Financial Rumblings (Biz Case)-July 8, 2016

On July 4th, 2016, NBA Super Star Kevin Durant, after being courted/recruited by a handful of the premier NBA teams, decided that he would sign with the Golden State Warriors, a team that had eliminated his Oklahoma Thunder in the Western Conference Finals in seven games.  The decision to switch teams is one that he did not undertake lightly, but his reasoning at his introductory news conference is enlightening and is probably a good tack that companies should take when hiring employees-be they entry or executive level.

Workplace environment and chemistry is huge. You are going to be with your co-workers longer than you are with your family on any given weekday, so it might as well be enjoyable. Lorne Michaels, Saturday Night Live creator and producer, told Tina Fey, “Don’t hire anyone you wouldn’t want to run into in the hallway at three in the morning.” (The New Yorker, “Lessons From Late Night”, March 14, 2011).  Durant spoke of how Steph Curry, Andre Iguodala, Klay Thompson, and Draymond Green seemed to really like being teammates: “But to see them together, they all walked in, they looked like they were holding hands. It was a family. I can tell they enjoyed being around each other.” Durant elaborated further, “It felt like like those guys just played pickup every single day… That’s the kind of feel I wanted.”

You have to be wanted. Though, you might not have a NBA MVP in your company, every company has a MVP who is the face of the organization/company, and that person needs to be all in in wanting you to be part of the organization. Durant said of Curry’s involvement and impact on his decision:

“He’s a guy that’s on top of the world right now. He’s the face of the NBA in a lot of people’s eyes. I wanted to see if he really would embrace me as a player and as a person, and I had no doubts that he would. He showed that he was all in on this thing. He worked with his family to come to the meeting and be a part of the meeting, and then he showed me how much he cared and how much he wanted me to be part of it.”

Growth and learning opportunities must be there.  Though Durant is an accomplished player ( NBA All-Star 5 times; All-NBA First team 5 times; NBA scoring champion 4 times; and NBA MVP 1 time), he is joining a team which has been in the NBA finals for two straight years and has three current All-Stars in the team’s starting five. Durant said of these opportunities, “But I want to just continue to keep getting better, man. I want to learn from these guys. I want to come in here and lead as best as I can and just be myself.”

You have to trust your gut on deciding on whether to change organizations. After processing all the information, as trite as it sounds, it really comes down to what your gut/instinct says. Gut instincts are very valid, according to an article by Samantha Olsen in Medical Daily ,“Your Gut Feeling is Way More Than Just A Feeling: The Science of Intuition”, provided a person was not forced or denied certain feelings during his/her prime stages of mental, physical and above all emotional growth .  Durant said of his decision team (father Wayne Pratt, business manager Charlie Bell and agent Rich Kleiman) and process on choosing whether to stay with Oklahoma City or change to Golden State, San Antonio, Boston, Miami, or Los Angeles:

“We sat down and went through the pros and cons of every team, every situation. We looked at it all, and they were there to support me, to be there for me, and I trusted them. I think the third, the night before, Fourth of July… we were talking and I was just torn, and I told them I wanted to sleep on it. I woke up about 7 o’clock in the morning and I walked in the room – everyone was asleep – and I woke them up and I just said ‘I want to go to the Warriors,’ … and we all gave each other hugs and we moved on from there. We knew a lot of attention was gonna come. We just stuck to what I wanted to do, and we moved on. That call to Oklahoma City was the hardest thing I ever had to do in my life. Tears were shed, but like I said this is a new journey for me, testing the unknown. I trusted my gut, I trusted my instincts. It’s an unpopular decision, but I can live with it.”

Once you join the organization, the work has just begun. Once the new employee is on board, the recruitment never stops, as you must continue to create an environment for the employee to stay: those tangibles/intangibles that persuaded the employee to join your organization must continue to be there, otherwise, the person might just jump ship. Although, Durant signed a two-year contract with a player option in the second year, it’s expected to be a long term contract. “I don’t want to go through that again, so I plan on being here,” Durant said. “I’m committed.”

