20150131

Asperger's: the IT industry's dark secret

Asperger's: the IT industry's dark secret
IT is a uniquely attractive industry for the autistic


"Ryno" is a 50-something ex-sysadmin, by his own account "burned out and living on disability" in rural Australia.

He loved the tech parts of being a system administrator, and he was good at them. But the interpersonal interactions that went along with the position — the hearty backslaps from random users, the impromptu meetings — were literally unbearable for Ryno.

"I can make your systems efficient and lower your downtime," he says. "I cannot make your users happy."

Bob, a database applications programmer who's been working in high tech for 26 years, has an aptitude for math and logic. And he has what he calls his "strange memory". If he can't recall the answer to a question, he can recall exactly, as if in a digital image, where he first saw the answer, down to the page and paragraph and sentence.

Bob has some behaviour quirks as well: He can become nonverbal when he's frustrated, and he interprets things literally — he doesn't read between the lines. "I am sure [my boss] finds it frustrating when I misinterpret his irony," he says, "but at least he knows it is not willful."

"Jeremy" excels at being able to see an engineering problem from the inside out, internalising it almost from the point of view of the code itself. He's great at hammering out details one on one with other intensely focused people, often the CEOs of the companies he contracts for. To protect his anonymity, he doesn't want to mention his programming subspecialty, but suffice it to say he's a very well-known go-to guy in his industry.

What Jeremy is not good at is suffering fools in the workplace or dealing with the endless bureaucracy of the modern corporation. If someone is wrong — if their idea just plain won't work — he says so, simply states the fact. That frankness causes all manner of upset in the office, he's discovered.

These IT professionals are all autistic. Bob and Ryno have Asperger's Syndrome (AS); Jeremy has high-functioning autism (HFA).

Though the terms are debated and sometimes disputed in the medical community, both refer in a general way to people who display some characteristics of autism — including unusual responses to the environment and deficits in social interaction — but not the cognitive and communicative development impairments or language delays of classic autism.

People with Asperger's, widely known as "Aspies," aren't good at reading nonverbal cues, according to the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders. They can have difficulty forming friendships with peers, they form a strict adherence to routines and rituals, and they may exhibit repetitive and stereotyped motor movements like hand or finger flapping.


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Dr Tony Attwood, a world-renowned Asperger's clinician and author in Brisbane, Australia, defines Asperger's in a more human context: "The [Asperger's] person usually has a strong desire to seek knowledge, truth and perfection with a different set of priorities. ... The overriding priority may be to solve a problem rather than satisfy the social or emotional needs of others."

Problems over people? Hmm, sounds like a techie.

A paper on Asperger's from Yale University's Developmental Disabilities Clinic continues down the same path: "Idiosyncratic interests are common and may take the form of an unusual and/or highly circumscribed interest (such as in train schedules, snakes, the weather, deep-fry cookers or telegraph pole insulators)."

Or technology. When Ryno spoke with a receptionist to make an initial appointment for an evaluation with Attwood, she asked him, what is your "Big Interest?"

"She inadvertently gave me a diagnostic question I have found invaluable," he recalls. "The Big Interest is a great start to Aspie-spotting."

Ryno's Big Interest is computers and communications. He's not the only one, not by a long shot.

The Asperger's-IT connection

Autism, though first identified and labeled in 1943, is still a poorly understood neurodevelopment disorder, and nearly every aspect of its causes, manifestations, research and cure is mired in controversy. Asperger's and HFA, being hard-to-define, often undiagnosed or underdiagnosed variants on the high end of the autism spectrum, are even less quantified or understood.

Diagnoses of autism, including Asperger's, have skyrocketed in the US in recent years — the Centres for Disease Control and Prevention now estimates that one in 150 8-year-old children has some form of autism.

It's not clear if the increase is because of better detection, a change in the diagnosis to include a wider range of behaviours, a true increase in case numbers, or some combination of those or other factors.

It's even less clear how many adults have Asperger's. Because Aspies are usually of average or above-average intelligence, they're often able to mask or accommodate their differences socially and in the workplace, meaning many of them make it well into middle age, or live their whole lives, without being formally diagnosed.

A spokesman for the National Institute of Mental Health says the agency is not aware of any government organisation or academic research that tracks the incidence of AS in adults.

