Archive for the ‘Investment’ Category

Service of When Is It Worth Selling Your Soul to the Devil?

Thursday, November 15th, 2018

Photo: theodysseyonline.com

There was a day when many wouldn’t buy products from companies or countries they disapproved of. There may be a few who still don’t though I suspect less than in earlier periods. Stock brokers ask if there are industries clients want to avoid investing in. Some PR and Ad agencies refuse to represent certain clients because they don’t like what they stand for or how they operate.

Photo: cnn.com

But this isn’t always the case. As recently as the midterm election constituents voted into high office—the Senate–a man who was indicted on federal corruption charges. [The Justice Department dropped the charges against him after a hung jury and mistrial.] In order to win, another senatorial candidate [photo right] swallowed his dignity and unctuously made up to a former opponent who had seriously trashed his father and his wife. He also won.

Emperor Vespasian. Photo: en.wikipedia.org

The Roman emperor Vespasian is said to have remarked “money does not stink.” The headline of Eliot Brown’s Wall Street Journal article illustrates how true this still is: “In Silicon Valley, Saudi Money Keeps Flowing to Startups Amid Backlash–Entrepreneurs and venture capitalists have remained generally quiet about Saudi funding since grisly killing of journalist.”

Brown wrote: “Two startups— View Inc., which makes light-adjustable glass, and Zume Inc., which uses robots to make pizza—disclosed investments over the past week totaling a combined $1.5 billion from SoftBank’s Saudi-backed Vision Fund.” Katerra Inc. that constructs housing units, is into SoftBank for $3 billion. SoftBank is in negotiations to lend WeWork $15-$20 billion. Wikipedia describes WeWork as “An American company that designs and provides shared workspaces for technology startup subculture communities and services for entrepreneurs, freelancers, startups, small business and large enterprises.” [This reporter wrote in a subsequent article on November 14 that the actual SoftBank investment in WeWork is $3 billion, although his sources told him that the larger amount is still under consideration.]

WeWork. Photo: wework.com

SoftBank is Japanese-owned. The Vision Fund has $100 billion to invest in tech companies. According to Bloomberg’s Pavel Alpeyev, “Saudi Arabia is the biggest investment partner.” Brown reported “Saudi Arabia has become the largest funder of U.S. startups in recent years as it works to diversify its economy by steering a big chunk of its Public Investment Fund toward technology. The kingdom has committed more than $12 billion to U.S. startups since mid-2016, according to a Wall Street Journal analysis, largely through its $45 billion commitment to SoftBank’s $92 billion Vision Fund.”

After Turkish allegations about journalist Jamal Khashoggi’s brutal murder some companies refused to attend an October conference “in Riyadh sponsored by the Saudi sovereign-wealth fund,” Brown reported—even some backed by SoftBank.

Photo: en.wikipedia.org

Companies that wanted to cut ties with Saudi Arabia include what Brown called Hollywood’s biggest talent agency, Endeavor, as well as Virgin Group and “multiple Washington lobbying firms…. Republican and Democratic lawmakers also have called for curbing ties with the kingdom. …Other companies, including many in the energy industry, have stood by Saudi Arabia through the controversy.”

Are there exceptions in which crossing a moral line is legit? Have you boycotted purchases or refused to work for a company or organization on ethical grounds? Have we lost our compasses that determine right and wrong now more than before? Have expedient choices always been pretty much acceptable here?

Photo: medium.com

Service of Irritating and Charming Commercials: Phony and Legitimate Laughs

Thursday, March 15th, 2018

Photo: tripsavvy.com

It was less than a year ago that I wrote about the commercials that drove me nuts. Clearly I’ve been listening to the radio and watching TV too much as there are two more to add to the “I immediately change stations or channels as soon as I hear them” list.

This time I’ll also share some adverts I like.

Photo: davekraft.org

Fake giggles over unfunny circumstances are the worst. The prize goes to 1-800-I-Got-Junk for radio commercials in which business or homeowners laugh hysterically when the junk crew tosses out a piece of rubbish. My hands can be wet or sticky but off goes the station at the first sign of this shrill irritation and sometimes I don’t return. In looking for a link to it, which I didn’t find you’ll be relieved to know, I noticed a similar reaction to it on a website “Commercials I Hate!

 

DJ Nana. Photo: twitter.com

Speaking of laughter, I can envision the room of 30-something creative types cracking up as they developed and produced the E*Trade commercial to scare people into saving money so they have funds for their retirement. Sung to the tune of “Banana Boat Song” that Harry Belafonte made famous, it consists of 85 year olds still working and looking foolish as they drop packages they’re trying to deliver, are dragged around by a heavy fire hose, are compared to model-perfect lifeguards and “DJ Nana” spinning records while hideously dolled up. Subconsciously, it could be this ad that inspired my post earlier in the week, “Service of Aging Gracefully.” The commercial isn’t aimed at me but at 30-somethings whose Nana’s and grandpas are, I hope, spending their time making money under more appropriate, dignified circumstances.

And I love “Banana Boat Song.”

“Triathlete” Photo: NYU Langone

I also enjoy the catchy tune that NYU Langone, a well-regarded NYC hospital, uses in some of its TV commercials which make me smile. There’s a series of which “Winter” and “Athletes on their Feet” are only two. Kudos NYU Langone! [And please take good care of my friend who has not been well.]

