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:

(Source: poundsterlinglive.com)

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 MexicoRaiders.com as well as UKRaiders.com, 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 MexicoRaiders.com; 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.