Marketing Theory Without Execution: An Idea With No Follow-Through
An ongoing debate exists in the marketing industry that begs the following question: Is it more important to devise a marketing strategy or to execute actions to achieve your goal?There are good arguments all the way around this debate, but when it comes down to it, the answer is really… neither. You simply can’t be successful without either one.The problem, however, is that many companies, consultants, and marketers do a lot of “theory” and talking, without taking it beyond that. They can sit around and discuss all the latest marketing tactics and even try to put them in place, but in the end, it’s all for naught if they don’t develop a solid strategy and execution steps to make it work for their business.It’s like school-you can sit in a classroom and learn all the information and theory that is taught to you, but what good is it unless you can apply it in real life? We all know this, but as marketers, we forget that it works the same way. Understanding theory is helpful, but you need to know how to develop a strategy and execute that strategy to actually see results.From Marketing Theory to Strategy & Execution
Successful marketing is really a 3-part process that involves following sound marketing theories, creating a detailed strategy, and executing that strategy. Let’s look at each of these steps in more detail.Follow Sound Marketing Theory
Marketing theory is the science of marketing. It’s the “rules” and guidelines we follow. It’s the methods we use to form our strategies.Marketing theory can lead to strong marketing strategies, but too often, we get stuck on the former. We might feel as though we are getting things done by talking and learning about various types of marketing theory, but in essence, we are just spinning our wheels.Mike Roach, CEO of CGI, was quoted as saying, “Strategy without execution is a hallucination!” If that is true, then marketing theory without strategy and execution is psychosis. It’ll get you nowhere.Create a Detailed Marketing Strategy
According to strategy-business.com, a strategy is “the series of choices you make on where to play and how to win to maximize long-term value. Execution is producing results in the context of those choices.”Your marketing strategy is your map. It’s like a light shining in the darkness, guiding every decision you make. Without it, you’re driving in the dark without headlights, expecting to find your destination and not crash in the process.Your strategy shines a light on the road ahead, making it clear when you could veer off a path and driving you forward in the right direction. With it, you’re able to work your way around your obstacles, follow your objectives, and illuminate the choices that will get you to your goal efficiently.According to the Small Business Association, only about 50% of small businesses succeed within the first 5 years. It’s not that businesses don’t have some sort of plan in place; the problem is that most small businesses don’t have a clue how to map out a plan that will lead them to success.They don’t have a strategy that is based on sound evidence, data, and experience. Instead, they read a lot of marketing theory and try a lot of different things.That is not the same thing as having a strategy.Without a sound strategy, companies struggle to keep up with their competition, they miss opportunities that would lead to better results, and they win fewer customers.Execute Your Marketing Strategy
Execution is what seals the deal. Without it, no strategy will be realized, which is why it’s crazy that so many companies create a business plan and then file it away in a binder on a dusty shelf.We know that we can’t get anywhere in business or life if we don’t take action, so too often we find ourselves spinning our wheels moving from idea to idea. We’re taking action, but it has no real strategy behind it.When we skip over strategy and start executing based upon abstract marketing theory, we’re shooting in the dark hoping we hit something, but we rarely hit the thing we want to hit. Unfortunately, that’s what too many companies are doing.We should use marketing theory to inform our decisions and help us plan our strategy, and when we do that, our execution will be solid.Why Companies Struggle with Marketing Strategy & Execution
There are so many reasons why it’s easy for companies to struggle with strategy and execution…Where to Start?
Right off the bat, it can be downright scary to figure out where to start when it comes to drawing up a strategy and executing it to success. Digital marketing has become more and more complicated as new technologies and opportunities keep cropping up.With so many options, how can companies choose? How do you know which marketing ideas to subscribe to and which ones to ignore? Just because one marketing theory works for one company or even thousands of companies doesn’t necessarily mean it will work for another company.How to Maneuver the Marketing Paradox of Consistency & Change?
The fact that marketing is ever changing makes it that much more difficult to execute a sound strategy. How do you know where to place your time, money, and energy? And what if you put all that effort into 1 or 2 marketing tactics and then they lose their effectiveness?How do you create something concrete that is ever changing? How do you know when to be flexible and change your marketing plan versus when to stay steadfast? After all, remaining consistent is essential when it comes to digital marketing, but so is changing with the times. It’s a paradox that can be difficult to maneuver.How to Know (Not Just Guess at) Who Your Customers Are?
