These are indeed tough times. How many of you hear the common refrain, "I'm just sitting on the sidelines right now." Or, "I'm not taking any risk at this time." So I have a suggestion: Why don't we all sit on the sidelines and take absolutely NO risk and watch the country die a slow death while we watch events unfold? What a novel approach to living under an overpass in a refrigerator box!!
Personally, I'm offended by these types. They don't do anything when times are good, or if they do, they inevitably buy at the top like Mr. and Mrs. middle America does and then grouse about how the "big wigs" took all of the profits off the table! Woe is us!
If you can't see this is the absolute worst approach known, consider an economic phenomenon caller "Recency Bias," the tendency to place too much weight on recent performance instead of the longer track record. Think of a card player who doubles the bet at a blackjack table because they have just won the last couple of hands. The odds haven't changed, but the perception has.
Many learned types, economists, investment professionals and the like are caught up in the latest trends in the marketplace that there is little room left for past relevant events that have manifested themselves over and over again. "Forgetting" the instances of past recessions, crashes and economic maladies, it doesn't take a combination of events that precipitates the current global gnashing of teeth, just a short memory.
We could conclude that our most recency bias would be one of understanding the situation is worse off than it actually is. Housing prices are still off their peaks, but have still increased by 20% since 2000, adjusted for inflation. We reamin wealthier than ever before as a collective unit, per capita disposable income is 18% higher than a decade ago.
If the good times are never as good as they seem, neither, perhaps are the bad one so bad. What to do? Continue with your dream, fight the urge to crawl under the covers and face the music! Look for opportunity from chaos, think scalability and a heavy dose of courage! Is this not the American way?
Tuesday, February 17, 2009
Monday, February 9, 2009
Does anyone have a job anymore?
Globally, the economic picture is continuing to show no signs of easing with massive layoffs in multiple sectors. The tally of jobs lost for the day:
Caterpillar: 20,000
Sprint Nextel: 8,000
ING: 7,000
Home Depot: 7,000
Phillips Electronics: 6,000
IBM: 2,800
That’s 50,800 for the first month of the year by the biggest and brightest companies in the global economy. What to make of this? We certainly haven’t seen the worst yet, but where does the “bleeding” stop? What does this do to the economy and the trickle down economics of 50,000 people/families shutting down spending and holding on for dear life? In the month of January? How many resulting bankruptcies will ensue?
Resulting job losses from yet more industries and companies large and small portend more slowing of the economy as retail sales are expected to decline 2.5% for the first half of the year, based on the National Retail Federation’s forecasts, including sales of automobiles and restaurants to name a few.
Will the government’s economic recovery package strengthen the economy? Things are changing constantly and even day to day in many cases, creating a never before witnessed uncertainty that makes it exceedingly difficult to get a foothold on economic direction.
One thing is clear; asset protection. Protecting existing holdings rather than acquire new ones is the order of the day. One could posit that it’s the return of equity rather than the return on equity.
That said, capital flows still need to occur. In a world of scarce capital, many companies could see themselves shut out entirely, exacerbating the job loss scenario. Capital markets have clammed up, even for the staunchest of credit worthiness. Companies with few debt needs and a cushion of cash can weather the storm. What of the remainder? There are companies in the realm that have cash to invest, they are even more finicky and deals can get done on strict terms. Find out who the players are, link to the NuQuest Capital MatchPoint, www.nuquestinc.com and find out what they’re looking for.
Caterpillar: 20,000
Sprint Nextel: 8,000
ING: 7,000
Home Depot: 7,000
Phillips Electronics: 6,000
IBM: 2,800
That’s 50,800 for the first month of the year by the biggest and brightest companies in the global economy. What to make of this? We certainly haven’t seen the worst yet, but where does the “bleeding” stop? What does this do to the economy and the trickle down economics of 50,000 people/families shutting down spending and holding on for dear life? In the month of January? How many resulting bankruptcies will ensue?
Resulting job losses from yet more industries and companies large and small portend more slowing of the economy as retail sales are expected to decline 2.5% for the first half of the year, based on the National Retail Federation’s forecasts, including sales of automobiles and restaurants to name a few.
Will the government’s economic recovery package strengthen the economy? Things are changing constantly and even day to day in many cases, creating a never before witnessed uncertainty that makes it exceedingly difficult to get a foothold on economic direction.
One thing is clear; asset protection. Protecting existing holdings rather than acquire new ones is the order of the day. One could posit that it’s the return of equity rather than the return on equity.
That said, capital flows still need to occur. In a world of scarce capital, many companies could see themselves shut out entirely, exacerbating the job loss scenario. Capital markets have clammed up, even for the staunchest of credit worthiness. Companies with few debt needs and a cushion of cash can weather the storm. What of the remainder? There are companies in the realm that have cash to invest, they are even more finicky and deals can get done on strict terms. Find out who the players are, link to the NuQuest Capital MatchPoint, www.nuquestinc.com and find out what they’re looking for.
