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Wednesday, July 11, 2007

The Customer is NOT Always Right

In a recent article,

Sprint customers get the brush off
McClatchy Newspapers

Sprint Nextel told about 1,000 disgruntled cell-phone customers that
they would be better off with someone else. ... Sprint executives decided to break up with a group of malcontents who called frequently with complaints. "While we have worked to resolve your issues and questions to the best of our ability, the number of inquiries you have made to us during this time has led us to determine that we are unable to meet your wireless needs," stated the letter Sprint recently sent to these soon-to-be former customers.

If you were a Sprint Nextel shareholder, how would you feel about how your company treats its customers? At first you may think that's pretty shoddy PR.

Some investors, on the other hand, may applaud Sprint Nextel for their good business sense. Sprint Nextel has the courage to recognize the fallacious statement The Customer Is Always Right and instead say, "We are expending too many resources trying to please a subset of users whose expectations may exceed the capabilities of our products."

We may see more companies becoming more selective in whom they will serve, and whom they will not.

Please see A Consumer Blacklist? for another example.


Sprint has been asked to pay each of these customers $200 - "the amount the customers would have had to pay if they had prematurely ended their two-year contracts with the company."

What works for the goose ...

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Wednesday, July 04, 2007

Stock Sale Regrets

Have you ever sold stock, and then later regretted it?

There can be any number of reasons why you might want to sell stock. I think one of the first times I sold was to put a down payment on a house. I sold to help pay for a cruise, sold to invest elsewhere, and most recently sold to help pay for our new kitchen.

In my mind, those are pretty good reasons to sell.

Of course, there are some not so good reasons to sell stock. Well, they might be good reasons, but you don't feel good afterwards because of the need that brought you to have to sell off assets.

Selling to pay off your daughter's credit card abuse. Selling to cover the wife's gambling debts. Selling to recover the costs of your son's wrecking his sports car. Selling to help pay for your lung transplant.

Every time you consider selling stock, there is, (or should be,) a bit of anxiety. After all, how do you KNOW that the stock is at or near a peak? Truth is, you don't. Do I NEED to sell? Is there another way I can come up with cash I feel I need?

Whether or not you sold high, sooner or later you will come to the realization that your portfolio is now that much smaller after the sale. You may have seller's regret after that. Kind of like postpartum depression. (Sorry Brooke Shields.) You may feel that there MUST have been a better or different way to cover expenses than to have had to sell off stock - specially when you see the values start to climb soon after.

The Story of Albert

This reminds me of the story of Albert. Albert was an investor of moderate means. He had a couple hundred grand in investments. Every month, Albert would track his net worth. He really enjoyed seeing how his money would grow over time. With few exceptions, every month would show a gain over the previous. He was in his glory.

One day, his wife suggested the two take a cruise to Alaska. She'd a friend who'd taken the cruise with her husband and they had a marvelous time.

At first, Albert sounded interested. When he asked his wife about how much such a cruise might cost, he nearly collapsed. This particular ten day cruise was twelve thousand dollars. Even though 12 grand only represented a small and containable portion of Albert's and his wife's total portfolio, the thought of seeing that Net Worth figure drop by so much troubled Albert. He just didn't want to accept such a dip in his nest egg for what seemed to him to be a luxury.

(Albert and his wife eventually got a divorce, and his wife went on the cruise with a girlfriend - on Albert.)


What can we learn from the story of Albert? Any investment vehicle, be it stocks, a 401(k), an insurance policy, whatever, WILL eventually get spent - by somebody. There is not a dollar sitting around in any nest egg that won't, someday, be spent.

Hopefully you will get the chance to choose how most of your total portfolio will become consumed, and if you have luck on your side, it will get spent in a manner that will make you glad you had put it aside in the first place.

But don't be like Albert. Don't be afraid to sell off a few shares every once in a while to take in some of life's pleasures. Sure, your portfolio will take a hit, but consider why you even have a portfolio. Is it ONLY to provide for your offspring? Is it ONLY to cover exorbitant health care costs? Probably not.

Sell off shares in a reasonable manner, spend the cash wisely, and most important, have no regrets over spending a little cash on yourself every once in a while. And be glad you're in a position to do so.

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