Two more big-shots call for the return of the Estate Tax, and we learn why 2010 is “the year to Throw Momma From the Train”… This time Bob Rubin and Julian Robertson co-author an op-ed in the Wall Street Journal calling for the return of the Estate Tax, at least in the 2009 model. We can’t help but agree the following reason is strong enough to demand attention by the US Congress: “[The USA] is losing revenue that, with its stressed fiscal conditions, it can ill afford to forego”.
Relatively clueless weekend articles by the Wall Street Journal. This one, ‘Preparing for the next Black Swan’, is downright scary in the number of supposedly “heads I win, tail you lose” hedging/ ‘black swan-proof’ strategies currently pushed to customers – increasingly retail customers on top of the institutional ones. To be clear: we’re all for capital preservation, and our company’s success is built more on the back of risk aversion than of risk-taking. However, the article doesn’t do nearly enough to highlight that hedging instruments or strategies, especially untested ones, have not only flaws (have we already forgotten counter-party risk in 2008?) but most importantly costs, sometimes hidden, and in no way are these costs of a fixed nature. This has all the tell-tale signs of a fad…
Thought-provoking presentation on (buzzword alert!) “information shadows”, “the sensor web”, cloud computing, data collection/ processing/ visualization, local marketing + micropayments, P2P credit-card payments, social network risk evaluation… and how all this is coming together to create new products and services that feed on the cloud and/or organize it. It’s still impossible to tell just how practical this is and who will make money from this, but it’s nice food for thought. Also a comment on the skill of networking.
Spinoff & Reorg Profiles’ latest report has a very interesting section on Insider Buying, and we asked for and got Bill Mitchell’s permission to post an excerpt here. Using Sharps Compliance (ticker SMED) as an example, this section of the report discusses when “incentive stock option exercises may act as an insider signal”. Item #5 in his summary (the last paragraph) is vital, as insiders are only human and can get carried away with frothy valuations just like the rest of the market. No matter how powerful one or even a combination of “signals” may seem, there must be “fundamental value” / margin of safety.
Gadgets that are increasingly online all the time help you multitask – but is that good? Scientists say a loud “no”, according to this New York Times article. There’s reason to be skeptical of either side of this debate, but it does recall one thing: One of Waren Buffett’s overlooked skills is that of saying no to things that would disrupt his schedule, or take time away from quiet reading and “just thinking”, as he says.
“Irony”: High-level corporate strategy consultants need to review their business models to survive. The Financial Times article may be just a sign of worldwide corporate spending cuts, so don’t read too much into it, but the fact remains that the downturn is driving consolidation in what is already a relatively concentrated market (useful chart in the story).
The World Bank has released a huge wealth of data on developing economies. The impacts of such moves are never immediate and almost always underrated, and there’s the risk of data deluge. That said, things like Google indexing and an app development contest could lead to interesting uses for all this information.
Official immigration decreasing, previously “hot” areas with unprecedented swings, NY’s staggering numbers… Sure, a data point does not a trend make, but demographics are too powerful to ignore as a long-term driver. And it’s hard to argue that the US is well-positioned. This WSJ story has lots of interactive charts and features, and here’s the primary source.
Quick tidbits inside from e-bit’s report about the state of the Brazilian e-commerce market in 2009 – Webshoppers, 21st edition (in portuguese and in PDF). We will discuss one company’s specific performance in regards to these numbers in our upcoming Q1 2010 report, but we wanted to highlight a few general data points in advance.
A Moody’s study shows that bank Boards have seen some shuffling and that more “financial expertise” was added. The FT argues that some banks with the “worst” boards in terms of financial experience actually did pretty well, and notes other apparently strange occurrences – for instance, Goldman Sachs has a CEO who’s also chairman and yet the bank has done pretty well in the crisis… We’ll never get tired of saying this: dump the checklist approach to CG. Actually, dump the checklist approach to anything.
