Conventional vs Digital : ‘The Interview’ could be a Game Changer
Written by Frehiwote Negash
The old adage ‘There is no such thing as bad publicity’ couldn’t be truer for Sony Pictures when it comes to ‘The Interview’. From the debilitating cyber-attacks on Sony to internet outages in North Korea, the tit for tat is baffling when you remember this stems from a comedy film that would be otherwise forgotten in matter of weeks. The hype surrounding the release of ‘The Interview’ reached a tipping point last week when Sony announced it was removing the film from wide release but not before major theatre chains banded together to state that they weren’t going to screen it citing security reasons (Tassi, 2014). Their decision on the matter is a curious one as they have effectively censored themselves; something that hasn’t happened since the implementation of the Hays Code in1934. The film was supposed to be released Christmas Day on 3000 screens across the U.S. The refusal of major chains to screen the film forced Sony to pursue other forms of distribution in an effort to recoup the $44 million spent on the film (CBC, 2014). Online platforms such as Google Play and YouTube offered consumers the option to rent or buy the film. ‘The Interview’ is also available via Microsoft’s Xbox and Sony’s PlayStation Video platforms. For consumers who wanted a big screen experience, 331 independent theatres across the U.S screened the film on Christmas Day (Eadiccio, 2014).
The on-going political maelstrom and initial fascination might be enough to get a significant audience to watch the film on non-traditional platforms. The proof is in the numbers as ‘The Interview’ made a $1million on Christmas alone with a limited release (CBC, 2014). This satirical comedy isn’t the next Citizen Kane but a more potent argument has emerged for seeing the movie. The relative success of release has less to do with artistic freedom and more to do with freedom of expression. Once hackers invoked the memory of September 11th, moviegoers came out in droves to see it. While the controversy brought people to the theatres that would otherwise never see the movie, it is also a testing ground for digital film distribution.
One of the issues that could plague this form of distribution is online piracy. The illegal practice is not limited to content distributed on digital platforms as films are uploaded online within hours of their release. Consider that moviegoers pay $17 a ticket plus concessions which can cost more than the price of admission for a product that isn’t nearly the same quality as what cable channels and streaming services are doing. American networks like HBO, Showcase and AMC create their own content and maintain a high level of quality. Streaming sites like Netflix are also creating their own programming and content. Not only do they have a large viewership that subscribes and pays for the service, it is affordable and offered in the comforts of your home or on your smartphone (Tassi, 2014). While Sony hasn’t yet released sales figure, the movie leads sales on YouTube and Google Play; an encouraging sign for digital distribution. For the consumer, the question boils down to what is important: the convenience of your home or the movie experience.
Works Cited
CBC.” The Interview grosses more than $1M US in limited release.” CBC. Accessed December 28, 2014, http://www.cbc.ca/news/arts/the-interview-grosses-more-than-1m-us-in-limited-release-1.2884272
Eadicicco,Lisa. ” Microsoft:: Here’s Why We Decided To Release ‘The Interview’” Businesss Insider. Accessed December 28, 2014,http://www.businessinsider.com/microsoft-release-the-interview-on-xbox-video-2014-12#ixzz3N8mUQgxy
Tassi, Paul.” What ‘The Interview’ Accidentally Taught Us About Digital Film Distribution.” Forbes. Accessed December 28, 2014, http://www.forbes.com/sites/insertcoin/2014/12/27/what-the-interview-accidentally-taught-us-about-digital-film-distribution/
- Published in Blog
What Cheap Oil Really Means
Written by Frehiwote Negash
When Oil prices crossed the $100 per barrel threshold in 2008, there was a prevailing thought that this might be considered the new normal. Oil prices have crossed that benchmark numerous times in the last 6 years hitting $115 as early as June (Isadore, 2014). Since then, oil prices have dropped over 50 {92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in the last 7 months; a staggering drop for a popular commodity. With Saudi Arabia’s Petroleum Minister announcing that Opec will not cut oil production regardless of the price per barrel, the days of $100 per barrel of oil are officially over (Defterios, 2014).
Countries like Canada and Russia are net energy exporters with oil being their largest export. While sanctions might have limited Russia’s economic prospects, the fall of oil prices has done more to damage their economy as evidenced by the free fall of the ruble last week. Yesterday, the Canadian dollar hovered near its 5 year low today hitting .85 against the American dollar (Nguyen, 2014). While the performance of the American dollar is boosted by its strengthened economy, the fall of the loonie can be attributed to fluctuating price of commodities, oil being the trigger point. Other oil producing countries such as Norway also suffered as the krone also hit a 5 year low upon the Opec announcement (Nguyen, 2014). This serves to further complicate things for non- Opec countries as the surplus of oil on the market will force them to slow production substantially and cancel future project in order to stay competitive.
As oil prices drop, Canadian consumers are delighted at the prospect of paying a little over a $1.10/l at the pumps during the holiday season. While it is clear that consumers benefit directly from lower oil prices, the same cannot be said for investors, governments and their respective economies. The recent fall in oil prices has had a massive impact on world markets. It has triggered panic selling forcing governments to act swiftly and adjust to the new reality. The price of oil is a major indicator for government projections. It helps governments determine how they plan and execute annual budgets. It can determine foreign policy and the outcomes of elections. In the short term, consumers see more money in their pocketbooks. However, with the free fall in oil prices and a weaker loonie there will be by-products of this crisis that affect all Canadians by way of government policy. Consumers have to remember that the loonie is a commodity currency so as the oil goes, the loonie goes.
For Canadians heading south for the holidays, that means less bang for your buck. For Albertans, lower oil prices means less in the public coffers as Premier Jim Prentice announced yesterday that Alberta will be $7 billion short of their estimated windfall (Curry, 2014).if you live in Southern Ontario, the hope is that the lower dollar will help boost the flagging manufacturing sector. The price of oil has created ripple effects in the Canadian economy but a sustained period will cause a tidal wave that affects every Canadian.
