Category Archives: People

Business Strategy, Capital Markets, Market News, MyOrbit Blogs, People

US and Global Financial Crisis – Views & Updates

Like most of you, we have been watching the developments for the last few weeks, as MyOrbit spans worldwide with a link into the global markets. This post puts our thoughts and updates for you.

Background:

Financial institutions have been struggling to meet the mandates of bad loans, and the global markets have been showing the effects.

Banks are allowed to lend about 10 times the capital they have on deposit (called CAR: capital adequacy ratio), but multiple banks seem to have not-confirmed to this requirement, and in effect lending much more than their safe limits. Losses on mortgage-related securities have depleted bank capital. Those securities had collapsed with falling home prices, along with increasing defaults and foreclosures.

Now the common annual-deadline-abiding taxpayer of the US will be paying for the lack of accountability by Wall Street Banks, and to an extent the Financial Heads in the US government.

While the US legislation passed a bailout package of $700 bn with good intentions (following great effort by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke)…but the what, when, where, how- are still not clear.

If so much of US tax payer’s money has to be used to rescue poor performing banks…and there’s a reason why they are poor performing …because they gave $500k to $1 million mortagages to almost everyone who asked in 2005-2007 without much due diligence (we heard about NYC road-side pirated DVD sellers getting $500k mortgages!)

And the tax contribution from the people who received those bumper mortagages probably don’t add up more than a few billion dollars, which leaves the majority of common tax payers holding the $700 bn bill….for a lunch they never had!

Initially, the plan was to buy distressed securities of the banks to help clean-up the Balance sheets of the Banks– but that did not sound good. Why should the Govt buy toxic securities which will only cause loss and give nothing much in return?

Updates:

Henry Paulson’s earlier life as an investment banker is now playing a key role in how the bailout solution is shaping up.

Most Republicans and Democrats in the US legislation agree on taking equity stakes in financial institutions, because if government money is going to be used, taxpayers should at least get the chance eventually to profit from the investment.

So the US legislation is now following the approach used by European govts — and will fund the recapitalization. Thankfully, the focus of Paulson’s initial plan — of buying distressed mortgage-related securities to improve banks’ balance sheets and make it easier for them to lend again — is not being shifted to buying equity/holding position in the distressed banks and FIs.

The latest approach of buying equity stake in distressed banks and FIs is a much better option for the taxpayer funds. At least there is an upside if/when some of the distressed banks and FIs do well, the Govt would gain from appreciation of its equity stake. In that sense, the Govt is taking the role of a mega-investment-banker by underwrtiting the securities of these banks and FIs.

5 Questions, Aerospace, Business Strategy, Capital Markets, FAQ, Finance, Industrial, Innovation, Insurance, Jobs & Careers, MyOrbit Blogs, People, Start-ups, Venture Capital

5 Questions With Warrent Buffet

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Warren Buffet doesn’t have to prove anything to anyone because his performance numbers speak for themselves. And that’s what makes it so interesting to hear him take Q&A: “The nastier the better”… as he says!



It’s a long video… if you are in a rush, here’s our summary of the various Q&A:

Q1. What do you look for in the people you like to work with?
WB: I like to work with people I like. I don’t look at their CVs or Grades to decide who can do what. In fact, I don’t even look if they have a degree. If you are working with people you don’t enjoy, please do yourself a favour, and leave the job and work with people you like. You’ll do better.

Q2. What kind of businesses do you like to invest in?
WB: I want to invest in businesses that are stable and where I can visualize it 10 years from now. Companies like Coke (soft drinks), Gillette (mens shaving blades) are examples of my investment choices. There are many others like GEICO (automotive insurance), Nebraska Furniture Mart (maximum sales from a single store location in the US), Iscar Metalworking Company (an industry leader in metal-cutting tools from Israel). I don’t have the understanding of technology-intensive business like software etc, and I stay away from them.

Q3. How do you do business valuation? How detailed is it?
WB: I like to invest in businesses where I have great comfort with the business owner. A paragraph is often sufficient to know the business value. The example being Nebraska Furniture Mart owned by Mrs. Rose Blumpkin, who recently turned 101 years, who has no formal education but has great common sense.

Q4. Tell us some of your bad decisions and what you learned from them?
WB: I invested in US Air though it was a difficult sector. Call it Temporary Insanity. I have learned that my bad decisions have happened when I had more cash than necessary. The airline industry is one step forward for mankind, a giant step backward for capitalism! And then there are other mistakes that conventional accounting does not capture, like the selling of 5% stake in Walt Disney (at $6m) within a year of buying it (at $4mn) in the 1960s. Today that stake is worth over a billion dollars.

Q5. Why not split the Berkshire Hathaway share to make it more affordable to investors?
WB: I think of my investors as a club or an audience in my presentation and we want long-term investors not traders. I don’t want high trading volumes for our shares. In fact, I will be happy with no trading at all. Our share price ($25k per share in recent times) has helped us maintain that seriousness and attract long-term investors.