Financial Rumblings (Biz Case)-July 7, 2016

Game of Thrones Script: The Winds of Winter Episode (Season VI, Episode X)

From the Winterfell-Dining Hall.

Slow zoom out from JON SNOW’s face. JON SNOW is sitting at high table. SANSA sits beside him. Representatives from Northern houses, the Vale, and the wildlings are gathered in the dining hall. TORMUND and DAVOS sit among the wildlings. PETYR stands off to the side, watching.

VALE KNIGHT: You can’t expect Knights of the Vale to side with wildling invaders.

TORMUND: We didn’t invade. We were invited.

VALE KNIGHT: Not by me.

JON SNOW stands.

JON SNOW: The tree folk, the northerners, and the Knights of the Vale fought bravely, fought together, and we won. My father uses to say we find our true friends on the battlefield.

One of the houses’ representatives stands.

MAN: The Boltons are defeated. The war is over. Winter has come. If the masters are right, it’ll be the coldest one in a thousand years. We should ride home and wait out the coming storms.

JON SNOW: The war is not over. And I promise you, friend, the true enemy won’t wait out the storm. He brings the storm.

The men begin to murmur. LYANNA MORMONT stands.

LYANNA: Your son was butchered at the Red Wedding, Lord Manderly. But you refused the call. You swore allegiance to House Stark, Lord Glover, but in their hour of greatest need, you refused the call. And you, Lord Cerwyn, your father was skinned alive by Ramsay Bolton. Still you refuse the call. But House Mormont remembers. The North remembers. We know no king but the King in the North whose name is Stark. I don’t care if he’s a bastard. Ned Stark’s blood runs through his veins. He’s my king from this day until his last day.


The most difficult thing for people in power- be they politicians, business leaders, managers, etc. – to realize is when to change their tack against headwinds in order to continue to progress forward toward their goal. The Brexit vote is an example, where those in favor of staying argued points which really didn’t register with the masses: 1) to vote to leave the European Union would be a disaster for free trade within the EU; 2) England’s status as one of the world’s financial centres would be diminished if it is no longer was seen as a gateway to the EU for the likes of U.S. banks; and, 3) the GDP would fall. In essence, the citizens of England who were in favor of leaving the EU were like Lyanna- trying to rouse the political officials to act on what they saw was was wrong with England’s involvement in the EU: lack of sovereignty on immigration and to a lesser extent court rulings that can be overturned by an EU central court; and, the despair that the working class felt as their own financial goals were fading as a result of lack of wage/career growth. In business, the constituency (consumer) cast their ballots with their wallets/clicks/follows, and they vote as frequently as they do in Chicago elections: often.

Business leaders, like lobsters, are often too slow to realize what is occurring before it is too late. Businesses need to be anxious, paranoid, and scan the horizon for new competitors, while making sure the product/service offered is the best; no one buys a crappy product for very long once they realize it is a crappy product and your competitor’s product is better or at least not as crappy as yours. H&M is growing big time, but their quality, or lack thereof, is a bit concerning. It is true that fashion trends change quickly, but, when a shirt fades and the thread in the shirt becomes less taught, it is enough for one to really question the underlying value of an item that will not last beyond the current season. H&M clothing fits a fashionable and value customer, but in order to maintain its reputation, it does need to increase the thread count/quality such that their products do have some longevity- even if it goes out of style.

Business leaders need to be empathic because when they aren’t, they sound just as clueless as those  in the Winterfell-Dining Hall arguing against supporting John Snow in his battles to come. Technological companies can be poor at not understanding their consumers, because often they are mesmerized, like the songs of the Sirens, by the “coolness” of the technology that they are providing. The wireless companies at first had unlimited data plans-which was fine when you didn’t have data hog applications like streaming video, movies, and social sites, but they were slow to address the needs of the consumers when the “unlimited” data plan became too costly to promote; thus the wireless companies started to have tiered pricing dependent upon usage-which also became obsolete due to the increased bandwidth flow because of 4G, etc. Thus, you have Verizon, increasing its prices and having roll over minutes, which is similar to offerings by AT&T. Another complaint that people had was the outsourcing of call centers to outside the U.S., which at times was challenging, which resulted in returning some of those jobs stateside/bettor training.