Works Cited
Curry, Bill. “Dropping loonie, sliding oil price redraw provinces’ economic pictures” Last accessed December 24, 2014. http://www.theglobeandmail.com/news/politics/federal-budget-revisions-shake-up-provincial-finances/article22184872/
Defterios, John .”Saudi Arabia: We’ll never cut oil production.̎Last accessed December 23, 2014. http://money.cnn.com/2014/12/22/news/economy/saudi-arabia-oil-production/index.html?iid=EL
Isadore, Chris. The end of $100 a barrel oil. Last accessed December 23, 2014, http://money.cnn.com/2014/12/23/news/economy/saudi-oil-minister-100-dollar-oil/
Nguyen, Lannah. ”Loonie near 5-year low as U.S. economy surges”. Last accessed December 23, 2014. http://www.bnn.ca/News/2014/12/23/Loonie-near-5-year-low-as-US-economy-surges.asp
- Published in Blog, Oil and Gas
The Dramatic Fall of Russia’s Ruble
For a country only a generation removed from communism, Russia has embraced capitalism whole heartedly. Today, one can see Louis Vuitton ads in Red Square, the once symbolic bastion of the Soviet Union. The marketing of consumer products was once considered anathema to the very principals of communism; they now represent the philosophical changes in Russian society in terms of the free market. However, these changes are not reflected in its foreign policy or its pseudo-democracy. The relative stability of the current government compared to the immediate post-communist era still cannot insulate Russia from the threat of an economic bloodbath lead by the declining price of oil.
Boris Yeltsen’s tenure as Russia’s first democratically elected leader was characterized by ineptitude and corruption. The collapse of the Soviet Union and along with hyperinflation exacerbated the problem making the transition from communism to capitalism an arduous one. People saw their savings wiped out as the ruble collapsed leading to wide spread poverty. The derisive term the “Wooden Ruble”, coined to describe its meagre value only furthered the lack of trust in Russian markets (Kitroeff and Weisenthal , 2014). In the 16 years since, Russia has risen to new heights under Vladimir Putin. Economic prosperity is evident in Russia and is driven in large part by the oil and gas industry which accounts for two-thirds of their exports (Matlack, 2014). The recent volatility of ruble and falling oil prices have many Russians feeling that history is repeating itself.
The dramatic fall of the Russian ruble over the course of the last two days has sent the Russian government and markets into a tailspin. The Russian economy has suffered in recent months due to geopolitical issues, economic sanctions, and the price of oil collapsing. Yesterday, the value of the ruble dropped 19 percent making it the worst single-day drop since 1998(Kitroeff and Weisenthal , 2014). Its rapid decline eerily echoes the 1998 crises which decimated the Russian economy and became an enduring part of Yelsten’s legacy. Images of people lining up at banks yesterday conjured images of the Soviet Era bread lines. In response, the Russian Central Bank announced that it would provide additional currency funds in order to stabilize the domestic market (Zmeyev, 2014).
Putin has declined to accept responsibility placing the blame on foreign governments and markets trying to undermine Russia’s interests’. The use of Cold War rhetoric adds another troubling dimension in search of stability in the world markets. The strength of Russia’s economy will determine how Putin will proceed with his foreign policy ambitions.
- Published in Blog
122 Things Everyone Should Know About Investing And The Economy
Written by Morgan Housel, The Motley Fool
A year ago I started writing what I hoped would be a book called 500 Things you Need to know About Investing. I wanted to outline my favorite quotes, stats, and lessons about investing.
I failed. I quickly realized the idea was long on ambition, short on planning.
But I made it to 122, and figured it would be better in article form. Here it is.
1. Saying “I’ll be greedy when others are fearful” is easier than actually doing it.
2. When most people say they want to be a millionaire, what they really mean is “I want to spend $1 million,” which is literally the opposite of being a millionaire.
3. “Some stuff happened” should replace 99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of references to “it’s a perfect storm.”
4. Daniel Kahneman’s book Thinking Fast and Slow begins, “The premise of this book is that it is easier to recognize other people’s mistakes than your own.” This should be every market commentator’s motto.
5. Blogger Jesse Livermore writes, “My main life lesson from investing: self-interest is the most powerful force on earth, and can get people to embrace and defend almost anything.”
6. As Erik Falkenstein says: “In expert tennis, 80{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the points are won, while in amateur tennis, 80{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves.”
7. There is a difference between, “He predicted the crash of 2008,” and “He predicted crashes, one of which happened to occur in 2008.” It’s important to know the difference when praising investors.
8. Investor Dean Williams once wrote, “Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.”
9. Wealth is relative. As comedian Chris Rock said, “If Bill Gates woke up with Oprah’s money he’d jump out the window.”
10. Only 7{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of Americans know stocks rose 32{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} last year, according to Gallup. One-third believe the market either fell or stayed the same. Everyone is aware when markets fall; bull markets can go unnoticed.
11. Dean Williams once noted that “Expertise is great, but it has a bad side effect: It tends to create the inability to accept new ideas.” Some of the world’s best investors have no formal backgrounds in finance — which helps them tremendously.
12. The Financial Times wrote, “In 2008 the three most admired personalities in sport were probably Tiger Woods, Lance Armstrong and Oscar Pistorius.” The same falls from grace happen in investing. Chose your role models carefully.
13. Investor Ralph Wagoner once explained how markets work, recalled by Bill Bernstein: “He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.”
14. Investor Nick Murray once said, “Timing the market is a fool’s game, whereas time in the market is your greatest natural advantage.” Remember this the next time you’re compelled to cash out.
15. Bill Seidman once said, “You never know what the American public is going to do, but you know that they will do it all at once.” Change is as rapid as it is unpredictable.
16. Napoleon’s definition of a military genius was, “the man who can do the average thing when all those around him are going crazy.” Same goes in investing.
17. Blogger Jesse Livermore writes,”Most people, whether bull or bear, when they are right, are right for the wrong reason, in my opinion.”
18. Investors anchor to the idea that a fair price for a stock must be more than they paid for it. It’s one of the most common, and dangerous, biases that exists. “People do not get what they want or what they expect from the markets; they get what they deserve,” writes Bill Bonner.
19. Jason Zweig writes, “The advice that sounds the best in the short run is always the most dangerous in the long run.”
20. Billionaire investor Ray Dalio once said, “The more you think you know, the more closed-minded you’ll be.” Repeat this line to yourself the next time you’re certain of something.
21. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know very little about.
22. “Buy and hold only works if you do both when markets crash. It’s much easier to both buy and hold when markets are rising,” says Ben Carlson.
23. Several studies have shown that people prefer a pundit who is confident to one who is accurate. Pundits are happy to oblige.
24. According to J.P. Morgan, 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of stocks have suffered “catastrophic losses” since 1980, meaning they fell at least 70{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} and never recovered.
25. John Reed once wrote, “When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles — generally three to twelve of them — that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.” Keep that in mind when getting frustrated over complicated financial formulas.
