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Mellody Hobson of Ariel Investments: ‘Capitalism Needs to Work for Everyone’
July 18, 2019 | The New York Times | By David Gelles.

Mellody Hobson was raised by a single mother and endured economic hardship as a child. The phone was shut off. The car was repossessed. Her family was evicted.

Today, Ms. Hobson is one of the most senior black women in finance. She serves on the boards of JPMorgan Chase and Starbucks, and this month was named co-chief executive of Ariel Investments, the largest minority-owned investment firm.......I was in the Woodrow Wilson School of international relations and public policy at Princeton. You have to apply to get in, and I did not originally get in. I lobbied really hard and called many people. I just would not take no for an answer.

I spent a lot of my years in the Woodrow Wilson School studying systems that really oppress people. I wrote my senior thesis on South Africa, and specifically on how children ultimately led to the end of apartheid because of their uprisings.........What do you tell people who are starting on their financial journey, wherever they might be?

I start off by explaining to them that it’s never too late, literally never. I also think the most important thing you can learn about money, and Warren Buffett talks about this, is compound interest. It’s the eighth wonder of the world. If you understand compound interest, you understand money working for or against you.

We talk about long-term patient investing, and that idea that slow and steady does win the race, that time can be your best friend when it comes to investing. That’s why we have a turtle as a logo at Ariel........ I believe in capitalism. It is the best system that has existed in the world. Show me a better one. I can’t find it. But I also believe that capitalism needs to work for everyone, and so I don’t begrudge those people who’ve done extraordinarily well in our society as long as it’s a fair fight.

It isn’t always a fair fight, though, and that’s what we need to fix. That could be anything from our tax bases and how that works, our tax rates, to other issues that occur in our society around fair opportunities for education.

I am a person of color who happens to be a woman as well, and I have firsthand dealt with inequality, despite having shown up with all of the credentials. I do not sit here believing that if you’ve just gone to a great school and this, that and the other, it’s all going to be fine. It just doesn’t work like that in our society. I think about those people who were like me and are like me. That goes into the boardrooms that I’m in. I also think about the people of color who are inside of those companies, making sure they get the same opportunity as those who are in the majority population....
African-Americans  alumni  Ariel  capitalism  CEOs  finance  inequality  investing  Mellody_Hobson  money_management  Princeton  women 
12 weeks ago by jerryking
White men run 98% of finance. Can philanthropy bring change?
June 16, 2019 | Financial Times | by Rob Manilla.

Q: How do you achieve change at the decision making level in the finance industry when diversity moves at glacial pace?
asset_management  diversity  endowments  hedge_funds  finance  foundations  Kresge  meritocratic  philanthropy  private_equity  real_estate  results-driven  social_enginering  structural_change  under-representation  white_men  women 
june 2019 by jerryking
The death of cultural transmission
April 3, 2019 | FT Alphaville | By Jamie Powell.

music publishing = the business of licensing songs for films, television and advertising.

Valuing [a record label's] music catalogue is... crucial for anyone looking to bid for a stake in the business.

Despite the prominence of new music, established artists are still fundamental to recorded music's success. .......So let's think about these golden oldies as assets. Assets whose appeal has, arguably, only been heightened by the advent of streaming which, with its recurring revenues and growing audience, has made recurring payments from established acts even more bond-like in their cash flow consistency.
But like fixed-income assets with long durations, these cash flows are also sensitive to the smallest assumptions about their future viability. Assumptions which are not as rock solid as some investors might imagine. Let's use The Beatles as a point of reference here, as "The White Album" was UMG's fourth best-selling album last year. (If you're asking “why The Beatles?” Well, Alphaville likes The Beatles, sure. The Fab Four could easily be replaced by its other legacy acts, such as Queen and Nirvana).

But the problem for a prospective buyer is why we're a fan. To put it simply: we had no choice. We were indoctrinated.

On a long car journeys to coastal summer holidays, or at home on a knackered JVC stereo, we, like many of our friends, were limited to a dozen or so records (jk: finite resources). One of which, inevitably, would be some form of John, Paul, George and Ringo (and George).

Call it the cultural transmission effect. Music would be passed on generation to generation, amplified by the relative scarcity, physical space constraints and high prices of recorded media.

This provided a boon for the major labels as it not only meant lower marketing costs but reissues, limited editions, and remasters became an easily repeatable trick, as younger generations grew up to become consumers themselves.......The Beatles, Rolling Stones and Bob Marley are after all, great artists. Their music will live on. But that's not the question for a perspective investor.

The question is: to what degree will the royalties from these artists continue to flow? Assume Sir Paul and Sir Ringo will continue to grow exponentially richer off the back of streaming, and perhaps the quoted multiples don't look quite so mad. In this age it's hard to find assets which both grow, and have semi-predictable cash flows.

But if the next generation doesn't hold the same affinity to the artists which defined the first fifty years of the pop era, where does that leave the labels' back catalogues? May we suggest: in a tougher spot than most imagine.
Apple_Music  artists  assets  Beatles  biopics  bonds  cultural_transmission  digital_strategies  finance  finite_resources  golden_oldies  hard_to_find  indoctrination  legacy_artists  music  music_catalogues  music_labels  music_publishing  platforms  Rollingstones  royalties  Spotify  strategic_buyers  streaming  superstars  U2  UMG  valuations 
april 2019 by jerryking
I covered the City for 20 years — here’s what I learnt
March 8, 2019 | Financial Times | by Sarah Gordon |

Sarah Gordon says businesses must do more to improve their image and dispel widespread misconceptions
culture  farewells  finance  financial_journalism  leadership  lessons_learned  noughties  women 
march 2019 by jerryking
How the 0.001% invest - Investing and the super-rich
Dec 15th 2018

Global finance is being transformed as billionaires get richer and cut out the middlemen by creating their own “family offices”, personal investment firms that roam global markets looking for opportunities. Largely unnoticed, family offices have become a force in investing, with up to $4trn of assets—more than hedge funds and equivalent to 6% of the value of the world’s stockmarkets. As they grow even bigger in an era of populism, family offices are destined to face uncomfortable questions about how they concentrate power and feed inequality......Every investment boom reflects the society that spawned it. ....The rise of family offices reflects soaring inequality......But since the financial crisis there has been a loss of faith in external money managers. Rich clients have taken a closer look at private banks’ high fees and murky incentives, and balked......Family offices’ weight in the financial system....looks likely to rise further. As it does, the objections to them will rise exponentially....that family offices have created inequality. They are a consequence, not its cause. Nonetheless, there are concerns—and one in particular that is worth worrying about: (1) The first is that family offices could endanger the stability of the financial system. (2) The second worry is that family offices could magnify the power of the wealthy over the economy.(3) that family offices might have privileged access to information, deals and tax schemes, allowing them to outperform ordinary investors.

