The markets were rough in 2008, that’s a sure thing. But while my financial counterparts and I are all over the newswires on an hourly basis, picking up every finite detail of the catastrophe that comes out, many people do not have that leisure. Because of this, I have created what I feel to be an all-encompassing presentation of the global recession, and all that happened to the markets in 2008… in an easier-to-understand version.

I’ve packed about all I can do into a short 20-minute presentation on the markets in order to bring you almost completely up to par on where we are, and why. It’s important going forward to understand why things are bad, and where the United States (among others) went wrong with our borrowing habits and over-leveraged recklessness. The bottom line is: if you are at all interested in business, or even if you just work in a line of work that handles a lot of transactions, this is going to be a very important presentation.

The Official Jimvesting 2008 Market Presentation

This is a video-presentation on the markets, and you can download it for yourself in Microsoft PowerPoint format here: DOWNLOAD PRESENTATION. The powerpoint presentation attached can serve as a nice refresher course of everything of note that happened in 2008 that specifically and directly impacted where we are today in the markets. There is certainly a lot of confusion, anxiety and uneasiness surrounding the investing world… and I think that the waters are finally starting to clear.

If you are considering investing, I highly recommend you consider equities over the next few months… as I feel that we are at an attractive long-term investing level. However, it is NEVER a good idea to jump into something without understanding how things function, and how things trade. After all, owning a successful stock in 2009 will not be a function of picking a “good company,” but rather, it will be a function of picking up on a favorable trend. Watching this presentation just might be the excuse you were looking for to get caught up, eh?

I hope that you enjoyed this year’s run-down of the entire year of 2008 in just twenty minutes. It’s definitely a crazy environment, so feel free to post any questions you might have down below in the comment area. If you enjoyed the presentation, please subscribe to my blog to show some support for my efforts. Alternatively, I would love for you to share this post around to your friends, so that we can get as many people “in the know” as possible. Here’s to a profitable 2009… stay BULLISH on the net!

-Jimvesting

I think that it is fair game to say that most of you reading this post either own a blog now, or would like to own a blog sometime in the near future. It comes as no surprise that many of us, myself included, like to monetize what we have with some advertisements to get some extra cash in our pockets. The average blogger will earn around $200 a month from private ad sales. But no matter how you decide to monetize your blog, it’s important to understand how pricing SHOULD work, so you can maximize your profits!

The most typical forms of blog monetization are through text ads and banner ads, both of which can be located pretty much anywhere on your website. Regardless of the format, what I am going to be talking about will apply as long as you offer your ads paid on some kind of periodic system. For example, maybe you charge your advertisers every month to put a banner up on your site; maybe you instead go by the week, or even semi-annually. Whatever the case, chances are that an ad today, is worth less than an ad tomorrow if you are running a successful blog. This is what we call in economics the “time value of money.”

The Time Value Of Money: So why is a dollar today worth less than a dollar tomorrow? Holding inflation aside, which will naturally cause the value of money to appreciate over time, we assume that you could always invest anything that you own today and make more money into the future! The less time you have to invest, the less money you will have in the long run.

So what am I going to talk to you about today? I’m going to talk about properly valuing your ad real estate using compounding interest rates. This is an important lesson, as you could be losing hundreds of dollars if you don’t keep this in mind when you negotiate.

Don’t Rip Yourself Off!

Just a few days ago I received an order for a text link ad, only the advertiser wanted to buy a text link for an entire year… that’s 12 months worth! While this was great news, ordinarily I would have just asked him to pay for one month at a time. Not wanting to lose such a massive sale, I decided to use a compounded interest chart to map out what the fair cost would be.

A typical blog owner would say that if my current rate per month is $20.00, then 12 months would be $20.00 x 12, or $240. This sounds fair, right? WRONG! If this was your answer, you need to seriously rethink the way you do business. Assuming that you are running a decent blog, your rates will go up over time, correct? Therefore, we need to adjust for this when we work the rates into a 12 month period.