Most companies don’t spend enough time discovering who exactly their customers are to be able to draft a marketing strategy that will lead them to success. It takes customer data, assessments, feedback, and a lot of investigation to really get to know your customer, but knowing how to compile all of that information can be overwhelming.Since different marketing tactics should be used for different customers, knowing this is essential, but too many companies guess at who their customer is rather than knowing them in depth.How to Bring It into the Everyday Details?
Understanding how to integrate your business plan into daily work is not as easy as it might seem. As a result, decisions are often made without the consultation of the marketing strategy, and that means they are not likely to be in alignment with the strategy.Methods need to be put in place for sharing the company’s marketing strategy with all team members and keeping them on the same page. This ensures the company’s message and interactions are carried out consistently. Expectations and follow-through need to be set up so that there is no duplication, which only leads to wasted time and money. Every decision should be made with the strategy in mind.How to Not Let Everything Else Get in the Way?
Especially for small companies, one thing or another can come up that gets the business owner off track, and unfortunately, when that happens, marketing tends to move to the back burner. Unless time is dedicated to each and every week to working a marketing strategy, forward movement in business is highly unlikely.The Solution
Look, here’s the bad news… For most small businesses, overcoming all of the obstacles that get in the way of creating and executing a sound marketing strategy is not really feasible. Without an in-house marketing team that is skilled and dedicated to marketing planning and execution, it is understandably difficult.But here’s the good news… That’s why most small businesses turn to marketing experts for assistance, and when they do, their business explodes.It is so important to partner with a company that can do more than just talking about marketing theory. Your marketing partner needs to be able to come up with a solid strategy and determine which tactics will best fit that strategy for your unique business.By moving from a marketing theory focus on a strategy/execution focus, you can move past your obstacles and charter the course to success.
The Benefits of Good SEO Training Courses
Search Engine Optimization (SEO) is a collective term for a variety of techniques designed to help target webpages rank highly with search engines. Search Engine Optimization, while still a new field, has a tremendous impact on the way businesses operate online. A good understanding of current Search Engine Optimization practices and techniques is essential to functioning well in today’s online business climate. Of course, it goes without saying that some ways of learning about Search Engine Optimization are better than others. All things considered, Search Engine Optimization training courses are the best source of up-to-date information on SEO.SEO training courses are superior to other methods of learning about SEO for the following reasons:1. They promote a deep understanding of SEO versus the more superficial understanding other sources of SEO information tend to promote.2. They are always designed by top SEO experts.3. They are always structured in a way that makes learning fun and efficient.4. They provide only the latest information on SEO.Reading online about SEO may give you some idea of the basics, but if you want to fully comprehend SEO as a whole, you need to look into SEO professional training courses. Training courses always teach SEO in such a way that all the parts of SEO are related to each other, which means that even a novice can get a good general understanding of SEO after a few instruction periods. SEO professional training courses take you far beyond just learning details out of context; they show you everything in context in such a way that you can work towards complete mastery.Unlike a lot of SEO instructional videos and books, SEO training courses are only put together by established SEO professionals. You do not want an amateur making your training materials. The quality of training materials is a key factor in the effectiveness of any kind of training. If you use poor quality materials, you will end up with poor learning results. Go with the experts, and don’t trust anyone else to design your SEO learning curriculum.The way your SEO learning materials are structured is just as important as their quality. Well-structured materials enable you to remember what you learn better and have more fun while learning. Poorly structured learning materials sabotage the progress of even gifted learners. One of the biggest advantages of SEO training courses is that they always carefully structure the information you learn so that you only ever deal with the meat of SEO and your time is never wasted on fluff.SEO professional training courses also distinguish themselves from other sources of SEO information by containing only up-to-date content. It is true that there is a lot of SEO related material available on the web, but the vast majority of this material is outdated. SEO changes very rapidly, and yesterday’s insights can be less than worthless. In order to really benefit from SEO training, you need only the latest SEO insights.Learning about SEO isn’t easy, but with the help of professional teachers, you can be well on your way to obtaining a mastery of SEO in a relatively short period of time. Don’t skimp on your SEO training; everything you invest in it now will payoff later.