Where statistics come up short, anecdote is happy to take up the slack. Ask an Asperger's-aware techie if there is indeed a connection between AS and IT, and you're likely to get "affirmative, Captain".

When the question is put to Ryno, he emails back a visual: "Aspies--> tech--> as fish--> water."

And Bob, the database applications programmer, says, "Yes, it is a stereotype, and yes, there are a higher than average number of Aspies in high tech."

Nobody, it seems, has more to say on the subject than Temple Grandin, a fast-talking PhD Aspie professor who's the closest thing Asperger's has to an elder stateswoman.


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Grandin made her mark designing livestock-handling facilities from the point of view of the animal; she now has a thriving second career as an Asperger's author (Thinking in Pictures, Unwritten Rules of Social Relationships) and speaker.

"Is there a connection between Asperger's and IT? We wouldn't even have any computers if we didn't have Asperger's," she declares. "All these labels — 'geek' and 'nerd' and 'mild Asperger's' — are all getting at the same thing. ... The Asperger's brain is interested in things rather than people, and people who are interested in things have given us the computer you're working on right now."

Career opportunities, career limitations

Grandin has compiled a list of jobs and their suitability to Aspies and autistics according to their skills. No surprise, tech jobs are cited early and often. Her list of "good jobs for visual thinkers", for example, includes computer programming, drafting (including computer-aided drafting), computer troubleshooting and repair, web page design, video game design and computer animation.

Grandin's "good jobs for nonvisual thinkers", which she further defines as "those who are good at math, music or facts," includes computer programming, engineering, inventory control and physics.

Why do Asperger's individuals gravitate to technology?

"Adults with Asperger's have a social naivety that prevents them from understanding how people relate. What draws them in is not parties and social interaction, but work that allows them to feel safe, to feel in control," explains Steve Becker, a developmental disabilities therapist at Becker & Associates, a private practice in the Seattle suburb of Des Moines, Washington, that conducts ongoing small group sessions for adults with AS, among other services.

"What's better for that than a video game or a software program?" Becker asks. "When you're designing a software program, there are rules and protocols to be followed. In life, there is no manual."

While careful to protect his clients' confidentiality, Becker confirms that he sees many adults and children of adults who work for the region's tech powerhouses — Microsoft and Boeing — and the hundreds of smaller companies that orbit around them.

Some of the Aspies he counsels are at the very top of their tech game: software and aerospace engineers, computer scientists, PhDs. But for every research fellow with Asperger's, he says, there are a legion of fellow Aspies having a much tougher time in the middle or lower ranks of the industry.

"The spectrum of success is much broader than one would expect," agrees Roger Meyer, the Oregon-based author of The Asperger Syndrome Employment Workbook who runs one of the oldest peer-led adult Asperger's groups in the country. "Adults who have grown sophisticated at masking and adaptive behaviours can either bubble along at the bottom of the market or do very well at the top."









It's that "bubbling along at the bottom" that has Becker, Meyer and other Aspie specialists concerned. Employees with Asperger's might do well for years in data entry or working in a job like insurance claims, where knowledge of ephemera is a prized work skill, only to flounder when they're promoted to a position that requires a higher degree of social interaction.

"The more technical the job, the better they do. But for some, managing people in a supervisory capacity can be a problem," Becker says.

That can leave Asperger's employees stuck on the lower and less remunerative ranks of IT, sometimes in jobs that are vulnerable to outsourcing, says Meyer. For example, certain tech support situations, where sensory distractions are minimal and human interactions are reduced to a screen or a voice on the phone, are a natural fit for some Aspies.

"They're good at diagnostic work. They can get in and slosh around in the computer, use their encyclopedic knowledge of applications and work-arounds, and arrive at a solution that may be unorthodox but effective," says Meyer. As those jobs increasingly become automated and/or outsourced, Aspies' chances for employment are diminished as well.

IT's dark little secret

Becker and Meyer say they have yet to hear of a single corporation that has any kind of formal programme in place to nurture and support employees with Asperger's and HFA, aside from covering the costs of therapy through standard health care plans.

Which begs the question: If Aspies are everywhere among us, why isn't the IT industry doing more to support them or even to simply acknowledge their existence?