26. James Grant says, “Successful investing is about having people agree with you … later.”
27. Scott Adams writes, “A person with a flexible schedule and average resources will be happier than a rich person who has everything except a flexible schedule. Step one in your search for happiness is to continually work toward having control of your schedule.”
28. According to Vanguard, 72{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of mutual funds benchmarked to the S&P 500 underperformed the index over a 20-year period ending in 2010. The phrase “professional investor” is a loose one.
29. “If your investment horizon is long enough and your position sizing is appropriate, you simply don’t argue with idiocy, you bet against it,” writes Bruce Chadwick.
30. The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come. A similar story can be told virtually every year.
31. According to Bloomberg, the 50 stocks in the S&P 500 that Wall Street rated the lowest at the end of 2011 outperformed the overall index by 7 percentage points over the following year.
32. “The big money is not in the buying or the selling, but in the sitting,” said Jesse Livermore.
33. Investors want to believe in someone. Forecasters want to earn a living. One of those groups is going to be disappointed. I think you know which.
34. In a poll of 1,000 American adults, asked, “How many millions are in a trillion?” 79{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} gave an incorrect answer or didn’t know. Keep this in mind when debating large financial problems.
35. As last year’s Berkshire Hathaway shareholder meeting, Warren Buffett said he has owned 400 to 500 stocks during his career, and made most of his money on 10 of them. This is common: a large portion of investing success often comes from a tiny proportion of investments.
36. Wall Street consistently expects earnings to beat expectations. It also loves oxymorons.
37. The S&P 500 gained 27{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in 2009 — a phenomenal year. Yet 66{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of investors thought it fell that year, according to a survey by Franklin Templeton. Perception and reality can be miles apart.
38. As Nate Silver writes, “When a possibility is unfamiliar to us, we do not even think about it.” The biggest risk is always something that no one is talking about, thinking about, or preparing for. That’s what makes it risky.
39. The next recession is never like the last one.
40. Since 1871, the market has spent 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of all years either rising or falling more than 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. Roaring booms and crushing busts are perfectly normal.
41. As the saying goes, “Save a little bit of money each month, and at the end of the year you’ll be surprised at how little you still have.”
42. John Maynard Keynes once wrote, “It is safer to be a speculator than an investor in the sense that a speculator is one who runs risks of which he is aware and an investor is one who runs risks of which he is unaware.”
43. “History doesn’t crawl; it leaps,” writes Nassim Taleb. Events that change the world — presidential assassinations, terrorist attacks, medical breakthroughs, bankruptcies — can happen overnight.
44. Our memories of financial history seem to extend about a decade back. “Time heals all wounds,” the saying goes. It also erases many important lessons.
45. You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it seriously.
46. The most boring companies — toothpaste, food, bolts — can make some of the best long-term investments. The most innovative, some of the worst.
47. In a 2011 Gallup poll, 34{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of Americans said gold was the best long-term investment, while 17{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} said stocks. Since then, stocks are up 87{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, gold is down 35{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}.
48. According to economist Burton Malkiel, 57 equity mutual funds underperformed the S&P 500 from 1970 to 2012. The shocking part of that statistic is that 57 funds could stay in business for four decades while posting poor returns. Hope often triumphs over reality.
49. Most economic news that we think is important doesn’t matter in the long run. Derek Thompson of The Atlantic once wrote, “I’ve written hundreds of articles about the economy in the last two years. But I think I can reduce those thousands of words to one sentence. Things got better, slowly.”
50. A broad index of U.S. stocks increased 2,000-fold between 1928 and 2013, but lost at least 20{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of its value 20 times during that period. People would be less scared of volatility if they knew how common it was.
51. The “evidence is unequivocal,” Daniel Kahneman writes, “there’s a great deal more luck than skill in people getting very rich.”
52. There is a strong correlation between knowledge and humility. The best investors realize how little they know.
53. Not a single person in the world knows what the market will do in the short run.
54. Most people would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president, and focused on their own financial mismanagement.
55. In hindsight, everyone saw the financial crisis coming. In reality, it was a fringe view before mid-2007. The next crisis will be the same (they all work like that).
56. There were 272 automobile companies in 1909. Through consolidation and failure, three emerged on top, two of which went bankrupt. Spotting a promising trend and a winning investment are two different things.
57. The more someone is on TV, the less likely his or her predictions are to come true. (University of California, Berkeley psychologist Phil Tetlock has data on this).
58. Maggie Mahar once wrote that “men resist randomness, markets resist prophecy.” Those six words explain most people’s bad experiences in the stock market.
59. “We’re all just guessing, but some of us have fancier math,” writes Josh Brown.
60. When you think you have a great idea, go out of your way to talk with someone who disagrees with it. At worst, you continue to disagree with them. More often, you’ll gain valuable perspective. Fight confirmation bias like the plague.
61. In 1923, nine of the most successful U.S. businessmen met in Chicago. Josh Brown writes:
Within 25 years, all of these great men had met a horrific end to their careers or their lives:
The president of the largest steel company, Charles Schwab, died a bankrupt man; the president of the largest utility company, Samuel Insull, died penniless; the president of the largest gas company, Howard Hobson, suffered a mental breakdown, ending up in an insane asylum; the president of the New York Stock Exchange, Richard Whitney, had just been released from prison; the bank president, Leon Fraser, had taken his own life; the wheat speculator, Arthur Cutten, died penniless; the head of the world’s greatest monopoly, Ivar Krueger the ‘match king’ also had taken his life; and the member of President Harding’s cabinet, Albert Fall, had just been given a pardon from prison so that he could die at home.
62. Try to learn as many investing mistakes as possible vicariously through others. Other people have made every mistake in the book. You can learn more from studying the investing failures than the investing greats.
63. Bill Bonner says there are two ways to think about what money buys. There’s the standard of living, which can be measured in dollars, and there’s the quality of your life, which can’t be measured at all.
64. If you’re going to try to predict the future — whether it’s where the market is heading, or what the economy is going to do, or whether you’ll be promoted — think in terms of probabilities, not certainties. Death and taxes, as they say, are the only exceptions to this rule.
65. Focus on not getting beat by the market before you think about trying to beat it.
66. Polls show Americans for the last 25 years have said the economy is in a state of decline. Pessimism in the face of advancement is the norm.
67. Finance would be better if it was taught by the psychology and history departments at universities.
68. According to economist Tim Duy, “As long as people have babies, capital depreciates, technology evolves, and tastes and preferences change, there is a powerful underlying impetus for growth that is almost certain to reveal itself in any reasonably well-managed economy.”