Are You an Entrepreneur or a Small Business Owner?
Do you want to be an Entrepreneur or a Small Business Owner? Is there a difference, and does it matter?There is a difference, and it’s easy to confuse the two or use the two terms interchangeably. A Small Business Owner owns their own business, but also actively participates in that business. Often the Small Business Owner is critical to the ongoing success of the company. Without him or her, the business either does not exist (i.e. medical, legal, accounting, consulting, freelancing) or would suffer greatly in the owner’s absence for any period of time.We often use the term “Solopreneur” to refer to the individual practitioner who is their own boss but must personally deliver a service or create a product for their business to generate revenue. While this may certainly be better than working for someone else, it’s still about trading time for money – and time is our most limited resource.Whether you are a Solopreneur or a Small Business Owner, you likely own a business that depends primarily on you. Perhaps the business is run by you and a couple of other founders. The point is, only a few people know and can execute on the secret recipe at the foundation of your business. And those key people must be present for the business to operate.An Entrepreneur instead builds a business and supporting systems that are independent from the founder. The founder may well be an integral (or exclusive) part of the businesses initially, but the goal is always to grow the business to the point where the owner does not have to be involved in day-to-day operations. When you build a business that continues to generate revenues in your absence, then you have created a truly leveraged model and can call yourself an Entrepreneur.Many of us start as Small Business Owners, enjoy success, and grow our companies. We may then move on to creating a larger business that does not require us to be present, and we graduate to the level of Entrepreneurship. If we repeat this multiple times, then we may call ourselves Serial Entrepreneurs.”Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”
Howard Stevenson, Harvard Business School Professor.
You may not be clear at the start as to which one you want to grow up to be, an Entrepreneur or a Small Business Owner. But by asking yourself a series of hard questions, and honestly assessing your true desires, you are more likely to start a business that suits you best. And it’s certainly acceptable if you want to be Small Business Owner… we are not saying that’s a bad thing. But it’s important for you to begin understanding the difference between the two as it may impact the type of business you build and how you plan to develop it.It’s also important to avoid creating another low-paying harder-working “job”, like the one you may already have! Michael Gerber explains this situation best in his seminal book “The E-Myth”. This book is a must read for small business owners, with one of its major themes being the difference between working “in” your business (you make the pies) versus working “on” your business (others make the pies following your recipe and systems).As you prepare to become your own boss, or if you have already started a small business, it’s important to keep your long-term vision in mind. Doing so will help you determine the type of business you start and build, helping ensure that you achieve your definition of success.Do you want to be an Entrepreneur or a Small Business Owner? Here are some questions to ask to help you determine want you really want:
Do you want to own just one or two locations (i.e. one or two franchise units, or your own practice) or do you want to create something bigger with multiple locations and perhaps grow internationally (i.e. offer franchises and hire others to run the business)?
Do you want to work in the business (i.e. make the donuts) or do you want to have someone else manage the day-to-day operations (i.e. someone else makes the donuts following your instructions)?
Are you looking for a job or are you looking to create a self-managing company (a business that does not rely on your day-to-day presence for success)?
Do you prefer to create or do you enjoy executing?
Do you envision creating multiple different businesses across multiple industries?
Are you able to let go of all of the details, or are you a micro-manager?
Are you the only person who can deliver your service or product, or can you teach others how to do it?
Is your goal to work hard until a certain age and then retire, or continue creating and leading your businesses until you are no longer mentally capable?
Can you sell your business as it currently operates and without you having to continue being part of it?
Have You Thought Of Using Entertainment Marketing To Hook Customers?