High-tech companies, after all, have been at the forefront of supporting workers with nearly every type of social, ethnic, physical or developmental identification. Microsoft, to take just one example, sponsors at least 20 affinity groups — for African Americans, dads, deaf and hard of hearing, visually impaired, Singaporeans, single parents, and gay/lesbian/bisexual and transgendered employees, to name a few. Just nothing for autistics.

A Microsoft spokeswoman confirmed that the company has no group or formal, separate support for Asperger's. On rare occasions, an employee with AS has requested accommodation, she says. When that happens, the employee is paired with a disability case manager to determine "reasonable accommodation" on a case-by-case basis.

Intel and Yahoo didn't respond to requests to discuss their policy toward Asperger's employees, and a Google spokesman says the company was "unable to accommodate the inquiry".

To be fair, the question of whether and how corporations should support Aspies is a thorny one to untangle.

For one thing, unlike a disability that confines an employee to a wheelchair or the language barrier that a foreigner faces, autism is something others can't see or easily understand.

"A readily visible disability is easier [for co-workers] to cognitively take on board, it seems," Ryno laments. "Ah, if only Asperger's made one turn green!"

"If you meet someone from another country," Jeremy elaborates, "people know they're from a different country and they cut them some slack."

And by their very nature, Aspies are not uniters. Microsoft's clubs and support groups are all initiated and chartered by employees. That leaves Aspies out by default: It would be highly unusual for an employee with Asperger's to voluntarily organise any type of social group, with or without other autistics.

Finally, many Aspies aren't "out" in the workplace; they haven't acknowledged their condition publicly or to more than one or two individuals.

Whether they should is a matter of contention. Ryno revealed his Asperger's at only one job (his last) and lived to regret it, even though his boss happened to be a young Aspie as well.

"It's the first time I've had an AS person as a superior," he says. "It was definitely a refreshing change not to have to explain why I didn't do eye contact, hated meetings and could not suffer fools, let alone feign gladness."

In retrospect, however, Ryno regrets having told anyone he has AS. "I'd say there were many disadvantages and few gains. The gains were short-lived, too." Specifically, systems that Ryno and his boss had designed both to help users and to minimise interruptions to their own workdays were resented and little used.

Now that Ryno is gone — he quit after being ordered by an executive to restore internet access for an employee caught downloading pornography against company policy — "the other AS employee is being forced into meetings, crowded social gatherings and many of the situations we had previously been allowed to keep to a minimum," he reports.

Jeremy has found that when he asks co-workers and bosses to accommodate his differences, it doesn't help, and in fact always seems to lead to the same end: termination.

"I don't blink. I stare. I don't understand boundary issues very well. I don't have a feeling of group membership, but other people have a very firm idea of membership in groups," he says, struggling to define the problem as precisely as possible.

As a result, where other employees are able to correct their mistakes and adjust their behaviours day to day in the office environment, Jeremy isn't. "People won't give me negative feedback. I don't know what I'm missing until it's already become a problem. I pick up on a lot of stuff, but I miss some cues. They're like little black holes, and the little black holes accumulate, and I end up being forced out. It keeps happening."

It isn't a question of work — he is sought out for his programming specialty and always busy as a contractor — but of social relationships. "I get the feeling what they'd like to do is put me in a black box, give me an assignment and get it out the other end in few weeks."

Building a better workplace?

The subtle social engineering that Jeremy and other HFA and Aspie employees struggle with may be beyond the ken of even the most proactive human resource organisations. But that doesn't mean the industry's heavy-hitters can't and shouldn't proactively fashion a more Asperger's-friendly workplace, a kind of "if you build it they will come — and work" scenario.

These changes needn't be monumental, or limited to Aspies only, specialists say. Bob, the database applications programmer, was just one of several Aspies interviewed for this story who spoke admiringly of the work/life accommodations in place at internet companies like Google.

"I would not demand it from anyone, but I do wish every employer were as accommodating as Google, supplying prepared meals and encouraging people to bring their dogs to work," he says.

Physical changes to the office environment can help as well, Grandin and others point out. Many Asperger's workers are debilitated by blinking or flickering lights; the mechanical noise of an air conditioner, photocopier or ringing telephones; or simple office chatter. A quiet corner, an office or cubicle with soundproofing or a white-noise machine may be all it takes to turn the situation around.