The answer is vigilance and light. Most regulators, treasuries and tax authorities are beginners when it comes to dealing with family offices, but they need to ensure that rules on insider trading, the equal servicing of clients by dealers and parity of tax treatment are observed. And they should prod family offices with assets of over, say, $10bn to publish accounts detailing their workings. In a world that is suspicious of privilege, big family offices have an interest in boosting transparency. In return, they should be free to operate unmolested.
diversification  family_office  finance  financial_system  investing  investors  money_management  the_One_percent  upper_echelons  high_net_worth 
january 2019 by jerryking
Taking the helm: why asset management bosses are getting the top jobs
September 1, 2018 | Financial Times | by Owen Walker.

The journey to the top of a global finance company is straightforward if recent hires are anything to go by: simply take over the asset management division, launch profitable products, open up new markets and wait for the chief executive role to become available.
asset_management  finance  financial_services  investment_management  leaders  money_management 
september 2018 by jerryking
Hedge funds fight back against tech in the war for talent
August 3, 2018 | | Financial Times | by Lindsay Fortado in London.

Like other industries competing for the top computer science talent, hedge funds are projecting an image that appeals to a new generation. The development is forcing a traditionally secretive industry into an unusual position: having to promote itself, and become cool.

The office revamp is all part of that plan, as hedge funds vie with technology companies for recruits who have expertise in machine learning, artificial intelligence and big data analytics, many of whom are garnering salaries of $150,000 or more straight out of university.

“A lot have gone down the Google route to offer more perks,” said Mr Roussanov, who works for the recruitment firm Selby Jennings in New York. “They’re trying to rebrand themselves as tech firms.”...While quantitative investing funds, which trade using computer algorithms, have been on the forefront of hiring these types of candidates, other hedge funds that rely on humans to make trading decisions are increasingly upping their quantitative capabilities in order to analyze reams of data faster.

The casual work atmosphere and flexible hours at tech firms such as Google have long been a strong draw, and hedge funds are making an effort to 'rebrand themselves' Besides the increasing amount of perks funds are trying to offer, like revamping their workplace and offering services such as free dry-cleaning, they are emphasizing the amount of money they are willing to spend on technology and the complexity of the problems in financial markets to entice recruits.

“The pitch is . . . this is a very data-rich environment, and it’s a phenomenally well-resourced environment,” said Matthew Granade, the chief market intelligence officer at Point72, Steve Cohen’s $13bn hedge fund.

For the people Mr Granade calls “data learning, quant types”, the harder the problem, the better. “The benefit for us is that the markets are one of the hardest problems in the world. You think you’ve found a solution and then everyone else catches up. The markets are always adapting. So you are constantly being presented with new challenges, and the problem is constantly getting harder.”
hedge_funds  recruiting  uWaterloo  war_for_talent  millennials  finance  perks  quantitative  hard_questions  new_graduates  data_scientists 
august 2018 by jerryking
Banking and finance have vacuumed up the talent
March 25, 2018 | Financial Times | Andrew Hill YESTERDAY.
"Unlike most people I actually enjoy manufacturing,” James Dyson says, “[but] I genuinely believe that the British middle class despises it, largely thanks to Charles Dickens’ Hard Times and William Blake’s ‘dark satanic mills’.”

The UK designer of vacuum cleaners and hand-dryers enjoys railing against national “cultural disdain for factories”......A more plausible reason why innovative juices are channelled away from manufacturing could be the sucking sound from the City of London. The rewards of banking and finance still vacuum up talented graduates......Even when the bubble was at full stretch in 2007, the percentage of engineering graduates who moved into finance and insurance within three years of leaving higher education did not top 5 per cent. Lately, the figure has dropped to 3.4 per cent. A Dyson-pleasing 25.5 per cent now go into manufacturing — not enough to cover a projected annual shortfall of 20,000 engineers in the UK, but still respectable.

It was the sheer success and smug complacency of Victorian manufacturers that made them a target for Dickens. As Sir James goes from strength to strength, he should be careful what he wishes for. He has set up a Dyson Institute to train a generation of engineers.
financial_services  engineering  talent  entrepreneur  war_for_talent  finance  manufacturers  James_Dyson 
march 2018 by jerryking
‘The Wisdom of Finance’, by Mihir Desai
Review by Gillian Tett

JULY 17, 2017
The Wisdom of Finance offers a thoughtful explanation of how money works that recognises how perverted the industry can be, but which also argues that “there is great value — and there are great values — in finance”.

Desai does this by using a clever and unusual device: literature. Most notably, he explains how money works by citing stories ranging from Chaucer to Jane Austen to the 1988 film Working Girl. He knows that stories are a powerful narrative device. But the wider philosophical point is, Desai argues, that one of the great failings of our modern world is a “chasm” between the arts and science, and between finance and humanities. This prevents financiers from understanding the social context in which they operate. It also means that non-financiers do not understand how finance drives our world, or the fact that money encapsulates and crystallises social patterns and values. “
books  book_reviews  finance  Gillian_Tett  humanities  Mihir_Desai  non-financial  storytelling 
december 2017 by jerryking
Mihir Desai explains the Wisdom of Finance | FT Alphaville
ERDAY By: Matthew C Klein

The theme of the book, and of our conversation, is that finance is a humanistic discipline. It deals with the same question that philosophy and literature have grappled with for thousands of years: how can we mortals thrive in a world full of danger?