69. Study successful investors, and you’ll notice a common denominator: they are masters of psychology. They can’t control the market, but they have complete control over the gray matter between their ears.
70. In finance textbooks, “risk” is defined as short-term volatility. In the real world, risk is earning low returns, which is often caused by trying to avoid short-term volatility.
71. Remember what Nassim Taleb says about randomness in markets: “If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull — you don’t even know how many sides the dice have!”
72. The S&P 500 gained 27{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in 1998. But just five stocks — Dell, Lucent, Microsoft, Pfizer, and Wal-Mart — accounted for more than half the gain. There can be huge concentration even in a diverse portfolio.
73. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are pretty high.
74. The book Where Are the Customers’ Yachts? was written in 1940, and most people still haven’t figured out that brokers don’t have their best interest at heart.
75. Cognitive psychologists have a theory called “backfiring.” When presented with information that goes against your viewpoints, you not only reject challengers, but double down on your view. Voters often view the candidate they support more favorably after the candidate is attacked by the other party. In investing, shareholders of companies facing heavy criticism often become die-hard supporters for reasons totally unrelated to the company’s performance.
76. “In the financial world, good ideas become bad ideas through a competitive process of ‘can you top this?'” Jim Grant once said. A smart investment leveraged up with debt becomes a bad investment very quickly.
77. Remember what Wharton professor Jeremy Siegel says: “You have never lost money in stocks over any 20-year period, but you have wiped out half your portfolio in bonds [after inflation]. So which is the riskier asset?”
78. Warren Buffett’s best returns were achieved when markets were much less competitive. It’s doubtful anyone will ever match his 50-year record.
79. Twenty-five hedge fund managers took home $21.2 billion in 2013 for delivering an average performance of 9.1{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, versus the 32.4{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} you could have made in an index fund. It’s a great business to work in — not so much to invest in.
80. The United States is the only major economy in which the working-age population is growing at a reasonable rate. This might be the most important economic variable of the next half-century.
81. Most investors have no idea how they actually perform. Markus Glaser and Martin Weber of the University of Mannheim asked investors how they thought they did in the market, and then looked at their brokerage statements. “The correlation between self ratings and actual performance is not distinguishable from zero,” they concluded.
82. Harvard professor and former Treasury Secretary Larry Summers says that “virtually everything I taught” in economics was called into question by the financial crisis.
83. Asked about the economy’s performance after the financial crisis, Charlie Munger said, “If you’re not confused, I don’t think you understand.”
84. There is virtually no correlation between what the economy is doing and stock market returns. According to Vanguard, rainfall is actually a better predictor of future stock returns than GDP growth. (Both explain slightly more than nothing.)
85. You can control your portfolio allocation, your own education, who you listen to, what you read, what evidence you pay attention to, and how you respond to certain events. You cannot control what the Fed does, laws Congress sets, the next jobs report, or whether a company will beat earnings estimates. Focus on the former; try to ignore the latter.
86. Companies that focus on their stock price will eventually lose their customers. Companies that focus on their customers will eventually boost their stock price. This is simple, but forgotten by countless managers.
87. Investment bank Dresdner Kleinwort looked at analysts’ predictions of interest rates, and compared that with what interest rates actually did in hindsight. It found an almost perfect lag. “Analysts are terribly good at telling us what has just happened but of little use in telling us what is going to happen in the future,” the bank wrote. It’s common to confuse the rearview mirror for the windshield.
88. Success is a lousy teacher,” Bill Gates once said. “It seduces smart people into thinking they can’t lose.”
89. Investor Seth Klarman says, “Macro worries are like sports talk radio. Everyone has a good opinion which probably means that none of them are good.”
90. Several academic studies have shown that those who trade the most earn the lowest returns. Remember Pascal’s wisdom: “All man’s miseries derive from not being able to sit in a quiet room alone.”
91. The best company in the world run by the smartest management can be a terrible investment if purchased at the wrong price.
92. There will be seven to 10 recessions over the next 50 years. Don’t act surprised when they come.
93. No investment points are awarded for difficulty or complexity. Simple strategies can lead to outstanding returns.
94. The president has much less influence over the economy than people think.
95. However much money you think you’ll need for retirement, double it. Now you’re closer to reality.
96. For many, a house is a large liability masquerading as a safe asset.
97. The single best three-year period to own stocks was during the Great Depression. Not far behind was the three-year period starting in 2009, when the economy struggled in utter ruin. The biggest returns begin when most people think the biggest losses are inevitable.
98. Remember what Buffett says about progress: “First come the innovators, then come the imitators, then come the idiots.”
99. And what Mark Twain says about truth: “A lie can travel halfway around the world while truth is putting on its shoes.”
100. And what Marty Whitman says about information: “Rarely do more than three or four variables really count. Everything else is noise.”
101. Among Americans aged 18 to 64, the average number of doctor visits decreased from 4.8 in 2001 to 3.9 in 2010. This is partly because of the weak economy, and partly because of the growing cost of medicine, but it has an important takeaway: You can never extrapolate behavior — even for something as vital as seeing a doctor — indefinitely. Behaviors change.
102. Since last July, elderly Chinese can sue their children who don’t visit often enough, according to Bloomberg. Dealing with an aging population calls for drastic measures.
103. Someone once asked Warren Buffett how to become a better investor. He pointed to a stack of annual reports. “Read 500 pages like this every day,” he said. “That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
104. If Americans had as many babies from 2007 to 2014 as they did from 2000 to 2007, there would be 2.3 million more kids today. That will affect the economy for decades to come.
105. The Congressional Budget Office’s 2003 prediction of federal debt in the year 2013 was off by $10 trillion. Forecasting is hard. But we still line up for it.
106. According to The Wall Street Journal, in 2010, “for every 1{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} decrease in shareholder return, the average CEO was paid 0.02{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} more.”
107. Since 1994, stock market returns are flat if the three days before the Federal Reserve announces interest rate policy are removed, according to a study by the Federal Reserve.
108. In 1989, the CEOs of the seven largest U.S. banks earned an average of 100 times what a typical household made. By 2007, more than 500 times. By 2008, several of those banks no longer existed.
109. Two things make an economy grow: population growth and productivity growth. Everything else is a function of one of those two drivers.
110. The single most important investment question you need to ask yourself is, “How long am I investing for?” How you answer it can change your perspective on everything.