Winter is coming and like John Snow and Lyanna and the other houses that swore their allegiance to the House Stark, need to be in unison on how to tack to reach their goal of defeating the outside invaders -White Walkers; businesses need to tack to reach their goal of providing the best product/service/value for the consumer, which leads to increased market share and earnings (EBIT and EBITDA).

Financial Rublings (Brexit)-June 24,2016

Date: The day after the UK voted to exit the European Union (AKA Brexit)

I am sure the UK supporters for remaining in the European Union feel how Taylor felt at the end of the “Planet of the Apes” (1968) after he dismounted his horse that is carrying him and his girlfriend, Nova,  and the camera pans across large metallic metal spikes that look like tank traps, and he says,

“Oh my God, I’m back. I’m home. All the time, it was. We finally really did it.” Then he falls to his knees and screams “You maniacs! You blew it up! Ah, damn you! God damn you all to hell.”

The hand writing, or Banksy, that the masses would vote to exit the European Union, was clearly on the wall. The polls seemed to point that the vote would be to stay in the EU, though it would be close; however, there were two polls that did call the exit vote correctly: @OpiniumResearch and @TNS_UK. Those that didn’t believe that an exit vote was in the cards was Wall Street; judging by the 1.3% rise in the Dow Jones Industrial Average the eve of the vote from the 17,780.83 to 18,011.07- they are also probably the the same people that thought that the Warriors up 3-1 on the Cavaliers would win the title. The prognosticators underestimated the tenacity of the foe and were not in tune with the mood of the electorate: status quo must go.

Every nation wants its sovereignty and though the common currency, gave unencumbered access to the EU partners, and the ability to create large trade agreements were benefits, it was outweighed by what the masses felt were the short comings of being part of the EU: not being able to have full control who enters and vet those that cross borders because entering one EU country was a pass to all; having the possibility of national laws struck down by an EU court; and, if the status quo so great, then why do I feel threatened in my financial prosperity and security?

Who’s next in line to leave the EU? I do believe that more countries will chose to exit the European Union, especially if the EU does not address the free rein issue of the public. This was not a large issue before, but given the numbers of of those seeking migration, the pedestrian growth in GDP in many countries, it does create a burden to the countries accepting those migrating-especially, when there is no real plan to incorporate them into the country and the financial burden that they represent.

It will take time some time for the UK, or what remains, if Scotland, etc., choose to leave, but the UK will be fine. The pound sterling has fallen, which was expected:


It will continue to vacillate in the weeks to come as the transition becomes clearer, as the pound loses the strength it had as part of the EU.

My outlook for the DJIA is one that hasn’t changed since August 2015:  the market is overvalued and given the weakness in earnings to come, there is no reason the market should be above 15,386.82 Thus, the market still has room to drop.

Financial Rumblings (Biz Case: My Almost Million $ Baby) – June 2, 2016

For one fleeting moment, I envisioned myself as the next Mark Zuckerberg (Facebook) or at the very least Richard Hendriks (Pied Piper) -as I had come up with an idea that I thought was revolutionary.  So, I had this brilliant idea-to be revealed in the following paragraphs-but I needed to see if I could possibly make it viable enough to garner some funding from an angel investor.  Before I put a down payment on a house in Malibu, California, I needed to slow my roll and think my idea through.

I researched the internet to see if there was anything like it currently available on the web.  I conducted my research using Google, searching words/phrases for my idea; I also looked at the web sites that I currently used to see if they had something that was similar to my ground breaking idea.  The results were that I did not find anything on the web that was very close to my idea, thus, I started to get goose bumps as I was already rounding third and heading home-unfortunately, in reality, I had just completed the first inning, or at least the top half of the first inning.

The next step was to try to protect my idea and research non-disclosure agreement (NDA). Again, I used Google-no, this is not product placement, but it happens to be the search engine I happen to use- to research how difficult it would be to draft one and it turns out not very difficult as there are forms available on the web.  I felt that I could now pitch my idea, if I needed to, with the confidence of having the NDA available to me when that time came.