The textbook answers finance provides to this question might be filled with maths and specialist jargon, but Desai’s point is that the concepts should be familiar to anyone.

We covered a lot of ground, including but not limited to:

The connection between poetry and insurance
What it means to create value
The power of leverage
The benefits of bankruptcy
The ways that finance can improve or derange people’s personalities
finance  Misir_Desai  HBS  humanities 
december 2017 by jerryking
Meet the People’s Quant, an Ex-Marine Who Champions Value Investing - WSJ
By Chris Dieterich
June 2, 2017

Wesley Gray’s value-focused fund of overseas stocks is beating all its rivals over the past year. For him, it’s almost beside the point.

Mr. Gray, chief executive of asset manager Alpha Architect LP outside of Philadelphia, says watching short-term market moves doesn’t pay off. Instead, his firm focuses on the benefits of finding and buying a small number of very cheap stocks, and holding them through thick and thin.

Alpha Architect is an upstart active investment manager that tripled its assets last year, a noteworthy performance at a time when traditional stock pickers are struggling with lackluster performance and investor withdrawals. The firm, with $522 million in assets, is among a growing crop of money managers using academic financial and behavioral research, and algorithms, to identify stock bets likely to beat the market.

So-called quantitative investment strategies pulled from academic research have been around for years, popularized by the likes of Dimensional Fund Advisors and AQR Capital Management. Mr. Gray and Alpha Architect aim to deliver highly potent iterations to smaller investors.

Mr. Gray is a former captain in the U.S. Marine Corps who served a tour in Iraq, and later earned a Ph.D. in finance from the University of Chicago Booth School of Business. He says extreme discipline is a crucial component of his concentrated, algorithmic adaptations of classic value investing, popularized by Benjamin Graham and Warren Buffett.

Last year Mr. Gray put out a report, “Even God Would Get Fired as an Active Investor,” concluding that stock-picking foresight alone wouldn’t equip investors to conquer perhaps their most formidable foe: the fear-driven urge to cut losses.....the market is littered with winning strategies that lose their potency over time, and smart-sounding theories that fail outright when put into practice. Moreover, success in investing often leaves market-beating managers awash in fund inflows that quickly outstrip their capacity to generate ideas.

Mr. Gray responds that the research upon which his strategies are based have proved their resilience for years, and that they can be explained by investor behavior. He admits that he has considered the implications of getting too big, a state that he says isn’t imminent but could force unhappy changes on his firm.
alpha  investors  quants  USMC  PhDs  value_investing/investors  asset_management  algorithms  behavioural_economics  quantitative  idea_generation  finance  active_investing  stock_picking  investment_strategies  beat_the_market 
june 2017 by jerryking
‘An Anthropologist on Wall Street’ — Cultural Anthropology
Tett, Gillian. "‘An Anthropologist on Wall Street’." Theorizing the Contemporary, Cultural Anthropology website, May 16, 2012.

Anthropology can be extremely useful for understanding the contemporary financial world because of all the micro-level communities—or ‘tribes’ to use the cliché term—that are cropping up around the financial system....The event pulled together bankers from all over. They staged formalized rituals with PowerPoint presentations, but also engaged in informal rituals like chitchat in the wings.

As they came together and talked, these bankers were creating a network of ties. But they were also inventing a new language they felt made them distinctive from everyone else. The way they talked about credit was to emphasize the numbers and to quite deliberately exclude any mention of social interaction from the debate and discussion. In the first couple of days I sat there, they almost never mentioned the human borrower who was at the end of that securitization chain. They were also very exclusive. There was a sense that ‘we alone have mastery over this knowledge’....Part two of the CDO gospel was that bankers had had this sudden inspiration that they should stop concentrating credit risk and find ways to scatter it across the system....Looking back there were many elements of securitization that were evidently flawed. The tools bankers were using to disburse risk across the system were themselves very opaque and complex. The very way by which they disbursed risk was actually introducing new risk into the system.......fundamental contradiction at the very heart of the system that almost nobody spotted. Why not? To put it crudely, because there were too few anthropologists, using basic anthropological techniques, trying to understand what was going on. Having an anthropological perspective is very useful. The very nature of anthropology is to try to connect up the dots. That’s something that most modern bureaucrats, most bankers, and most company executives are not able to do, precisely because they’re so darn busy running around in their silos.
Wall_Street  Gillian_Tett  anthropologists  financial_system  securitization  finance  ethnographic  insights  CDOs  connecting_the_dots  cultural_anthropology  anthropology  tribes  silo_mentality 
march 2017 by jerryking
At BlackRock, a Wall Street Rock Star’s $5 Trillion Comeback - The New York Times
SEPT. 15, 2016 | NYT | By LANDON THOMAS Jr.

(1) Laurence Fink: “If you think you know everything about our business, you are kidding yourself,” he said. “The biggest question we have to answer is: ‘Are we developing the right leaders?’” “Are you,” he asked, “prepared to be one of those leaders?”

(2) BlackRock was thriving because of its focus on low-risk, low-cost funds and the all-seeing wonders of Aladdin. BlackRock sees the future of finance as being rules-based, data-driven, systematic investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. Fink believes that his algorithmic driven style will, over time, grow faster than the costlier “active investing” model in which individuals, not algorithms, make stock, bond and asset allocation decisions.

Most money management firms highlight their investment returns first, and risk controls second. BlackRock has taken a reverse approach: It believes that risk analysis, such as gauging how a security will trade if interest rates go up or down, improves investment results.

(3) BlackRock, along with central banks, sovereign wealth funds — have become the new arbiters of "flow.“ It is not about the flow of securities anymore, it is about the flow of information and indications of interest.”

