GoPro or Go Home?

The rise and fall of GoPro is a story other technology companies should be looking at when thinking about going public on the stock market. With an innovative company like GoPro, it seemed like a great next move and expand their business model, however, they might be regretting it now. Companies like GoPro and Twitter are having a hard time diversifying their products and gaining a consumer base, making it hard on investors to stay confident in their products. In its IPO filing in 2014, GoPro admitted that they depend on the sales of their products to capture profits for their company. Let this be a cautionary tale for those who want to become a publicly traded company or for those investing in a stock they may believe in.


GoPro is an American company that produces versatile, portable high-definition cameras used for action videos and photography. In 2002, Nick Woodman founded the company after going on a surf trip to Australia and failing to capture quality action photos while surfing. As the company developed, so did the camera software and eventually, digital and video cameras were installed. GoPro made the decision to go public in order to become a larger media company and generate additional revenue from their camera products. On June 25, 2014, GoPro became a publicly traded company on the NASDAQ where their price per share was sold at $24. That day, they sold over 17.8 million shares of GoPro stock.


GoPro Official Website

Since their IPO, their share price quadrupled in the course of three months and things were on-track for success. On September 24, 2014 GoPro released their camera, Hero 4 causing their stocks and investor confidence to rise in the brand and their price per share jumped from 72.88 to 78.46. At its highest, GoPro was trading for $98.

However, some investors were soured when CEO Nick Woodman sold shares of GoPro stocks for his new charity, the Jill +Nicholas Woodman Foundation, and gave 5.8 million shares to their charity, causing the share price to decrease by seven percent. Although the shares were taken came directly from Woodman’s holdings, which was comprised of 52.4 million shares at the time of GoPro’s IPO, the company created more shares for the charity as well. This was especially alarming because GoPro’s lockup period expired in late November 2014. After the lockup ended, GoPro managers and directors can start selling shares, but not before then. This caused investor confidence to lower because they thought Woodman was signaling the stock’s high price was too extreme by selling off his shares in October.

Jump to two years later after a tumultuous year after becoming a publicly traded company, where their share price is around $10—quite a different company than two years prior. This fall from grace has happened because investors simply don’t like the stock and that’s because slumming sales. In 2015, their price fluctuated but had a sharp decline in July, where they plummeted to $60 per share. Because GoPro technically sells hardware, they cannot have a high operating margin, especially when their growth is expected to slow. GoPro is projected to generate $2.1 billion in 2017, when its actual revenue of 2015 was around $1.93 million—not a big increase year-over-year. 


Yahoo Finance

However, today with a share price of around $10, maybe some investors are too hard on GoPro and their sales, they may be able to turn it around. Although the company faces competition and is having a hard time expanding its consumer base, but people who have the product love it. GoPro now has a Karma drone in the works, which could life the company up. Everybody loves a comeback story and this is an opportunity for GoPro to reinvigorate stockholder confidence and gain a new segment of customers.





Burberry, Brexit & Trade

With the click of a button, a classic Burberry trench coat can be delivered to your doorstep within days. As an iconic British brand, Burberry has over 498 locations around the world and countless products traveling between national borders every day. Consumer demand and international markets that make the item seasonless while it remains a symbol of British fashion and production around the world. As winter creeps closer, you get your hands on a classic Burberry trench coat and discover the larger story of how it got to you through the process of international trade.



Burberry was founded over 160 years ago in 1856 in Basingstoke, England as a high-fashion brand. Unlike other luxury brands, Burberry has prided itself on producing its clothing in England. When the brand announced that they would open a manufacturing in China in 2012, they were met with staunch negativity. Because the trench coat is a symbol of British manufacturing and England in general, Chief Executive Officer Christopher Bailey thought that the brand should stay loyal to the heritage of the textile industry that would provide the timeless quality of the coat and opened a factory in Leeds in 2015. Although China’s production would have a comparative advantage and possibly make more money for the brand, the products would lose their history and sentiment. Using the original method that includes over 100 processes, it takes three weeks to complete a single Burberry coat. The site in Castleford manufactures 5,000 trench coats a week and has a capacity of 240,000 a year. With an average price point of $1,500, that’s $360 million a year in trench coats produced at this site. When Brexit occurred, people and brands were on edge of how trade barriers would change and impact British brands and products throughout Europe and if trade agreements would also change with the United States.