What I have done is create a compounded rate excel file that will take a starting rate (e.g. $20.00) and adjust it up x% for each month, depending on how quickly you predict you will develop your website and increase the value of the advertisement. A small note, this is not the same as adding 60% for 12 months of 5% growth… this is wrong. The way that this works is that we would start at our base price, $20.00, then add 5% for the second month, or a new cost of $21.00. After that, it is a third month at the second month cost plus 5%, or $22.05. This process continues all the way to the 12th month, when each ad spot would cost $34.21 adjusting for that 5% growth we expect.

Think it doesn’t make much of a difference? Think again!

If you had used simple straight-line growth at a constant rate, you would have billed a total of $240 for the ads. However, if you used a 5% growth per month, you would have billed a total of $318.34… that’s a difference of $78.34! This is revenue that you are just giving away if you are going to give an advertiser the same rate into the future.

Jimvesting’s Advertising Cost Model – A FREE Gift to You!

I have developed in Microsoft excel a model that will take two inputs, a base ad price and a rate (specified by you), and generate a 12-month pricing plan… showing you the difference between constant rates and compounded rates. It’s very easy to use, but if you need some help, follow along in the video so that you can see just how to use this powerful model.

DOWNLOAD THE NET FOOL’S ADVERTISING COST MODEL

Remember, you can really use any growth rate that you want, and my 5% is only a sample. Suppose you are a newer blog and you are going to grow tremendously in the first few months… maybe you would like a rate closer to 20% growth? Or suppose you are an old timer who doesn’t increase traffic as much as you should… perhaps you use 2.5% growth? My model can pump out valuations 12 periods into advance, and you can look anywhere in the middle and pick out, let’s say, 8-months of payment if you’d like.

Bottom Line: If you are going to sell ad space to your users, you better make sure that you aren’t ripping yourself off! If somebody asks if they can pay for a year of service… don’t tell them “no!”, tell them that you need to account for 5% growth and show them my model in work… they should easily agree to the terms. Heck, it works for me!

- Jimvesting

Today is November 4th, also known as election day. While I had planned to do a write up on the candidate’s position on various things like taxation, energy and the War in Iraq… I have decided instead to share with you a completely free report that I have recently published as a newsletter giveaway for Bullish Bankers, LLC.

Why Is The Election So Important?!
This particular U.S. presidential election comes in the face of a global recession and a lot of problems at home. Many attribute this to the current presidency, but I say that it was, in fact, simple American Greed that got in the way of logic. Our federal programs like the Federal Reserve and the SEC had set up the market in such a way that people were buying. hand-over-fist, second-rate investments like home mortgages and grouped-debt we call “collateralized debt obligations” or CDOs.

This election is going to change the face of the stock market, there is no doubt about it. Whether this be the health care policy that will effect medical stocks, or the nation’s Defense Department budget that will effect aerospace & defense plays… it’s a big one. Of course, there are upsides to electing Barack Obama and there are upsides to electing John McCain. The choice is yours, but I believe that it is smart to have holdings on your portfolio that are resistant to the election.

Election Proofing Your Portfolio!
This November newsletter publication offered from Bullish Bankers, entitled “Election Proofing Your Portfolio” includes in-depth analysis from our firms’ lead stock analysts from each sector of the market. It’s a seven-page report… but honestly the thing has more content then you would find in a 50 page “ebook” that is put out by internet marketers in size 20 font.

What is most compelling is that you get 9 killer stock picks that are researched by professionals and that are picked to outperform the market in shaky times. These are companies that we have hand-selected that will outlast the election from each sector of the market. Believe me, I spent a LOT of time compiling this one… and it is definitely worth picking up to read.

