Concept Cracker

Prateek Agrawal

Lipstick Effect

When facing aneconomic crisis, consumers will be more willing to buy less costly luxury
goods. Instead of buying expensive fur coats, for example, people will buy expensive
lipstick.

Although times of economic turmoil generally force consumers to downsize on all sorts of
spending, one consumer good has fared unusually well- beauty products.

It points to the observation that cosmetic manufacturers do not struggle during economic
recessions. While a majority of non- essential industries get struck hard, the cosmetic
industry remains largely unaffected.

The underlying assumption is that consumers will buy luxury goods even if there is a crisis.
When consumer trust in the economy is dwindling, consumers will buy goods that have less
impact on their available funds.

The influence of diminishing monetary status on women beautification products is believed to

have occurred during the Great Depression, when sales of women cosmetics boomed
unexpectedly.
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Concept Cracker

Prateek Agrawal

Cockroach Theory

A market theory that suggests that when a company reveals bad news to the public, there
may be many more related negative events that have yet to be revealed.

The term comes from the common belief that seeing one cockroach is usually evidence
that there are many more that remain hidden.

In the US Subprime crisis, New Century Financial Corporation was the first of many
subprime lenders to face liquidity issues due to subprime mortgages. The fact that one
subprime lender( one cockroach) faced financial problems indicated that many other
similar businesses were likely to face the same issue.

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Fact-a-Base

Anubha Aggarwal

INDIA AT A GLANCE
MEASURE
GDP

CRR
SLR
IIP
CPI (Industrial
Workers)
Government Bond
Yield-10 Year

WORLD AT A
GLANCE
MEASURE
LIBOR (Yearly)
US One Year
Constant
Maturity Treasury
(CMT)
US Treasury
Yield- 10 YearCoupon- 2.0%

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VALUE
2.1
Trillion
USD
4%
21.50%
178.5
264

Matthias Muller

7.54%

He has been named as the new CEO of Volkswagen.

He was the CEO of Volkswagens luxury sports-car
brand Porsche and his appointment comes as a
replacement to Martin Wintercorn.
His most urgent task would be to win back trust for
the Volkswagen group
He has spend more than 30 years at VW. He also
holds the advantage of not being tainted because
none of the Porsche cars were using the conspicuous
diesel engine that has ensnared the Volkswagen and
Audi brands.

Carly Fiorina
VALUE
0.845%
0.28

2.09%

She is an American Republican politician and former

business executive who currently heads the non-profit
philanthropic organisation Good360. She was the CEO of
Hewlett-Packard and was the first woman to lead a top
20 company as ranked by Fortune magazine.
Carly is running for the US Presidential elections as a
Republican candidate. It is likely that she will be the only
female candidate from the Republican Party.
She has also made it to the short list of candidates being
considered by the Koch Brothers network of donorspotentially opening the door to a deep pool of money.

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