“Entertainment Marketing” has not been taken advantage of very much by many brands and companies.How To Fulfill A Human Need?Hook your customers’ attention and persuade them to consume your products by fulfilling the human’s needs for entertainment.Now what is “Entertainment Marketing?” Here is a simple definition:Entertainment marketing is the strategy of creating, associating with and promoting entertainment and entertaining activities to excite, then engage the customer, while forming a high-profile, positive affinity with the brand to drive continuous profitable customer action.Other Marketing ApproachesSome other marketing terms that have been used by marketers, for example, are:Retail Marketing: Retail marketing is the range of activities undertaken by a retailer to promote awareness and sales of the company’s products — Tracey Sandilands, Demand MediaContent Marketing: Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.When it comes to marketing and attracting more customers, I observe many businesses, especially retailers, hit the wall. Usually, the strategy being employed tends to be more of what I call “sales marketing” which is offering services such as “discount coupons, freebies, sales, ladies’ nights, happy hour, special packages, birthday specials… “Those are strategies a business should keep using regularly, but after awhile, it loses its lustre with customers and in the end, it doesn’t matter much to them if they get another discount. I know this is what happens with me.Why Does Entertainment Marketing Work?But on top of that, a business should really look into the immediate elevation of your brand or product in the minds of the customer by associating itself with an entertainment idea or activity, whether it be an event, a performance, a song, a movie, an entertaining video, a game or contest, celebrity or public figure endorsements and appearances.Now, “entertainment marketing” probably works best for retail businesses, but it is not only applicable to B to C’s (business to customer), but often, bosses find that they also need it in B to B’s (business to business).McDonald’s is a ready example of a business that has kept customers coming in for years with entertainment marketing. Rather than keep “pounding on” (no pun intended) the ingredients or value meals for their burgers, McDonald’s is often your source for the current box-office movie premiums. Remember the “Hello Kitty” or “Minions” soft toy craze which saw alarming lines at McDonald’s? Well, we don’t need to ask McDonald’s to show us their daily sales report in order to know that they would have had jackpot sales that day!If, as a business, you are expecting the media to give you some coverage — unless you are an NGO (non-governmental organization), political or governmental organization, social or charitable benefit, cultural or educational association — do not expect the media to give you much time of day unless you advertise hugely with them.Now, many small medium enterprises (SME) might lament that you could not possibly afford the licensing or cost of bringing entertainment to your premises, or even being associated with big-time Hollywood films, like the McDonald’s example.Believe it or not, your customers will still be entertained by cleverly-executed concepts at much lower budgets. Therefore, don’t worry if you cannot afford the licensing fees for hit movies such as Star Wars or engaging top Hollywood or K-Pop superstars!The keywords to remember are Excite, Entertain and Engage — conceptualized and customized for your needs.Once entertainment elements are used to market your business, product or brand, the opportunity is very much bigger for:1) the media to report your stories,2) the customers to run through your doors,3) customers to bring friends and family along to enjoy fresh offerings,4) elevating your brand into a premier, go-to position,5) more public relations and networking,6) collaborations with and third-party endorsements from the media, celebrities, public figures and customers.
A Simple Way to Manage Investments
One investment criterion important to many people, and perhaps to you, is: How easy are my investments to supervise? For example, does the investment require constant care, supervision, or expense, such as the complete or partial ownership of real estate property with its rental, repair, maintenance, taxation, and other management problems?Or does the investment require none of your time, such as your contributions to a pension fund? Some people feel confident and enjoy the time and effort that may go into managing their investments. Others have neither the skill, time, nor patience to bother with their investments. There are investments that satisfy both groups, depending on personal objectives.The best method to manage all investments is the Investment Portfolio Evaluation Grid. It is a great chart to help organize your present portfolio, even if your investments right now are some money in a savings account, or an IRA or pension plan.Start by creating 7 columns and input the following: Date, Cost, Present Market Value, % Total Portfolio Market, Annual Return, Yield, and % Return on Market.Next, input all your investments on the left in rows: Savings Accounts, U.S. Savings Bonds, Treasury Securities, Certificate of Deposit, Bonds-Tax-Free, Common Shares-Dividends, Preferred Shares, Blue-Chip Shares, Real Estate, Second Mortgages & Trust Deeds, IRA & Keogh Accounts, Pension Plans, Insurance Annuities, Growth Stocks, Undeveloped Real Estate, Precious Metals, Stock Options, Commodity Contracts, Commercial Paper, Other, and Total Portfolio.Determine the percentage of the market value of your portfolio as a whole. Divide the present market value of the individual investment by the total present market value of your portfolio. Determine the percentage of what it costs you to make an investment. This is easy to figure with interest bearing investments. A $1,000 10% bond you paid $1,000 for has a 10% yield. On stocks or real estate, estimate yield by dividing the amount of increase in value and/or dividend by the amount you paid. For example, if