The Telegraph

With consumer prices on the rise in the U.K., the pound has fallen by a fifth to the U.S. dollar since the U.K.’s vote to leave the European Union. This is caused the price raw materials to increase, causing the price of consumer products to climb as well, which means the cost of that trench coat would rise as well. Since the U.K. will be leaving the EU, borders that were once open and had few restrictions will all change. The uncertainty of the U.K.’s trade could make labor market conditions tighter and cause even higher inflation. This type of monetary affect would curtail consumer spending, which is a main driver of the British economy. In addition, it may be harder for other Europeans to get their trench coat delivered from digital, which outperformed in this half according to Burberry’s “First Half Trading Update.” In fact, digital saw growth on a global scale in Asia, EMEIA (Europe, Middle East, India and Africa) and the Americas since the redesign and launch of this past September. Knowing this, the delivery methods of European market segment may change in the future based on trade rules, barriers and even tariffs. The price of a coat could rise based on these factors and it is uncertain if shipping will be a different

For America, Brexit gave the United States a chance to get closer as trade partners. Obama previously said that Brexit would put the U.K., “at the back of the queue” when it came to free trade deals. The United States is the U.K.’s second largest trading partner while the U.K. falls behind as the U.S.’s seventh largest trading partner. Exporting goods is a huge boost to the British economy, in fact 10% of British exports came to the United States last year, which I can only assume included numerous Burberry coats. If the U.S. and the U.K. were able to form the Trans-Atlantic Trade and Investment Partnership (TTIP), it would cover 800 million people and facilitate closer trade with two of the largest economies in the world. However, like almost every trade deal, it has been disputed by Brits because of worries that large corporations that could take over the market, movement of jobs and softening on food safety and regulation.

You may not have realized it, but before your coat arrives to you via digital or if you pick it up in-store, all these factors have impacted that single coat. Raw materials makes your trench more expensive, the fall of the British pound has created inflation in women’s clothing. The landscape of the economy for England is in a transitional period and how it will change within Europe and America is yet to be seen at its full capacity. Your trench coat’s price is always changed based on these factors and more and how it will be delivered to customers may change and further impact this price. Perhaps it is in your best interest to go to England and purchase it straight from the source because it will be at the cheapest cost. However, next time you buy a Burberry coat, pay attention to what’s happening in the world of trade and Brexit, because the story of that coat might have changed.



Barreled & Tapped: The History & Impact of San Diego’s Craft Beer Scene

San Diego is known for its robust craft beer scene, but it’s the history and economics behind this industry that makes this city shine in a nation filled with craft beer cities. According to the Brewer’s Association, in 2014, small and craft breweries contributed $55.7 billion to the U.S. economy and supported over 424,000 jobs with 115,000 directly at breweries or brewpubs. In San Diego, for every brewery job that is added within county, 5.7 jobs in supporting industries are created. The rich history, educational practices and connectivity between brewers and has allowed more breweries to open led to success of San Diego craft beer.

Craft beer may reign in San Diego, but it didn’t start there. The story of beer actually started in Mesopotamia in 5 BC with the Sumerians who participated in the brewing and drinking of beer that was passed down from generations through a poem. Oxford scholars found this poem from1800 BC that involves Ninkasi, the goddess of brewing, and the production of beer from barley. Thousands of years later in North America, Spanish missionaries came to spread Catholicism and brought fermentation practices that produced sacramental wine, which would eventually be used in the beer making process. When the Mexican government gained independence from Spain and in 1848, the United States took the region of San Diego from Mexico.

Beer making in San Diego can be traced back to 1868 when Conrad Doblier began brewing European-style beer as an emigrant from Austria as a brewer. In 1868, two breweries were created in San Diego named the San Diego Brewing Company and Mission Brewery. During Prohibition from 1920-1933, many San Diegans moved south to Tijuana, Mexico in order to produce and drink beer legally. While there, they opened Aztec Brewing Company and Mexicali Brewery, which soared in popularity due to the low supply and high demand of alcohol in the U.S. At the end of Prohibition in 1933, the San Diego Brewing Company and Aztec Brewery were responsible for 25 percent of California’s beer production. Once beer powerhouses like Anheuser-Busch, Coors Brewing and Miller Brewing started their production of beer in the 50s, they caused commercial beer production halt in San Diego breweries until 1987.