And more than one person spoke highly of the rumours that Microsoft offers a "buddy system" for Aspies, pairing an Asperger's employee with a neurotypical — that is, nonautistic — colleague who coaches them through the whys and wherefores of meetings and other social interactions. A Microsoft spokeswoman says there is no official information available on any buddy programmes, but says there is a good chance such initiatives are conducted on a team-by-team basis within the company.

Beyond that, Asperger's individuals hope only that they be given a chance to find a niche in the modern corporate landscape. Companies have evolved to accommodate everything from workers' physical height to their hearing ability, sexual orientation or ethno-religious status, Ryno points out.

In the same way, he says, "employers of Aspies should look at the person and the tasks, environment, and communication structure and adjust for the best viable fit."

Seattle-area psychologist Becker has seen some early signs that forward-looking high-tech companies may be doing just that. "I have seen cases where [a client] will say, 'I have Asperger's,' and receive a positive response from social workers employed by the business or the insurance companies," he reports.

On the whole, Becker is willing to cut IT some slack — for now at least. "Most corporations have never dealt with Asperger's. It's a fairly new diagnosis, even newer for adults," he points out. His general feeling is that high tech wants to support Aspies as valuable employees, it just doesn't yet know how. But that too shall change.

"In the next five to 10 years, we'll see more businesses treating autism spectrum disorders as routine," he predicts.

20150106

13 Secret Tactics of Bullion Dealers | Investing


13 Secret Tactics of Bullion Dealers | Investing




Gold and silver are commodities. This means that any one ounce of gold is equal to any other ounce of gold, in terms of its metal content, and the same is true of silver. Gold and silver have emerged as money in various cultures and at various times throughout the world’s history because of this, and because they share other qualities that make them good money. But as they are commodities, the question then becomes, how can bullion dealers make money selling them?

Well, although the metals are commodities, coins and other bullion products are not, strictly speaking. All bullion products, beyond shot, have some numismatic or collectible value. A Silver Eagle is more desirable than most generic silver rounds because its a Silver Eagle, but even a generic silver round is worth more than an ounce worth of silver shot. Still, two Silver Eagles in the same condition are equal, and with the market so broad, it would be difficult for bullion dealers to make money on these commodity-like products if they didn’t have some secret tactics. This article explores thirteen of them.

But before we go any further, let’s first define what we mean by “bullion dealers.” Here, we will be using the term to refer to retailers of gold and silver products—whether they be major national businesses with online presences, local coin shops, small-time eBay sellers, or dealers at coin shows. These are the tactics they use to make a profit—some of them are perfectly legitimate, others somewhat dubious, and others clearly unethical. Obviously, not all dealers use all of these tactics, but being aware of them all will make you a more-informed customer.

1. Hedging

Hedging is the process of playing both sides of a market, so that you’re protected against the market’s fluctuations. In the case of gold and silver dealers, this would involve taking offsetting long and short positions on precious metals so that they make a small profit on the bid/ask spread regardless of whether gold or silver go up or down.

For instance, imagine a big coin shop had a steady order of 1,000 ounces of gold per month. The shop could sell futures contracts for the delivery of 1,000 ounces per month for each of the next twelve months, thereby insulating itself from the fluctuations of the precious metals’ pricing. When each futures contract came due, the dealer could either make delivery of the metal, or, more likely, buy an offsetting long contract on the futures market, thereby canceling out the position.

Hedging is a perfectly legitimate and ethical practice. Major gold and silver retailers do it as a matter of insurance, but they may not be 100% hedged. Fifty-percent hedging, for instance, would allow the dealers to make some profit as gold went up, while still offering some protection against losses if it went down. Local coin shops, however, are unlikely to be hedged at all. They’re more likely to use Replacement Cost Pricing as a means of protection.

2. Replacement-Cost Pricing

Let’s say a bullion retailer purchased 10,000 ounces of silver when it was just $15 per ounce. As the price rose to $20 and then to $30, he would technically be able to make a “profit” by selling silver rounds at $17 or $18 apiece—or would he?

