Coach in the Year of the Dragon

WSJ
1/23 "Coach's Shares Should Remain in Fashion"

According to the WSJ, Coach's stocks, unlike high-end retailers such as Tiffany's, are a safe bet. Coach's popularity in China and its men's line of cases for various technologies have increased their earnings for the December quarter by 15%.

Clearly, innovating and appealing to new groups of people helps to increase demand and boost sales. Perhaps retailers such as Tiffany's should market in China and open more men's lines.

But until then, I know I'll be flying Coach.

No Trade Allowed

Economic trade with North Korea is not beneficial as it would help sustain a criminal regime.

North Korea would benefit from trading with the United States, as they cannot establish domestic markets for their products, as shown by their per capita GDP of $1,800 (versus $47,000 for the United States). 

Further, North Korea cannot establish domestic markets because their people cannot afford their products, due to the extreme income inequality and poverty.

However, if the United States were to trade with North Korea, the money would support the dictator and his regime, and in turn, further mistreatment of the North Korean people. Therefore, in order to encourage a collapse of North Korea’s dictatorship, countries should not engage in trade with North Korea. 

A Fact I Appreciate

(Market Structure #2) 

My father runs his own business, Government Loan Solutions, which values small business loans. His company is essentially a monopoly, but in a small niche industry.

Although GLS has great market power, they do not have complete control over their prices, as the product is not a necessity. In fact, although the company meets demand, they charge less than the price they could charge (due to demand).

Lastly, the company meets its costs and has a healthy profit margin, a fact I appreciate. 

To a Fifth Floor Apartment

(Market Structure #1)

I spent Christmas on the upper West side of New York City, where Christmas trees were sold at nearly every street corner.  These Christmas trees, which fall under the oligopoly mark structure, were about three to five feet tall and easy to drag down West 79^th to a fifth floor apartment.

My brother’s distress over not being home for the holidays, which led to a search for a small Christmas tree that would not be viewed as a fire hazard to the hotel staff, allowed me to observe the consistent pricing of Christmas trees on the Upper West Side. Nearly every vendor sold their trees for $35. Therefore, I believe that the few sellers colluded and established the price to allow all vendors to sell their inventory.

Although Christmas tree sellers did not have individual commercials encouraging New Yorkers to walk six blocks when they could buy one two blocks from their apartment, some vendors provided a delivery service, so one would not have to drag it down West 79^th to a fifth floor apartment.