Friday, February 6, 2009
The Creation of an Online Investment Community
People are talking, collaborating and sharing information in a digitized age that is perfect for the introduction of an online investment community. If you’re not part of the conversation, then you’re missing the opportunity to listen and participate in ideas that will benefit you and your company. Social networking provides published conversational and educational content, site visitors can participate in the conversations and share their experiences, best practices, opinions and talk about the products and services our site has to offer. It’s that user-generated content that makes a community so powerful and keeps visitors coming back for more.
What services does a great site contain? Well, let’s start off with what you’re on right now; a blog. Got opinions? Problems? Answers? Use the blog functionality. Forums: these have robust user profiles that contain a “wall” that other users can post notes to you. Groups: create micro communities! Messaging and Social Streams: send and Instant Message to a friend, an individual or an entire group…micro blog! Ratings and Comments: users can comment on group posts and encourage collaboration. Wikis: searchable knowledge repository. Media Gallery: file storage and sharing. RSS/Email: allows to pull people into the community.
So? A lot of bells and whistles? Not really. Using a site that has these functionalites allows the users a rich experience and creates communities that foster education and commentary and gets the investor and capital seeker alike closer to one another in a lot less time than it takes to drive down to your local neighborhood angel group or venture firm looking for the “next best mousetrap” and/or expecting it will get funded in the next week. Cast the net, learn about the business of doing business, share experiences and collaborate, from both sides of the marketplace. If you’re not online, you’re offline and spinning tires without gaining any of the overused word: traction. Help yourself and get social!
What services does a great site contain? Well, let’s start off with what you’re on right now; a blog. Got opinions? Problems? Answers? Use the blog functionality. Forums: these have robust user profiles that contain a “wall” that other users can post notes to you. Groups: create micro communities! Messaging and Social Streams: send and Instant Message to a friend, an individual or an entire group…micro blog! Ratings and Comments: users can comment on group posts and encourage collaboration. Wikis: searchable knowledge repository. Media Gallery: file storage and sharing. RSS/Email: allows to pull people into the community.
So? A lot of bells and whistles? Not really. Using a site that has these functionalites allows the users a rich experience and creates communities that foster education and commentary and gets the investor and capital seeker alike closer to one another in a lot less time than it takes to drive down to your local neighborhood angel group or venture firm looking for the “next best mousetrap” and/or expecting it will get funded in the next week. Cast the net, learn about the business of doing business, share experiences and collaborate, from both sides of the marketplace. If you’re not online, you’re offline and spinning tires without gaining any of the overused word: traction. Help yourself and get social!
Venture Firms Take A Hit...Whose Your Friend Now?
Venture firms are increasingly turning their attention to their own portfolios and culling out the weaker companies and preserving their remaining capital for the strongest of their investments. In an economic environment we are experiencing presently, it makes sense the strong will survive and the weak fall by the wayside. Now, more than ever, their own portfolio is competing against itself.
Is this premise valid however? There is no certainty that even though capital deployed to the best and the brightest will ensure that these companies will succeed when things turn around. What of the companies that get overlooked by one firm but are right in the investment crosshairs of someone else? The trite saying, “One man’s trash is another man’s treasure” may never be as poignant as now.
What if a firm gets dropped, or capital is severely restrained? Banks? They’re hoarding cash instead of lending and supporting business growth. Next rounds? Who might that be? The ubiquitous chase to the next capital source is on. Many firms will now be seeking money for virtual survival in the most unlikely of places. There are over 700 venture firms in the U.S. that are constantly looking for the “next best” deal. How to access them when timing is urgent?
What if there was a deal repository where companies can seek to match their capital needs to a source that understands the nature of the business and has the capital to invest? What of a community where investors can pool ideas, syndicate their own deals, getting capital to work faster and more efficiently towards the best companies that match their criteria? The answer is the Capital MatchPoint, where business and capital meet.
The pressure is on: survival of the fittest, deal aggregation, capital deployment and efficiencies to automate the process in a secure environment. Many deals, many investors…are you ready for the new paradigm in commerce?
Is this premise valid however? There is no certainty that even though capital deployed to the best and the brightest will ensure that these companies will succeed when things turn around. What of the companies that get overlooked by one firm but are right in the investment crosshairs of someone else? The trite saying, “One man’s trash is another man’s treasure” may never be as poignant as now.
What if a firm gets dropped, or capital is severely restrained? Banks? They’re hoarding cash instead of lending and supporting business growth. Next rounds? Who might that be? The ubiquitous chase to the next capital source is on. Many firms will now be seeking money for virtual survival in the most unlikely of places. There are over 700 venture firms in the U.S. that are constantly looking for the “next best” deal. How to access them when timing is urgent?
What if there was a deal repository where companies can seek to match their capital needs to a source that understands the nature of the business and has the capital to invest? What of a community where investors can pool ideas, syndicate their own deals, getting capital to work faster and more efficiently towards the best companies that match their criteria? The answer is the Capital MatchPoint, where business and capital meet.
The pressure is on: survival of the fittest, deal aggregation, capital deployment and efficiencies to automate the process in a secure environment. Many deals, many investors…are you ready for the new paradigm in commerce?
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