The price at which the dealer bought a coin or other product is not as important as the price he’d have to pay to replace it. If a bullion dealer bought silver at $15, but to replace it he’d have to pay $30, then he’d be a fool to sell for anything less than $30 plus his mark-up. Bullion dealers are always going to sell at prices that will allow them to profit above the item in question’s current replacement cost, but beyond that, many bullion dealers are keen market watchers who seek to stock up when gold and silver seem to be “cheap.” A good example of this philosophy is David Gordon’s admonition that silver should be bought whenever it’s under $30 per ounce.

The concept of replacement-cost pricing is especially important if you sell bullion to a coin dealer to raise cash. Do not think the dealer should then sell the item back to you based on the price you received—it will be sold back based on the price he’d have to pay to replace the item in his stock. And keep in mind that in the case of collectible coins, the spread between the price he’s willing to pay and the price he’s willing to sell at can be quite wide.

3. ‘Price Gouging’

Bullion dealers determine their prices by what the market will bear. In online marketplaces, dealers must offer competitive prices, or else provide added value, cheaper shipping options, etc. They cannot get away with charging higher prices for lower value. If they tried, customers would simply shop elsewhere. In offline market places, this is not necessarily the case–or, if you prefer, the proximity of the dealer offers its own value, which customers may be willing to pay for.

For instance, in a small town with only one dealer selling bullion, the dealer may get away with charging much higher prices than you could find online, or even in a more competitive offline environment. Our research found a bullion dealer in Hudson, Michigan, population 2,307, selling silver at a flat rate of $3 over spot. It didn’t matter if you were buying a single one-ounce coin or round, or a ten-ounce bar—this was his pricing.

Obviously, this dealer would never be able to do this in a more competitive environment. One-ounce rounds are more liquid than ten-ounce bars, so you’d expect to pay a higher per-ounce premium on the one-ounce rounds. But the Hudson dealer was charging the one-ounce premium on ten-ounce bars! Why would anyone buy at these prices? Because he’s the only game in town.

4. Rigging Rolls

Everyone on the Internet knows about the “Rick Rolling” meme—well how about Rig Rolling? This is an arguably dishonest practice of some bullion dealers, where they open sealed rolls of uncirculated gold and silver and take out the best, most blemish-free coins, replacing them with other uncirculated but imperfect coins.

If you’re buying strictly for the metal-content, this isn’t a big deal—and it isn’t even necessarily dishonest, if the dealers don’t re-seal the rolls and act as if they haven’t been tampered with. But if you are interested in getting the most value for your money, make sure that seal hasn’t been broken!

5. Paying Wholesale

When you look up the value of your collectible coin in a price guide, don’t get too excited. This is the retail price of the coin, and no dealer is going to pay you that amount. If you want that price, you’re going to need to work for it—you’re going to have to do the dealer’s job and sell the coin to a collector. Dealers are not collectors; they’re in the business to make money selling to collectors.

The wholesale price of collectible coins is much further from the retail price than in the case of bullion. There are two elements to the value of any coin: 1) The spot value of the metal content, and 2) “Numismatic,” or collectible value. The first of these two is undeniable: the market is huge and what is being bought and sold is a commodity. Thus, the difference between the wholesale and retail prices (or “bid” and “ask”—see below) are small.

The second of these—numismatic value—is much different. While there are millions of people buying gold and silver every day, the market for a particular collectible coin is comparatively tiny. The smaller the market, the less liquidity, and the greater the spread between wholesale and retail. This is just how markets work: look up a stock, such as Microsoft, and see what it’s “bid” (wholesale) and “ask” (retail) prices are. The difference between the two will be minimal. Now look up a smaller stock—say, one with a market cap of under $100 million. I guarantee there will be a much wider bid/ask spread.

When markets are large, it means that dealers can move product more quickly, and thus they can afford to make less per unit sold and “make it up on volume.” When markets are small—such in the case of collectible coins—dealers need to make more per unit. Dealers always pay wholesale, and this is one way they make their money.

6. Using Different Rules for ‘Bids’ and ‘Asks’

When you buy gold or silver rounds, you expect to pay the spot price of the precious metal plus a premium over spot. The premium is typically higher, on a per-ounce basis, the smaller the denomination of the round. For instance, a 1/10-ounce silver coin would normally have a much higher per-ounce premium than a 100-ounce silver bar—this is because the 1/10-ounce silver rounds are more liquid. Another factor affecting liquidity and thus premiums is the familiarity of the coin: Silver Eagles, for instance, carry a higher premium than most random generic silver rounds. This is because people know and trust the Silver Eagle.