San Diego’s craft brewery scene started again in the 80s when California legislation was passed that legalized the brewpub throughout California. It also made commercial production ands sale of beer in restaurants and home brewing legal, giving beer enthusiasts the chance to capitalize on their hobby. Home brewers started swapping recipes, experimenting and eventually, built the connection between brewers in San Diego that exists today. However, during the 80s, one brewery stood out as the founder of this new era of beer. It is the story of two best friends who formed the Karl Strauss Brewing Company. Chris Cramer and Matt Rattner opened The Karl Strauss Brewing Company in Downtown San Diego and kick-started the craft brew revolution on February 2, 1989. It was the first brewery in operation since the 50s and the first-ever brewpub in San Diego. The 1980s marked a period of brewing pioneers innovators and craft brewers in the U.S. had gone from eight in 1980 to 537 by 1994, with Karl Strauss as one of them. Today, there are 518 craft breweries opened in California alone, the most out of any state, with over 120 located in San Diego.

coasters, pivni tacky, bierdeckel

Karl Strauss started their business by only brewing a golden ale, an amber lager and a dark brown ale. Because of their innovative flavors that challenged the typical light beers that were on the market, there was a high demand for Karl Strauss beer and in 1991, Karl Strauss opened a distribution center in order to ramp up their production. Today, Karl Strauss has eight brew pub locations and has plans to open a second distribution center because of the demand for their beer. Even though they only distribute their beer in California, Karl Strauss is ranked the 45th– for the largest volume of craft beer distribution in America out of 3,000 breweries. According Karl Strauss, “craft beer is not just a job, it’s who [they] are.” This can be seen through their extensive network they created with employees that were mentored at their brewery and branched out on their own.

Karl Strauss started the careers on many brewers in San Diego who added the to culture of education and family. According to the founder of Karl Strauss, Chris Kramer, “One of the reasons why San Diego has become such a mecca for craft beer is we started off with a group of individuals who were friends and collaborative rivals.” This is still true today and is the reason why San Diego’s craft brewery scene is so interconnected. Many employees who had their start at Karl Strauss opened their own breweries, adding to the ever-growing family of craft brewers in San Diego. Karl Strauss’ original bartender, Scott Stamp, opened the San Diego Brewing Company and their first-ever waitress; Gina Marsaglia opened the ever-popular Pizza Port in 1992 with her brother Vince. In addition, Karl Strauss’ original tour guide, Jack White, opened the renowned brewery Ballast Point in San Diego in 1996, which is now the 11th brewery in America for its wide distribution, innovative flavors and unique offerings. The small craft brew circle that started at Karl Strauss has promoted the art of beer making is one of the reasons why San Diego craft brewing is successful today.


The interconnected nature of the San Diego craft industry started with Cramer and Rattner in 1989, but the San Diego Brewer’s Guild allowed the craft brew industry to continue to grow in San Diego. Founded in 1997, the guild was created with two goals: to promote San Diego’s brews and to create an open line of communication between brewers. This type of communication has allowed San Diego to continue to grow the industry while also keeping the competitive market friendly with the sole goal of promoting the craft as whole rather than individual businesses. The guild advances their mission to, “promote… locally brewed beer through education and participation in community events.” Craft powerhouses like AleSmith Pizza Port, Stone Brewery, Green Flash and Karl Strauss are all members of this coalition, making it easier for brewers to unite within San Diego. Although there are guilds throughout the U.S. that promotes craft beer, the SDBG is different because their breweries continue to innovate together within San Diego. As a team in 2014, San Diego breweries dominated the World Beer Cup where they won 11 of the 14 medals awarded. During the World Beer Cup in 2016, the SDBG won more medals than the entire United Kingdom and even beat-out Germany in the category for Kölsch, which is a German style beer. Just this October, the SDBG took home another 18 medals at the Great American Beer Festival in Denver, Colorado, cementing San Diego as a destination for craft beer innovation. Denver is often thought of as a craft-brewing center as the home of the Great American Beer Festival, but only won eight medals.