Thanks for coming by!
MyOrbit Team

FAQ, Finance, Innovation, IT Services, MyOrbit Blogs, Online Marketing, Outsourcing, People, Real Estate, Retail, Sales & Marketing, Start-ups, Training

Motivation for Starting Your Home Based Business

Did you know that increasing number of professionals working from home — even if they are employed with large companies? The advances in Internet and communications have made this possible.

And with such experience (or taste), some people are finally able to make a decision to start working on their own from their home office.

Most home based businesses can outsource 100% of non-key business functions. It’s a definite trend if you see the increase in project volume of sites like Elance.

We are seeing every possible work – from easy digital products to high-end investment banking work — being done from a home based business. Starting your home business is easier today than ever before, but most people don’t realize it, or don’t want to act on it!

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Here’s a thoughtful article written by Lazz Laszlo.

Has the idea of starting a home based business of your own been rolling around in your head for days, weeks, months, or sadly… even years?

You almost started a couple of times, but for some reason something came up that resulted in you deciding to delay the very first step.

The first step is truly the hardest, but there’s no denying that the first step is STARTING.

A man by the name of James Cash Penney who died at the age of 96 in the year of 1971 said something that perhaps will help you to understand that you are not the only one to have been timid about beginning a new business, in particular, your new home based business.

James Cash Penney said, “It is always the start that requires the greatest effort.”

He knew, and I’m sure you know, he’s the man behind the retailer J.C. Penney. You have to just love his middle name as it relates to his last name and capsulizes his life so to speak. He’s got a great story to tell if you take the time to find it and read it. Just to imagine that he lived through two world wars is amazing in itself.

There are lots of excuses used by people as to why they haven’t started their new home based business. Some of them include, but not limited to; just don’t have the time; just not ready yet; not sure which type of home based business to start; no money; looking for a partner; haven’t found the right product; or have to learn more.

If you’re in this zone of not being able to start, investigating the lives of others may just be the catalyst to kick you in the behind, knock you off the fence, and get you started. Benjamin Franklin said, “An investment in knowledge pays the best interest.”

The money you spend on a new pair of shoes is gone forever once it is spent and after weeks, months, and even perhaps years, those shoes will be discarded. The knowledge you gain from the article you read, the book you buy, the course you take, or the mentor you befriend will be with you for a lifetime.

You are not the first to have the desire to start a business. You certainly won’t be the last, but if you don’t start, you’ll be among the thousands who wished they had. It’s your choice to either get started or just forget it.

Some of my favorite people to read about have been, but certainly not limited to just these people;

Jeno Paulucci, the creator of Chung King Foods brought Chinese food to the kitchen tables of America. One of my favorite parts of his story was when he made a split-second decision and ate a grasshopper rather than… well, you’ll have to read his story.

Walt Disney began his dream, essentially in a garage. There are a lot of companies that begin in a garage, apparently because the kitchen table wasn’t available. Bill Hewlett and David Packard began the company that bares their name in a garage and as a footnote, they wound up burning down the garage. Oops! Apple Computer is another garage beginning business.

William Wrigley Jr., essentially stumbled on his fortune with chewing gum when this item he used as an incentive became more popular than the item he was selling.

Reading one or two of what I like to call, “How’d they do it” stories can shed a lot of light on what it really takes to get a business off the ground. It would be smart to make this an ongoing practice of reading about how others built their businesses, but don’t use the excuse of having to read just one more, and another, and another, and another… delaying your own start indefinitely.

The message here is that you have to focus and disregard what the naysayers think and say, this includes that little naysayer voice in your own head. Do you really want to do what other people want you to do, or do you want to put your efforts, energy, and brain power into doing what you really would like to do?

If you’re embarrassed as to what people will think of you while you are climbing and stumbling on the ladder of success, you might as well quit now. Success is a bumpy road with lots of hazards and stress, which is another couple of reasons why people seek the safety of a job rather than beginning a home based business in their off hours.

Dean Martin, the entertainer said, “Successful people make mistakes.” Some people make more mistakes than others, but I have never met anyone who has only made one mistake in their life. I was taught that there is a lesson in every mistake, but more to the point, you can learn from the mistakes made by others. Read a biography or two of people behind some of the greatest achievements in history and you’ll see that it wasn’t always smooth sailing.

If you are not just a little bit daring and willing to spit in the face of pessimism, than you’re not living.

Malcolm Forbes said, “Venture nothing, and life is less than it should be.”

It’s time to start your journey into business. You don’t have to go at break-neck speed, but you do have to begin. It’s been said that the best part of the trip is not the destination, but the journey itself. Begin your journey today.

Yes, it sometimes hurts to be entrepreneurial and a visionary. It is full of embarrassment and behind-your-back ridicule, neither of which is lethal. Try something and if it doesn’t work, try something else. The adversities in your life will fertilize the genius within you. I’ll leave you with this Welsh proverb; adversity and loss make a man wise.

