Corporatestrategy
We were initially skeptical because, as Buysiders.com readers are probably well aware by now, we view risk management as a matter of knowledge gathering/sharing and corporate culture. The excerpts inside this post explain our satisfaction with the video. It’s not enough for us to judge whether this course is a great investment for you or your company, but we have attended classes with Bob Kaplan (and other) at Harvard and we certainly got more than our money’s worth.
Steve Jobs resigned as Apple CEO yesterday, intends to stay on as Chairman. Sad news and nothing much to comment – the praise has been doled out before here. We only wish him the best and highlight a few links with amazing, heartfelt reaction around the web.
Very interesting profile on Ray Dalio’s Bridgewater in the new issue of the New Yorker magazine. Long and often a bit on the speculative side – it’s always difficult to take without “salt” the perceptions of someone who has spent, at best, a few days/weeks with the subject of the report – it’s still a great read.
Interesting preliminary finding by researchers looking at 18,000 professional basketball games: ending the first half losing by one point actually increases a team’s chance of winning the game. If a team was winning by 4 points at halftime, the chance of winning the full game was 70%. If the advantage was 6 points, the chance of winning jumped to 80%. However, when the margin was 1 point then the team had a better chance of losing… The study seems well done, but take it with a grain of salt before applying it to motivational “tools” inside your company.
The article on GE’s aggressive tax practices that we linked to two weeks ago roused a lot of angry reactions. It’s always useful to filter away the noise, and we’ve found one article that does just that. Joe Nocera’s NY Times Op-Ed is useful to better understand how much of GE’s recent tax “breaks” are actually “aggressive”, and that the rest of it is simply about taking advantage of existing regulations.
We have had for years a section in our Intranet on Tax legislation and another on interesting corporate structures that save money in any way – operationally, fiscally, etc. The overall idea is to study the state-of-the-art in all espects of corporate life – it’s useful to understand companies’ performances/ strategies/ cultural aspects, and if it’s good it can eventually be shown to companies we invest in. Of course, in the case of tax practices there’s a thin line between aggressiveness and innovation and falling into regulatory traps… Reading this NYT article out today, we still have no idea where GE fits in this range, but it’s safe to say that they’re certainly innovative in the tax department.
We’ve stumbled upon a series of videos by Bloomberg Television on Game Changers, and the first episode we saw is fantastic and profiles Steve Jobs. There are many interesting moments and lessons, but one that stuck with us concerns the power of ideas and the inspiration/ motivation they bring – not just to potential customers but, in Apple’s case at a time when morale was at the lowest point, also internally. That’s when the team finally “awoke” and all that brilliance in engineering/ product design/ marketing was brought together to create, as a VC says in the video, “the greatest comeback in corporate history”.
The WSJ published a story about the possible tactics that Buffett used in the Lubrizol acquisition. This part sounded like music to our ears: “(…) Buffett undoubtedly told Lubrizol that he would refuse to participate in an auction. And here is where you see Buffett’s cleverness at work. He puts his targets in a dilemma that really only has one answer: take the price that looks very good or let Buffett walk away. Buffett’s real genius is a mix of these tactics and his ability to identify undervalued companies combined with the courage to act quickly on his analysis. That mix has been a recipe for big profits for Berkshire.”
Two quick notes. First, a relatively superficial story about Brazil’s pre-salt oil’s potential for changing the country for good – or bad. It’s interesting to see how this story is being told abroad. Second, an interesting story on Jeffrey Kaplan, who for 24 years was involved with M&A – including some of the largest deals such as the HCA LBO. The interview is an interesting inside view on M&A, private equity, even debt markets.
High-profile article on Valor on Thursday about how Laureate Education is ready to invest R$ 1.1 billion in Brazil by 2015 (some US$ 660 million). Understandably, the part most likely to “stick” is the “we will triple enrollment” bit. We’ve been following Laureate since 2002 and even invested in the stock for a while until it was taken private in 2007, so we found the story even more interesting.