Great American Beer Festival

The strong dynamic to promote the craft within the industry and become a world competitor as a city has been promoted by the San Diego Brewer’s Guild but has remained a part of the craft culture with San Diego as well. . Because most brewers had their start at other breweries, they formed a sense of respect and trust for the craft culture in San Diego. When Vinnie Cilurzo created the Double India Pale Ale in 1994 in San Diego County, nearly every brewer has embraced this style of beer in San Diego. In fact, San Diego is now internationally known for their Double IPAs, which is often referred as the San Diego Pale Ale. Stone Brewery, Karl Strauss and AleSmith, all a part of the SDBG, are famous breweries that carry the torch of the Double IPA today. The creativity and education that solidified the bonds between brewers allowed many brewers to leave the breweries they worked at to form their own and create a craft beer boom in San Diego.


Between 2009 and 2011, nearly 40 breweries opened in San Diego causing a surge in the craft beer market. In 2011 alone, the county’s brew pubs generated $300 million to the county, generated over $600 million in sales and created more than 2,800 jobs in San Diego. The expansion of breweries in San Diego translates to a boom of jobs and contributions to the local economy through these jobs, revenue and taxes to the City of San Diego. During this time, more brewers came to San Diego than competing cities because of the respect the city has garnered for itself and wages provided. In 2012, San Diego had the highest average wage for brewery workers in the U.S. compared to Portland and Denver, which are often regarded in the same category. Today, the wage gap has closed where the average salary is around $36,000 a year. Although wages slowed in 2014, the craft brew sector grew overall and had a direct economic value of $600 million, which is twice the amount three years prior. This figure is generated based on San Diego’s 120 local breweries and their revenue, profits, wages and jobs the industry produces. Wages may have helped grow the craft industry, but it is education portion that diversifies San Diego from other brewing regions.


NUSIN Institute

According to the NUSIN Institute, San Diego provides more education programs for industry professionals entering the craft beer market than their competitors. These types of programs further the industry and allow brew masters to pass on their knowledge within the industry. There are two major education programs in San Diego: the San Diego State University College of Extended Studies Business of Craft Beer Professional Certificate and the University of California– San Diego Extension Brewing Certificate. Both were founded in 2013 and follow the mission of the SDBG to promote local beer through education. In addition, many brewers encourage their employees to participate in the Cicerone Certificate Program, which was created in 2008 to educate people and create craft beer leaders. Similar to sommelier training in the wine industry, the Cicerone program trains professionals in the knowledge of beer in sales and services. In the NUSIN Institute study, 57 percent of craft breweries indicated that their employees participated in the Cicerone Certificate Program. Karl Strauss is one brew company that prides themselves on having multiple employees that are certified Cicerones and beer servers because, “everything from beer and food pairings to style education is part of the Karl Strauss experience that goes above and beyond what you’ll find anywhere else.” It is experiences like this that adds an extra layer of knowledge to employees and education to customers on their journey of beer in San Diego further expanding art of beer making into other industries in San Diego.

Jobs are being created within the craft brew industry and in supporting fields. Throughout the county, NUSIN has identified that one third of local industry jobs are directly relate to brewing while two thirds focus on brewpub operations. Brewpubs are dependent on food service and hospitality sectors that are composed or hosts, servers and cooks. Because of this specialized nature of brewing, supporting fields have popped up within San Diego such as: brewing equipment design and manufacturing, packaging, sales and marketing, brewing labs, home brewing supply stores and hops and farming. All of these industries that have an impact on the brewing process generates an average $56.6 million in sales annually.


NUSIN Institute

San Diego is a hub for the innovative beer market because of the rich history of beer making and the connections between brewers that has allowed the city to work together to educate people and produce beer as one unit. These factors are the reason that San Diego has its own IPA category of beer and produces more than 2,000 unique beers annually. If Karl Strauss had not started the craft sector in the 80s, the industry would not be the same. It is the need for creative flavors, friendly and collaborative rivals and the growth of an industry that Karl Strauss created that keeps the San Diego craft beer industry alive today. It is also the reason why they won mid-size brewing company and brewer of the year at the 2016 Great American Beer Festival. If the San Diego craft beer industry stays true to their message that craft beer is a family network that succeeds based on innovation, education and interconnectivity, there is a chance that the beer bubble won’t bust for a while longer and small batch brewers will continue to succeed.