(4) Asset Liability and Debt and Derivatives Investment Network (Aladdin), is BlackRock's big data-mining, risk-mitigation platform/framework. Aladdin is a network of code, trades, chat, algorithms and predictive models that on any given day can highlight vulnerabilities and opportunities connected to the trillions that BlackRock firm tracks — including the portion which belongs to outside firms that pay BlackRock a fee to have access to the platform. Aladdin stress-tests how securities will respond to certain situations (e.g. a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.)

In San Francisco, a team of equity analysts deploys data analysis to study the language that CEOs use during an earnings call. Unusually bearish this quarter, compared with last? If so, maybe the stock is a sell. “We have more information than anyone,” Mr. Fink said.
systematic_approaches  ETFs  Wall_Street  BlackRock  Laurence_Fink  asset_management  traders  complacency  future  finance  Aladdin  risk-management  financiers  financial_services  central_banks  money_management  information_flows  volatility  economic_downturn  liquidity  bonds  platforms  frameworks  stress-tests  monitoring  CEOs  succession  risk-analysis  leadership  order_management_system  sovereign_wealth_funds  market_intelligence  intentionality  data_mining  collective_intelligence  risk-mitigation  rules-based  risks  asset_values  scaling  scenario-planning  databases 
september 2016 by jerryking
A Reading List of Tell-Alls, Strategic Plans and Cautionary Tales in Finance - The New York Times
JULY 4, 2016 | DEALBOOK | Andrew Ross Sorkin

(1) “Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley,” by a former Facebook executive, Antonio García Martinez.
(2) “The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse” by Mohamed A. El-Erian, chief economic adviser at Allianz and chairman of President Obama’s Global Development Council.
(3) “Makers and Takers: The Rise of Finance and the Fall of American Business” Rana Foroohar
(4) “Originals: How Non-Conformists Move the World” Adam Grant
(5) Bloodsport: When Ruthless Dealmakers, Shrewd Ideologues, and Brawling Lawyers Toppled the Corporate Establishment” by Robert Teitelman,
(6) “Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism,” by Jeff Gramm, owner and manager of the Bandera Partners hedge fund and an adjunct professor at Columbia Business School.
(7) “Brazillionaires: Wealth, Power, Decadence, and Hope in an American Country” by the journalist Alex Cuadros.
(8) a biography of Alan Greenspan titled, “The Man Who Knew: The Life and Times of Alan Greenspan.” It is by the journalist Sebastian Mallaby, an adroit writer who also published a brilliant book on hedge funds several years ago, called “More Money than God: Hedge Funds and the Making of a New Elite.”
(9) “To Pixar and Beyond: My Unlikely Journey with Steve Jobs to Make Entertainment History” by Lawrence Levy, the former chief financial officer of Pixar.
books  booklists  summertime  Andrew_Sorkin  Adam_Grant  Pixar  Mohamed_El-Erian  hedge_funds  central_banks  finance  dealmakers  Silicon_Valley  Brazil  biographies  cautionary_tales 
july 2016 by jerryking
University challenge
25 June/26 June 2016 | Evernote Web - FT | by Thomas Hale and Gonzalo Vina
Colleges_&_Universities  tools  finance  debt  London  investment_banking  real_estate 
june 2016 by jerryking
Why Uber Keeps Raising Billions - The New York Times
Andrew Ross Sorkin
DEALBOOK JUNE 20, 2016
Continue reading the main storyShare This Page
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Uber  funding  venture_capital  Andrew_Sorkin  sharing_economy  deterrence  finance 
june 2016 by jerryking
Meet the Zaouis
23 May 2015 | Financial Times | Jonathan Guthrie.

The business plan for their M&A advisory firm was essentially a Post-it note reading 'Allons-y!" But in the two years since they set it up, broth...
finance  financiers  investment_banking  London  United_Kingdom  start_ups  boutiques  mergers_&_acquisitions 
july 2015 by jerryking
What to Learn in College to Stay One Step Ahead of Computers - NYTimes.com
MAY 22, 2015 | NYT | By ROBERT J. SHILLER.

The successful occupations, by this measure, shared certain characteristics: People who practiced them needed complex communication skills and expert knowledge. Such skills included an ability to convey “not just information but a particular interpretation of information.” They said that expert knowledge was broad, deep and practical, allowing the solution of “uncharted problems.”

These attributes may not be as beneficial in the future. But the study certainly suggests that a college education needs to be broad and general, and not defined primarily by the traditional structure of separate departments staffed by professors who want, most of all, to be at the forefront of their own narrow disciplines.....In a separate May 5 statement, Prof. Sean D. Kelly, chairman of the General Education Review Committee, said a Harvard education should give students “an art of living in the world.”

But how should professors do this? Perhaps we should prepare students for entrepreneurial opportunities suggested by our own disciplines. Even departments entirely divorced from business could do this by suggesting enterprises, nonprofits and activities in which students can later use their specialized knowledge....I continue to update the course, thinking about how I can integrate its lessons into an “art of living in the world.” I have tried to enhance my students’ sense that finance should be the art of financing important human activities, of getting people (and robots someday) working together to accomplish things that we really want done.
Robert_Shiller  Yale  Harvard  college-educated  education  students  automation  machine_learning  Colleges_&_Universities  finance  continuing_education  continuous_learning  Communicating_&_Connecting  indispensable  skills  Managing_Your_Career  21st._century  new_graduates  interdisciplinary  curriculum  entrepreneurship  syllabus  interpretation  expertise  uncharted_problems 
may 2015 by jerryking
Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance
Walker New York 2 hours ago APRIL 10, 2015
Professor Mullainathan's article illustrates perfectly why the study and profession of economics has been dubbed the "dismal science." He draws upon highbro...
letters_to_the_editor  finance  Harvard  Wall_Street 
april 2015 by jerryking
Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance - NYTimes.com
APRIL 10, 2015 | NYT | By SENDHIL MULLAINATHAN.

Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys. If I set up a shop on Etsy selling photographs, my private returns may be defined as the revenue I generate. The social returns are the pleasure that my photographs provide to my customers....
career_paths  career  Wall_Street  students  economics  Harvard  Colleges_&_Universities  talent  rent-seeking  arbitrage  finance 
april 2015 by jerryking
Capital Markets 'Impediment' to Innovation - The CFO Report - WSJ
June 20, 2011, 10:05 PM ET

By MICHAEL HICKINS

Glenn Hutchins, the co-founder and co-CEO of private equity firm Silver Lake, believes the expectations of shareholders and analysts often prevent companies from investing in new businesses or technologies. “One of the largest impediments to getting all of this done is in fact the capital markets,” he said during the opening panel discussion of The Wall Street Journal’s CFO Network Conference.
+++++++++++++++++++++++++++++++++++

CFOs often find it tough to make aggressive, long-term investments because explaining the reason for “making a short-term diminution for the purpose of a long-term gain [to the equity markets] is very difficult to do.”

Still, companies need to be willing to overhaul their entire businesses, if necessary, to avoid being overtaken by aggressive innovators...He lauded Apple for being willing to promote something like the iPad despite the fact that the tablet may in fact destroy the computer maker’s iMac franchise. “Business model innovation is underrated,”.....Also speaking on the panel, HBS professor Clayton Christensen blamed a corporate culture born, ironically, of business school formulas that separate strategy and finance. “The business schools decided to teach strategy and finance [separately] and this got carried over into companies. [But] a lot of things that make sense financially make no sense strategically.”
++++++++++++++++++++++++++++++++++++
With the finance function certainly in mind, Christensen wrote that, “Managing innovation is the complexity of managing the resource allocation process.”
Silver_Lake  Clayton_Christensen  innovation  short-sightedness  strategy  finance  CFOs  long-term  impediments  capital_markets  business_models  Glenn_Hutchins  resource_allocation  expectations  new_businesses  new_products  investors'_expectations 
february 2015 by jerryking
Sponsor Generated Content: 4 Industries Most in Need of Data Scientists
June 16, 2014 12:00 am ET
4 Industries Most in Need of Data Scientists
NARRATIVESby WSJ. Custom Studios for SAS

Agriculture
Relying on sensors in farm machinery, in soil and on planes flown over fields, precision agriculture is an emerging practice in which growing crops is directed by data covering everything from soil conditions to weather patterns to commodity pricing. “Precision agriculture helps you optimize yield and avoid major mistakes,” says Daniel Castro, director of the Center for Data Innovation, a think tank in Washington, D.C. For example, farmers traditionally have planted a crop, then applied fertilizer uniformly across entire fields. Data models allow them to instead customize the spread of fertilizer, seed, water and pesticide across different areas of their farms—even if the land rolls on for 50,000 acres.

Finance
Big data promises to discover better models to gauge risk, which could minimize the likelihood of scenarios such as the subprime mortgage meltdown. Data scientists, though, also are charged with many less obvious tasks in the financial industry, says Bill Rand, director of the Center for Complexity in Business at the University of Maryland. He points to one experiment that analyzed keywords in financial documents to identify competitors in different niches, helping pinpoint investment opportunities.

Government
Government organizations have huge stockpiles of data that can be applied against all sorts of problems, from food safety to terrorism. Joshua Sullivan, a data scientist who led the development of Booz Allen Hamilton’s The Field Guide to Data Science, cites one surprising use of analytics concerning government subsidies. “They created an amazing visualization that helped you see the disconnect between the locations of food distribution sites and the populations they served,” Sullivan says. “That's the type of thing that isn't easy to see in a pile of static reports; you need the imagination of a data scientist to depict the story in the data.”

Pharma
Developing a new drug can take more than a decade and cost billions. Data tools can help take some of the sting out, pinpointing the best drug candidates by scanning across pools of information, such as marketing data and adverse patient reactions. “We can model data and prioritize which experiments we take [forward],” Sullivan says. “Big data can help sort out the most promising drugs even before you do experiments on mice. Just three years ago that would have been impossible. But that's what data scientists do—they tee up the right question to ask.”
drug_development  precision_agriculture  farming  data_scientists  agriculture  massive_data_sets  data  finance  government  pharmaceutical_industry  product_development  non-obvious  storytelling  data_journalism  stockpiles 
june 2014 by jerryking
The Lost Art of Finance
15 Mar. 2014| Financial Times | Gillian Tett.


'Back in the days when "money" meant sacks of gold coins, artists had something tangible to paint'

Last month I received a striking request fro...
Gillian_Tett  art  finance  Wall_Street 
may 2014 by jerryking
Look beyond the obvious to understand an artwork
Sir, Gillian Tett (" The lost art of finance ", March 15) rightly argues that a more creative approach to finance would be beneficial and that art can be a useful means of gaining a fresh perspective....
finance  Wall_Street  art  museums  fresh_eyes  letters_to_the_editor  artists  artwork  art_galleries  Gillian_Tett  perspectives  paintings  interpretation  latent  art_appreciation 
may 2014 by jerryking
Felix Salmon is leaving Reuters for the Fusion network because the future of media is “post text” — Tech News and Analysis
by Mathew Ingram

Financial and media blogger Felix Salmon says he is leaving Reuters to join Fusion, a cable channel co-owned by ABC and Univision, because the future of storytelling and communication is not in text but in video, animation and other digital experiments
appointments  start_ups  future  Communicating_&_Connecting  Mathew_Ingram  Reuters  storytelling  finance  digital_media  web_video  journalism  CATV  animation  Felix_Salmon  visual_culture 
april 2014 by jerryking
London's Former Investment Bankers Are Joining the Start-Up Craze - NYTimes.com
March 19, 2014, 12:41 pm
London’s Former Investment Bankers Are Joining the Start-Up Craze
By MARK SCOTT
start_ups  London  United_Kingdom  innovation  banks  financial_services  finance  mobile_applications  fin-tech  Yahoo! 
march 2014 by jerryking
Yes, the Wealthy Can Be Deserving
FEB. 15, 2014 | NYT | By N. GREGORY MANKIW.

