Is inflation really 0%? And who is Richard Tait?
Yes, when compared to the previous month – it’s all in the context, folks. The overall Consumer Price Index, CPI, did not increase as a whole between June and July. Hence the 0% inflation figure quoted by some politicians. But surely prices increased?? Yes – stand by and read on.
Alert: No Russell Report next week. The editorial and reporting staff have been hard at work and will be out of the office this week, so no economic and business news next week. Perhaps a weather report from the beach…?
Back to the CPI…
The CPI, partially explained; you really don’t want to spend 10 minutes at the beginning of your week having your eyes glaze over as we discuss seasonally adjusted price fluctuations ….zzzzzzzzz.
So, as I have mentioned in earlier Reports, there are over 60,000 items whose prices are measured: oil changes, cereal, airfares, gasoline, haircuts etc.
For July, compared to June, just 30 days earlier, you had the following monthly increases:
Cereals and bakery products - 2.0%
Nonalcoholic beverages – 2.0%
Other food at home – 2.1%
Converted to an annual increase, that’s 24%. Ouch.
In reality, the last 12 months increase for food products was 15%. Still high, but not 24%.
For July, compared to June, you had the following monthly decreases:
Gasoline – down 7.7%
Airfares – down 9.6%
Convert that to annual percentages and you have almost a 100% decrease.
But that’s not realistic either. It would be nice, but not realistic.
What happened for the month to month changes is that it all balanced out. The increases in beverages, food and other items were balanced by the decreases in fuel and airfare. The net result was a 0% change in the CPI. Only for the last 30 days.
And of course, year over year – July 2022 compared to July 2021 – inflation was 8.5%.
Yes, that is down from the previous month of 9.1%. Down is good.
Cocktail Party Question: Which category had the lowest increase year over year?
Physicians Services at 0.8% annually.
Second Cocktail Party Question: Which category had the highest year over year increase?
Easy guess: Fuel Oil at 75%.
Chase is getting into the travel business.
Yes, Chase Bank.
The nation’s largest bank bought a booking system, a restaurant review company and a luxury travel agent.
It is also building its own airport lounges and a force of thousands of travel agents.
Coincidentally, the company cafeteria has 5 star reviews.
I’m just kidding about that last part, but really? The CEO of Chase is one of the best bankers in the world; why get into the travel business? Evidently the Chase Sapphire credit card is driving the process.
It’s all about travel rewards and having a very large client base that can be a captive market.
I wish Chase would just stay with the banking and either do a stock repurchase or do a special dividend to it’s shareholders.
Which leads me to my point.
A consistent mistake I see from business owners is the desire to get into a different industry. For small business owners, it’s usually some bizarre desire to start a restaurant.
Don’t. How do you make a small fortune? Start with a large fortune and open a restaurant.
Folks, stick to your knitting. If you want to start something completely unrelated to your business, set a maximum budget, stick to it and pull the plug once you hit it. Don’t let it cripple your existing business.
Oh, and don’t go to your bank expecting them to give you a loan to start a restaurant, no matter how long you’ve been a “good customer”. Unless you want to secure it with cash.
Unlike Chase, your net income wasn’t $48 billion in 2021. Chase can afford to ‘experiment’ with a $750 million investment.
Who is Richard Tait?
One afternoon in the late 1990’s, Mr. Tait and his wife were in competition with another couple playing Pictionary. They crushed them.
When they played Scrabble, the other couple returned the favor and crushed Tait and family.
That inspired him to create a game that has something in it for everyone.
He missed the 1998 New York Toy Fair, a key event. Lamenting this at a Starbucks, he noticed that Starbucks customers were the demographic he was targeting.
He approached Starbucks, and they stocked the game at their coffee houses.
He approached Barnes & Noble. No thanks.
He talked two B&N managers into trying the game.
Soon, the game was on sale at Barnes & Noble.
He went to a book signing by Richard Branson, CEO of Virgin Records and pitched him on the spot.
Virgin bought the game.
In 2008, Hasbro Toys agreed to buy his company for $77.5 million.
The game? Cranium.
Mr. Tait, a lifelong entrepreneur, passed away in July at the age of 58.
His personal mantra? “Orville Wright did not have a pilot’s license.”
In other words, just because you have never done a particular thing before doesn’t mean you can’t do it now.
Mr. Tait succeeded because he had no problem asking for the sale, and he believed in his product.
As a business owner, you need to believe in your product and even more importantly, do the cold-calls and ask for the sale.
Helpful DIY tip of the week: When prepping an area for interior painting, make sure to remove all items that might interfere with said painting. An example would be a full cup of coffee that could be knocked over by the sprayer hose onto freshly painted cabinets. A helpful tip from your Uncle Adam.
See previous Russell Reports here. To be added to the distribution list, just email me at adam@ss4bllc.com.
Enjoy the week!