The Economics of Beer in San Diego

Beer, it’s everywhere— from the your local pub, favorite football stadium, it’s even in your home. So what kind of economic impact does beer make in the United States and the craft brewery capital of San Diego? In 2014, small and craft breweries contributed $55.7 billion to the U.S. economy and supported over 424,000 jobs with 115,000 of those directly at breweries or brewpubs. With all this money in craft beer, it’s easy to see why in 2014 the 120 breweries in San Diego generated a local economic impact from wages, revenue and profits of $600 million. San Diego is the “craft brew capital of America” because of the support it has from local government and the strong San Diego Brewer’s Guild, which has allowed the industry to grow and create more local breweries and tourism.

San Diego’s craft brewery scene started in the 80s when California legislation was passed to legalize the brewpub. It also made commercial production and sale of beer in restaurants and home brewing legal, giving beer enthusiasts the chance to capitalize on their hobby. After California made this leap, home brewers started swapping recipes, experimenting and built the framework for the production for beer in San Diego that exists today. In fact, the story of two best friends who formed the Karl Strauss Brewing Company is one and the same.

After Prohibition, large breweries such as Budweisser dominated the market but Chris Cramer and Matt Rattner were determined to change this after a trip to Australia inspired them to open a brewpub of their own. On February 2, 1989, Karl Strauss Brewing Company opened their doors in Downtown San Diego and kick-started the craft brew revolution. Soon, their brewery grew and inspired some of their employees to open their own breweries that compose the local craft beer culture in the San Diego community today. According to the founder of Karl Strauss, Chris Kramer, “One of the reasons why San Diego has become such a mecca for craft beer is we started off with a group of individuals who were friends and collaborative rivals.” This is still true today and is the reason why San Diego’s craft brewery scene is so vibrant. Renowned breweries such as Pizza Port and Ballast Point were both started by former employees of Karl Strauss. The small craft brew circle that started at Karl Strauss and promoted the art of beer making is one of the reasons why San Diego craft brewing is successful today.


The idea of “family” may have started with Cramer and Rattner in 1989 but it’s the San Diego Brewer’s Guild that allowed the craft brew industry to continue to grow in San Diego. Founded in 1997, the guild was created with two goals: to promote San Diego’s brews and to create an open line of communication between brewers. Craft powerhouses like AleSmith Pizza Port, Stone Brewery, Green Flash and Karl Strauss are all members of this coalition making it easier for brewers to unite within San Diego. In addition, the guild has over 134 affiliate members that are firms, corporations and people who manufacture/sell products used in home or commercial brewing. Each sector of the guild promotes their mission to, “promote… locally brewed beer through education and participation in community events.” The SDBG also has a robust calendar online of events that occurs almost daily from “yoga and beer” to “rare beer breakfast.” In fact, beer is so imbedded in the culture that the Mayor of San Diego declared June as Craft Beer Month in 2011. Because of this, every year multiple breweries host a series of events including the San Diego International Beer Festival and meet frequently to educate the community about the benefits of craft beer.

Breweries are vital to the tourism sector of San Diego because is not seasonal, it occurs year-round with a full calendar of events. Many breweries offer facility tours and tastings in addition to their taprooms where people can become educated on the beer making process year-round. Many of the larger beer events also occur in San Diego’s off-season for tourism in autumn and spring, which can be seen below. The most notable event is San Diego Beer Week in November hosted by the San Diego Brewer’s Guild. Breweries are also packed at peak tourism season in summer when their seasonal, summer session ales become available and Craft Beer Month in June.


NUS Institute

The San Diego Brewer’s Guild hosts the most popular beer event, San Diego Beer Week, which has allowed the growth of the industry, education of beer enthusiasts and positively impacted San Diego hospitality industry. According to the San Diego Tourism & Marketing District (SDTMD), in 2009 San Diego Beer Week booked 1,000 hotel rooms and generated $115,500 in revenue when they only invested $22,320 in the event. Compare this to four years later in 2013 where the same festival generated a total of $789,794 and booked 5,943 hotel rooms with an initial investment of $68,936 with SDTMD—that’s almost seven times the original revenue made. This growth is due to the “boom” of the industry in 2010, where nearly 40 breweries opened between 2009 and 2011. Beer Week has a wide variety of events that are either put on by independent breweries or the guild themselves culminating in the San Diego Brewers Guild Festival. Attendees can also go to “Beer College” and receive an extension-brewing certificate from UC San Diego or a professional certificate in the business of craft beer from San Diego State University. Beer Week enhances the mission of the guild to promote local beer through education and participation in community events while also making an impact on the tourism sector of San Diego.



