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Michael Lee, founder of Epsilon in Chico, California, is a passionate business professional who has helped establish successful businesses and uses this experience to meet the needs of businesses, non-profits, and individuals with whom he works. The backgrounds of Lee and his consulting staff... More
My company:
Epsilon
My blog:
EpsilonFinancial.com Blog
My book:
The Stock Advisor App Series (iPhone/Android apps, not a book)
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  • FDA Proposes Sugar Labeling Requirements

    It is finally becoming common knowledge that the foods we eat contain far too much sugar. The history of sugar and its use in our foods in this country is long, but to provide a simple overview:

    • In the 1960s and 1970s, scientists began collecting evidence that foods with saturated fat could raise LDL cholesterol and, therefore, increase the risk of heart disease.
    • As a result, in 1976 Senator George McGovern called a hearing to raise attention to the links between diet and disease.
    • This led to the creation of the first set of dietary guidelines in America. Known as the McGovern report, these guidelines recommended lowering overall fat intake.
    • The food industry saw this as a marketing opportunity and began offering "low fat" foods. When removing fats from foods, however, taste is compromised. To combat this, the food industry replaced fats in food with added sugar.

    Here's a bit more historical info, if interested.

    Fast forward to today. Sugar has now been linked to weigh gain, obesity, cardiovascular disease, alzheimer's disease, depression, cancer, and a myriad of diseases and health issues. (Perform a Google search for the words "sugar linked to" and see the amount of diseases that autofill the search form.) In summary, too much sugar is very bad for us, and we've been eating way too much of it for about 40 years.

    So how much sugar is too much?

    If you look on any food product's "Nutrition Facts" label, you can quickly see the contained amount and daily recommended value of calories, fat, cholesterol, carbohydrates, etc. But the recommended daily value of sugar is surprisingly absent. (Don't believe me? Check any nutrition label on any food product anywhere.) Here's an example from a bottle of Coca-Cola (NYSE:KO):

    How is this possible? Needless to say, food companies like The Coca-Cola Company make every effort to keep consumers naïve to the amount of sugar they're consuming because these products generally contain unhealthy amounts of the sweetener. And if consumers knew that the amount of sugar they were consuming was too high (over the recommended daily value), these companies would likely need to decrease the amount of sugar in their foods and beverages, which, of course, would result in a less tasty product.

    But this could all be changing soon. The U.S. Food and Drug Administration (FDA) recently proposed that the recommended daily value of sugar be added to all Nutrition Facts labels.

    The Dietary Guidelines Advisory Committee has proposed a value of 50 grams per day as a recommended daily value, which is about 10% of a person's diet if they are eating 2,000 calories per day. The American Heart Association, however, recommends that women should eat no more than 20 grams of sugar per day and men shouldn't exceed 36 grams.

    This regulation change, if approved, would be a significant step forward in our journey, as a country, toward lower obesity rates, lower cancer rates, and overall better nutrition. But food companies like The Coca-Cola Company , Kellogg Company (NYSE:K), Post Holdings, Inc. (NYSE:POST), General Mills, Inc. (NYSE:GIS), Pepsico, Inc. (NYSE:PEP), and many others in the consumer goods sector would be affected and, therefore, will likely do everything in their power to keep this change from happening.

    Further information and details about the proposed food labeling changes can be viewed here. As with all proposed regulation changes, the public is encouraged to submit comments. To submit a comment, click here.

    Tags: GIS, K, PEP, POST, KO, market-outlook
    Jul 31 7:20 AM | Link | Comment!
  • Update: If Gold Continues To Fall, I'll Continue To Buy

    I recently wrote an article, "7 Reasons To Buy Gold Right Now," which, along with providing a brief history of the metal, outlines my reasons for owning gold as a long term investment and my reasons for purchasing the commodity over the weekend.

    After having not owned gold since 2012, last weekend I purchased gold at around $1130/oz. Since my purchase, gold has dropped a few percentage points and is trading at $1085/oz (as of this writing).

    So, am I disappointed that the metal has fallen since my purchase? No. What will I do if it continues to fall? I will buy more.

    Gold's next areas of support (where the stock may pivot and turn upward) are $1050/oz and $1000/oz. If gold falls to $1050/oz, I will watch price action closely at that level and possibly buy more. If gold falls to $1000/oz, I will definitely buy more.

    Here's how I see it: If I purchased five ounces of gold at $1130/oz and then I purchase five ounces of gold at $1000/oz, my average entry is $1065/oz. In other words, my position would be akin to a single purchase of ten ounces of gold at $1065/oz. Sure, I would've rather purchased all ten ounces at $1000/oz, but buying at (what I would assume to be) the exact, lowest point is an unrealistic expectation (for me and many others).