About the Author: Lazz Laszlo is a former Investment Executive and Radio & Television Financial Reporter with many entrepreneurial endeavors to his credit. He spends his time as an emcee, public speaker, enjoying life and writing about business, travel, retirement, strategy, and pleasure. To learn more, please visit Lazz’s website; http://www.925-wage-slave-alternatives.com

Business Development, Business Services, Business Strategy, FAQ, Innovation, People, Project Management, Risk Management, Sales & Marketing, Software, Start-ups, Technology

Will Information Technology Really Turn Organizations Upside Down This Time?

The battle tank example used by Professor Heskett is a high risk, high gain scenario for an information technology (IT) application. The latest advances in IT have the highest marginal utility for a tank commander because it is a question of life and death. However, the majority of us prefer to deploy IT applications for medium risk, medium gain scenarios like credit card processing, market forecasting etc., and prefer the manual route where it really matters.

The battle tank example presents two distinct scenarios. On one hand, a badly implemented IT application could lead a tank commander to make a wrong decision. On the other hand, a well implemented and intuitive IT application could actually lead the same tank commander to save his life and that of his comrades. He could fight more and increase his country’s chances of winning the battle.

In business terminology, the latter scenario is equivalent to large gains in employee productivity and increased employee contribution towards winning market share. All CEOs want this to happen, but only a few succeed. Why?

It is because organizations differ in their risk-taking profiles. We can divide organizations in two broad categories. On one end, we have organizations like the pension funds that are risk-averse because their investors want it that way. Their employees tend to have the same philosophy. And because they are giant investors themselves, they pass their risk-averse sentiment along with their investments. The quarterly reporting on Wall Street represents this sentiment. Strategic investments like high-end IT applications tend to get flagged as low priority in the annual budgeting exercise, even though some of them could turn out to be market winning applications.

On the other end, we have organizations that want to experiment, and their investors want them to do exactly that. Failure is usually a part of the annual expenses. The firms in biotech and wireless are examples of this category. They are smaller in size than the typical Fortune 500 and the employees know their regular customers. They tend to know how an event could affect their revenues and profits. These firms not only sell their experimentation, but also pass their innovative methods on to their customers.

Most of today’s Fortune 500 organizations lie in between these two ends. And therefore, they vary in their zeal to try out an innovative approach, which could be an IT application.

It is true that exposing decision ­making information to frontline employees is a business risk. But a well-implemented IT application can mitigate that risk and still bring the benefits of speed into business. For example, it could help a customer service rep to identify potential sales, and pitch right away from a pool of ready-made product demos while the competition is still planning an internal meeting. It is the same as the ability of a Japanese autoworker to stop the billion­ dollar production line and correct a defect right away, and avoid expensive and embarrassing recalls later.

So, will information technology really turn organizations upside down this time? Yes it will, but only for a few organizations. These would be organizations willing to experiment with the capabilities of their frontline employees using innovative approaches. These would be organizations willing to place the knowledge acquired by the seniors in front of the juniors. And possibly, these would be organizations poised to become the new market leaders.

Shankar AVSB
Associate
Infosys Technologies Limited
01 October 2021

Reference:  https://hbswk.hbs.edu/archive/heskett-column-will-information-technology-really-turn-organizations-upside-down-this-time-readers-respond

Internet, MyOrbit Blogs, People

Amitabh Bachchan Blog -the Power of Blogging -Reiterated

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If you are from India or having something to do with India – you will know one person for sure: Amitabh Bachchan. He’s a legendary actor, who’s been there for decades now, and continues to produce great movies – often with a strong social message.

What’s this got to do with MyOrbit and Online Business? A lot! He has very recently started his own blog, through which he aims to share his views on various things impacting his life and industry, and because he has earned the stature – about the society at large as well.

Here’s the link: Amitabh Bachchan Blog

You can consider Amitabh Bachchan as a company himself (in India, he’s called BigB), and he has just started using his blog as a powerful communication channel with his stakeholders, which considering his profession are: fans worldwide and fellow industry professionals, and of course media. And like true bloggers, he has started answering questions as well, which will ensure the most people become regular visitors.

As we have been advising companies — both early-stage and established — a blog presents a powerful self-controlled media that you can use to share updates of important projects (upcoming films in case of BigB), respond to customer queries (fans in this case), and media reports (where necessary).

And here’s his post from today: Day 4 Blog

Okay, while the post titles are not really descriptive – he has just started using this medium – the content is great – and that’s what really matters because the readers know him already!

But if you are a start-up or if people don’t know you yet, then it will help to write more descriptive titles, because that will then show your blog posts in relevant online search-engines like Google, and bring people to your blog.

If you are serious about business relationships, you must be running a blog. The benefits far outweigh the efforts involved. Because the voice of business leaders reaches those they actually need to communicate with.

So, if you have any questions in setting-up or running your blog, please feel free to ask us. We have helped dozens of professionals and companies already. No, there’s no fee on it. We would be happy to set you up online in the best possible way.

cheers,
Shankar
on behalf of MyOrbit Team