In San Diego, breweries are a fast growing business sector because of the tourism and tax revenue it generates. The expansion of breweries in San Diego translates to a boom of jobs and contributions to the local economy through these jobs, revenue and taxes to the City of San Diego. In 2011, the direct economic impact in San Diego County was $299.5 million generated by breweries and brewpubs, this is more than one and a half times the economic impact of Comic-Con International San Diego. In this same year, the industry made $660.8 million in sales and created 2,796 jobs. However, in 2014, the craft brew economic sector had an economic value doubled in the region of $600 million. This figure is generated based on San Diego’s 120 local breweries and their revenue, profits, wages and jobs the industry produces. To give you an idea of the level impact this is, the economic impact Super Bowl XLIX had on the state of Arizona was $500 million. The money generated by this industry goes to the local government from retail, real estate and property, income and sales taxes. In fact, California breweries paid around $850 million in local, state and federal taxes in 2012.

The local government has created policies that allow the industry to flourish in San Diego and keep breweries within their county. In 2013, they created the Microbrewery Ordinance, which changed the municipal code to allow beer manufactures to operate full-service restaurants within a brewery as an accessory of use if this environment did not exceed more than 25 percent of the total floor area. Thus, breweries can be permitted as restaurants in all commercial and some industrial zones. Thanks to the government, these restaurant add-ons to breweries can create more income and jobs to further enhance the local economy. Stone’s World Bistro and Garden in Escondido is a prime example of this, where their restaurant is the third most visited attraction in San Diego after the San Diego Zoo and Legoland.

The city also formed the Business and Industry Incentive Program as a way to keep breweries in San Diego instead of moving to other cities. It provides businesses with flexible economic development incentives if they provide revenue and jobs that promote city taxes and encourage business development in underdeveloped parts of San Diego. If they can prove this, the government could persuade breweries through fee reimbursements to keep their businesses in San Diego. These fees, which represent city permit fees and are determined by the City Council approval, can be reimbursed in the form of property taxes and taxable property. It is because of these policies that the government allowed Ballast Point and AleSmith to expand their brewery facilities within San Diego County to Miramar. In the case of Ballast Point, the brewery wanted to move but with this deal, the city will reimburse them for the additional tax revenue they would have received from an expansion project if they chose to expand in Miramar instead. In addition, the local government would give back 50 percent of future sales tax at the expanded location until they paid back the brewery for the municipal fees they would need to pay to move their facility. This represented a $156,000 reimbursement from the City of San Diego to Ballast Point. It may seem one-sided but the City would now collect $35,000 more in taxes a year at the new location for Ballast Point after their three-year reimbursement period ends. Because of this partnership with the city, breweries have the chance to stay in San Diego, create innovative beers and communicate to a robust tourism industry.


Craft beer is more than a delicious drink— it’s an economic factor that affects local, statewide and the national economy. In fact, craft breweries make up most of America’s beer market and saw production volume increase 16 percent from January to June in 2015. San Diego is a hub for this type of innovative beer market because the government works with the community to grow the industry and brewers are a tight-knit community that promotes the art of beer together within the San Diego Brewer’s Guild. These two factors are the reason that San Diego has its own IPA category of beer and produces more than 2,000 unique beers annually. If the local San Diego community keeps supporting the craft beer industry and the San Diego Brewer’s Guild stays true to their message, there is a chance that the beer bubble won’t bust for a while longer and small batch brewers will continue to succeed.


Millennials, The Renter Generation

Millennials are the largest generation in America’s history with over 92 million people and coined as the “renter generation.” With this influx of people, more Millennials are staying home and if they leave, they are renting not buying houses. So what components make up the Millennial generation and what does this mean for the housing market?

Let’s break down the Millennials and see what makes them stay home longer and why. From 2005 to 2010 there has been a three percent increase in Millennials living at home. Some of them graduated during the recession and the housing crash and their perspectives have shifted. Pew Research cites that they are more burdened with student debt than any other generation but are excited about their financial futures. They want to be mobile, save money and start the large life decisions at a later age than previous generations. For example, Millennials are waiting to get married. The median marriage age was 30 in 2010. Often times, this means that buying a house and starting a family is also a priority later in life. However, buying a house isn’t the only thing Millennials are putting off.