111. “Do nothing” are the two most powerful — and underused — words in investing. The urge to act has transferred an inconceivable amount of wealth from investors to brokers.
112. Apple increased more than 6,000{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} from 2002 to 2012, but declined on 48{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of all trading days. It is never a straight path up.
113. It’s easy to mistake luck for success. J. Paul Getty said, the key to success is: 1) rise early, 2) work hard, 3) strike oil.
114. Dan Gardner writes, “No one can foresee the consequences of trivia and accident, and for that reason alone, the future will forever be filled with surprises.”
115. I once asked Daniel Kahneman about a key to making better decisions. “You should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are,” he said. Try this before making your next investment decision.
116. No one on the Forbes 400 list of richest Americans can be described as a “perma-bear.” A natural sense of optimism not only healthy, but vital.
117. Economist Alfred Cowles dug through forecasts a popular analyst who “had gained a reputation for successful forecasting” made in The Wall Street Journal in the early 1900s. Among 90 predictions made over a 30-year period, exactly 45 were right and 45 were wrong. This is more common than you think.
118. Since 1900, the S&P 500 has returned about 6.5{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} per year, but the average difference between any year’s highest close and lowest close is 23{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. Remember this the next time someone tries to explain why the market is up or down by a few percentage points. They are basically trying to explain why summer came after spring.
119. How long you stay invested for will likely be the single most important factor determining how well you do at investing.
120. A money manager’s amount of experience doesn’t tell you much. You can underperform the market for an entire career. Many have.
121. A hedge fund once described its edge by stating, “We don’t own one Apple share. Every hedge fund owns Apple.” This type of simple, contrarian thinking is worth its weight in gold in investing.
122. Take two investors. One is an MIT rocket scientist who aced his SATs and can recite pi out to 50 decimal places. He trades several times a week, tapping his intellect in an attempt to outsmart the market by jumping in and out when he’s determined it’s right. The other is a country bumpkin who didn’t attend college. He saves and invests every month in a low-cost index fund come hell or high water. He doesn’t care about beating the market. He just wants it to be his faithful companion. Who’s going to do better in the long run? I’d bet on the latter all day long. “Investing is not a game where the guy with the 160 IQ beats the guy with a 130 IQ,” Warren Buffett says. Successful investors know their limitations, keep cool, and act with discipline. You can’t measure that.
Source
- Published in Blog
LinkedIn 2014 statistics!
LinkedIn (LNKD) recently released their annual breakdown of most common skills! This can give us an idea of who is getting hired and what makes them stand out.
LinkedIn currently operates the world’s largest professional network on the Internet with more than 332 million members in over 200 countries and territories. A tool for professionals, it has allowed entirely new forms of networking to open up, and changed the realm of recruiting, job hunting, and communication in a business setting.
Some quick stats:
Over 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of users check LinkedIn daily, with over 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of users having a “full profile”. What is interesting to note, is that despite LinkedIn opening to students in 2013, only 13{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of millennials, and 8{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the class of 2014 are using linkedIn. On the other hand, 41{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of Millionaires have LinkedIn.
Linkedin recently released their annual breakdown of most common skills! This can give us an idea of who is getting hired and what makes them stand out.
For Canada, the top 15:
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Statistics Analysis and Data Mining
-
Storage Systems and Management
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Middleware and Integration Software
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Network and Information Security
-
C/C++
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Mac/Linux/Unix systems
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Computer graphics and animations
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Business Intelligence
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SAP ERP Systems
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Perl/Python/Ruby
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Digital and Online Marketing
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Java Development
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Mobile Development
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Data Presentation
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Web Architecture and Development Framework
The top Canadian skills do not differ very much from the entire LinkedIn network. It appears that Canadians are quite STEM (Science, Technology, Engineering, and Math) savvy, as they make up most of the list.
It is interesting to see how over the last 10 years the rise of internet related skills has increased, from Perl to Social Media Marketing.
Using this data with Canadian Business’s top 100 jobs of 2014 is good way to scope out the current demand in the Canadian work force, and how to prepare ones personal education to adapt the changing industries.
It is important to note that this data, while highly useful, has several variances that must be accounted for – it will vary based on professional, social, and regional culture, as well as overall site availability and accessibility.
Top LinkedIn Tip From One Of Its Long-Time Product Managers
- Published in Blog
Putin Just Gave An Amazing End-Of-The-Year News Conference
Russian President Vladimir Putin gave a big end-of-the-year news conference Thursday that lasted about three hours, speaking about his country’s economy and the collapse of the ruble.
He also addressed Russia’s conflicts with the West.
Several English-speaking journalists, including Max Seddon of BuzzFeed and Paul Sonne of The Wall Street Journal, tweeted translations of Putin’s statements, and NBC News carried a live stream with an English translation.
Here are some highlights:
- Putin insisted that growth was “inevitable” and that Russia could dig out of its economic crisis in two years at most.
- He refused to call the ruble’s collapse a crisis, and he blamed it partly on sanctions from the West.
- He said that regarding Ukraine, Russia was right and the West was wrong.
- He compared the Russian invasion of Crimea to taking Texas from Mexico.
- He implied that the US was aiming to disarm Russia and asked: “Do we want our bear to just become a stuffed animal?”
The Economy
The ruble weakened against the dollar just ahead of the news conference. Russia’s currency has fallen over 40{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} against the dollar and the euro since June, hitting a record low of 80 rubles to the dollar and 100 rubles to the euro earlier this week.
Early on, Putin commented on Russia’s currency crisis. He said it had been “provoked by external factors” and that the central bank and government were taking adequate measures to deal with the economic situation.
He also insisted that growth is “inevitable” and that Russia could dig out of the crisis in two years at most.
Putin said he is optimistic because he thinks the economy will eventually adjust to low fuel prices. He also said that Russia must step up efforts to diversify its economy so that Russia is not so reliant on oil.
Before discussing the ruble crisis, Putin opened on a higher note, citing 2014 gross-domestic-product growth of 0.6{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} and noting that Russia saw a record agricultural harvest despite turbulence in financial markets.
He later shied away from calling the ruble collapse a crisis.
“I don’t think I can call the situation a ‘crisis’; you can call it whatever you want,” he said, adding that he thinks the central bank and government are taking the correct approach.
He also blamed Russia’s economic situation partly on sanctions by the West over Ukraine, saying the sanctions are responsible for 25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} to 30{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the ruble’s problems.
