Monthly Archives: August 2009

P/E Investing

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A company’s price-earnings (P/E) ratio is a valuation measurement of a company’s current share price compared to its earnings per share (EPS). While EPS is generally calculated from the last four quarters (trailing P/E), for the purposes of this post we are using expected earnings to determine a forward (projected) P/E.  Think about earnings as = how many times you are going to wear an item. Therefore, the P/E ratio is:

___________Price of an Item____________

Est. Number of Times You are Going to Wear It

So why is this useful? It’s a quick and easy way to determine if a purchase is worth it. For example, a $300 pair of riding boots that you will wear, say 50 times, has a P/E of 6. Can you justify paying $6 each time you wear them? (Yes, so buy them already!) What about that gorgeous $150 pair of 5-inch ankle-wrap python platform stilettos that you find on sale and try to convince yourself that you “might wear, some day.” Yeah, a year later they’re still sitting in my closet with the price tag on the bottom. They may have been on sale, but not wearing them makes them a bad investment.

What determines a good/bad P/E? Aside from the obvious never wearing them = bad, you have to decide what’s appropriate for your financial goals (budget). Note, a lower P/E is not necessarily a better investment, it just means you’re getting more for your money based on a specific value meaurement. On that note, eDressme is having an amaaazing Labor Day Sale (up to 90% off!!!) and after some intense financial analysis, I’m concluding there are definitely a good number of dresses worth the investment. To make things easier, eDressme has organized the sale by price points ($20, $40, $50, $75, $99, and $149) so pick the one(s) that work for you but before you buy, make sure the P/E is worth it!

edressme_20Black Boat Neck Synergy Organic Sundress (Reg: $97, Sale: $20)

edressme_40Short Sleeved Yellow Casual Dress by Josh Brody (Reg: $110, Sale: $40)

edressme_50Button Front Shirt Dress by ecoSkin (Reg: $190, Sale: $50)

edressme_75Fuchsia Party Dress by Kirribilla (Reg $440, Sale: $75)

edressme_99Double Breasted Coat by Tara Jarmon (Reg: $592, Sale: $99)

edressme_149Silver Sweetheart Cocktail Dress by Badgley Mischka (Reg: $520, Sale: $149)

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A Lesson in Diversification

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Every wardrobe should have a wide variety of investments (see Investment Basics). In finance, diversification is important to reducing portfolio risk by spreading your investments across various asset classes as well as market capitalizations, countries, and industries.  Similarly, in fashion, your closet should be diversified so that any one investment does not cause a significant decline in the portfolio as a whole. For example, if your closet with only t-shirts and pairs of jeans, or you’ll have nothing (appropriate) to wear to a cocktail party.  Alternatively, if your closet is appropriately diversified, people are less likely to notice that you are wearing the same black skirt to work every single week, because you look fabulously different every time. What’s in my portfolio today:

colehaan.pngCole Haan Carma Air Patent Pump, Black ($275)

Why it’s like an institutional money market fund: for anyone with an office job (or really anyone who owns a single pair of heels) a black pump is essential. NIKE Air technology gives this pair more wearability (a higher interest rate, if you will) but at a price. Hey, you gotta pay for what you get.

asosbfriendAsos Roll Sleeve Boyfriend Blazer (£50.00)

Why it’s like an international junk bond: A good boyfriend blazer is definitely a wardrobe staple and this one from a UK online fashion store is worth the buy (maybe not the highest quality, but if you play it right you’ll get great use out of it).

anthropologiesheathAnthropologie Sunlit Angles Sheath ($120)

Why it’s like a value stock: This timeless shiny sheath is perfect for teatime or an afternoon wedding –and it’s marked down from $228!

bcbgskirtBCBG Sheri High-Waisted Skirt ($148)

Why it’s like a high quality bond: A great high-waisted skirt that works for day or night and won’t go out of style. Guaranteed to be super cute by BCBG, made with spandex for extra insurance.

ayalabarneckAyala Bar Timeless Beauty Necklace In Twilight Blues ($139)

Why it’s like an international value stock: This stunning number from Israeli designer Ayala Bar is a statement necklace at its best, and truly a value at 50% of its original cost.

