Finance - Page 12 of 31 - oldsite.exkalibur.com

Please enjoy these Library articles about Business Finance.

Goldman Sachs -Not so fast!

Will Rogers was fond of saying, “Buy low, sell high … and if it doesn’t go up, don’t buy it!”

That’s a whimsical sentiment, but I wonder what’s in the air when I read about the alleged fraud by Goldman Sachs described in the civil complaint filed by the SEC, referenced in the recent article here. I wouldn’t jump to conclusions too quickly. In too many ways, this episode is reminiscent of earlier 1980s battles with Michael Milken. Notwithstanding Milken’s misdeeds, my vivid memory is that there were accredited investors and savvy buyers on both sides of those transactions perfectly capable of making independent decisions. Some of them were wrong and they lost money, but in virtually every case, they were well-equipped to make sound decisions … if they did their homework.

These challenges typically arise when people lose money … and there’s no question a lot has been lost. But, to assume that people who lose on one side of a transaction, are incapable of making prudent independent decisions and were sold a bill of goods , is the flawed argument that often pervade these matters. (more…)

Vol. 62: Strategic Finance Fundamentals: It’s time!

“If I am through learning, I am through.”– John Wooden

Some of you will remember – back in the day – the E. F. Hutton commercials that intoned, “When E.F. Hutton speaks, people listen.” (Some of you are probably wondering – who is E.F. Hutton in the first place?) These days, the Sage of Omaha has taken their place and has the ear of many. When I finished re-reading Warren Buffett’s Annual Letter to Shareholders, it resonated with similar messages in a number of recent articles.

What is growth?

From a Wall Street Journal article on March 25 discussing Conoco/Phillips’ future plans: “We asked ourselves, ‘What is growth?’” an executive said. “Growth could be viewed as just growing absolute volumes, but we felt that in this challenging environment what’s really important is to grow the value of the company.”

Or this one, from an article in the April 5 edition of Business Week about the Sears/K-Mart merger: “Simplistic analyses … ignore the fact that negative or below-market returns on invested capital are as harmful to creditors as to shareholders.”

Finally, in Warren Buffett’s shareholder letter, (more…)

White House Jabbing about Jobs

As I’ve said here before, I don’t think our elected servants in D.C. know much about creating jobs. Let’s remember that the stimulus program was always “too little, too late” and we harped here that the length of time over which those funds would be deployed was way too long … witness today that jobs officials say more than 50% is still in the pipeline over one year later. So, no surprise it hasn’t help as much as they would have you believe. Robb Mandelbaum writing in the NY Times also agrees that there is very little in President Obama’s most recent speeches flowing from the Jobs Summit last week.

What do you think of the ideas being floated about, the key ones of which are summarized here? Will any of them help your business? Are there other ideas that could work? Fire up those fingers and add your comments here.

For one thing, the Administration continues to talk about incentive programs to spur business lending. While that would also be welcome, it doesn’t get at the root cause of unemployment and jobs growth. I’ve reported here before that lending is NOT the biggest problem in the middle market … it’s demand and revenue growth. Companies are not going to borrow except to meet demand and if demonstrable demand is present, borrowing is usually easier anyway.

One idea is to eliminate the capital gains tax for small business investing. (more…)

Vol. 54: The road to cost control

The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.

This page provides the Print-Friendly Version of the article, as published.

Any related materials or articles referenced in the column, or otherwise applicable, will also be referenced below:

The electronic version of the article, as published, may be found here.

**********************************************************************************

Article published -November 30 2009

Is fear or kindness the road to cost control? You decide

“Strive not to be a success, but rather to be of value.”

– Albert Einstein

Last time I presented the dichotomy of two opposing cultures and posed the question: If measured by financial performance, how can dramatically different organizations be equally successful? In this continuing series, we’ll explore some of the combinations and permutations of sound business principles and cultural patterns that often collide within an organization’s walls.

In many ways, it doesn’t seem fair that both charitable and churlish cultures can thrive. It’s easy to embrace the benevolent culture created by Sid Rich (we’ll call it Company South, “S” for Sid) as profiled in my last column.

That company deserves to be successful. Wouldn’t it be great if that was the company I worked for? Contrarily, when you look across the aisle at the rough and tumble world of Company North (“N” for Nasty), highlighted by temper tantrums, public floggings and a petulant devotion to spending a dime on anything, we’re either glad we’re not working there … or wishing we didn’t.

Some powerful lessons are evident as we compare and contrast these companies, their styles and culture, although some lessons are not very inviting. (more…)

Small business still swimming upstream

Like big bears hovering over the waterline picking off salmon swimming upstream, the economy is not much of a friend to small business. As you probably realize, small businesses generated 65% of the job growth between 1993 and 2008, and represent about half of the private-sector employment in the U.S., according to the Small Business Administration. “Smaller firms, with fewer than 20 employees, account for 25% of all jobs, but they generated 40% of the [job] growth in the last expansion in 2001,” says Joseph Brusuelas, a director and senior economist at Moody’s Economy.com.

Nouriel Roubini, the NYU economist, writes in a column published in BusinessWeek that the small business economy, is still mired in an “deep and persistent recession”. In fact, a Goldman Sachs analyst recently explained that small business sentiment is out of line with other measures of the economy, like GDP.

What’s the answer? A recent meeting of chief executives concluded that efforts need to center on getting more credit to small and mid-market businesses. The CEOs argued that the main impediment to a faster economic recovery was the high level of unemployment and called for ensuring that credit was available to jump-start hiring, with an emphasis on smaller businesses. I seriously doubt that’s the holdup and am inclined to agree more with the NFIB Chief Economist. (more…)