Lary – Page 110 – www.exkalibur.com

Is anyone really independent?

I wish had the time to write about all that’s on my mind about the SEC charges vs. Goldman. The crux of my most recent post was that institutional investors – not individual investors – have few excuses for making unsuccessful investment decisions except their own lack of due diligence or the fact that what they thought was a good decision … wasn’t.

I’m happy to see that Warren Buffett agrees as he told his rapt audience in his comments at Berkshire Hathaway’s recent annual shareholder’s meeting. Of one firm, ABN Amro, Mr. Buffett said: “It’s hard for me to get terribly sympathetic when a bank makes a dumb credit bet.” (more…)

Email Overload. Really?

No news flash here ... except that many of us share the frustration over the relentless flood of email that washes ashore 24/7. There is a nugget somewhere in various ideas companies are trying to dam the waters, particularly with internal email. This Wall Street Journal article summarizes some of…

No Jerks Allowed!

Many of you have seen articles about this general theme recently – in part a function of "The No A**hole Rule" published last year by Dr. Robert Sutton of Stanford University. Lars Dalgaard, President of Success Factors, a company with whom I have an affiliate relationship, spoke recently about his…

Hypnotizing Chickens?

I must admit that's a new phrase to me ... but it's a kissing cousin to "Death by PowerPoint", it seems. You'll enjoy the recent NY Times article about the U.S. military use of PowerPoint slides and how numbing it's become ... witness the slide that accompanies the article and…

He saw it coming ….

When someone tells you no one saw it coming ... you can usually assume they mean "I" didn't see it coming. By now, many of you are familiar with the story about Michael Burry, the Stanford Hospital surgeon who uncovered the flailing mortgage market and made a fortune betting against…

Business Finance | Does EBITDA Bury Its Own Dead?

Does EBITDA really tell you what you need to know?

“I have enough money to last me the rest of my life … unless I buy something.”– Jackie Mason

Does this sound like you?

Someone recently told me that they’re bored by finance. “Don’t distract me with strategic finance stuff, just let me run my business the way I know how.”

“No problem,” I said, “if you’ll just answer one question. What if the way you’re running it is causing increasing strain on your financial resources, cash flow is dwindling and you’re destroying market value every year. Do you care about any of that?”

“Of course, I do, but when sales start picking up again, all of that will go away and my EBITDA will return to normal levels.”

“Really?” I said. “How do you know that?”

“That’s the way it’s always worked.”

“Have you had any problems with your banking relationship?” (more…)

People are still – and will always be #1.

Many of you are familiar with my interest in the Corner Office articles appearing in the New York Times on a regular basis. These articles, by Adam Bryant, focus on varying approaches taken by CEOs to lead their organizations.
A recent interview with Fuse founder, Bill Carter, reminds me of two critical variables that are easily lost in our haste to always move to the next issue. First, above all, having the best people is the only antidote to business mediocrity. I’ve said it time and again, and virtually everyone knows this deep down (but very few put it into practice) … that the organization that excels identifies the best people, makes certain they are properly rewarded, and never stops looking for top talent. (more…)

Goldman Sachs -Not so fast!

Will Rogers was fond of saying, “Buy low, sell high … and if it doesn’t go up, don’t buy it!”
That’s a whimsical sentiment, but I wonder what’s in the air when I read about the alleged fraud by Goldman Sachs described in the civil complaint filed by the SEC, referenced in the recent article here. I wouldn’t jump to conclusions too quickly. In too many ways, this episode is reminiscent of earlier 1980s battles with Michael Milken. Notwithstanding Milken’s misdeeds, my vivid memory is that there were accredited investors and savvy buyers on both sides of those transactions perfectly capable of making independent decisions. Some of them were wrong and they lost money, but in virtually every case, they were well-equipped to make sound decisions … if they did their homework.
These challenges typically arise when people lose money … and there’s no question a lot has been lost. But, to assume that people who lose on one side of a transaction, are incapable of making prudent independent decisions and were sold a bill of goods , is the flawed argument that often pervade these matters. (more…)

Freakonomics – The Movie

“Incentives are the cornerstone of life.” Remember that phrase?
Many of you have read my posts, or heard me discuss the fascinating insights of Freakonomics, the best-selling book by Steven Levitt and Stephen Dubner about the power of incentives and how often they produce unexpected and unwanted results. The sequel is called Super Freakonomics.
For those of you who may be cast members in the diorama described by the article, “Is Google Making Us Stupid“, you should be thrilled to learn that Freakonomics is coming out soon as a documentary film. Should be pretty cool.
While we’re waiting, try this exercise in your organization. (more…)