Russia’s economy is widely expected to fall into a recession next year because of collapsing oil prices and economic sanctions by the West.
Putin noted that the country’s central bank has reserves of $419 billion, which he said is enough to maintain the “social situation” in Russia. He was also careful to say Russia would not drain its reserves trying to protect the ruble.
Despite the country’s economic troubles, Russians still widely support Putin. His approval rating hit record highs this year, with 80{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of Russians saying they support him.
The West
Putin also addressed tensions with the West.
“Our Western partners decided that they won and that they are an empire, and they began to squeeze everyone else out,” he said.
He also referenced the Berlin Wall, saying that new “virtual” walls were being built through a NATO expansion.
“We want our partners to understand that the best way is to stop building those walls and to build a united humanitarian space,” Putin said.
Putin later implied that the West is trying to disarm Russia.
He compared the country to a bear and said the West would “always try to put it in chains and … take out its teeth and claws, which in this case means our strategic nuclear deterrent.
“Sometimes I think, maybe they’ll let the bear eat berries and honey in the forest; maybe they will leave it in peace,” he added. “They will not.”
Putin concluded by asking: “Do we want our bear to just become a stuffed animal?”
When a journalist asked Putin about talk of a “new Cold War” brewing, Putin said that Russia had just been defending its interests, and he implied that the US was the aggressive party, not Russia. He insisted that Russia was not attacking anyone.
He then said the sanctions that had been imposed on Russia were “illegitimate and illegal.”
Ukraine
A Ukrainian journalist asked Putin how many soldiers Putin sent to Ukraine and what he told the families of dead soldiers.
Putin said Russian soldiers in eastern Ukraine were volunteers and couldn’t be called mercenaries because they were not paid. He also blamed Kiev for starting the conflict.
“The problem is that after the coup d’etat … instead of starting a political dialogue, the new authorities started using law enforcement officers,” Putin said. “When that didn’t work out, they started using the army; when that didn’t work out, they started using other means, such as an economic blockade.”
Putin also said that regarding Ukraine, Russia was right and the West was wrong.
He didn’t address how many Russian fighters were in Ukraine, nor did he give a death toll from the conflict.
Estimates put the number of dead at about 4,000 since fighting broke out between Ukrainian forces and pro-Russian rebels in April. Kiev, Ukraine’s capital, says Russia is supporting the separatists and has about 10,000 troops on the ground.
Crimea
Another journalist asked whether Russia’s economic crisis was somehow payback for the country’s annexation of the Ukrainian peninsula of Crimea.
Putin said the troubles with the ruble were not payback for Crimea, but rather “payback for our natural desire to survive as a nation.”
“It’s not a matter of Crimea; we are defending our independence, our sovereignty and our right to exist. We should all understand this,” he said.
Putin also compared the invasion of Crimea to the US’ taking Texas from Mexico, saying Russia was just managing its territories and protecting its sovereignty.
Mikhail Khodorkovsky
Putin was asked whether he regretted pardoning Mikhail Khodorkovsky, once Russia’s richest man and owner of the country’s biggest oil company, because Khodorkovsky recently said he wanted to be president.
To that Putin replied: “President of which country?”
Putin said he ordered the pardon because Khodorkovsky’s mother was ill, and a mother is a “sacred thing.”
He added that he didn’t regret it. Khodorkovsky spent a decade in prison for fraud and was released last year.
China
Putin said China is Russia’s biggest trade partner and that there were no problems between the two countries.
He said the two have many common interests and have helped stabilize the international arena.
Putin added that Russia would seek to increase trade with China and noted that their trade balance with China would reach $90 billion this year.
He also said Russia’s gas deal with China would be beneficial for both sides despite the high costs.
Russia brokered the deal in an effort to become more independent from the West, given the sanctions that have hindered Russia’s ability to develop energy reserves and raise finance abroad, Reuters reports.
A Possible Coup
A Reuters reporter asked Putin whether he thought a coup was possible in Russia.
Putin said he isn’t worried and that he would not be ousted because Russians knew that he acted in the “overwhelming interest” of the majority of the population.
He also noted that the Kremlin is well protected and said: “We don’t have palaces, so there can’t be any palace coups. We have the Kremlin, and it’s well secured.”
The reporter also said that although Putin blamed the economic crisis on external forces, even those within his circle were known to blame Putin.
Putin, grinning, said: “Give me their names!”
Inequality
Putin insisted that there are not elites in Russia and that while there are rich and poor, all people are equal.
“There is elite wine, resorts, but not people,” he said. “Who is the Russian elite? The peasants, the hard workers.”
Russia has notoriously high wealth disparity.
A report from Credit Suisse in 2013 said that Russia has the highest rate of income inequality in the world.
- Published in Blog
Oil’s demise is a Symptom of Something Big
Dear fellow investors:
The “well known fact” with regards to oil over the last decade read like this: because of huge GDP growth in emerging markets like China, there were going to be 400 million new middle class citizens born of uninterrupted prosperity; they were going to want all the autos, consumer goods, $10,000 watches and food that Americans have.
The demand for commodities was going to be endless because capitalism practiced under authoritarian control was going to be better than the “invisible hand” of the free market. No recessions or depressions required.
Now, with oil dropping from $95 per barrel to below $57 through the first half of December 2014, many pundits seem to focus on the over-supply of oil and falling demand in a slowing global economy. But we think they miss the long-term view.
As long-duration common stock investors, we don’t see oil dropping merely because OPEC and Bakken Shale have produced too much supply. Instead, we see oil’s demise as a symptom of something larger: the unwinding of a globally synchronized trade tied to the “well known fact” stated above.
Part of the job of the long-term contrarian investor is to identify a body of economic information which is not only known to all market participants, but has been acted upon by anyone in the marketplace who wishes to participate. We call this the “well known fact.” If we know where the vast majority of investors are, then we can contentiously go where they are not.
Nearly every major institutional and high-net-worth individual investor had to adjust their portfolio to this particular “fact” about China and the emerging markets over the last decade. The most successful money managers of the prior decade, who had successfully participated early in the “well known fact,” were validated and received adulation for promoting it (think BRIC-trade). As Warren Buffett likes to say, “What the wise man does at the beginning, fools do at the end.”
The boom created by a once-in-a-generation and massive capital re-allocation toward everything related to the globally-synchronized trade did what all booms do. It turned to bust. Few experts or pundits view it this way, but for many it’s often tough to see the forest through the trees.