Thus far, this all sounds fair. However, we’ve only been minding the “ask” side of the bid/spread equation—the price at which dealers sell their bullion. The “bid” side—the price at which they buy it from customers—may not work as equitably.

In my experience, bullion dealers will normally pay the same price no matter how much gold or silver you are selling them, and no matter what form it comes in. If you’re lucky, they’ll pay you roughly spot—perhaps a bit over—but they don’t normally give you a premium for Eagles, or for small-denomination rounds. On the other hand, you could put a positive spin on this: dealers who do this don’t discount generic rounds.

7. Reneging on Agreements

Gold and silver are honest money, and in general, charlatans are drawn to industries in which trickery and deception more easily go unnoticed. That is not to say, however, that everyone in the precious-metals industry is honest. There are crooks and cretins, just as with any other line of work, especially when gold and silver periodically heat up, drawing more people into the field. Real gold- and silver-bugs weed these people out rather quickly, though, so one way to be safe is to only deal with bullion dealers that have been in business for at least ten years—you’ll find no shortage of them. If you do choose to do business with a newcomer, start slowly and let the trust build.

Of course, there’s no guarantee that even a long-time dealer is legit. I once had established a fairly good business relationship with a local dealer in Saginaw, Michigan. Every week, I was buying silver rounds from him, putting 10% of my pretax income into bullion. We saw each other every week, did business, chatted—he wasn’t the most friendly guy in the world, and maybe that should have tipped me off. Anyway, he told me that he always bought back at spot. His prices were a little higher than I could get from APMEX, but I was buying small amounts, and what I was saving on shipping made up for it. Plus, I thought it was good to have a local contact. I thought wrong.

One week, I was in a cash crunch, and I needed to sell some rounds in order to pay some bills. I took a roll of twenty rounds that I had bought from his shop, and the dealer offered to pay me $2 under spot! I told him, “You said you’d buy back at spot.” He said, “Two dollars under, take it or leave it, that’s the deal.” Needless to say, there was no transaction that day, and there haven’t been any since. The good news is, this led me to find a much more reputable and fairer local dealer in Bay City, Michigan. I highly recommend stopping by Flying Eagle Coins if you’re ever in the area.

8. Preying on the Uninformed

Coin dealers typically have a flood of customers coming in with old cigar boxes or coffee cans full of coins. Most dealers are scrupulous, and they will give even uninformed customers a fair price—of course, if the customer doesn’t understand the nature of bid/ask spreads (see #s 5 & 6), he may later think he’s gotten a raw deal, but that’s another story. However, there are dealers out there who will take advantage of clueless people who come in with their boxes of old coins. Is this ethical?

On the one hand, it is the customer’s fault: he should know what he has. In the age of the Internet, it’s really not that hard to come up with at least some idea of your coins’ value. On the other hand, many of the people bringing in their inherited collections are elderly and not familiar with the Internet, and they’re coming to their local coin shop for an honest, expert opinion. An argument can be made that they deserve honest advice.

Nevertheless, this won’t affect you so long as you are informed, will it? Actually, it can. If a dealer has a steady supply of uninformed customers bringing in valuable coins that he can buy at discount prices, he’s unlikely to want to pay a fair price to you. For this reason, regardless of your views on the ethics of the matter, you should avoid using dealers who prey on the uninformed. Instead, establish relationships with dealers whose ethics are beyond reproach—even if their prices are a little higher, it should pay off in the long term.

9. Buying for Meltdown Value

With the rash of “We Buy Gold” storefronts, and the uninformed public’s rush to turn in their “worthless” old gold for paper money, this has quickly become one of the big money-makers for bullion dealers. This is sort of like “preying on the uninformed,” but the scruples of the dealers here are not really in question—anyone can look up the spot value of gold; it does not take an expert.

In my experience, the retail offerings of these “We Buy Gold” places—if indeed they sell gold and other precious-metals products—are nothing to get excited about, neither in terms of price nor selection. I avoid them, and you probably should too.

10. Market-Making

One advantage bullion dealers have is that they meet hundreds of buyers and sellers in their shops or at their booths at coin shows. They are, in a sense, always market makers, buying from one party and selling to another. One way they can maximize their profits is by making specific matches—i.e., they hear about a particular coin a customer wants, and then find another customer who has that coin. Instead of connecting the two individuals, the coin dealer will typically offer to buy the coin from the one party and sell it to the other, turning a quick, risk-free profit.