Actors, authors, and athletes do not make up the entire ranks of the rich. Most top earners make their fortunes in ways that are less transparent to the public.... the most natural explanation of high C.E.O. pay is that the value of a good C.E.O. is extraordinarily high.

That is hardly a surprise. A typical chief executive is overseeing billions of dollars of shareholder wealth as well as thousands of employees. The value of making the right decisions is tremendous. Just consider the role of Steve Jobs in the rise of Apple and its path-breaking products....A similar case is the finance industry, where many hefty compensation packages can be found. There is no doubt that this sector plays a crucial economic role. Those who work in banking, venture capital and other financial firms are in charge of allocating the economy’s investment resources. They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow. It makes sense that a nation would allocate many of its most talented and thus highly compensated individuals to the task.
high_net_worth  income_distribution  winner-take-all  the_one_percent  CEOs  compensation  private_equity  income_inequality  talent  breakthroughs  Steve_Jobs  finance  capital_allocation  decision_making 
february 2014 by jerryking
Kensho, a startup doing Siri (or Watson) for financial markets, has raised $10M — Tech News and Analysis
By Derrick Harris
Jan. 22, 2014

It looks like a smart product from a smart team, especially if the UI and visualizations are as good as the algorithms.... Warren (as in Warren Buffett, I presume), is a natural-language search engine for data on financial markets. You (assuming you’re a banker or very sophisticated day trader) type in a question — an example from the company’s website is “Which aerospace companies rally following major breakthroughs in drone technology?” — and it returns results in the form of data.
start_ups  open_data  value_chains  fin-tech  finance  Kensho  search  search_engines  financial_services  Siri  IBM_Watson 
january 2014 by jerryking
Political
 Finance 
in 
City 
Elections: Toronto 
and
 Calgary
 Compared

September
2008 | The
 Canadian 
Political 
Science
 Review |Lisa
 Young

(University
 of 
Calgary)
 and
 Sam 
Austin 
(University
 of 
Calgary)

Comparing
 candidate 
contribution
 and
 expenditure
 data
 from
 urban 
elections
 in
 Toronto
 and
 Calgary,
 the
 paper
 concludes
 that
 elements
 of
 the
 regulatory
 regime
 in
 Toronto
 contribute 
modestly
 to
 a
 more
 level
 playing
 field 
for 
political
 competition 
in 
that 
city.
In

particular,
the
limits
on
the
size
of
contributions,
when
coupled
with
a
rebate
for
political

donat
ions,
 make
 candidates
 less
 reliant
 on
 corporate
 and
 development
 sources.
 These
 elements
 of
 Toronto’s
 regulatory 
regime
 also
 contribute
 to
a
somewhat 
higher
 level
 of
 competitiveness 
in 
municipal 
elections
 in
 Toronto
 than 
in 
Calgary,
where 
election 
finance

is 
effectively
 unregulated,
cities  elections  municipalities  finance  funding 
december 2013 by jerryking
We should pay heed to the new faces in finance
June 1, 2013 | The Financial Times p.16| by John Authers.

For five years now, we have dwelled on the problems of the old finance. The efforts of financiers, politicians and regulators have been gea...
finance  innovation  M-Pesa  future  start_ups  mobile_payments  crowdsourcing  Kickstarter  peer-to-peer  crossborder  digital_currencies  crowd_funding  fin-tech 
june 2013 by jerryking
In London, Nimble Start-Ups Offer Alternatives to Stodgy Banks
October 22, 2012 | NYT |By MARK SCOTT.

London’s fast-growing start-up scene is trying to disrupt the financial status quo. As consumers’ trust in banks deteriorates because of a series of recent scandals, young companies are pressing their newcomer advantage. Firms are offering services like low-cost foreign currency exchange and new ways for small business to borrow cash.

Backed by venture capital firms like Index Ventures, the financial start-ups are taking on entrenched incumbents by using technology to pare back costs and improve the customer experience. Local authorities do not directly regulate many of the firms, but the young companies often use traditional banks and other financial firms for their back-office functions, like processing payments, which are monitored by British regulators.
London  United_Kingdom  start_ups  banks  financial_services  finance  regulators  mobile_applications  fin-tech  foreign_exchange  nimbleness  back-office 
october 2012 by jerryking
The Next New Thing
September 28, 2012 | Institutional Investor | Jeffrey Kutler
finance 
october 2012 by jerryking
Small Company Finance
November 1, 1987 | HBS |
What may be appropriate for management of large public corporations doesn't necessarily (or often) fit private companies. Standard financial statements are unreliable when money moves freely between the business and owner. And rules of thumb for investment decision making and growth aren't useful either. When a company is largely operated as a vehicle for a family--to provide jobs, security, flexibility, and access to opportunities that suit the family as much as me market--conventional protocols don't always matter.
Subjects Covered: Entrepreneurial finance, Family-owned businesses, Financial management,
small_business  finance  start_ups  HBS  case_studies  CFOs 
august 2012 by jerryking
Graduates, Take Heed - WSJ.com
June 11, 2004 | WSJ | By DANIEL AKST.

if you are dreaming of making the world a better place...just go out and make the most money you can. Then, if you still want to do more, give it away....Economics, remember, is not a zero-sum game. Capital is the lifeblood of the economy, fueling the productivity gains that in turn fuel expanding affluence and social progress. As if none of this were sufficient, Alex's earnings required him to pay enough income taxes over the years for the government to employ a small army of social workers. He never shirked these obligations through dubious tax-shelter schemes, either. And don't forget the foundation!

The conclusion is unavoidable: If you have a good education, you shouldn't just consider getting rich. Creating and amassing wealth is an outright moral obligation. Do so and you can take comfort not just in financing public services but in knowing that you are giving people what they need or want, generating jobs and underwriting the affluence that makes art, justice, environmental protection and other social goods possible.