Here is an excerpt from the newsletter to get you interested:

Healthcare Pick: Becton, Dickinson & CO (BDX)
“…One obstacle they have faced in the past few quarters is the rising price of oil, which increases costs of resin (part of their raw ma­terials for many products); however, BDX has managed the concern and does not feel it will significantly im­pact their margins. This part of their business is known as the Medical segment, and also includes, but not limited to, pre-fillable drug delivery devices, ophthal­mic surgical instruments and ACE brand elastic ban­dages. In total, the Medical segment represents 54.4% of revenue…”

I have full confidence that you will love and enjoy this release, and I feel like Jimvesting would better serve you guys by offering up such a report then by trying to overstep my boundaries and turn this blog into a politics opinion page. Many other bloggers have fallen into this trap, and I feel like I need to go against the grain on this one and avoid that stance… sticking to my style and content so as not to turn anyone off of my stuff if they happen to disagree with my thought on such a touchy subject.

You can get this premium report absolutely FREE when you subscribe to our newsletter through Aweber. Let’s face it, most professional sites make you pay $100s for lower-quality research on their membership-driven sources. We want to get you off on the right foot… and will never charge for anything in our newsletter. You’ll get NO spam, but will be able to receive premium content like this every month you come by.

Sounds like a good deal? Sign Up Below!

I hope you guys in the United States all come out to vote for your favorite candidate. Polls are still open, so it’s not too late! As always, I hope that you enjoy this great report that I have made available through Bullish Bankers. Have a great election day!

-Jimvesting

Times are tough out there. As the global economy sours, funding is getting harder and harder to come by… and big media conglomerates are starting to feel the pressure just as much as Wall Street. As more and more businesses turn in losses… people are going out of business faster than ever before. And the worst part? You thought you were safe!

Here’s a news flash to those of you that thought, for some reason, that the internet isn’t tied to the globalized economy… it is. The problems that the companies based in technology face can be just as gruesome as what your local McDonalds or Best Buy deal with on a day to day basis. One thing that most people trying to make money online don’t realize is that online advertising companies are pretty much dead in the water at this point in time. Let’s talk about why.

Online Advertising Speculators Create a Bubble

People throw fits when someone says there is an economic “bubble” that is about to pop. So what is a bubble? Essentially,  when everyone rushes into the “next big thing,” it creates an over-hyped market where everyone is doubled-down and nobody realizes that things aren’t as good as they seem. An example of this was the technology boom in 2001 or the crude oil craze earlier this year.

An undiscovered bubble has been made in online advertising, an arena where more than 300 online-ad networks have started up over the past few years alone. The Wall Street Journal itself called online ad brokering “one of the most popular, and crowded, niches on the Internet.” Truth be told, there are WAY too many companies servicing ads right now, and they are going to get hammered because there haven’t been that many new opportunities opened up in the same period of time. In fact, it’s not even close!

The Online Collapse Has Already Begun

So yeah, there are obviously way too many competitors in this business for everyone to be the next Google. Everybody know it, yet people continue to jump in as if nothing is wrong and there is plenty of wealth to spread around. Just this month alone, JellyCloud, an ad network that had raised over $11.5 million in venture capital this year, closed its doors.

Well maybe only a few small players are getting hit? Think again. Look at AdBrite, one of the biggest companies on the net with more than $35 million in capital funding raised to date. AdBrite actually cut a whopping 40% of their workforce just to stay profitable. Time Warner said in September that its AOL unit, which has over $1 billion invested, was “experiencing softening in major ad categories.”

Online Ad Networks Anxiously Seek Suitors

Now that everyone (except for you) understands that the industry is in chaos, people have been scrambling about looking for someone to potentially buy them. People want to jump ship… and that is never a good sign. I mean come on, I support around 6-7 internet marketing networks on this blog alone and more contact me every day! “Ad networks like Burst Media, the 17th-largest by unique visitors, and Collective Media, the 16th largest, say they are both seeking buyers” according to Emily Steel of the Wall Street Journal. What to make of this? Companies would prefer to be bought out then to continue their operations in vain.

No More Funding… Get Ready for the Long Haul

In good economic times, people are more than willing to open up their wallets for advertising and whatnot. Marketing companies are feeling constrained now because nobody is spending, and nobody is funding. It used to be a case of simply asking for money… and you’d have instant venture capital. Now, not so much… and there is a big panic all around an industry where companies made big bets, assuming that things would be recession proof all the way. In reality, lots of ad deals that were in the pipeline are being reduced or pulled completely.

