Emerging Emerging Market Brands

Western Brands Under Siege?
http://www.economist.com/news/business/21579791-western-brands-are-coming-under-siege-developing-country-ones-emerging-brand-battle

The changing labor and education market

Why are so many college graduates driving taxis?
http://www.bloomberg.com/news/2013-06-25/why-are-so-many-college-graduates-driving-taxis-.html

The New Temporary Labor Market
http://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe

Paying for college tuition with a summer job used to be possible.
http://seattletimes.com/html/localnews/2021250505_westneat23xml.html

What to make of this?

The percentage of food service workers as a part of the overall US labor force is at an all time high (~7.5%):

http://economix.blogs.nytimes.com/2013/04/05/the-fries-with-that-economy/

7 out of 10 of the lowest paying US jobs are in the food industry:

http://www.huffingtonpost.com/2013/04/02/lowest-paying-jobs-food-industry_n_2999799.html

Healthcare in America is EXPENSIVE

But we all already know that.

I found this article on medical prices in other countries vs the United States to be a pretty good starting point. So, why do Americans pay such high prices?

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,”

In the United States "Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured."

And from the perspective of the patient in the US, there's a confluence of factors that all make it extremely difficult to be price sensitive. It seems like almost every factor that could make a market inefficient or demand for a service insensitive to price applies in some way in healthcare.

So, you are being price gouged for a medical service or products but:

• You may not be in a position to refuse this care.
• You may be in a time sensitive situation; or just as often, you may be uncertain whether or not you are in a time sensitive situation.
• You are likely to want to do "everything possible" in such an important area as personal health.
• It is hard to know what care is necessary and what might be overkill.
• There is always asymmetrical information - providers are more knowledgeable than you. Providers of care have an incentive to provide care.
• There are a lot of moving parts and complex information both medically and within the health system.
• It can be difficult to shop around or compare prices.
• The scope of the medical issue or the treatment needed to be done is often not known up front.
• It seems quite difficult to definitively know whether your insurance will cover something until you have already received services.
• If you are in the middle of a medical situation you are not in a strong position mentally, physically, or financially to negotiate.
• Physicians and care providers have position of trust and authority, even more so than in most industries.
• There are often no substitutes or alternatives for a given drug, procedure, etc.
• It is difficult to switch providers mid-treatment, and in general, or or to know if you should.
• You know that have insurance for a particular service and so you are STILL not sensitive about price.

And that's why healthcare is expensive!

Follow up to 2013 Views

Interesting panel in Davos where Ray Dalio speaks to the new global competitive environment similar to how I've been describing:

Views on 2013
"Education has been 'democratized' and is available globally. The set of corporate laws, strategies, infrastructures and overall economic "setups" are becoming more similar and copied across business and countries internationally as well. We will all be playing by the same rules."

http://www.bloomberg.com/video/no-growth-easy-money-navigating-the-new-normal
Listen to Dalio around 20:45 minutes: "The issue will come to productivity... the economics of 'how do you become competitive'..."

Or here is a transcript:
https://www.santangelsreview.com/2013/01/27/transcript-of-ray-dalios-comments-at-davos/


Again, every country is moving closer together on:

• Government structure
• Legal, financial, corporate setup
• Healthcare
• Education
• Technology

There are basically a series of "best practices for setting up a country" and "best practices for running a global multinational corporation" and anyone is going to be able to put them into place to become more competitive and productive.

More Japanification Links

 The Rise of the Permanent Temp Economy
http://opinionator.blogs.nytimes.com/2013/01/26/the-rise-of-the-permanent-temp-economy/

Underemployed (And with College Loans)
http://economy.money.cnn.com/2013/01/28/overeducated-and-underemployed/?iid=Lead

Follow up to this post:
http://zebrainvesting.blogspot.com/2012/11/japanification.html

Stock Purchase 1/18/2013

More stock:

BOUGHT RDS.B ROYAL DUTCH SHELL PLC 1/18/13 $71.89

Over time trying to add holdings in companies with "stuff in the ground"... commodities, real estate, oil & gas and other tangible natural resources.

Stock Purchase: PCL, CVX

I thought I'd add a post whenever I buy or sell something in my portfolio, and try and write down my reasons for doing so, so I can look back on it later. Here are the first two of these posts, retroactively:

BOUGHT PCL PLUM CREEK TIMBER CO INC 11/07/12 $43.28

BOUGHT CVX CHEVRON CORPORATION 11/07/12 $107.86

Over time trying to add holdings in companies tied to commodities, real estate, energy and other tangible natural resources.