Of course, making yourself a pile of money is good for you too. You'll live in a better neighborhood, drive a safer car, get to be more selective in choosing a spouse and enjoy a longer, healthier life. Your kids will get a better education, which in turn will mean more of the same for them, too -- and will better equip them to improve the world still more.
commencement  advice  Wall_Street  capitalism  new_graduates  personal_enrichment  career_paths  finance  wealth_creation  philanthropy  tithing  geographic_sorting  compounded  self-perpetuation  super_ZIPs  zero-sum_games 
august 2012 by jerryking
Bootstrap Finance: The Art of Start-ups
November-December 1992 | HBR | Amar Bhidé.

(1) get operational fast;
(2) look for quick break-even, cash-generating projects;
(3) offer high-value products or services that can sustain direct personal selling;
(4) don't try to hire the crack team;
(5) keep growth in check;
(6) focus on cash; and
(7) cultivate banks early.
HBR  bootstrapping  hustle  finance  funding  good_enough  start_ups  Amar_Bhidé  fast_followers  copycats  financing  entrepreneur  venture_capital  vc  execution  advice  capital_efficiency  team_risk  market_risk  technology_risk 
june 2012 by jerryking
Note on Deal Making
1994 | The University of Western Ontario | Steve Suarez and Jim hatch
deal-making  Ivey  funding  finance  investing  frameworks  dealmakers 
may 2012 by jerryking
Lessons From a Lender - WSJ.com
May 8, 2006 | WSJ | By DAVID ENRICH
Lessons From a Lender
How a small-business investment company decides where to put its money
SBICs  hospitals  venture_capital  vc  funding  finance 
april 2012 by jerryking
Ray Dalio: Man and machine
Mar 10th 2012 | The Economist |
The economic ideas of the world’s most successful hedge-fund boss.

Mr Dalio says his ideas are entirely the product of his own reflections on his life as a trader and his study of economic history. He has read little academic economics (though his work has echoes of Hyman Minsky, an American economist, and of best-selling recent work on downturns by Carmen Reinhart and Kenneth Rogoff) but has conducted in-depth analysis of past periods of economic upheaval, such as the Depression in America, post-war Britain and the hyperinflation of the Weimar Republic. He has even simulated being an investor in markets in those periods by reading daily papers from these eras, receiving data and “trading” as if in real time.
Bridgewater  Ray_Dalio  hedge_funds  finance  economics  debt  business 
march 2012 by jerryking
School for quants
March 2, 2012 | FT.com | By Sam Knight

The Financial Computing Centre at UCL, a collaboration with the London School of Economics, the London Business School and 20 leading financial institutions, claims to be the only institute of its kind in Europe. Each year since its establishment in late 2008, between 600 and 800 students have applied for its 12 fully funded PhD places, which each cost the taxpayer £30,000 per year. Dozens more applicants come from the financial industry, where employers are willing to subsidise up to five years of research at the tantalising intersection of computers, data and money.
United_Kingdom  quantitative  Colleges_&_Universities  finance  quants  PhDs  LSE  collaboration 
march 2012 by jerryking
Food hubs offer a strategic path toward profitable sustainability — Transition Voice
By Naomi Starkman November 11, 2011

Investment opportunities

In order to build a successful food hub, start-up capital is often needed to renovate facilities for aggregation, storage, packing, light processing, and distribution.

In addition, working capital is necessary for business management systems to coordinate supply chain logistics. Financial support is also needed for enterprise development training and technical assistance to increase grower capacity to meet wholesale buyer requirements.

“As with any infrastructure-heavy project, a food hub will likely require several different forms of capital to launch successfully,” said Elizabeth Ü, Founder and Executive Director of Finance for Food, and author of the forthcoming book, Finance for Food: A Sustainable Food Entrepreneur’s Guide to Raising Mission-Aligned Capital.

Ü noted that a food hub might need to structure a variety of points of entry to appeal to potential investors, who may have different risk tolerances, time horizons, and investment amounts. She said,

A little creativity can go a long way; in addition to USDA grants and traditional loans, there are several innovative investment models that food entrepreneurs are using to raise capital, including revenue-sharing agreements, advance sales, and crowdfunding. The challenge is finding a good fit between investment terms and the values of both the food hub management and each investor.

The USDA sees food hubs as ripe investment opportunities and is currently funding nearly 30 percent of the food hubs it surveyed. Preliminary analysis shows that food hubs have great economic potential and are a sound investment. The USDA is preparing a more comprehensive resource guide for food hubs to be released later this year. The guide will feature a mix of government and non-government resources available for food hub development.
farmers'_markets  entrepreneurship  finance 
february 2012 by jerryking
globeadvisor.com: Living in the real world of finance
December 9, 2011 | G&M | by David Parkinson.
Both a scientist and financial guru, Emanuel Derman warns of relying on mathematical models to predict stock movements. As David Parkinson reports, investors should beware the wild card of human nature...Mr. Derman was in Toronto discussing his new book, Models. Behaving. Badly: Why Confusing Illusion With Reality Can Lead to Disaster, on Wall Street and in Life.

DAVID PARKINSON
boundary_conditions  finance  quantitative  Wall_Street  Colleges_&_Universities  books  physics  models  mathematics  stockmarkets  biases  modelling  dangers  false_confidence  human_factor  stock_picking  illusions  oversimplification  in_the_real_world 
january 2012 by jerryking
Out of Harvard, and Into Finance - NYTimes.com
December 21, 2011, 10:00 am
Out of Harvard, and Into Finance
By CATHERINE RAMPELL
Ivy_League  career  career_paths  finance  Colleges_&_Universities  Harvard  Yale  Princeton 
december 2011 by jerryking
Companies close to home need your help
Nov. 2, 2011 | The Financial Times p12.| Luke Johnson.

Two recent books, independently published on either side of the Atlantic, have each drawn parallels between the "slow food" movement and the idea of investing locally. The slow food concept was pioneered in Italy in 1986, to champion small-scale producers and regional ingredients, as a backlash against global fast-food operators such as McDonald's. Now this philosophy is being extended to the financial sector.