We think it would be helpful at this point to review other psychologically-driven boom-bust cycles to analyze the depth of their declines and the duration of the bear market which followed. In this way, we might prosper from the disarray of investment managers and the largest institutional pools. They remained trapped chasing an over-capitalized belief in the 400 million new middle-class citizens on “a permanently higher plateau” in commodities.
Go-Go Mutual Fund Boom Peaked in 1968
- Well Known Fact: Technology sparked by the space race was limitless.
- Result: Small-Cap Stock Boom.
- Declines to 1974 Bear-Market Low 60-80{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}.
- Duration: 6 years.
Nifty-Fifty Large-Cap Stock Boom 1972
- Well Known Fact: 50 companies having limitless earnings growth and consistency.
- Result: Institutions had 74{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of their portfolio in common stocks at the beginning of 1973.
- Declines of 50-80{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} and no ultimate bottom until 1982.
- Duration: 10 years.
Commodity Boom of the 1970s peaking in 1981
- Well Known Fact: Never ending double-digit inflation demanded investments which benefit from inflation (Oil, Gold, etc.).
- Result: stock, Gold stock and Commodity Boom.
- Declines of 70{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in Oil and 60{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in Gold ending in 1999.
- Duration: 18 years.
Tech Bubble 2000
- Well Known Fact: The Internet Will Change Our Lives.
- Result: Tech-Heavy NASDAQ Index fell 78{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} and isn’t back to even 15 years later.
- Duration 3 Years.
Residential Real Estate 2005
- Well Known Fact: Houses always go up in value and are geographically diverse.
- Result: Homes fell 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in hottest markets and the leverage attached to them created the biggest financial meltdown since the 1930s, helping to cause a 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} decline in stock prices.
- Duration: 7 Years.
What can we as long-duration common stock investors glean from reviewing these past episodes of financial euphoria? First, it appears that stocks confess sins and cleanse faster than other asset classes. Second, the connection to leverage and the inter-connectedness of multiple asset classes seemed to cause longer-duration declines in the past.
For example, tech stocks had very little debt and most investors weren’t using margin in 1999. Therefore, the grief didn’t spread to the real economy; however, owners of leveraged oil tax shelters and garden-style apartments in the Sun Belt in 1981 were illiquid and everything inflation-related was tied together.
Third, our observations suggest that asset quality affects decline duration. Exxon paid dividends from 1981-1999, while gold and commodity indexes didn’t. Investors had something to fall back on like earnings, free cash flow and dividends.
Lastly, how fast can money managers purge? Most institutions and high-net worth individual investors have the stamp of the well-known-fact all over their portfolios as evidenced by studies like the 2013 NACUBO study of endowments and foundations. It should take years to rearrange their commitment to all aspects of the globally-synchronized trade.
What do we look for among common stocks as we bargain hunt in sectors which get unwound by a vicious bear market following the unwinding of a “well known fact?” We will watch for the shaming of the globally-synchronized-trade apologists in the media and the closing or liquidation of sector mutual funds, ETFs, hedge fund and private equity vehicles tied to the globally-synchronized trade. This is historically what occurs near the bottom as capacity contracts severely.
So far, nobody has even been criticized yet, let alone vilified. Wait for the time when few are mentioning the new 400-million middle class citizens and when the word “damn” gets put in front of the stocks, commodities and asset classes involved. Finally, we believe that you shouldn’t give too much weighting to any mid-December 2014 explanation which doesn’t include the psychology of a boom/bust cycle and the long-duration nature of the law of supply and demand.
Warm Regards,
William Smead
Smead Capital
- Published in Blog, Oil and Gas
Richard Branson on How to Raise Money When You’re Just Starting Out
Editor’s Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.
Q.: G’day Richard. I am a young engineering student with little to no practical experience as an entrepreneur. I think I’ve got a great idea, a ready and capable team, but have little money to pursue commercializing my novel product. I fear that potential investors will not take me seriously because of my age (21) and inexperience. How can I convince seasoned investors to believe in my team and invest in my idea? — Jordan Gruber, Australia
My friends and I came up with the name “Virgin” one day when we were 15 years old, sitting around in a basement. I was keen on the name “Slipped Disc” for our new music venture, but then one of my friends pointed out that when it came to business, “we’re all virgins; why don’t we call it that?” In our case, inexperience proved to be a huge asset — if we’d gone with the safer option, I’m not sure that many people would be working out at Slipped Disc Health Clubs or banking at Slipped Disc Money!
Innovation and entrepreneurship thrive on the energy of people who are dipping their toes into the water for the first time. Budding entrepreneurs with fresh outlooks have the freedom to think quite differently, which is tremendously exciting to potential collaborators. However, as you’re finding out, Jordan, translating a new concept into a product can be very daunting.
While you might not yet have the right connections or an “in” with major investors, other people out there do — experienced businesspeople, in your sector or in others, who were once in your shoes and went on to be successful. These people are potential mentors who can help you on your way.
Mentoring is a subject that is very close to our hearts at Virgin; I myself have benefited from many mentors throughout my life. However, don’t consider mentoring as a quick way to gain useful contacts. A good mentoring relationship is based on more than that — it’s a way to learn valuable lessons from the mistakes someone else has made.
Additionally, I noticed in your message an emphasis on convincing “seasoned investors” to back your idea. While securing huge sums of money from major business figures might seem like the ideal way to propel a business forward, the reality is that very few ventures win this kind of funding. A better alternative might be an online crowdfunding platform. Websites such as Indiegogo not only have the potential to fund the creation of a prototype to get your business up and running, but they also can result in significant publicity.
Another option is taking out a small business loan. In the U.K. we launched Virgin StartUp, a program that provides loans of up to 25,000 pounds to companies trying to get their ideas off the ground. It is well worth your time to look into similar initiatives in your area, and decide whether a loan is the right step for you. As an added benefit, both crowdfunding and small business loans will mean that you can retain full ownership of your business — you won’t have to give any equity away to investors.
Here are three steps that can help you discover which approach is best for you:
1. EVALUATE AND RESEARCH.
Always be honest with yourself about your abilities, the work you’ll have to put in to get your company up and running, and the amount of money you’re hoping to raise. Research all the options that are available, and evaluate how they would affect your end goal.
Ask yourself: Is your crowdfunding target realistic? How much of a stake in your business are you willing to give to potential investors?
And if you want to find a mentor who can help give you direction and guidance, make sure you find a suitable one. Find out what they do, whether they’ve mentored others before and which sectors they are interested in.
