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The Smart Profits Report: Issue #269
Thursday, December 22, 2005
Emerging Markets: Forget the Great Wall of China - Let’s Go Shopping
By Karim Rahemtulla
Chairman, Mt. Vernon Research
Each year at Christmas time, I buy a lot of presents for family and friends. I also buy myself something that I want or need. This is usually the most difficult present because I have just about everything that I need… and some of the stuff that I want I can’t justify buying.
Oh! To be Bill Gates for just a day! Or to travel to a distant land with dirt-cheap eyewear. Let me explain…
Christmas in China…
Earlier this year, I was in China. What I loved most about the country was the shopping. Sure, the Great Wall is something to behold. But I have been to China many times and have enjoyed the cultural experiences. This time, my focus was shopping. And I was not disappointed.
Thoughts of quitting my day job flitted through my mind. I could go to China once a month, buy a container load of stuff for next to nothing, and sell it for a huge profit stateside. (But, wait, Wal-Mart’s already doing that.)
Instead, I concentrated on buying things that were fun. I bought an antique camera for $100, about $2,000 less than a similar model I saw at a show in Florida. I bought some leather goods for family members for about $60 - two jackets and a vest. And, I bought a bunch of “junk.” A suitcase full of this stuff set me back about $20, including the suitcase!
My favorite purchase was a pair of rimless prescription glasses at the Pearl Market. And after realizing what they’d cost me in the States, I should have bought 10 pairs!
Capital Losses Back Home
About a week ago, I lost the rimless glasses… I ended up wearing my prescription sunglasses for two days of meetings at our Baltimore offices. I was interviewing several editors for the Agora Financial Year-End Forecast Series (see today’s Crib Sheet for details). It was quite funny… I am sure they thought I was trying to act cool.
Anyway, when I got home I went to the local Pearle Vision Center to look for a new pair of rimless frames and lenses.
The first thing they told me was that my prescription was more than two years old, so I had to get a new eye exam. I informed them that I could see just fine and that I would not have been able to find their store if my vision needed to be corrected. I also informed them that I have been using the same prescription for at least 20 years with no measurable, unusual side effects. There was no getting out of it - $39 for a new exam, or no new glasses.
Fine! I went over to the rimless frame section. “Those are for women,” the associate yelled out… maybe I do need an eye exam. He pointed me over to the men’s section. The selection was smaller. I perused the frames and the ones that I wanted cost $319. They were identical to the frames I bought in China.
“How much for the lenses?” I asked politely. Another $149 was the answer. I asked for the total for a pair. It came to just a tad more than $500, plus the mandatory exam. “Jeez, what a rip off,” I muttered under my breath. “Any discounts?”
“Only if you buy TWO pairs” came the reply. If I bought a second pair, I would get $100 off the total. Now, if I were my significant other, this would be a savings. “Look, honey, I just saved us $100!”
At this point, I was convinced that I would not be walking out of the store with new specs that day. But, I asked anyway: “Can they be ready in an hour?”
“Oh, no. These are polycarbonate and they need to be sent out so that they can drill directly into the lens, it will take at least two weeks.”
I was taken aback. Not only did they want to charge me for more than any other pair of glasses in the store, but they would not be ready for at least two weeks. And I would have to take an eye exam as well, just to pad their profits some more. I thanked them for their time and walked back to my car.
I thought back fondly about the Pearl Market experience in China. I bought my rimless glasses with lenses and a sunglass clip for $40 - a 92% discount! They got my prescription off the pair I was wearing. And they had the pair ready in 45 minutes. I need to get back there ASAP.
Using my partner’s shopping methodology, I could buy two pairs in China for $90, and save $900 compared to the price at home - enough to pay for a round-trip ticket and two nights at the five-star Hyatt in Beijing!
Happy Holidays from the staff of The Smart Profits Report, Mt. Vernon Research and the Xcelerated Profits Report.
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Today’s Smart Profits Cribsheet
- Today I mentioned the Agora Financial Year-End Forecast Series. This one’s a “must-know.” See what to expect in the markets this year…
Good trading,
Karim
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