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We may be closer to a major market top than most investors think.
That at least is the conclusion that emerged when I compared the current market environment to what prevailed at major market tops of the past century.
To be sure, there are some dissimilarities as well. But that doesn’t necessarily mean we’re not peaking. No two tops are exactly alike. As Mark Twain famously said, even if history does not repeat itself, it does rhyme.
With that thought in mind, I examined all 35 bull market tops since the 1920s. I searched for patterns in the performance of not only the market itself, but of various internal market factors, such as earnings and price/earnings ratios. I was also interested in how small company stocks tend to perform in the months leading up to a top, both in their own right and relative to large-cap stocks. Likewise, I searched for patterns in the relative returns of growth and value stocks.
I relied on several extensive databases: Yale University Prof. Robert Shiller’s database of Standard & Poor’s 500 earnings and P/E ratios, as well as a database showing the relative performances of small- and large-cap stocks, as well as of the growth and value styles, maintained by Eugene Fama of the University of Chicago and Ken French of Dartmouth. To determine when bull and bear markets have begun and ended, I relied on the precise definitions employed by Ned Davis Research, the quantitative research firm.
Here’s what I found.
Market rises steeply before bull dies
The typical bull market comes to an end following a period of extraordinary performance. In other words, some of a bull market’s best returns are produced right before it dies.
This is important to know if you thought that this bull market would, before it breathes its last, begin to slow down and go through a period of modest performance. That’s not typically the case: On a price chart, the average market top looks more like a pointed mountain peak than a plateau.
While it is of course possible that the next market top is more like a plateau, it would be the exception rather than rule: Since the 1920s, the average bull market has gained more than 21% over the 12 months prior to a top — more than double the long-term average.
Interestingly, the stock market recently has produced a return that is quite similar to this average 12-month gain prior to market tops: The S&P 500 over this period is up nearly 23%. Read More
HTC is preparing an extensive two-year marketing campaign featuring Iron Man star Robert Downey Jr, according to two sources who spoke to Bloomberg. The deal is said to be worth $12 million and will span television, print, and billboard advertising around the globe, with Downey maintaining a level of creative control.
HTC has struggled to keep the pace with rival Samsung’s marketing muscle, despitepositive reviews of products such as the flagship One smartphone, and was also recently hit with a series of high-profile departures. The company said last month it had soldaround five million One phones since its March launch, compared to Samsung’s 10 million shipments of the Galaxy S4 in its first month.
“We haven’t been loud enough,” said chief marketing officer Ben Ho in his first meeting with the press this March. Ho added that the company would be retiring its long-serving “Quietly Brilliant” tagline in favor of a campaign based around the themes of “bold,” “authentic,” and “playful.” Read More
Marketing is everything these days. You can have the best technology, but if customers don’t know you exist, or they don’t know how your technology solves a real problem for them, your startup will fail. Yet I see many entrepreneurs that focus on the basics of marketing too little and too late.
They skimp on the design of their website, procrastinate on the rollout to make sure the product is perfect, and get so excited about technology features that they forget about creating value for customers. In fact, this article was driven by a startup press release I just saw today, highlighting a startup’s “geo-fencing technology” as a new basis for discount coupons. How many customers will have any idea what this means to them?
On the marketing side of the equation, there are so many “marketing gurus” and “marketing resources” out there, the real challenge for most of us is to sort out the basic do’s and the don’ts that apply to startups. I found some help from marketing coach David Newman’s new book “Do It! Marketing,” which provides some pragmatic marketing advice for all small businesses as follows:
- Don’t tell customers how great you are. Parroting a generic message that you have great service, great value, and a great selection says you have nothing unique. You need to clearly convey what makes your startup the only choice for your customers. Give yourself the “So-what?” test and check for a compelling value-based answer.
- Don’t fall into the marketing-speak trap. Don’t fall for the temptation to make big claims, empty promises, and mind-boggling jargon. Learn to speak a new customer-specific dialect based on current research and homework. Go directly to the source – your real live customers, and get their priorities, issues, pressures, and challenges.
- Don’t waste your time networking with strangers. Start networking smarter and smaller. Invite key people for coffee or lunch one-on-one, and get to know them and their business. Aim first and foremost to make them a friend, and the connections to others will come naturally. Working the circuit of big groups of strangers is minimally productive.