    This is similar to the opposite when selling. Using gold again as an example, let's say I owned ten ounces of the metal in 2011 when it reached record highs. When gold broke above $1600/oz, it would've been wise of me to sell part of my position. So we could imagine that I would've sold five ounces at, let's just say, $1650/oz. As the metal then continued its climb, I would've liquidated the rest of my position when it reached above $1800/oz. So, we'll say I sold five ounces at $1650/oz and five ounces at $1800/oz, giving me an average exit price of $1725/oz. Again, I wouldn't have sold at the exact peak of gold's climb, but this selling strategy would've made my average exit price much closer to that peak than if I had liquidated everything during my first transaction at $1650/oz.

    The point I'm trying to make is, if you're looking to purchase gold as a long term investment like I am, its continued fall should be seen as a good thing as it offers you the chance to purchase more of the metal for less. As mentioned, if gold reaches all the way down to its major support level at $1000/oz, I'm definitely buying more.

    Note: I do like gold as a safe, long term investment but I also believe in full portfolio diversification. As such, I do not intend to have a position in gold that represents more than 10% of my entire portfolio. Other investments, that produce regular income (dividends, payouts, etc.), make up a much larger part of my portfolio.

    Tags: GLD, SPY
    Jul 24 12:09 AM | Link | Comment!
  • What I Learned About The Job Market When I Opened A Restaurant: College Educated 20-Somethings With No Industry Experience Are A Dime-A-Dozen

    My wife and I and another business partner are opening a restaurant in downtown Chico. We plan to open early September and, in preparation, we recently put out a couple ads on Craigslist for front and back of house positions. Within the first week of posting the ads we received over 50 applications/resumes. Of course, it's very encouraging to see such interest from job applicants. And now we have to sift through all those resumes and hope a few applicants stand out.

    I've already begun going through the resumes and, like the title of this article suggests, the majority of the applications/resumes are from 20-somethings, either in college or with a Bachelor's degree. And almost all of these applicants have very little related industry experience.

    Now, I know that, because I'm hiring for a restaurant, I'm really looking for two types of employees: Back of house (cooks) with industry experience and front of house (servers/cashiers) who are personable and have some customer service experience.

    Starting with back of house hiring, I actually think this will be easy. (This article is more about the front of house applicants than back of house.) The applicants we have had for back of house seem to have a good amount of industry experience and some applicants have attended culinary school. So I think we're good there.

    But front of house is another story. Taken, verbatim, from our ad, we hope to find applicants with the following traits:

    · Must be energetic and able to multi-task

    · Professional, friendly demeanor

    · Positive attitude and excellent communication skills

    · Be able to adapt in stressful or fast-paced situations and think on their feet

    · Be able to work with minimal supervision, take direction well, and learn quickly

    · Take pride in his/her work

    · Remains calm and collected under pressure

    · Familiar with a POS system

    Looking at the applications/resumes we've received so far, thankfully, a couple do stand out. But the vast majority of applicants all have similar experience (have held a handful of low-responsibility positions with varying companies in varying industries) and similar education (are either in college or have a Bachelor's degree).

    Now, here's how I see the importance of each section of resume and application review (by percentage):

    · Work experience: 25%

    · Applicant's availability: 20%

    · Skills/abilities/proficiencies: 20%

    · Intro/answers to specific questions asked (review of written communication skills): 15%

    · Searching the applicant's name in Google or Facebook for background: 15%

    · Education: 5%

    · References: 0%

    Side note: If you want to be taken seriously by a potential employer, begin by using proper grammar and syntax in your application and communication with the employer. Use spell check. Write a sentence with more than one properly used comma. Don't mistake "to" for "too" or "there" for "their" or "your" for "you're". It is so disappointing how many college educated folks (applicants and otherwise) simply don't know how to write, something that should've been learned long before attending college.

    Back to the topic.

    A college education is great. For you. I'm glad that applicants are working toward or have completed a degree in some unrelated field but, unfortunately, it's generally just that, unrelated. For our restaurant, culinary school, of course, is an exception because that's more of a trade degree as opposed to an academic degree. But even if I were opening a web development company and I had a choice between an applicant with a degree in computer science and an applicant with two years of experience building websites, I'd pick the applicant with industry experience.

    We haven't begun interviews for the restaurant yet so, realistically, I think that's when we'll really be able to tell which applicants stand out and which don't. But before the interview, when your name is in an email folder with 50 other applicants just like you, employers need something, anything that makes you stand out. And we're not looking for some colorful resume font or someone who has the audacity to use profanity in his application (yes, this happened). We're looking for people who know what they're doing. They've done it before. They understand the business. Etc., etc.

    I know that hiring for a restaurant is vastly different than hiring for, let's say, some large corporation with significantly more upward mobility. I just want to make the point: A college education is a very valuable thing but employers know that it's generally just academic. Theory is different than practice. Knowing the theory of, let's say, public relations, is nice but working at a PR firm and understanding how to run a PR campaign is a much more valuable skill in the eyes of an employer.

    Work. Do. Invent. Try. Get industry experience. Start your own business. Make friends. Shake hands. Be a good person. Build your reputation. Get involved in your community. Just don't blindly believe that a college degree will separate you from the herd, because it won't.

    Jul 17 1:23 PM | Link | Comment!
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