Author Archives: efficientminds
The Set-Up-To-Fail Syndrome – Harvard Business Review
Two questions came to mind as I read this article.
1. How do you determine how much of an employee’s failure is the responsibility of the employee and how much is due to the manager? The article does not address that question.
2. Is this article part of the broader movement to coddle and entitle people? That is, support blaming someone else for your actions when outcomes are bad and claiming credit for your actions when outcomes are good?
I think the answer is simple. Both subordinate and manager are responsible. Both would be better served communicating their concerns to each other. Both should be responsible for doing all they can for success. Neither should play the blame game.
This reminds me of my 11+ years of university schooling in three different states. I had some above average, average, and below average professors. At times I blamed the professor and did poorly in the class. Other times I acknowledged I wasn’t learning from the professor and spent more time on the library with more books. In those cases I did well in the class.
The third case is not something I tried in those 11 years: suggesting, politely, how the professor could improve the learning environment while simultaneously spending more time in the library with more books.
Why didn’t I try that? I believe it is due to traditions, practices, and values that I have. I was raised to do what you are told and not to question authority. I was also taught to take responsibility for your own actions, not the actions of others.
So my recommendation to students specifically and subordinates in general? Don’t complain, take responsibility for your own actions (grades for students other metrics for employees), and choose words that contribute to harmony if you have suggestions to improve the environment. Actually, those suggestions apply to professors and managers as well.
Oh, and for students, I believe more time in the library with more books is a good thing no matter what. Kind of fits the job title “student” eh?
5 years after crash, wealthy are better off – SFGate
College rankings hurt students
This is an interesting article that gives five reasons to ignore college rankings by US News & World Report.
http://m.cbsnews.com/fullstory.rbml?catid=57602138&feed_id=76&videofeed=43
Apple Unveils Faster iPhone, and a Cheaper One, Too – NYTimes.com
I am underwhelmed. This is what we call incremental improvements. But then again, this could be just the thing to incrementally maximize profits. If folks dump their iPhone 5 and buy an iPhone 5s perhaps my father was right when he said “find a fool and bump his head.”
Meanwhile, how are those working conditions in Chinese factories as Apple approaches $200 billion in cash?
Income gap now the largest in history
And they complain about taxes and big government? Checkout my Cadence of Finance presentation, accessible via my homepage of efficientminds.com, for causes of the widening wealth gap See Robert Reich’s Aftershock for suggested remedies.
http://www.usatoday.com/story/money/business/2013/09/10/pay-gap-richest-poorest/2793343/
Also see this article from the managing editor of Fortune magazine.
Another place for finance graduates to look for jobs
I recently received the following flurry of finance job postings. For those recent finance graduates that follow my website or are LinkedIn, I recommend you set up a profile on the cybercoders.com website. Let me know if you have already found a job or if you land any interviews as a result of today’s suggestion.
Good luck!
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Verizon paying $130 billion (with a B) for Vodafone’s interest in Verizon
In one of the FIN101 sections this week we discussed targets and acquirers. I said the acquirer’s stock price tends to drop and the target’s stock price tends to rise. This recent article in the New York Times makes a similar comment:
“Verizon shares are about the same as they were before rumors of the deal surfaced last week, even though the share price of the acquiring company usually drops.” [emphasis added]
Let’s look at the math of the acquisition. If Vodafone’s 45% stake is worth $130B then Verizon’s total value is $130B/0.45 = 289B. That is $159B for Verizon’s 55% and $130B for Vodafone’s 45%. The NYT article suggests the Enterprise Value is $176B, but that number does not include Minority Interest (which is 52.376B as of the 2013.12.31 balance sheet). So let me calculate what Vodafone is worth:
Enterprise value = Market cap + debt + minority interest + preferred stock – cash and cash equivalents
= 132.61B + 47.618B + 52.376 + 0 – 3.093B = 229.503B
Therefore Vodafone’s 45% is: 0.45*229.503B = 103.28B
So why is Verizon overpaying by roughly 30 billion dollars? Who knows? Perhaps some of the board members, executives, or large shareholders of Verizon are also shareholders of Vodafone. Good for those folks, but not for the remaining shareholders.
If you factor in VZ’s current P/E (84.87) and P/B (3.92) that enterprise value of 229.503 seems inflated. So apparently the offer for Vodafone’s interest includes a mix of the overpriced stock and cash. Maybe it is a fair deal…
Trump University Made False Claims, Lawsuit Says – NYTimes.com
While one should reserve judgement, one should consider that Trump businesses have filed for bankruptcy 4+ times. Does that sound like an organization you should transfer $35,000 of your wealth to learn how to make money in real estate?
http://mobile.nytimes.com/2013/08/25/nyregion/trump-university-made-false-claims-lawsuit-says.html
Wall Street Ends Higher on Economic Data, Despite Halt – NYTimes.com
Should “glitches” like these concern investors? Should you be concerned if your retirement funds are in a market that has flash crashes, trading halts, and computers executing trades and trading strategies by the millisecond?
All good questions. I don’t have a definitive answer. Let me quote Robert Reich’s “Aftershock”: “Wall Street is a casino in which high stakes wagers are placed within a limited number of betting houses that keep a percentage of the wins for themselves and fob off losses on others, including taxpayers.”
If you have money in the market I suggest you buy low and sell high. For example, Netflix has price to earnings ratio of 335 now. The historical average for the market in general is roughly 15. This seems like a sell high opportunity. Yes, it could go higher. But isn’t a P/E of 335 high enough?
http://mobile.nytimes.com/2013/08/23/business/daily-stock-market-activity.html
Efficient Minds™ 