Time for the rubber to meet the road: I created a beta version of my revolutionary website. I am the domain owner of as well as, and since I wasn’t using the former, I created a beta version on that site.  My idea, drum roll, was to create a site so that an individual could go to their webpage that had grouped, by icons, all the sites they frequented; i.e., a grouping for mortgage/rent/loans, credit cards, sports sites, news sites, etc.  Thus, I created a version on; I liked the functionality in my proposed website. It linked to the homepage of these various sites and through my research I understood that this was the most legal means to do so and it would avoid creating links that were too specific to update regularly. I am still in the bottom of the first, but, I have one out and two to go.

I had to conduct market research to see if there truly was a need or if this idea was just pie in the sky. Since my budget was limited-very limited- I asked people I knew: How do you pay your bills?  How do you access a web page?  Would you use a website that had all the links to the pages you viewed?  I found that most people go to the website directly by typing the words in the URL or using a search engine. Although, there are Bookmarks on the web browser, they are not as user friendly as they should be and not an intuitive place to access the web. Ugh! It was time to withdraw that offer on the Malibu home, where I had envisioned throwing some great summer bashes that would be attended by all the Hollywood elite- that’s Hollywood, California, not Hollywood, Florida.

Since the goal is to make money, ultimately, and not be a unicorn, the next idea was to how to monetize it.  I determined that it would be best to sell advertisement on the right side of the page; discreteness is the key to web advertisement.  All the major banks have the ability to pay directly, thus to charge for being a conduit to their website would have probably been illegal and would have been grounds to remove the icon from my website, which defeats the purpose of my website.  We all want to click on an icon link, not an URL link-it’s the reason that Microsoft uses Windows and not DOS- which is what Apple realized long before Microsoft did. An aside, according to Wikipedia, the graphic icon traces its history from “Doug Engelbart’s Augmentation of Human Intellect Project” at SRI International in Menlo Park, California, to Xerox PARC to Xerox Alto and Xerox Star, to the Apple Macintosh. 

Although my idea was a good one and I have many more good ideas (contact me if you like), it ultimately suffered because to truly work it would have to be part of a larger established platform, such as Facebook, Snapchat, Instagram, etc. Thus, the game was called after 1/2 an inning.  To be successful on the internet, be it social (Twitter, Instagram, Facebook, etc.), or otherwise, one needs to garner followers. It’s all about the number of eyeballs you have on your product that would make it viable/worthwhile for advertisers or to be a pay site directly.  I could have created a webpage to be used individually, as I did in my beta website, but it would have been a labor of love. I do think my idea has a lot of merit and ultimately, there will probably be such a website, however, it would need to be part of larger platform to be truly successful. 

Financial Rumblings-May 19, 2016

At the time of this post on May 19, 2016, the DJIA was 17,376.65 , down 149.97 or  .86% from yesterday’s close-which is close to the 17,000 mark I thought it would be in my last post on March 21, 2016. I know, my powers of prediction are incredible- at times, but my reasoning is always spot on.

Today’s free fall appears to be the market’s reaction to the possibility of a rate hike by the Federal Reserve in June 2016.  I believe that the Fed will increase interest rates by a quarter point, though, the earnings in the next few quarters will be challenged.  The Fed is very tired of the market’s skittishness to the possibility of a rate hike, much like a dog that leaps from the couch and scurries to the front door to bark when someone is within 15 feet of the front door.  The market needed to “slow its roll” as the run up to 18,000 was not warranted and realize that a quarter point hike by the Fed would eliminate further action until next year as Q3 and Q4 earnings for 2016 will not foster any warm and fuzzy feelings for another rate hike given these last two quarters will be challenged to meet the growth expected as the top and bottom lines reflect an economy that is challenged.  

Financial Rumblings (Biz Case) – April 29, 2016

Ozzie Silna, former owner of the American Basketball Association (ABA) Spirits of St. Louis, passed on April 26, 2016. He is what everyone in business strives to be: visionary. Silna and his brother, Dan, dissolved the Spirits of St. Louis, according to the ESPN. News services, “when the ABA merged with the NBA after the 1975-76 season.” The brothers agreed to dissolve their team in exchange for a small percentage of the NBA’s future broadcast revenue. That amount increased with the growth of the NBA and the television market; the NBA estimated the amount to have been collected by the brothers to be about $750 million, which included a $500 million dollar payout in 2014 to the Silna’s in order for the NBA to minimize future financial exposure.