This morning (October 30th), BMO Capital’s Leland Westefield gave us a fresh look at how the online ad industry have really fared through hard times. Westefield noted that for the ad business, this will be “an unparalleled recession in severity and duration in the post-World War II era.” As consumer and commercial spending continues to fall into the red… it’s going to be rough sailing for ad companies that were enjoying consistent growth in the post-tech bubble era.

So What Can You Do? Looking Forward.

Is this all doom and gloom? No, not really. The ad industry is still growing at a solid double-digit tick in many areas of the market. However, you need to realize that a lot of these ad companies are having a hard time staying afloat. Many of you remember how CPA Empire was accused of shaving profits from one of their customers… I honestly believe it completely, because times are tough and people will try to stay profitable.

Barron’s predicts that it won’t be until 2010 that we see ad agencies return to “business as usual.” I totally agree with this assessment, and feel that it won’t be until one year from now when you’ll start to see things rebounding and coming on strong. I believe that we have a long way to go, and the industry is about to consolidate as smaller companies are gobbled up or bankrupted by a vicious investing environment.

As an internet marketer… don’t worry too much. Keep your head on straight, and your profits won’t drop off too much, despite the flailing industry you work under. There will always be affiliate business to be exploited for cash… so stay in the game and hope for a better tomorrow. One thing: maybe you should start buying some sympathy cards for the marketers that are about to dance with unemployment.

-Jimvesting

I’ve seen my fare share of “brilliant” ideas to lower the gas prices in the United States. Stage a one-day protest against buying gasoline, shift all business to one gas company in order to bankrupt another or maybe we could even tax the big oil companies into submission?

Now that the U.S. Presidential race is down to two candidates, Barack Obama and John McCain, our energy policy has become one of the most pressing issues… even outweighing the economic state and the war in Iraq. For this reason, I feel that it is time to get you all up to par on the truth about crude. These downright foolish ideas to artificially lower prices will never work; I’ll get you “in the know” on why prices are the way they are, and what we can/can’t to do fix it.

Why Are Gas Prices So High?

In short, gas prices are high because of two driving factors: high demand and increased speculation. The energy bubble that existed in the first half of 2008 has since popped, but prices are still pretty high at the pump. This holds true mainly because of a jet lag in the pipeline. Essentially, there are several steps in the oil-production business. You need to explore, find, drill, refine, transport and sell. That’s a lot for a few trips to the grocery store, eh?

There is a rumor floating around that gasoline prices actually bump up faster than they go down. I’m not trying to completely disprove this, but it is a bit ridiculous to think that despite anti-trust policies… all the nations gas stations have some secret agreement to raise prices at the same time at the same rate. Otherwise, if one seller kept prices low, you better believe that they’d get all the business. One thing I will explain further down is that the oil & gas companies are actually losing money and profit margins are dwindling.

How about speculation? While this is debatable, I feel that throughout the first half of the year… investors were gambling excessively on the futures in oil, which will drive the actual price of crude upward. I suppose that the Securities and Exchange Commission (SEC) could have made longs on oil illegal, but other than that there’s just not a lot you can do. Surely, if investors are feeling that demand is soaring while supply is crunching… things are going to get interesting. This isn’t so much anyone’s fault as it is a problem with the way we trade to make money on the open markets. But as you’ll soon find out… the heart of the problem is a bit closer to home.

Who’s At Fault?

Exploration and Production Companies
Obviously, somebody has to do the dirty work to go out and actively find oil and natural gas reserves that we can unlock later for production. Are Exploration and Production (E&P) companies making money? Yes. Are they making excessive amounts? Absolutely not. Let me explain.