Image from Goldman Sachs

Car ownership and purchasing high-ticket luxury goods have also slowed. With the enhancements of technology such as Uber and rideshare programs, there is less of a need to buy cars. Millennials believe that if they can rent something or use a service, they can save more money.

Sharing not owning is the tagline for this generation. Over 60 percent of all Millennials are interested in renting over owning—this applies to all goods and services from clothing, music and homes. This type of “sharing economy” has caused companies like Rent the Runway, Spotify and Airbnb to rise to success. Seen as yet another opportunity to save, renting is clearly the answer for everything for this generation. Not only does it give them an opportunity to try new things, but they are also not tied to those items and have more freedom in the future. This is the key to why they rent— it allows for more mobility.

With all the new technology in place, mounting student debt and a need for freedom, it’s no wonder the housing market is seeing a loss. According to a new report, home ownership has fallen since the financial crisis in 2009 with a huge drop in the Millennial generation alone. Homeownership has drastically dropped since 2004. More recently, CNBC stated that home ownership rates for Americans under 35 have dropped from 39 percent in 2010 to 34.1 percent in 2016. This could be bleak for the future of housing because peak home buying years are 25 to 45-years-old. However, the mere size of the generation and aspirations to settle down at a later date could mean a delay in the surge of housing.


Image from CNBC

Many wonder if Millennials are a renter generation, will they ever buy a house? Right now, it’s unclear. According to a study by Trulia, 93 percent of Millennials are interested in purchasing a home some day. With a premium on freedom, they want to live in trendy cities where home are often out of reach financially. So where do we go from here? Financial institutions need to work with Millennials and engage them in the importance of saving money. Banks also need to talk about the importance of credit and work to make mortgages more accessible to younger borrowers who might have a smaller credit history. Hopefully one day they will invest in a home but for right now, the number of Millennials will only rise.


Image from Goldman Sachs

Ladies Turn to Lip Service in Times of Turmoil


Want to predict if we are entering a recession without consulting the usual economic indicators like gross national product (GDP) or the unemployment rate? Enter the lipstick index. It basically shows that in times of turmoil, American women turn to purchasing makeup and lipstick. Leonard Lauder, the chairman of Estée Lauder, coined this term in 2001 because he found that in times of hardship, women consistently turned to his makeup company and their sales soared.

So why does this link to a recession in the economy? While the desire to own products such as electronics declines, primal cues increase women’s desire to attract mates through the use of beauty products. Psychologists analyzed this phenomenon further only to realize that when the going gets tough, women buy makeup, perfume and stilettos to increase their sexual appeal. The end game? To find a mate that can provide financial security in the future. Although some may believe that women should think adversely about finding a suitable mate during a time of economic strife, we are primed to believe this—especially during a financial crisis. When you think about it, a financial crisis separates the fiscally strong men from the pack and women see this. Charles Darwin and evolutionary biology suggested that only the fittest of a species will survive. So therefore in a recession, a woman needs to find a mate that can provide resources and can help achieve reproductive success like biology tells her. I know what you are thinking, that’s crazy but it’s true. Even during the Depression, cosmetic sales increased by 25 percent.

As a woman, I find this hard to believe, but are we kidding ourselves? It doesn’t seem like it. However, I would rather buy two lipsticks, eyeshadow, a tube of mascara and a bottle of perfume for $180 from Sephora over a blouse for the same price of Nordstroms and that has nothing to do with biology. We can all get more bang for our buck when it comes to makeup during a recession. If you really think about it, a blouse or expensive purse is more of an investment than a couple of beauty items that can boost your confidence to the same level.

The lipstick index may be something that is cognitively hardwired in women but it also happens to be an excellent economic indicator. In fact in 2008, L’Oreal saw their sales increase by 5.3 percent while other companies like Ford saw a decrease of 18 percent that same year. Although beauty brands may not suffer during a recession, clearly almost everyone else did. This shows that power of the consumer during economic decline and how their behavior can make or break an industry, whether they realize it or not. Primal needs take over in times of crisis from finding a suitable mate to making hard fiscal decisions in order to survive the next month. If anything, this shows that economics can be regarded as a study of behavior and women rather you’re your usual dollars and cents.