if they needed when they needed to.

     When it came to the point where Coca Cola needed to raise the price because the price of the ingredients was increasing they found themselves in a small predicament.  All of their merchandise was advertised everywhere for five cents so they didn't want to double it and make it ten cents. So the company went to the president of the United States and asked him for a coin that would be worth seven and a half cents because vending machines were not capable of making change.  The plan was shot down so the company had to go back to drawing board.  They came to the idea that for every ten bottles they put in the vending machine, one of them would be empty. Doing so would make that one unlucky person put in another five cents. This did not last very long because of the obvious system they were using.  Besides it barely generated any profit by doing so, it increased the profit by not even a single cent.  Doing this was clever but not very rational because in a way they were scamming people, which could have possibly been illegal.  Like I said previously this system lasted not very long.  Soon after Coca Cola had to increase the price of their product because they were losing money. The price didn’t dramatically increase, it only went up to six or seven cents per bottle.  People thought the company would fold over.  If you look at where the company is now I would say it was just a small bump in the road because Coca Cola is a product sold worldwide.

RS8 - Manufacturing the Song of the Summer

            In the podcast that we had to listen to called, “Manufacturing the Song of the Summer”, I learned how much money it really costs to produce a block buster song.  Planet money broke down the expenses to the exact dollar. Just listening to the podcast I learned a lot about the work and preparation that goes into the work as well.

            The podcast mainly focused on Rihanna’s song “Man Down” and how it was built to be a summer anthem sort of song. It turns out the song did not end up living up to its hype because from what Planet Money said they actually lost money. One of Rihanna’s coaches was interviewed and was asked how much it costs to produce a song by a big name artist who is planning to have this song be big itself.  The coach of Rihanna responded by saying a song of decent hype as “Man Down” cost over one million dollars to make.  From the camp costs, to the expenses for the coaches, to personal expenses for the artist so they are most comfortable when they are recording.  A lot more then you actually would think goes into the cost for the production of music.

            Another thing that Planet Money talked about was how producers will get their songs know by the listeners to potentially create a large amount of popularity for the song.  Planet Money mentioned that in order for producers to get their artists songs out there to be heard by everyone is to actually bribe radio station DJ’s in order for them to put the song on the radio several times per hour.  This is fairly common these days as you listen to the radio, hear a good song, then you start to hear it overplayed and suddenly the song is not pleasing to you anymore and you begin to dislike it.  Today music has become more of a business and all about making money then it is to make music for the entertainment for the people.  The money gets to peoples heads and once they build a big fan base then for some artists their music ratings start to decline because they will just make songs to put out to make a quick dollar.  To me the best artists are the ones who start of underground and don’t reach mainstream until they have made a few albums.

            Going back to the “Man Down” single created by Rihanna, I believe another reason that the song didn’t create a profit like it was suspected to is possibly because in today’s day and age people do not buy their songs.  Instead people will go on the Internet and download them for free which in most cases is illegal.  But it is so easy to do so that it is almost impossible to do anything about it because almost everyone does it.  That would be a good explanation to why iTunes has boosted its songs by thirty cents for purchase. They had to do this because they aren’t getting the income that they used to get so the only way for them to still pull in a profit is to increase prices.

RS 7: The Economics of the Music Industry

            In the two podcasts I listened to, “Why K-Pop Is Taking Over The World” and “Katy Perry’s Perfect Year”, I learned that economics plays a bigger role then I expected it to play.  Music in America is one of only huge industries left that we still out do every other country in.  But slowly and surely Korea is on its way to something great. As big as the music industry is, you would think the record labels would be pulling in some more cash but that is not the case.

            As they said on the podcast, anywhere in the world you go, you will hear the American music.  It is such a big industry that is worldwide, with a fan base so large that there just are no signs of it slowing down.  Most recently though Korea had a star shine pretty bright when the song “Gangnam Style” came out.  It burst onto the music scene when it hit youtube.  It is now one of the most viewed videos on youtube with over five hundred million views in just three months.  If that is not a sign that Korea has a music culture on the rise then I don’t know what is. 

            If you turned on the radio last year you would hear Katy Perry on ever radio station about twenty times a day.  She absolutely with out a question was the most successful artist in the past decade if you go on strictly hit songs.  Not only are her songs catchy but they have good lyrics.  That is why she has so many hit songs, clever lyrics mixed with a good beat will give you fame. And that is exactly what happened to her.  She has become one of the most famed musicians in the past decade but also one of the most high paid.  With all the revenue she produced the record labels on average will earn fewer than ten million dollars by the end of an album.  The record labels do so much and get so little in return.  So these record labels have almost become extinct, there are three big record companies left in what is now; Sony, Warner, and Universal.  They have started to make deals with the artists by collecting income off of every revenue that the artist gets because it was getting to the point where these labels were just not getting paid enough for the work thy put in.