The British title is Slow Finance: why investment miles matter by Gervais Williams,
The US book is Locavesting: the revolution in local investing and how to profit from it , by Amy Cortese.

the City of London is largely failing as a provider of capital for British business. The new-issue market for domestic companies has almost disappeared in recent years - all the activity is in trading second-hand shares and floating overseas companies like mining concerns from Africa or Russia. So if mainstream investing institutions such as pension funds are not backing British enterprise, then individuals should look to channel their savings directly into local ventures. For just as a society that won't reproduce commits a form of suicide, so if we fail to invest in our own industries, then we face inevitable economic decline.
local  locavore  investing  books  crowd_funding  Luke_Johnson  microproducers  slow_food  backlash  investors  economic_decline  London  small-scale  finance  funding  fin-tech  decline 
november 2011 by jerryking
Teaching Young Women to Brag
May 9,2007| WALL STREET Journal|Victoria E. Knight

Reference [Victoria E. Knight, Teaching Young Woman to Brag, WALL ST.J., May 9,2007, at B3 ]

In turn, women of Wall Street are joining groups like High Water Women out of a desire to go beyond checkbook philanthropy....Ms. Klaus explains the importance of framing accomplishments in an engaging way. This means telling a story that highlights accomplishments, passions and interests without descending into a boring laundry list of achievements blighted by overuse of the word Ì`.
advice  mentoring  disadvantages  leadership  women  networking  self-promotion  New_York_City  public_speaking  leadership_development  finance  Wall_Street  philanthropy  storytelling  coaching  praise  daughters  girls 
november 2011 by jerryking
Physicist Makes 'Big Bang' at Citi - WSJ.com
OCTOBER 6, 2009 | WSJ | By DENNIS NISHI.

Hamid Biglari went from physics to finance. Now, he's helping lead efforts to revive Citigroup Inc...."I've always believed the best time to reinvent yourself is when you're on a high note as opposed to when in decline," he says. "Your options are larger that way."
...After a fourth-quarter 2008 loss of $8.3 billion, Citigroup moved to split into two different entities: Citicorp would handle the retail banking and investment operations while Citi Holdings would have the riskier "noncore" assets. Mr. Pandit named Dr. Biglari vice chairman in charge of strategy and resource allocation for Citicorp. Dr. Biglari had already spent the past year restructuring the securities and banking side of the business. He says he is now working with Mr. Pandit to reframe the company.The pressure has been intense, but Dr. Biglari feels he is in the job that he has been working for since leaving physics.
Citigroup  Second_Acts  Iranian  Robert_Rubin  physicists  finance  generating_strategic_options  McKinsey  Managing_Your_Career  reinvention  options  reframing  resource_allocation 
october 2011 by jerryking
Internet businesses: Another digital gold rush
Internet companies are booming again. Does that mean it is time to buy or to sell?
bubbles  Web_2.0  business  finance 
may 2011 by jerryking
Michael Lewis’s ‘The Big Short’? Read the Harvard Thesis Instead! - Deal Journal - WSJ
March 15, 2010 | WSJ | By Peter Lattman.

Back at Harvard, against the backdrop of the financial system’s near-total collapse, Barnett-Hart approached professors with an idea of writing a thesis about CDOs and their role in the crisis. “Everyone discouraged me because they said I’d never be able to find the data,” she said. “I was urged to do something more narrow, more focused, more knowable. That made me more determined.”

She emailed scores of Harvard alumni. One pointed her toward LehmanLive, a comprehensive database on CDOs. She received scores of other data leads. She began putting together charts and visuals, holding off on analysis until she began to see patterns–how Merrill Lynch and Citigroup were the top originators, how collateral became heavily concentrated in subprime mortgages and other CDOs, how the credit ratings procedures were flawed, etc.

“If you just randomly start regressing everything, you can end up doing an unlimited amount of regressions,” she said, rolling her eyes. She says nearly all the work was in the research; once completed, she jammed out the paper in a couple of weeks.
financial_system  Michael_Lewis  economics  Harvard  Colleges_&_Universities  students  thesis  CDOs  data  patterns  Wall_Street  investment_banking  women  Philip_Mudd  economic_downturn  linear_regression  finance  crisis 
march 2011 by jerryking
Ask the Wizard: Series A Financing: How Much to Raise?
Well, the obvious answer is that it all depends, but on the grounds most people wo
funding  entrepreneur  entrepreneurship  finance  money 
february 2011 by jerryking
Commodities Report: Mining Start-Ups Look for Northern Exposure - WSJ.com
NOVEMBER 30, 2010 | | Phred Dvorak. The Toronto bourse
estimates Canada has snagged more than a third of the world's equity
financing by mining companies during the past 10 years, and 55% in the
first three-quarters of this year.

The flow of mining deals comes amid a boom in commodities prices that
has pushed gold and copper to records and silver to near 30-year highs.
Canada  Canadian  mining  finance  start_ups  TSX  stockmarkets  TMX  commodities  commodities_supercycle  bourses 
november 2010 by jerryking
7 Easy Steps to Bootstrapping Success
Oct 1, 2010 | Inc. Magazine | By Andrew Park. In this economy,
you can pretty much forget about financing. And it's probably just as
well, says marketing guru Seth Godin, author of The Bootstrapper's
Bible. People often ask him for advice on raising venture capital for
their start-ups, and "nine times out of 10, I advise them they
shouldn't," he says. Instead, take these seven steps to self-funded
stardom. (1) GET CLOSE TO YOUR CUSTOMERS ; (2) MAKE CLIENTS PAY UP FRONT
;(3)FIND THE FREE LUNCH ;(4) FORGET STEALTH MODE ; (5)BECOME AN
EXPERT ; (6) ASK FOR HELP ; (7) BE PATIENT
Seth_Godin  bootstrapping  entrepreneurship  inspiration  start_ups  asking_for_help  funding  finance  tips  venture_capital  charge_for_something  stealth  expertise  patience  Pablo_Picasso  strategic_patience 
september 2010 by jerryking
Ranks of Women on Wall Street Thin - WSJ.com
SEPTEMBER 20, 2010 | Wall Street Journal | By KYLE STOCK
Wall_Street  women  finance 
september 2010 by jerryking
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