Monday, March 23, 2015

Bolloré Is No Mercier

Jean-Marie Messier took a stogy French utility and construction conglomerate and converted it into an unwieldy media monstrosity in numerous related and unrelated businesses including Universal Studios.  During the bubble, he drank the internet Cool Aid and paid fabulous prices for companies whose value evaporated like water spilt on summer asphalt.

As the value of his empire collapsed, he met his Götterdämmerung

Eventually French financier Vincent Bolloré took a dominant position in the company, became Vivendi's chairman, and divested many of its assets to concentrate on content. In the process, Vivendi has piled up €16bn of cash. Lex’s Oliver Ralph and Robert Armstrong discuss whether Vincent Bolloré should return this money to shareholders in this Mar 23, 2015 video:

However, there is nothing like idle cash to attract the wolves.  Bolloré now faces an activist challenge from Wall Street’s quiet professor Peter Schoenfel, the head of the hedge fund, P. Schoenfeld Asset Management.

The inside story of how Clarke’s tenure at Tesco came to an end

Andrea Felsted and Andrew Hill tell "The inside story of how Clarke’s tenure at Tesco came to an end" in the Financial Times, July 23, 2014

Wednesday, February 04, 2015

Tea with Carly Fiorina

Carly Fiorina advises Stamford MBAs on making tough choices and leadership:
Emily Mekinc gives us an interview with Carly Fiorina Landini Brothers in Old Town Alexandria , Virginia. The powerhouse who made HP what it is tells, among other things, the advice Steve Jobs gave her after she was fired. 

Monday, January 26, 2015

The ABCs of Income: MLPs, REITs, and BDCs

Jack Hough and Jack Otter on the best investments for income in 2015, including the benefits of dividend stocks and the pros and cons of Treasury bonds.  MLPs are master limited partnerships, REITs are real estate investment trusts, and BDCs are business development companies.  They suggest there are some which are oversold.

Are there are a few undervalued stocks out there?

Meryl Witmer is a portfolio manager with Eagle Partners.  She looks for undervalued stocks which is getting harder and harder as the market gets pricier. Speaking at the Barron's Roundtable,  she explains why two stocks, Houghton Mifflin and Gildan Activewear, are undervalued in this January 17th video:

Sunday, January 25, 2015

Carly Fiorina Faced 'Tough Choices'

The "HP Way" and the change agent.

Carly Fiorina talks about leadership, management, and culture ans her book, 'Tough Choices:' 

"When culture becomes convention, then something has to change."

"...sometimes the toughest choices you have to make are to fire somebody, not because they're not getting results, but because their values and judgment are inconsistent with what you say you stand for. The toughest personnel choices I have ever had to make in my career are where I have had to deal with abusive or dishonest people and, let's be honest with each other, abusive, dishonest people get results in business."

"I was taught long ago that values are what guide your behavior when no one's looking and you think no one will find out."

Thursday, January 01, 2015

On Monetary Policy, Are You a Dove or a Hawk?

Our own Federal Reserve Bank of Kansas City President, Ester L. George, has been called a hawk based on her votes and statements in the Federal Open Market Committee. The financial press characterizes those in central banks who want to move strongly to fight inflation and speculative excess by tightening monetary policy and raising interest rates as "hawks." Those who advocate lower interest rates are called "doves."

What's with these terms?  : The terms 'dovish' and 'hawkish' are second nature to anyone covering central bank policy, finance and economics. But where do the terms come from? In this December 24th, 2014 video, FT Alphaville's Izabella Kaminska delves into the Vietnam war, evolutionary game theory and even 'Mary Poppins' to find out. 

Tuesday, December 23, 2014

Will Airbus Give Up on the A380?

 Two strategic bets
When Boeing committed to the Dreamliner (AKA the B787), it made a very different strategic bet from Airbus which had made its own huge bet on the A380.  Both manufacturers forecast world traffic growth of near 5% per year over twenty years.  The demand for planes is a demand derived from air travel. How were the duopolists' customers–the world's airlines–going to meet a doubling of passenger miles/kilometers in less than two decades? 

Two different answers
Airbus decided they would move more people through the key international hubs with a bigger jumbo jet that would by increase those hubs' throughput capacity.  Their solution was the A380 which could both fly 8-10,000 nautical miles and hold up to 950 people. The massive size of the plane would also allow it to be marketed with a smaller seating capacity and hitherto undreamed of luxuries like an airborne gym, three cocktail lounges, and other amenities.

Boeing predicted that the world's airline would meet the growing demand with more point-to-point flights.  The Dreamliner would have a similar long range, but would hold only 250-350 passengers.  Boeing bet the airlines would try to attract their most lucrative customers with direct flights and time value of executives rather than the luxury that also required large numbers of the unwashed masses to meet load factors. Boeing made committed later than Airbusand may have gone to school on the European's putt.

So are the results in yet?  No, but there is preliminary evidence Boeing may have made the better bet.        

With hindsight is there a winner?
So far Airbus has failed to get a single new buyer this year.  And now in this video Bloomberg's Benedikt Kammel Airbus suggests Airbus's might discontinue its A380 superjumbo as soon as 2018.  has Airbus misjudged the market? (Source: Bloomberg, Dec. 11

Saturday, December 20, 2014