you paid $100 for a stock and received a $5 cash dividend, the yield would be 5%. Determine the percentage of the return on your portfolio as a whole. Divide the annual dollar return on all investments by the total present market value of your portfolio.For each investment you now have, fill in all the information you can in the columns to the right. The last three columns (Annual Return, Yield, and % Return on Market), tell how your investments have performed for you, as well as their relative value within your portfolio. If you do not have exact numbers for everything, do not worry. At this point you are just seeking an overview of what you have. A big picture will start to form that indicates how your money is allocated. You can also see what types of investment vehicles serve your objectives.If you are like many people who are just starting to invest, your grid is heavily weighted toward protection of principle. You may not even be aware of some of the listed investments. Before you get into the characteristics of different investments, you will benefit greatly from having a reference point with which to evaluate the various investment opportunities. Consider all the personal factors in your financial picture, including the other people affected by the decisions you will make.Forecast as much as possible, where your current and potential income sources will take you 5-20 years from now. What standard of living is important to you now and in the future? Will you need to provide for children? Do you wish to retire early? Where do you want to allocate investment and other disposable income? To a house in the hills? In world travel? To building a business?These and dozens of other personal questions should get some serious thought at this point. Do not be rigid. Expect your priorities and goals to change. But better a mutable plan for the future than none at all. Allow yourself to dream and get excited about the possibilities. Though it is difficult, even dangerous, to generalize about what investment objectives are most important to different groups, the following information will give you broad guidelines to consider, if you are:a) Single, with low to average working income, with a savings-oriented temperament, seek investments that produce income but that also provides some long-term capital growth.b) Single, with an average to high working income, and/or an aggressive temperament, seek investments with strong total return (the sum of the current yield and the capital-gain yield), concentrating on long-term, and high-growth vehicles.c) Married, with no dependents earning an average to high income growth-oriented but aggressive, look at safe income-producing investments, such as bonds and money-market mutual funds.d) Married, with dependents, a low to average income and a conservative temperament, seek secure investments with long-term growth in both capital and income, perhaps blue-chip stocks.e) An older person, with income from Social Security and some savings, and a goal of more income while preserving current capital, seek a conservative income fund that pays dividends and has appreciation value, or a money-market fund with a satisfactory yield.Take a look at your new chart and you will see Percentage of Portfolio typically allocated to investments goals. You can use this as a guideline when considering how to allocate your investment money. However, at a younger age, safety and capital gain has greater weight. In later years the need for income and safety of principle tends to increase.
Universal Health Care – The Ideal Health Care
There are various theories floating around about health care at the moment. Each and every single one has an ideal attached to it, in which every single individual gets accessible health care whenever they need it at an affordable rate. However, very few of them actually put a plan into action that dictates how the ideal would be achieved. One of those that does is universal health care. It does imply that every person in the world should have access to basic health care, which would raise the health level of the world. Universal health care also refuses to take factors like age, location and status into account. However, it is slightly optimistic considering the third world does not even have access to basic utilities yet.However, the idea of universal health care is backed by several ideas as to how it can be carried out. Universal health care should in fact be administered via a series of insurance policies that are controlled by the government of any given time. In this way, universal health care will give everyone access to health care whenever they need it at very little personal cost, thus ensuring that every single person can actually call a doctor out whenever necessary. Universal health care may also be administered through a series of clinics and other medical establishments to ensure that lower class individuals that cannot afford private health care can just drop by.Universal health care could actually be administered by any number of schemes in effect, but at least there are ideas in place to ensure that it could work if governments in power at the moment changed their policies. The ideal behind universal health care are valid as preventative as well as remedial because it would actually encourage everyone to have regular health checks to ensure that they stay in the best of health. This would include testing g younger people for STIs and monitoring their progress as they grow up via a series of vaccinations against diseases that may cut their lives short. Similarly, under universal health care would actually allow older people to be tested for ailments like diabetes on a regular basis too.Universal health care could provide treatment for every individual, whether they could afford it on paper or not. This would provide great positives for all of humanity and make for a much better world. There is so much more resting on universal health care than just health care alone. If we want a better world, we have to take the chance whenever we can. Universal is one of the chances we should take.