One thing that people fail to realize is that these E&P companies deserve to profit, and aren’t making money hand over fist. If you want proof, let’s just look at the profit margins to find out how profitable their ventures are versus other companies:

• EnCana (NYSE: ECA) – 13.16%
• Apache (NYSE: APA) – 33.01%
• Anadarko (NYSE: APC) – 9.64%
  ————————————–
• Microsoft (NYSE: MSFT) – 29.26%
• Intuitive Surgical (NYSE: ISRSG) – 24.68%
• Goldman Sachs (NYSE: GS) – 23.68%

Crude Oil Refiners
You might be thinking that the companies that come in and refine the oil for commercial use would be making big profits… but this couldn’t be further from the truth. In fact, the majority of these companies have been eaten up by their reliance on the spot price of oil. Since all of their business relies on obtaining crude oil from someone else, they have very small guns to flex in the face of the E&P companies.

The oil refiners have some of the smallest margins in the business, and add the least to the bottom line. The crack spread, aka the margins refiners make, is absolutely free falling… as major refiners like Valero Energy (NYSE: VLO) and Tesero (NYSE: TSO) have seen their stocks dumped 50%+ in the face of a broader energy rally.

Gas Stations
Since most Americans aren’t aware of anything but the gas pump, a lot of people assume that this is where their money is going down the drain. In actuality, the gas station business is in one of the worst states as they, like the oil refiners, have almost no control over pricing initiatives. Over 1,000 gasoline stations closed down last year, and many were actually losing money every time you came to the pump in order to stay competitive.

The gas station business is so unprofitable, that major integrated oil companies like Exxon Mobile (NYSE: XOM) and ConocoPhillips (NYSE: COP) are closing thousands of branches a piece… basically cutting and running from the horrible markets where consumers complain despite the fact that station owners no longer make money.

The Government
Not so fast! Sure, a lot of us have figured out that the government has instated a gas tax… but this really doesn’t effect the price you pay at the pump. Why? The current gasoline tax has an indirect effect because of the drilling policies that are in place. What would be a lot more effective (in my opinion) would be to open up all the U.S. territory for drilling. This would discount the futures back to the present and have an immediate impact on the price of gas.

The People
So now we work down to the actual reason gasoline is so high… you. Yes, the United States demands more gas than any other nation in the world, and we just can’t get enough. Once you get down to it, it really is as simple as reducing demand. Clearly, once average gasoline prices hit a high of $4.11, we’ve been under $4 from then on out. This is mainly because Americans started driving less once prices got out of control… and it worked. Reduce demand for the commodity, reduce the price. No one-day protests. No shifty business ideas to “force” companies into cutting rates more. It’s a question of conserving what we have and being less reliant on crude oil.

The Solution

We’ve found the problem haven’t we? Nowhere along the oil & gas production line do we see excessive gains being taken off the table. In fact, it’s been just the opposite! Just take a look at the 1-year stock charts for Exxon Mobile, Chevron or ConocoPhillips! You can say that one of these companies is making $1000 a minute… but when you are the biggest company in the world like Exxon, it’s hard not to. The fact remains that demand and the low crack spread have companies across the board reeling.

Are we doomed then? I don’t think so. Throughout time, our government has found ways to innovate and react to shortages on the market. I truly believe that it is not the government that will solve this, but the free markets and the intuition of the worldwide intellect that is working around the clock on a solution. Maybe it will be the Pickens Plan, with natural gas as a headline alternative, or maybe it will be the flaunted alternative energy sources of solar, wind and clean coal. Perhaps we even find a way to use nuclear technology, the most effective (but dirty) production means, in an innovative way.

In the meantime, we can fix the problem by using alternatives to driving and demanding oil. America alone uses about 1.3 trillion gallons of gas per year. Other countries like India use about 1/20th of that! True, America is a nation that was literally founded on the use of petroleum… and you’d be surprised to realize that the amount used per capita is currently about half of what it was in the 1980s. That being said, prices probably will rise from here… but this isn’t a problem we can’t fix.

-Jimvesting

Disclaimer: Many of these investing ideas brought to you by BullishBankers.com