- Don’t waste your time following up. If you are focused exclusively on prospects who are actively seeking to solve the problem you are positioned to solve, you won’t need five or seven attempts to get their attention. Craft a no-follow-up sales letter, after you have positioned yourself as the right expert, with powerful testimonials. They will call you back.
- Don’t dumb it down for social media. Many entrepreneurs fear giving away their very best insights, strategies, or tools via social media – it might diminish the demand and the profit. In fact, when customers perceive real value in what you give away, they begin to imagine how much more they might get as a real customer.
- Don’t put all your faith in passion. Passion is necessary, but not sufficient to grow your startup. Be passionate about what you do, but develop a really strong plan, and a strong plan B too. The more you think ahead of failure, and think beyond failure, the better your chances for success are.
GOOGLE executives, declaring themselves pleased with the results of an unusual advertising initiative last year, are bringing out a Version 2.0, again teaming with agencies and marketers to try demonstrating that technology is not incompatible with traditional Madison Avenue sales strategies like emotional storytelling.
The 2013 version of the initiative is to be announced on Thursday as a gaggle of Googlers gets ready for the annual South by SouthwestInteractive Conference and Festival in Austin, Tex.
The initiative last year, known as Project Re:Brief, was meant to help change minds outside Silicon Valley and Silicon Alley about the role that technology in general, and Google products in particular, could play in mainstream brand marketing.
The focus of Project Re:Brief — as in rethinking a creative brief — was to reimagine for contemporary consumers four classic commercials and campaigns from the “Mad Men” era, for Alka-Seltzer, Avis, Coca-Cola and Volvo.
Another change for 2013 is a renaming of the initiative: Art, Copy and Code, riffing on the ad industry phrase “art and copy,” evoking the two components of most ads; the organization known as the One Club for Art and Copy; and a movie, “Art and Copy,” produced by the organization.
Perhaps the biggest change for Version 2.0 is to shift the time frame. The work developed last year for Project Re:Brief was based on ads from the 1960s and 1970s. The work being developed for Adidas, Burberry and Volkswagen will be based on current ads.
“We had a great experience last year when we went back to the iconic campaigns, people saying, ‘Wow, you can build brands online; digital isn’t just for click-here, direct-response ads,’ ” said Jim Lecinski, vice president for United States sales and service at Google.
By : Eric Jackson
Image via CrunchBase
To listen to the Facebook (FB) earnings call last week, you would have thought that the management team passionately cares about their users’ experience and the care and feeding of their advertising clients.
Here’s Mark Zuckerberg discussing how complex Facebook’s internal systems are to track user behavior and the effectiveness of various ad campaigns:
at any given point, we have a lot of different tests, different algorithms running, and we measure engagement of everything downstream from News Feed and the whole system, right? So obviously, clicks and engagement and feedback in News Feed, how many people want to share, but also how many page views and how much time people spend on Facebook overall, ad performance, everything, down to all of the different tweaks that we do in News Feed, and user sentiment as well. So I think we have pretty robust systems that are built out around this. And one of the things that I think is pretty interesting is what we’ve seen is that we can put in good sponsored content and have it not degrade those metrics. So that’s really what we’re trying to do, is we’re rolling some of these Sponsored Stories out more conservatively because we want to make sure that the quality is very high. And we’re basically continuing to run those tests to make sure that we are producing the best product that we can.
our third area of progress has been to make it easier for small- and medium-sized businesses to advertise on Facebook. Local business advertising is considered by many to be the Holy Grail of Internet advertising since the market opportunity is so great. This is proving difficult, however, because small business owners often lack the time or ability to adopt new technology. Facebook is uniquely accessible to them. As they typically learn to use Facebook by setting up personal profiles or Timelines, they then discover the value our service can provide them as business owners. Many of the world’s approximately 60 million business owners are already Facebook users. Over 11 million businesses already have pages on Facebook. Over 7 million of these pages are actively used each and every month. In addition, hundreds of thousands of small businesses advertise with us. By making it easier to create a business page and run ads, we believe we can increase the number of small and local businesses who use our tools.
Yet, there are two stories out this morning about small businesses who are frustrated with their Facebook ad experience.