Why “Free Market Competition” Fails in Health Care
In trying to think about the future of health care, thoughtful, intelligent people often ask, “Why can’t we just let the free market operate in health care? That would drive down costs and drive up quality.” They point to the successes of competition in other industries. But their faith is misplaced, for economic reasons that are peculiar to health care.More “free market” competition could definitely improve the future of health care in certain areas. But the problems of the sector as a whole will not yield to “free market” ideas – never will, never can – for reasons that are ineluctable, that derive from the core nature of the market. We might parse them out into three:1. True medical demand is wildly variable, random, and absolute. Some people get cancer, others don’t. Some keel over from a heart attack, get shot, or fall off a cliff, others are in and out of hospitals for years before they die.Aggregate risk varies by socioeconomic class and age – the older you are, the more likely you are to need medical attention; poor and uneducated people are more likely to get diabetes. Individual risk varies somewhat by lifestyle – people who eat better and exercise have lower risk of some diseases; people who sky dive, ski, or hang out in certain bars have higher risk of trauma.But crucially, risk has no relation to ability to pay. A poor person does not suddenly discover an absolute need to buy a new Jaguar, but may well suddenly discover an absolute need for the services of a neurosurgeon, an oncologist, a cancer center, and everything that goes with it. And the need is truly absolute. The demand is literally, “You obtain this or you die.”2. All demand apes this absolute demand. Medicine is a matter of high skill and enormous knowledge. So doctors, by necessity, act as sellers, and agents of other sellers (hospitals, labs, pharmaceutical companies). Buyers must depend on the judgment of sellers as to what is necessary, or even prudent. The phrase “Doctor’s orders” has a peremptory and absolute flavor.For the most part, people do not access health care for fun. Recreational colonoscopies are not big drivers of health care costs. In some cases, such as cosmetic surgery or laser eye corrections, the decision is clearly one the buyer can make. It’s a classic economic decision: “Do I like this enough to pay for it?” But for the most part, people only access health care because they feel they have to. And in most situations, it is difficult for the buyer to differentiate the truly absolute demand (“Do this or you die”) from the optional.Often it is difficult even for the doctor to tell the difference. The doctor may be able truthfully to say, “Get this mitral valve replaced or you will die. Soon.” More often, it’s a judgment call, a matter of probabilities, and a matter of quality of life: “You will likely live longer, and suffer less, if you get a new mitral valve, get a new hip, take this statin.At the same time the doctor, operating both as seller and effectively as agent for the buyer, is often rewarded for selling more (directly through fees and indirectly through ownership of labs and other services), and is not only not rewarded, but actually punished, for doing less (through the loss of business, the threat of malpractice suits, and punishment for insufficiently justifying coding).So the seller is agent for the buyer, the seller is rewarded for doing more and punished for doing less, and neither the buyer nor the seller can easily tell the difference between what is really necessary and what is optional.This is especially true because the consequences of the decision are so often separated from the decision. “Eat your broccoli” may actually be a life-or-death demand; maybe you need to eat more vegetables to avoid a heart attack. But you’re not going to die tonight because you pushed the broccoli around the plate and then hid it under the bread.So, because it is complex and difficult, and because its consequences are often not immediate and obvious, the buy decision is effectively transferred to the seller. We depend on the seller (the doctor) to tell us what we need. Whether we buy or not usually depends almost solely on whether we trust the doctor and believe what the doctor says.3. The benefit of medical capacity accrues even to those who do not use it. Imagine a society with no police. Having police benefits you even if you never are the victim of a crime. You benefit from that new bridge even if you never drive over it, because it eases the traffic jams on the roads you do travel, because your customers and employees and co-workers use it, and because development in the whole region benefits from the new bridge.This is the infrastructure argument. Every part of health care, from ambulances and emergency room capacity to public health education to mass vaccinations to cutting-edge medical research, benefits the society as a whole, even those who do not use that particular piece. This is true even of those who do not realize that they benefit from it, even of those who deny that they benefit from it. They benefit from having a healthier work force, from keeping epidemics in check, from the increased development that accrues to a region that has good medical capacity – even from the reduction in medical costs brought about by some medical spending, as when a good diabetes program keeps people from having to use the Emergency Room.All three of these core factors show why health care is not responsive to classic economic supply-and-demand theory, and why the “free market” is not a satisfactory economic model for health care, even if you are otherwise a believer in it.Answers for the future of