Ozzie Silna believed that in the 1970’s there was much room for growth in the NBA’s TV deal, though, he later conceded “we had no idea it would grow this much.” How could have the Silna brothers had known or anyone had known, the NBA would grow so much, especially, since the finals were still tape delayed up until 1981.

It did take NBA Commissioner David Stern’s brilliant marketing campaign of its stars, which were at first  Magic Johnson and Larry Bird, and later Michael Jordan (yes, he did play basketball and is not only brand of shoes) to raise the interest and entertainment value of the NBA.

In business it takes a long range view of the market as well as a viable product in order to succeed. The ABA had great players such as Moses Malone, Rick Barry, George Gervin, David “Skywalker” Thompson, Dan Issel, and Julius Erving (Dr. J); the league was entertaining and innovative (3 point line and Slam Dunk Competition during the All-Star game); and, they were mostly in cities where the NBA wasn’t: Baltimore, St. Louis, New Jersey, Virginia, San Diego, Minnesota, Indiana, Utah, San Antonio, Florida, and Denver. Businesses need to have the following questions answered-yes, it’s a simplistic list, but isn’t business:

  • Is your product better than anything currently available?
  • Is your product innovative?
  • Is there growth in the market your product is entering?
  • How will the other players in the market react to your new product?
  • Do you have the capital you need to sustain this business until it is profitable or until people stop believing in what you’re doing and the funding stops?
  • Is your belief in the product based on your hubris?
  • Why do you believe your product will succeed?
  • Is there someone who can manage the business better so that you can focus on the product?
  • What is your time horizon for success? Define success?
  • Would you be crushed if someone told you your product was crap?
  • Would you realize your product was crap before being told it was?
  • Your product is successful, now what?
  • Is your new product better than anything currently available?…etc., etc.

The ABA maybe a distant memory, but the Silna’s belief in professional basketball isn’t. The Silna’s viewed their product of professional men’s basketball to be one which had room for growth and that the growth of the NBA, which would include four of the ABA teams, would rise given the almost non-existence presence of the sport on TV. Obviously, they couldn’t have envisioned that NBA games would be streaming on phones, etc., but they did believe in their product’s entertainment value, and that demand would grow. Everyone should be thanking former Commissioner David Stern for his marketing skills as the NBA reached new heights under his leadership.

Financial Rumblings-March 21, 2016

I’m back from my vacation from my financial musings.  When I last wrote on February 12, 2016, the Dow Jones Industrial Average (DJIA) was 15,904.43 and WTI traded at $28.84. I felt that stocks were going to trend side ways to down as the Street still hadn’t fully accepted what most Americans knew: the economy is not very healthy even though the Street thinks otherwise.

On March 21, 2016, the DJIA closed at 17,623.87 and WTI traded at $41.52, or a gain of 10.8% and 44.0%, respectively, from February 12, 2016. That’s a bigger turnaround than yesterday’s Northern Iowa vs Oklahoma University NCAA basketball tournament game, where Oklahoma overcame a 12 point deficit with 44 seconds remaining in regulation to force overtime, and ultimately won in the second overtime.  Like “Public Enemy” rapped: Don’t believe the hype. I still have a negative outlook for the DJIA as I still don’t believe the U.S. economy, and definitely not the World economy, is humming along.

My outlook is that the DJIA will close below 17K in the next few months and close around 16.5K as the outlook on earnings come in negative against the backdrop of a shambling world economy.  That is a 6.4% drop from the close on March 21, 2016.  Continue reading Financial Rumblings-March 21, 2016

Financial Rumblings- February 12, 2016

I’m taking a vacation from my financial musings. I’ll return after the NCAA’s March Madness, well, the second round. Or more importantly, right after the next Federal Open Market Committee (FOMC) meeting: March 15-16.