            Before this new deal was being used by the recording companies they would only get commission off of the money earned through song and album purchases.  When a song was bought off of iTunes, the recording company would only walk away with about twenty to twenty-five cents from the ninety-nine cent song.  But now with the Internet people download songs illegally for free, so the artist is not gaining any profit off of that person because they didn’t pay for it.  People will also just go on youtube and just sit there and listen to their music for free along with Pandora.  These tow websites allow you too listen to music for free at no cost to you except at the cost of artists who put in the hard work to produce that song.  So with the economy changing constantly, in the future we will get to the point where there are no record labels and ITunes will no longer exist.

RS 6: An Economist Gets Stoned

  In the podcast "An Economist Gets Stoned" they talked about drugs and how legalizing them could have an effect on the economy.  In 2012 seventeen states including Connecticut had legalized the use of marijuana for medical use only.  Medical marijuana is only distributed to those with proper documentation because it is not street legal. 
   In this podcast Plant Money interviews a Harvard economist by the name of Jeffery Miron.  Miron did a study of the economy on the use of marijuana and whether or not making marijuana legal would help boost the economy due to people being taxed on the plant.  Miron claimed the drugs would become cheaper because of increased elasticity due to the legalization and more easily accessible.  He states that the reason being that black market drugs are so much more expensive because of the fact that they are illegal and that there is a lot that goes in to the business to make sure it is not discovered by the police. 
   I personally believe that legalizing marijuana would solve a lot of problems if people did not take advantage of this law nor did they harm anyone and just stayed to themselves.  The way I look at it is this, legalizing the drug would allow for the government to create a tax on the drug making a profit from it.  Also, by legalizing it you do not have to pay the law enforcement as much to watch out for the drug deals.  In my eyes it would help our struggling economy.  Marijuana plants are no different then a normal plant.  These plants just give you a high if you smoke them, if used within reason it causes no harm to others.  In the United States we live by laws that promote freedom, so we should be allowed the right to smoke the plant in controlled amounts. 
  Relating this podcast to elasticity is rather simple.  Legalizing marijuana would increase supply and in my eyes increase the demand because people will now want to try a drug that was once deemed illegal. So with supply and demand up, elasticity is also up.  And with the elasticity up it allows for the price of the marijuana to decrease in a big way because more people are willing got buy it and its not such a high demand due to the fact that it was illegal and hard to get because you had to find a black market dealer.
  To look at this topic from the other side of the spectrum if you are talking about my personal opinion there are reasons to believe that making this drug legal could boost the prices.  The government could pass laws to control prices on the drug allowing them to control how much is sold due the high asking price.  But to me honestly I just do not see them asking for large prices because if it was made cheap and governments taxed it, then they would make bundles of money off of it and it would soon become a million dollar business.  So to me I think making marijuana legal would benefit everyone and by it being illegal right now is just a hassle to law enforcement because the sales of illegal marijuana is never going away and is only going to get bigger and will continue to cause a problem.

RS5 - Ted Talks

   Ken Robinson spoke at a conference about education and how school can be a major factor on the students creativity. I believe education is all about preparing children for the future but also to guide them to pursue things that they value the most and would benefit them the most in their future.  

   As Ken Robinson said in his presentation, I agree that school is educating students out of their creativity.  You go to any elementary school, middle school, high school, and most colleges you will find that the mathematics, languages and humanities all come before the arts.  The arts is where you can let your creativity take over and do things you really cant in most classes.  You can express yourself in paintings, plays, musicals, and dances.  In the other classes you are given strict rules to follow and have equations to memorize and aren't given the chance to be who you really are.  In dance, art, and music you can let lose and be your true self and not have a care in the world.  You can write your own lyrics and draw your own art and not have someone tell you that you are wrong.  But in math if you mess up the equation you are wrong and you have failed.  Making mistakes in the arts can sometimes lead to something extraordinary.  And that is what will make you who you are, there are no right or wrongs. The arts allow you to be creative, and to most people I know, when they are being creative they are happy and in a great mood.  And for one to be successful in their future you need to help and guide them to that happy place, their special god given talent.

    Education is preparing students for the future, its about paving the path for the child to learn and grow.  Educating a student for the future is pretty difficult because as Ken said, you can only predict the future for about 5 years down the road.  And who knows what material you teach them will still be valid by the time they enter the work force.  Education to me is about giving the student skills to have mental toughness, and good decision making skills.  Its not about finding square routes and being able to name all the planets in the solar system, education is about figuring out what is important and what is irrelevant.  Education is about guiding the student in the direction that will best fit them.  Whether is a difficult road or an easy road to pave, you do the best you can because the decisions you make as an educator may affect the choices the student makes.  

   Education is one of the most key things in a young students life.  Its about giving the student the support he or she needs to become successful in the path that they chose.  I believe education is all about preparing children for the future but also to guide them to pursue things that they value the most and would benefit them the most in their future.