2. GET ON PEOPLE’S RADAR.
Attend industry events such as seminars and conferences. Talk to as many people as possible, and do not immediately launch into a pitch of your product. Be sure to listen and learn from what people have to say.
Networking doesn’t stop at face-to-face contact, either; interact on social media, join LinkedIn groups and keep the relationships going online. When you do approach potential mentors or investors, or if you launch a crowdfunding campaign, you’ll have a degree of visibility.
In fact, the more proactive you are in building your profile, the more likely it is that potential investors will feel confident enough to put their faith in you — and their money in your company. Remember that the more relationships you build, the better the chances that your network will put you in touch with the people who can help your business.
3. KEEP AN OPEN MIND.
Remember to be flexible. While winning investment might look like the best option now, don’t discount any other opportunities that come your way. For example, crowdfunding might not have the prestige of an investment from a big-time entrepreneur, but it will connect you directly with future customers, and you will have more control over the process.
Keeping an open mind is especially important when it comes to mentoring. Don’t see mentorship as a quick fix for problems, and do not brush off advice. Consider your connection with a mentor as a long-lasting business relationship that can teach you lessons and reduce the potential for failure. But also remember that, as with anything else, you’ll get out of mentoring what you put in.
Making sure that your potential business is a success is not contingent upon gaining a large investment. Many successful companies — including Virgin — started with modest funds. Right now, investors might seem like they are the gatekeepers between you and your dream, but the one person who can make your business succeed is not an investor, or even a mentor. It is you.
Good luck!
- Published in Blog
Spending Bill to Restrict Persecution of Legal Cannabis Businesses
In wake of the government shutdown as Congress attempts to wrap up a two-year legislative session, the 2014 Continuing Resolution Omnibus bill was passed on Saturday.
With 1603 pages, this $1.1 trillion dollar bill, one long line has received little fanfare – It states that the Department of Justice (and, therefore, the FBI) cannot spend money to investigate, raid or prosecute cannabis businesses that are accredited as legal within their parent states. It is important to note that this does not restrict spending from previous budgets.
To be specific, the bill says:
“None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”
“Congressional leaders seem to have finally gotten the message that a supermajority of Americans wants states to be able to implement sensible marijuana reforms without federal interference,” said Tom Angell, head of the pro-legalization Marijuana Majority. “This legislation greatly reduces the chances that costly and senseless DEA raids will come between seriously ill patients and the doctor-recommended medicine they need for relief.
This does not mean that the DOJ will stop monitoring the cannabis industry, or that there is a sudden change in legalization. It will also not affect any on going investigations or persecutions, and only applies to the states mentioned – any state who changes their cannabis laws will have to wait till the next budget to be recognized.
The spending bill also “prohibits both federal and local funds from being used to implement a referendum legalizing recreational marijuana use in the District of Columbia,” according to a summary from the House Appropriations Committee.
DC’s initative would actually cost them nothing – it would save district money to not enforce laws against marijuana possession. Essentially, it prevents DC Council from spending its time and resources to approve the legalization initiative and send it to Congress. Under federal law, this is a required step in order to legalize.
Congress previously used this authority to block DC from implementing a medical marijuana law for nearly 12 years. Federal lawmakers have also prevented DC from using local tax dollars to fund abortion services and life-saving clean needle exchange programs. They can experiement with medical marijuana… but not legalization.
While not all encompassing, this does show that the American federal government is moving away from persecution, and is willing to update its archaic views on cannabis sativa.
- Published in Blog, Medical Marijuana
Dundee Sustainable Technologies Seeing Some Market Activity!
Dundee Sustainable Technologies (C:DST) has been on the tip of the tongue of multitudes of institutions and investors. A new technology play in Canada, it has been recognized by the Sustainable Development Technologies Canada. Recently in talks with various South American countries, DST has negotiated a decree in the province of San Juan in Argentina, as well as secured two MOU’s with strategic partners located in Peru and Chile. These are by no means small steps, this could eventually lead to the only technology being used in the regions for extraction would be that of DST’s!
Are we there yet?
No.
Could we be in the future?
Yes.
Financially, DST has a working capital cash flow of negative $6.1 million, which includes the $5million short term loan from Dundee. DST does not expect to have enough cash to continue, however it is confident it can raise what is required to continue operating and expanding. So far this hasn’t been an issue, nor is it expected to be one. Several time already has Dundee excersized in position to give DST some cash flow.
With the recent selloff, there has been concern for the current share price of DST. While it is clear that someone had to get out, the why as several possibilities. Considering the time of year, we have entered what is commonly known as Tax Loss Season. As the holidays draw near, some investors justify portfolio adjustments for gifts, vacations and festivities.
One possibility, is Pinetree Capital, which recently disclosed that the company was in default by the trustee under the Indenture. Its debt-to-assets ratio on was 38.8{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, contrary to the 33{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} debt maintenance covenant contained in the Indenture. Considering it’s recent financial hurdle and that it is involved with Dundee and DST, it may have had to adjust it’s position.
Remember the Minto Property? Well, some testing has been done, and they were able to compare their own chlorination method (90{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery) vs traditional cyanide ( 35{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery). This was able to confirm the refractory nature of the Deposit. Using a modular processing plant, they plan to concentrate the deposit, and subsequently ship it to their Thetford Mines demonstration plant. The construction or acquisition is expected to be $4.5 million (which is included in the $27 million demo plant cost).
The modular processing plant is expected to go live in the summer of 2015.
The reason for the delay was because of a mechanical inspection Dundee performed on a concentrator in Mexico. Dundee has interest to acquire this as part of the demonstration plant cost.
Also within that $27 million budget for the demonstration plant, is $6.5 million for processing materials obtained by Dundee Precious Metals and / or other third parties. This will only be for a period of 6 months, after which it will process the ore of Creso.
|The demonstration plant is expected in March of 2014. The first thing to be processed? 10-20 tons of 1 pound gold/ton ore. So far they were able to get 99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery of the first kilograms of it, and will establish the feasibility of processing at their demo plant. 1 ton of this stuff is worth over $19, 000 at today’s gold prices!
This all means possible revenue as of next year.
Read more:
Dundee Sustainable Technologies – Making big moves in South America
Dundee Sustainable Technology (CSE:DST) in the News! (Global Mining)
Cyanide, Mercury and Tailing Pond Spills – Perhaps we Should Change our Extraction Methods
Management Discussion and Analysis
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