VSromper.jpgVictoria’s Secret Satin Romper ($58)

Why it’s like a growth stock: You know what you’re getting with Victoria’s Secret and this romper is a new addition to the line you know is only continuing to grow as long as women are wearing underwear.

clucelbd.jpgCluce Pleat Bust Brocade Dress ($89)

Why it’s like a convertible bond: A LBD might be considered a staple, but this probably isn’t going to be the go-to black dress in your closet. More likely an on-a-whim purchase, but at this price it’s worth the investment.

ring(2)Blu Bijoux Turquoise Oval Cocktail Ring ($20)

Why it’s like a high yield bond: A great cocktail ring won’t go out of style, but this isn’t the high quality turquoise that will last forever. Still, at $20 the return on this investment is certainly going to be positive.

blackbootie.jpgAnne Michelle Foxy86 Platform Pumps ($21)

Why it’s like a value stock: Adorable peep-toe ankle booties with bow details aren’t exactly a necessity, but these are seriously undervalued compared to the similar Valentino Nappa Bow Booties I’ve been drooling over.

brnecklace.jpgBanana Republic Multi-Chain and Locket Necklace ($60)

Why it’s like a corporate bond: Backed by the guarantee of the Gap Inc. brand, this pretty gold locket necklace is a staple that can be worn until it falls apart.

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Luxe for Less

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So you’re buying something online and right at the end of the checkout they ask you to check a box if you want to be the first to receive emails about the retailer’s special promotions or next big sale… and of course you don’t want to miss out, so you check it, right? Anyone else with an online shopping obsession must get a ton of emails a day from retailers alerting you of upcoming sale events. It can be a hassle to sort through your 20 new messages when that email from the friend you haven’t heard from in awhile gets buried between your Shop It to Me daily update and the email alerting you about the 30% off friends and family sale at Banana Republic. Eventually… you want to unsubscribe from all the retail emails or at least trim them down to the shopping essentials (but how do you decide???).

Solution? A few months ago I created a separate e-mail account for all shopping related e-mails… Seriously, try it. It keeps my regular inbox free of clutter and makes it easier to see all the sales in one place. (And when your budget is telling you to stay away from the shopping, just don’t check your shopping email account!)

On that note, if you haven’t already, you should use that shopping email account and sign up for online sample sales from Rue La La, Gilt Groupe, ideeli, HauteLook, Billion Dollar Babes, One Kings Lane, and Editors Closet -or atleast couple of them- right now. Some of these sites are invite only, but for you, my wonderfelle readers, the links above include invitations. Yes there are others, but I think these are pretty much the best ones out there. Just beware – because if you wait too long after a sale starts, that too-good-to-be-true 75% off perfect knee-length trench coat will definitely be gone) and make sure you like it too, because a number of these sites don’t accept returns. If you’re not signed up, here’s a peek at what you might be missing:

mccartneyStella McCartney Crochet Peeptoe Pump (Gilt Price $168, Originally $595)

identifyideeliIdentify Leather Motorcross Jacket (ideeli Price $215, Originally $494)

malandrinoruelalaCatherine Malandrino Black Wool Jewel Neck Dress (Rue La La Price $199, Originally $670)

Not able to shop at work (ughh, I understand) or just can’t deal with the anxiety of trying to get to the sample sale right when it opens? Try Shop It To Me. You get to pick from a long list of retailers, then what types of items you want to see (shoes, bags, dresses, you get it…), what size(s) you want to see, and how often you want to see it. Result: a daily/weekly/monthly summary email with all of the things that have gone on sale in your size from all your favorite retailers.

Otherwise, there are always sites like Bluefly or the Outnet that only carry discounted designer items (and haves sales on top of the already discounted price! Want to show off that designer dress or fabulous bag for your high school reunion/ ex-boyfriend’s wedding/ fancyshmancy black tie soiree… but will never wear it again and thus can’t justify the purchase? Wear Today Gone Tomorrow (membership is free) or Bag Borrow or Steal might be for you – they’re like Netflix for fashion!

Chloe “Bay” Large Hobo (Bluefly Price $1,210, Originally $1,900)

jimmyoutnetJimmy Choo Erica Ankle Boots (Outnet Price $419, Originally $1,395)

herreraweartodayCarolina Herrera Strapless Corset Gathered Dress (Borrow for $299, Retail Value $2,990)

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