Columbus, Columbia

By |2012-10-08T10:39:30+00:00October 8th, 2012|Global Market Update, New Markets|

Columbus, Columbia Why should we celebrate Columbus Day? For workaholic Americans, taking another day off seems like a waste. After all, there are reports to be run, machines to be tended, facilities to be fixed, and sales to be made. And in its initial years, Columbus Day wasn’t very popular. […]

The Facebook Effect?

By |2012-05-24T06:50:35+00:00May 24th, 2012|Global Market Update, New Markets|

Well that was a short honeymoon.Some large shareholders who participated in Facebook’s initial public offering have turned around and sued the company, its CEO, and its bankers claiming that just before the IPO the company and bankers materially lowered their revenue forecasts for next year and didn’t tell them. That, they claim, is why the stock declined almost 20% after launching at $38 per share, almost 100 times last year’s earnings.I suppose it’s the American way to find someone to sue when something goes [...]

The Success of Failure

By |2017-07-17T12:34:54+00:00May 23rd, 2012|Global Market Update, New Markets|

The Success of Failure What makes a successful innovation? The US has been blessed by a series of dramatic innovations over time: electrification, telephones, personal computers. Some of these have been truly disruptive, changing not only the way people do their jobs, but the very jobs themselves. Indeed, mastering the dynamics of innovation is critical for any company. In the past year corporations that file with the SEC used the word “innovation” over 33 thousand times in their annual and quarterly reports! But by its very nature [...]

Facing the Books

By |2017-07-17T12:34:54+00:00May 22nd, 2012|Global Market Update, New Markets|

Should you buy shares of Facebook?Before I answer that question let me re-state the obvious: this blog doesn’t dispense investment guidance, recommendations to buy or sell securities, or anything remotely resembling advice. For that you need someone who can tailor a plan to fit your particular goals and constraints. Blogs don’t do that.But having said that, is it a good idea to buy Facebook now? After all, many people get a lot of enjoyment buying MacDonald’s shares and eating at MacDonald’s, buying Disney shares [...]

Capital Thinking

By |2012-05-21T06:26:44+00:00May 21st, 2012|Global Market Update, New Markets|

What are capital controls, and why do countries have them?Capital controls are restrictions on money flows. Countries enact them to control the flow of cash into and out of their economy. They can take the form of alternative exchange rates, market regulation, and sometimes outright prohibitions. Most countries have some kinds of rules around money flows. In the US, we regulate cash movements into and out of the country, and we take special note of large cash transactions by bank customers, primarily to fight [...]

Losing A Bundle

By |2012-05-17T05:51:28+00:00May 17th, 2012|Global Market Update, New Markets|

What are some other bundled products?Yesterday I discussed how part of Apple’s success comes from the iTunes Store, where they unbundled the individual songs on an album. You can still purchase an album, but now you don’t have to. With individual songs costing 99 cents, piracy is less of an issue: most people feel they can afford the price.Bundled products load unneeded products in with desired ones, simplifying the marketing and enabling the seller to earn a wider margin. But if the same goods [...]

Apple’s Core

By |2012-05-16T06:29:46+00:00May 16th, 2012|Global Market Update, New Markets|

What’s at the heart of Apple’s success? Many look at Apple and see a business that makes appealing, convenient consumer electronics. (Others see an information Hegemon bent on destroying individual liberty, but that’s another story.) But consumers are notoriously fickle and faddish about their gadgets. How does a gizmo company become the one of the largest corporations in the world in less than a decade, eclipsing oil giants and industrial powerhouses that took centuries to achieve their status? Part of Apple’s success comes from [...]

Swapping Stories

By |2012-05-14T09:12:48+00:00May 14th, 2012|Global Market Update, New Markets|

Boy, talk about history rhyming! When JP Morgan announced that they had lost $2 billion via mismanaged hedges, I wasn’t surprised. Yes, it’s a large number. But JP Morgan has a $2 trillion balance sheet and a $5 trillion swaps book—and they may be ¼ of the credit default market. After news surfaced a month ago of some of their trading positions, losses seemed inevitable, as smaller, more agile trading firms were able to position themselves against the outsized positions taken by the JP [...]

Alma Matters

By |2017-07-17T12:34:54+00:00April 19th, 2012|Global Market Update, New Markets|

Why are US colleges and universities so successful?In a recent study of global universities, institutions from the United States occupied 17 of the top 20 spots, based on academic reputation, graduate accomplishments, and academic journal citations. While the US has a large and relatively wealthy population capable of supporting its universities, this kind of dominance is striking. What can explain it?One possible reason is alumni involvement, control, and generosity. […]

Market Failure

By |2017-07-17T12:34:55+00:00March 23rd, 2012|Global Market Update, New Markets|

I’ve missed a couple of blog entries. I’m sorry about that, and I want to explain why.I’ve developed a medical issue that’s going to involve surgery. Not major surgery, mind you, but I will need anesthesia, an OR, and so on. The procedure is common, and I’m hopeful that there won’t be long-term complications. But as I’ve worked through the process of diagnosis, analysis, and preparation I’ve been taken aback by how little attention has been paid to the cost. Not just little attention—but [...]