11. Selling Extras

Just like movie cinemas make most of their profits at the concession stand, bullion dealers have much higher margins on the extras they sell: coin protectors, albums, price guides and other books, and various memorabilia items. Non-collectable gold and silver products have very low profit margins, so bullion dealers have to make up for it somewhere else. For mail-order dealers, add-ons such as insurance and “rush delivery” have high margins, too. And of course, there is #12.

12. Padding Shipping Charges

Before you buy online, make sure you’re aware of the shipping fees charged by the dealer. Even if dealers merely charge “actual shipping,” the costs can easily cut into whatever you may be saving by shopping online, especially on smaller orders. But of course, with non-numismatic gold and silver products having such low profit margins, the incentive is always there for dealers to make a little profit in shipping. Packaging and handling charges, usually included with shipping, can also take a bite out of your savings and add to the dealer’s bottom line.

Every dealer charges different shipping, and you may find it advantageous to shop around. Maybe small orders from one dealer provide the best value, while larger ones may end up being cheaper from another. Some dealers may even offer free shipping on especially large orders, and most max-out at a certain level. For example, APMEX charges $12.95 shipping on orders under $250; $19.95 on orders between $250 and $999.99; $24.95 on orders between $1,000 and $24,999.99; and no shipping at all on orders of $25,000 or more. Some other dealers may charge less than $12.95 on small orders, but if you’re making a large order, APMEX’s rates are hard to beat.

Shipping is something you should definitely consider when buying on eBay. Then again, there are several other underhanded tactics you need to be aware of when dealing on eBay.

13. Shill Bidding and Other eBay Tricks

First among them is shill bidding. This is the process by which a dealer uses other accounts to bid up the price of his own items, in the hopes that he’ll ratchet up the legitimate bids. Worst case scenario, the dealer ends up “buying” his own product, which he simply relists, so he’s out very little (just the eBay fees). Then again, the real worst case scenario for dealers who do this is the suspension of their eBay accounts—it happens!

Even seemingly “big-time” eBay users may occasionally engage in shill bidding, but there’s another tactic that is used less commonly, and almost exclusively by smaller-time eBay sellers. It involves listing an item with no real intention of sending it to the buyer—essentially using the buyer’s money for an interest-free, short-term loan. Thankfully, eBay’s buyer protection program makes it hard for buyers to really get ripped off, but sellers who “lose the item”—either from their inventory or in shipping—and gladly offer to refund the buyer (after a week or two of using his money, interest-free) rarely face any consequences. After all, their deception is difficult to prove.

Conclusion

In the marketplace, parties engage in mutually beneficial transactions—we know that the transactions are beneficial to both parties, because otherwise, they wouldn’t engage in them. There’s nothing “dirty” about turning a profit—but there is something dirty about some of these tactics. And, even in the case of the non-dirty ones, knowing these secret tactics can do nothing but make you a more-informed trader. Good luck!

20150102

Watch Out for Your Eyeballs!

"market"


Watch Out for Your Eyeballs!


I'm going to paraphrase a conversation I had recently with a Venture Capitalist whose focus is on the tech industry:

Me: "Eyeballs, that's what founders are telling me. How will this company monetize them?"
VC: "Don't know, they haven't figured that out yet."
Me: "Right. Then how do you come up with your current valuation?"
VC: "That's industry standard."
Me: "Industry standard?"
VC: "Yeah, it's based on what other companies are getting funded at presently."
Me: "Companies are being funded on eyeballs at the moment. So it's based on eyeballs?"
VC: "Yeah. Well, they're not there yet. It's projections of eyeballs."
Me: "Right, projections of eyeballs which they don't yet know how they'll monetize?"
VC: "I don't think they need to monetize them."
Me: "Really? How does the company make money for shareholders?"
VC: "Exit will be a trade sale."
Me: "Right. Who's going to buy them?"

[...]

This goes deeper than stupid ideas turned into stupid companies, run by stupid people selling equity to other stupid people, with the anticipation that even stupider companies, run by even stupider people, will buy out this stupid company. Following me?