health care?The answer to the first problem, the variability and absolute nature of risk, is clearly to spread the risk over all who share it, even if it is invisible to them. If you drive a car, you must have car insurance, and your gas taxes contribute to maintaining the infrastructure of roads and bridges; if you own a home, you must have fire insurance, and your property taxes pay for the fire department. Because of your ownership and use of these things, you not only must insure yourself against loss, you also must pay part of the infrastructure costs that your use of them occasions. Similarly, all owners and operators of human bodies need to insure against problems that may accrue to their own body, and pay some of the infrastructure costs that their use of that body occasions. However the insurance is structured and paid for, somehow everyone who has a body needs to be insured for it – the cost of the risk must be spread across the population.Skipping to the third problem, the infrastructure argument, its answer is somewhat similar: To the extent to which health care capacity is infrastructure, like police, fire, ports, highways, and public education, the costs are properly assigned to the society as a whole; they are the type of costs that we normally assign to government, and pay for through taxes, rather than per transaction. In every developed country, including the United States, health care gets large subsidies from government, because it is seen as an infrastructure capacity.That leaves the second problem, the way in which all demand apes the absolute nature of true demand in health care (“Get this or die”). The answer to this problem is more nuanced, because it is not possible to stop depending on the judgment of physicians. Medical judgment is, in the end, why we have doctors at all. But we can demand that doctors apply not just their own judgment in the moment, but the research and judgment of their profession. This is the argument for evidence-based medicine and comparative effectiveness research. If a knee surgeon wishes to argue that you should have your arthritic knee replaced when, according to the judgment of the profession as a whole, the better answer in your situation is a cortisone shot and gentle daily yoga, the surgeon should have to justify somehow, even if just for the record, why your case is different and special. The physician’s capacity to make a buy decision on your behalf must be restrained at least by the profession’s medical judgment. If the best minds in the profession, publishing in the peer-reviewed literature, have come to the conclusion that a particular procedure is ineffective, unwarranted, or even dangerous, it is reasonable for insurers, public or private, to follow that best medical judgment and stop paying for it.These three core factors – the absolute and variable nature of health care demand, the complexity of medicine, and the infrastructure-like nature of health care capacity – are all endemic to health care and cannot be separated from it. And all three dictate that health care cannot work as a classic economic response to market demands. Failure to acknowledge these three core factors and structure health care payments around them account for much of the current market’s inability to deliver value. Paying “fee for service,” when the doctor is both the seller and acting as agent for the buyer, and when the doctor is punished for doing less, is a prescription for always doing more, whether “more” delivers more value or not. Paying “fee for service,” unrestrained by any way to make classic value judgments, means that hospitals and medical centers respond to competition by adding capacity and offering more services, whether or not those services are really needed or add value.For all these reasons, it is vastly more complex to structure a health care market rationally, in a way that delivers real value, than it is to structure any other sector, and simply fostering “free market” competition will not solve the problem.
S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows
Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
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Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.
The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.
Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.
Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.
Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.
From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.
S&P 500 Tests Resistance At 3730
S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.
On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.
SPDN: An Inexpensive Way To Profit When The S&P 500 Falls
Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio
By Rob Isbitts
Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.
The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.
SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.
Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.
Proprietary ETF Grades
Offense/Defense: Defense
Segment: Inverse Equity
Sub-Segment: Inverse S&P 500
Correlation (vs. S&P 500): Very High (inverse)
Expected Volatility (vs. S&P 500): Similar (but opposite)
Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.
Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.
Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.
Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.
Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.
Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy
Long-Term Rating (next 12 months): Buy
Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.
ETF Investment Opinion
SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.