Tuesday, December 8, 2015

What happens when you ignore lessons from Managerial Economics?

Venezuela's mistakes are familiar fodder to readers of this blog.  Things got so bad in Venezuela that in 2013, I even sent President Maduro a copy of the third edition, and urged him to read chapter two, to help him understand why Venezuela was running out of toilet paper and used cars.

 


“We’re in a state of constant deterioration,” said Juan Pablo Hidalgo, a 27-year-old hotel worker who voted on Sunday against Mr. Maduro’s allies in hope of economic improvement. “In any other country, people can save. Here, no one in my generation can save anything, much less have hopes of owning a car or a house.”

This is what happens when you don't study economics.  I wrote to President Maduro asking him for a plug that I can put on the cover of the fifth edition, "I should have read this book."

6 comments:

  1. Maduro is following in the footsteps of Hugo Chavez, who manipulated political structures undemocratically, ruled with an iron fist, suppressed dissent and appropriated private industry for Venezuela. He was a strongman who allied himself with rogue state Iran, Cuba, and Russia. What I will never understand is the support he received from liberal Hollywood icons like Sean Penn, Michael Moore, Oliver Stone, Kevin Spacey, and Danny Glover just to name a few. Now with the economy in shambles, even Chavez's home state of Barinas has voted for the political opposition. The initial success of Chavez depended on government largesse enabled by petrodollars. With the general collapse of oil and commodity prices, emerging economies face a far tougher economic road which may breed political instability around the globe.

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  2. I believe in life without learning from our past mistakes or lessons, it is impossible to get success or right success, so that’s why we need to keep on learning as well as possible. I am trading with broker OctaFX broker and through their support and guide, I am able to gain plenty of benefits including low spreads starting from just 0.2 pips, high leverage up to 1.500 plus much more which all builds up in making trading so much easier for me.

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  3. If Containerboard rises, boxes must follow:
    On October 1st many large integrated paper company’s announced a $50/ton increase on linerboard and medium to their converting plants. The industry as a whole has not seen a paper increase in 3 ½ years, the longest run in a decade. It is stated by RISI, “we continue to believe that the increase will go through fully and also be fully passed through to boxes as well within several months” (RISI, 2016, pg.1). This article was published on sept. 8, 2016. Pulp and Paper Weekly (PPW) is published every third Sunday of the month and is the determining factor whether or not the increase will be passed to box plants. On September 18, PPW was published and there was no announcement of a paper movement. The corrugated industry is on the edge waiting to see what Octobers issue has to say. If paper moves, how much will it move? Typically, the price of a box moves 2% for every $10/ton movement. A $50/ton movement would warrant a 10% increase for converted boxes. Both producers and buyers of boxes are anxious to see what will happen as there has been rumors that Georgia Pacific delaying its price increase due to weak market prices. Time will tell.

    Reference:
    Dillon, C. (2016, September 8). Financial Analysts: Containerboard - If containerboard rises, boxes must follow. Retrieved October 15, 2016.

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  6. What happens when you ignore lessons from Managerial Economics?

    It was funny and I was reading on the BLOG on how a person was dissatisfied with the President of Venezuela handling of the economy and he had suggested that the President read chapter two of the book “Managerial Economics.” The person felt that the President of Venezuela could understand how businesses are run and how to look for opportunities. This was under the caption called “What happens when you ignore lessons from Managerial Economics.” What happens when you ignore lessons from Managerial Economics is you do not grasp the idea of how to recognize money-making opportunities. Before you can come up with money making opportunities, you must first understand how wealth is developed. Wealth is established when properties move from lower to higher value assets. You can conclude the worth of a product or service by the amount a person is eager to pay. Economics is imperative to business because it aids them in ascertaining ways of making money. In order for them to see this, they must look at efficiency, because an economy is well-organized if all assets are engaged in their highest valued uses. Making money is easy in belief which you need to find an asset employed in lower valued use, buy it, and then sell it to someone who places a higher value on it. Businesses need to know that the art of business consists of identifying assets in low valued uses and devising ways to profitably move them to higher value ones. In reality, each underemployed asset represents a potential wealth creating transaction. Whatever that obstructs the undertaking of assets to higher value uses, like taxes, subsidies or price controls, abolishes wealth which defeats the whole purpose of wealth. Such inefficiency implies a money making opportunity. I do agree with the person that the President of Venezuela would benefit from reading the book. (Luke m., Froeb, Brian T. McCainn, Mikhael Shor, and Michael R. Ward 2016)

    Reference:

    Luke m., Froeb, Brian T. McCann, Mikhael Shor, and Michael R. Ward 2016. Managerial Economics. Published by Cengage Learning
    Posting:
    https://managerialecon.blogspot.com/2015/12/what-happens-when-you-ignore-lessons.html?showComment=1485389314963#c5553805462616616154

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