As of this posting, the Dow Jones Industrial Average (DJIA) is up 244.25 or 1.56% at 15,904.43. I guess we are out of the woods- NOT! The stocks bounced as bank stocks were scooped up, in part because of the Deutsche Bank buying over $5 billion in bonds and WTI oil gained 10% or $2.63 to $28.84 per barrel. This I know will occur in the interim: stocks will yo-yo for a bit as people analyze and over analyze each bit of economic news; talking heads will wrestle with 5.0-4.9% unemployment, yet the feel of an economy that is much worse; economists will explain negative interest rates and the negative/positive impact for the global economy; politicos will focus on the Presidential race and the impact to Wall Street; and, everyone will realize that their taxes will soon be due, but why on April 18th and not on April 15th (answer: Washington, D.C. Emancipation Day).

Until then, like Glenn Frey and the Eagles sung: Take it easy, take it easy. Don’t let the sound of your own wheels drive you crazy.

Financial Rumblings – February 11, 2016

Lloyd Christmas: What do you think the chances are of a guy like you and a girl like me… ending up together?

Mary Swanson: Well, Lloyd, that’s difficult to say. I mean, we don’t really…

Lloyd Christmas: Hit me with it! Just give it to me straight! I came a long way just to see you, Mary. The least you can do is level with me. What are my chances?

Mary Swanson: Not good.

Lloyd Christmas: You mean, not good like one out of a hundred?

Mary Swanson: I’d say more like one out of a million.


Lloyd Christmas: So you’re telling me there’s a chance… YEAH!

(Dumb and Dumber, 1994)

In the question and answer period of today’s Semiannual Monetary Policy Report to the Congress, U.S. Federal Reserve Chair Janet Yellen conceded there’s a chance of a recession.  “There is always some chance of recession in any year. But the evidence suggests that expansions don’t die of old age.”

I also don’t believe the U.S. is headed towards a recession this year, however, the headwind that the global economy has felt for some time, is finally being felt on the foreheads of those on Wall Street. The stock market, at the time of this report, is down 378.99 or 2.38% from yesterday’s close and now sits close to 15,386.82 -where I forecasted in August 2015 the market would be on August 30, 2015.  I know my timing was off, but I felt at the beginning of this year, the market would reach those lows, and lower, but by mid-year as companies begin to report Q2 earnings; the speed of this drop is amazing.

The expansion hasn’t died of old age, but it was never very spry to begin with. The U.S. GDP growth rate, per the U.S. Department of Commerce, for 2015 was the same as 2014: 2.5%. And, 2016 has been forecasted to be around that level as well. I still predict the economy will shamble along and the Federal Reserve will resist increasing the Federal Fund rate in March 2016, however, it should, for continuity, increase the rates in March.  What ultimately will get the world  humming again is what brought the great growth for the last six years: China. However, China is transitioning from a manufacturing economy to a service economy, thus the big building boom is gone. No more Summer Olympic Games or construction of buildings for the sake of building.

The bottom line is that the stock market will trade lower for the near term as it reluctantly accepts the new economic paradigm.



Financial Ramblings – February 9, 2016

“Some see the glass as half-empty, some see the glass as half-full.
I see the glass as too big.” George Carlin (Brain Droppings)

The George Carlin quote is apt for today’s variances from yesterday’s close as the market grapples with its view of the world economy: at the beginning of the day it was half-empty, down 1.04% (price of oil falling); by mid-day it was half-full, up 0.6% (Deutsche bank considering buying back Euros); and, at closing it was too big, down 0.2%(negative interest rates in the U.S. a possibility).

The market is finally seeing what I’ve seen and called for some time: the world economy is ill and the current stock market is overvalued and has not accounted for poor earnings in Q3 and Q4 of 2016. China’s economy has been slowing for some time, the U.S. economy-which is 2/3 based on consumer spending- is shambling along, and U.S. companies are producing products based on sales that will not be there given the lack of disposable income by the consumer and uncertainty in the economy-which is ironic as the unemployment rate is 4.9%.

I expect the market to bounce along as it magnifies each sliver of good news and comes back to reality with each spoonful of bad news.