Archive for the ‘Grow Page’ Category

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What’s the difference between a recession and a depression?

Wednesday, August 3rd, 2011

Before the 1930′s, recessions didn’t exist. This doesn’t mean that the economy behaved all that differently than it does now: up until that time, all economic declines were simply called depressions. But after the Great Depression, the term “recession” was coined to separate financial downturns on a lesser scale from those comparable to the catastrophe of the ’30′s.

The common definition of a recession is a drop in Gross Domestic Product (GDP) over two or more consecutive quarters. But economists tend to dislike this definition because it only looks  at GDP, and the two-quarter minimum means shorter recessions can go unnoticed. The National Bureau of Economic Research officially declares a recession after an in-depth analysis of financial information.

A depression is a recession in which the GDP declines by more than 10%, or one that lasts for more than three years. While recessions are pretty common, depressions are not. Only one developed country, Finland, has suffered a depression since the end of World War II. Depression has become a loaded term since the 1930′s catastrophe, and we want to make sure we use it only when the situation is appropriately grave.

A Future is…

Wednesday, August 3rd, 2011

A “future” in market terms, is a contract to buy or sell a commodity for a specific price at a specific time in the future. That contract (or future), can be bought and sold up until that date. Think of it this way: today, an apple costs 25¢ but you think the price will go up 50¢ next fall. You decide to buy a contract with an apple farm for an apple next fall at today’s price. Now you can sell that contract up until next fall.

What makes a stock price go up and down?

Tuesday, August 2nd, 2011

At the most basic level, stock prices are related to demand. When many people want to buy stock in a certain company, the stock price goes up, and when a lot of people are trying to get rid of a stock, its price goes down. But there are several other factors that go into a stock’s price.

If investors think a certain stock will do well, they will buy it and its price will go up; the reverse is also true. Stocks don’t exist in a vacuum, so their environment (both in general and specifically) affects their price. How is the company that owns the stock doing? Has it released positive earnings reports or a new product that shows promise? Investors also examine the social and economic climate in general – interest rates, political interest in certain businesses, and so on. Lastly, there’s the market itself to consider: during a bull market, everyone is buying stock, so stock prices in general tend to go up.

The stock market is tricky because it relies so much on anticipating things before they actually happen. A stock’s price will go up if it is popular, but investors may also buy that stock because they think it will become popular in the future. If enough people have this hunch, investing can become a self-fulfilling prophecy.

Josh Weinstein Offers Advice to Potential Entrepreneurs: Do it!

Monday, August 1st, 2011

josh-weinstein.jpgJosh Weinstein is the founder of YouAre.TV. YouAre.TV allows anyone to be on TV and interactive gameshows via webcam. He previously
founded CollegeOnly, GoodCrush, and CollegeGovs. Josh likes people,
technology, and leveraging the latter for the benefit of the former. You can check out some of his early work at Photocracy.org.

Josh was nice enough to sit down with TILE for a few questions.

TILE: What inspired you to become an entrepreneur?
Josh: My passion for creating things is the primary catalyst for me becoming an entrepreneur. GoodCrush was the first entrepreneurial project I worked on post-grad and was something I came up with in college. It was clearly addressing a problem and was used by a lot of my peers, so I was excited to continue to work on it.
TILE: Where do you get your best ideas?
Josh: The best ideas come from actual experiences when you are like “I really wish I had something that could do X” — that’s how I came up with the CrushFinder originally. YouAreTV came about in the same way.

TILE: Which start-up are you most proud of and why?
Josh: Tough to say between GoodCrush and YouAreTV. GoodCrush was cool because we clearly hit a need and people really liked it. YouAreTV, however, is really novel and disruptive.
TILE: How has your experience as an entrepreneur – personally, financially and in business – compared with your expectations?
Josh: Patience is of the essence in entrepreneurship. You hear about a lot of homeruns that seems to be magic right out of the box, but it’s not like that for the majority of the cases. Even some of those instant homeruns weren’t instant — Groupon for example, was a pivot from a failing venture.
TILE: What advice would you give to any young people considering entrepreneurship?
Josh: Do it. Learn to code.
TILE: Help our members learn from your mistakes…What’s the dumbest thing you’ve ever done in your financial life?
Josh: I worked with an outside firm to code some of our site – they were incredibly expensive but ostensibly some of the best in the world. It was a massive waste of money and they didn’t care about our stuff at all, it didn’t even work at the end. I should have used our money to focus on building a team internally instead of a) racing to get the product out b) working with people who weren’t invested in the same way.

What does $1 trillion in cash look like?

Monday, August 1st, 2011


(image source: http://usdebt.kleptocracy.us/)

Ever wondered how many Benjamins can fit in a football stadium?

As the debt ceiling (quickly) approaches and the government (hopefully) nears some sort of resolution, we just thought we’d help you get a handle on what all these ginormous (fact: ginormous is actually a word) numbers look like.

You can also check out this infographic and this one if you want to learn more about where the debt came from and exactly whose debt it is.

Lolz! SEC Says WTF to Groupon Accounting Language

Friday, July 29th, 2011

social-media.jpg
(image credit: webtreats)

You know how (old) people are always saying that “texting and Facebook are the end of the world because kids can’t write anymore and say ‘u’ instead of ‘you,’ blah blah blah?” (like, omg, it’s nbd…)

Well, the SEC is now taking issue with the way Groupon and other start-ups are reporting their finances. Groupon, which is preparing for its IPO (i.e. selling shares of itself to the general public), is using some new – and misleading, according to a lot of financial experts and regulators – terminology to talk about how much money they are worth.

Other web and social media start-ups have done this sort of thing in the past – like talking about “eyeballs” (the number of people who view a website) instead of dollars to demonstrate a company’s value. However, some are saying Groupon is going too far, and others are saying stuff like “eyeballs” should never have been put next to traditional financial metrics in the first place.

So, do you think this is just an example of old finance not really getting the new way stuff works, or are Groupon and Zynga trying to punk us?

Mercantilism is…

Wednesday, July 27th, 2011

Mercantilism is an economic theory that was popular in Europe during the 17th century.

The basic idea is that a country’s power and economic well-being come from having lots of precious metals around, like gold and silver. This leads to arguments against free trade and for protectionist trade policies. By gaining a trade surplus (i.e., exporting more than you’re importing), a country can collect more and more of these metals from other countries buying its goods.

While mercantilism is usually associated with European trade policies of the somewhat distant past, it still pops up in today’s world to describe a country that is acting in mercantilistic ways.

A Credit Crunch is…

Wednesday, July 27th, 2011

A credit crunch is a period when lenders are unwilling to provide loans to borrowers. Generally a lender will extend credit to a borrower under the assumption they will be paid back with interest. But when the economy is bad, lenders become hesitant to make loans for fear of losing their money.

Econometrics is…

Wednesday, July 27th, 2011

Econometrics is the use of mathematics and computing to analyze economic questions. Someone who does econometrics is called an “econometrician.” Yup.

Econometricians use models (like linear regression) to achieve a number of goals. These include:

  • generating economic data
  • answering a particular question
  • testing a theory
  • discovering an economic relationship

Embezzlement is…

Monday, July 25th, 2011

Embezzlement is taking something for personal gain that you’re supposed to be looking after for someone else.

It often happens in small amounts over time, and can sometimes go undetected for years. This is why accounting is so important – and why we need watchdogs like the U.S. Securities and Exchange Commission (SEC) to growl at offenders.

Examples of embezzlement include someone in charge of a trust or an investment fund snagging some of the money in their care, or those at the head of a nonprofit tweaking the books so that everything looks normal… while dollars secretly slip out the back door.

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