I wish there were more State Farm “Hall of Claims” commercials as this series is clever. My first favorite is the Mer-Mutts scene where the family pooch turns on the water in the kitchen and floods the living room transformed into a swimming pool. The woof and his pals perform a water ballet while their human mom and pop look on horrified. Actor J.K. Simmons is terrific. Some other good ones are The Truck-Cicle; Frightning-bolt and Vengeful Vermin.

My bet is that the ads that aggravate sell their products like crazy and the ones I like don’t—but I’m not in advertising so what do I know? Are there ads that motivate you to change channel or station in an instant and others you don’t mind hearing and even enjoy?

Vengeful Vermin Photo: Youtube

Service of Conflict of Interest III: Link Between Executive Stock Options & Product Recalls

Monday, September 28th, 2015

Photo: wallstreetprep.com

Photo: wallstreetprep.com

Gretchen Morgenson shared highlights of a University of Notre Dame seven year study, “Throwing Caution to the Wind: The Effect of C.E.O. Stock Option Pay on the Incidence of Product Safety Problems.” It focused on two industries that represented 85+ percent of recalls reported by the Food & Drug Administration [FDA]: Consumer staples like personal care, food and drink and health care products such as medical devices and meds. In addition, the companies had sales and assets of $10 million or more. It did not name companies associated with the 386 chief executives in the study.

FDAAccording to Morgenson, the authors concluded: “ ‘C.E.O. option pay was associated with both a higher likelihood of experiencing a recall as well as a higher number of recalls.’”

In her New York Times article, “Safety Suffers In Executive Pay Packages,” Morgenson observed that grousing about excessive executive pay packages is nothing new for stockholders. The significance of this study is that consumers are also losers with what Morgenson described as “This heads-I-win, tails-I-barely-lose arrangement [that] encourages executives to swing for the fences.” 

I first heard "heads I win, tails you lose" on The Honeymooners

I first heard “heads I win, tails you lose” on The Honeymooners

She explained: “Stock options have been the jet fuel propelling some of the biggest executive pay packages over the years. From an investor’s point of view, these instruments are problematic because they provide an executive with little downside if the company’s underlying shares fall but oodles of upside on the rise.”

Quoting one of the authors of the study, Adam J. Wowak, Morgenson wrote: “that he and his colleagues wanted to build on past analyses of how stock options induce risk-taking among executives.  ‘If options are generally causing C.E.O.s to be more aggressive, then it makes sense that more mistakes could occur and consumers could be affected,’ Mr. Wowak said. ‘Options could be making C.E.O.s ignore the downside potential of some of their actions.’”

Morgenson concluded that corporate boards “say they have gotten the picture that chief executives’ pay should be aligned with their owners’ interests. As this new study shows, directors should understand that executive pay needs to line up with consumers’ interests as well.”

I wonder whether the uptick in workplace fatalities reported recently in preliminary Labor Department statistics might also be related. According to Alexandra Berzon in The Wall Street Journal, “The preliminary estimates indicate an increase in fatal injuries last year, to 4,679, compared with 4,585 workplace deaths the year before. Including the expected revisions, the total number of deaths last year was likely higher than the approximately 4,700 deaths recorded in 2010 and 2011. It was the worst year for workplace fatalities since 2008, which had 5,214 deaths.”

Do you have faith that corporate boards and stockholders, many of whom think that they and theirs are immune to harm by faulty products, will acknowledge the relationship between product safety and stock option compensation for executives and lower or eliminate them? Do you think that  most executives who condone sloppy work to lower costs feel remorse or is this another case of “business is business, we’re hired to make a profit and benefit the stockholders, so lay off.”

Business is business

Service of Patriotism

Thursday, August 7th, 2014

Parade

I cheered when I heard NPR Radio’s coverage yesterday morning of drugstore chain Walgreens’ decision to keep its headquarters in Illinois rather than in Europe where it had considered moving to save on taxes. It is in the final stages of purchasing pharmacy chain Alliance Boots headquartered in Switzerland. At the end of the segment the reporter noted that the stock was down 15 points.

WalgreensUSA Today’s headline on Adam Shell’s story was “Walgreens move to keep HQ in USA gets thumbs-down from Wall Street.”

In The Wall Street Journal’s Marketplace section, Damian Paletta and Dana Mattioli wrote: “The Walgreen situation has been widely watched because most tax-beneficial merger deals lately have been in the pharmaceutical industry, where many companies have substantial profits overseas.”

double punchLater in “A Double Punch for Tax ‘Inversion,’” Paletta and Mattioli reported: “Companies, especially ones in health care, have been busily striking inversion deals in the past year. But lately, a chorus has risen against the deals. President Barack Obama last month dubbed them ‘wrong’ and called on Congress to do something about what he termed an ‘unpatriotic tax loophole.’”

Just whom do the American investors think would make up the loss in tax revenue? Can’t you hear some of these same people sniffing self-righteously that they’d never invest in a company that made firearms or cigarettes? Had Walgreens headquarters moved abroad there would be more than lost tax revenues: What about jobs in the Land of Lincoln?

While microscopic potatoes as compared to Walgreens and its some 8,200 stores [this estimate according to Paletta and Mattioli], I’ve written previously about a renowned southern living history museum that once sold American-made reproductions. My husband and I have stopped buying their wares. The tavern glasses we subsequently ordered from their catalog weren’t near the quality of those we’d bought in the gift store. Further: The second set was made abroad.

What’s with us? Why have investors become so numb? Is patriotism old fashioned, out of sync with life today and no longer a factor in the public’s buying decisions?

what's up doc

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