tag:blogger.com,1999:blog-72491403934097683712024-03-19T05:43:10.997-05:00Out of The BoxA blog about economics, finance, business and corporate governance. My background is in economics, with degrees from Columbia and Johns Hopkins. A career in international development, equity capital markets and as a corporate finance chief and board member lead me to think about events in a different way--hence the blog's name.Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.comBlogger807125tag:blogger.com,1999:blog-7249140393409768371.post-12891464809590425842015-10-24T22:52:00.000-05:002015-10-24T22:52:43.896-05:00Thinking About HP EnterpriseAs we come closer to the official splitting of HP into two companies, I've been listening again to the HP presentations, looking at some of the other big players and reviewing my SWOT analysis of HP Enterprise.
In the three year turnaround of HP, CEO Meg Whitman characterizes FY 15 as being a year of "accelerating progress," in which the combined company invested in security, networking, Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-67160047213050215952015-10-06T10:19:00.000-05:002015-10-06T10:19:37.951-05:00MSFT Lowers Expectations and Declares Victory
Microsoft's PR flaks must be encouraging the CEO to get in the news more, and he has been placed in two recent, high visibility stories. In one, there is a rambling, philosophical interview about long-time insider, CEO Satya Nadella being, in fact, an "outsider" at Microsoft. There seems to be little evidence so far that (a) this is true, or (b) that it would be making a Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-35472952786250836772015-09-23T13:00:00.001-05:002015-09-23T13:00:58.707-05:00More Process Doesn't Mean Better GovernanceI've been a presenter at governance classes at the University of St. Thomas Law School and at various professional association fora. Every once in a while, there is a somewhat smug comment from a presenter about the 'superior' European corporate governance model, which consists of a management board and a supervisory board.
Well, here come the recent revelations about Volkswagen. I Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-78714543954157836982015-09-04T10:46:00.000-05:002015-09-04T11:22:19.148-05:00A Shrinking U.S. Equity Market?$173 trillion in investable assets in all forms of retirement funds. Thousands of mutual funds in the U.S., more worldwide, looking for equity investments, as advisers continue to trumpet the need to own high equity allocations in order to participate in global economic growth, particularly outside of the developed markets.
Of course, developed economies, particularly the U.S., will Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-46401301003539563542015-08-13T19:46:00.000-05:002015-08-13T19:46:34.188-05:00Berkshire Hathaway's Issues Aren't Its NumbersBerkshire Hathaway's net income for its fiscal 2nd quarter 2015 declined 37% over the prior year period, which generated some market consternation. However, in a holding company of this size and breadth, driven by insurance businesses, volatility is a fact of life, as the Chairman himself has often said in his letters.
The big question about this company can be framed in terms of Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-6659767603373431842015-08-11T10:58:00.001-05:002015-08-11T10:58:34.843-05:00Google's Alphabet: Seizing the DayOur mid-July post on Google focused directly on corporate structure, focus and returns to shareholders, especially dividends to return excess cash. It looks like Google's founders have learned their lessons quickly with a dramatic announcement of a reportedly Berkshire Hathaway-like holding company structure and a division among their core businesses and their longer-lived, investment Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-10735154546183917072015-08-04T13:39:00.000-05:002015-08-04T13:39:39.467-05:00Andreessen Horowitz and The End of WindowsI read a very interesting post by Ben Evans, a partner at Andreessen Horowitz, titled "Microsoft, capitulation, and the end of Windows Everywhere."
In many ways, what he says about Microsoft is right in alignment with our writing over the past few years. In some other ways, namely about the future of computing, I am not sure that extrapolating the present gives the picture about the Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-5941660072171646042015-07-28T16:05:00.000-05:002015-07-28T16:06:36.917-05:00Cisco Hightails It Out of Some BusinessesCisco made two executive announcements, namely a new CTO and a CDO ("Chief Digital Officer"--whatever that means). The announcement about flattening the organization by eliminating layers of xVPs is long overdue, and it is a good, but unquantifiable, omen.
The more significant announcement is one about throwing in the towel on a September 2013 acquisition of flash storage provider Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-84830920815535210402015-07-24T22:34:00.001-05:002015-07-26T00:39:22.941-05:00Tech's Four Horsemen: A Midyear CheckupSome of our leading, bellwether technology companies--Cisco, HP, IBM and Microsoft--have reported earnings recently, and although I have parsed them and listened to the basically uninspiring conference calls, the Four Horsemen all stand at the same crossroads, between reinvigoration or a secular irrelevance.
Notice that I avoid the word "reinvention," as I haven't seen organizations of the sizesEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-62164301603372630012015-07-23T14:30:00.001-05:002015-07-23T14:30:52.390-05:00Memo to CNOC: We Told You So About Canadian Oil SandsIn 2010, no less, when Canadian heavy oil deposits were beginning to have financial and energy pundits breathe heavily we posted about the economic and environmental problems associated with these deposits, based on our own work on these resources decades back. First of all, not all these deposits are created equal.
Extractive technologies may have improved, but the political and environmental Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-57968423163189199882015-07-18T23:56:00.002-05:002015-07-18T23:56:57.122-05:00Google's New CFO Says Return Money to Shareholders, Maybe?On June 7th, in the context of the sometimes great hubris of the corporate engineering class, we wrote that Google should consider paying a dividend.
In her first conference call, Google's new CFO thought out loud about buying back shares or paying a dividend.
Peter Lynch, the portfolio manager of Fidelity Magellan during its heyday, warned about public company CEOs succumbing to the siren Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-40256089433293056442015-07-15T16:05:00.000-05:002015-07-15T16:05:58.353-05:00Microsoft Says "Näkemiin" to Value from NokiaJust before the closing of the Nokia acquisition, we had our doubts about Microsoft's ability to realize value from it. Some comments,
"Microsoft too, under Steve Ballmer, has said "it's all about services," but the current Nokia platform is poorly positioned to garner anything more than the current 2-3% of all handset sales."
"When the Nokia deal goes through I will be curious to read the Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-9155929213450847152015-07-07T16:47:00.000-05:002015-07-09T05:57:54.201-05:00Greece Moves to Become a Banana RepublicHere is a picture of what a real European leader looks like (Associated Press):
Greek politicians have overplayed their hand. "Give me more money, or I'll shoot myself!" Let's say, in the eternal Euro-Optimist view, French mathematics are applied to Greek sovereign debt, i.e. stretched out to 40 years, with rates and face values TBD. It is guaranteed that there will never be any Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-72135068753262568122015-07-03T20:29:00.000-05:002015-07-07T16:11:05.524-05:00France Reappears To Support Greece? From the very beginning of our posts on the Euro, dating back to 2011 we have talked about the fundamentally divergent interests of France and Germany. For a while, French President Sarkozy made a concerted effort to have arms outstretched for his partner, Chancellor Merkel. Since the next regime, things have become somewhat aloof, if not frosty.
We noted in a recent post, that French Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-12147052861637813602015-06-30T09:31:00.000-05:002015-06-30T09:31:57.659-05:00The EU and Greece Share a Cup of HemlockSince 2012, we have written about the inevitability of the events the European union are facing today, a Greek sovereign debt default, an exit from the euro currency zone, political chaos at home, and a fundamental failure of the grand European experiment.
To reach this conclusion, no complex economic models are needed. The design of the system and the notion of divergence, along with theEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-55772849999959334312015-06-18T14:23:00.000-05:002015-06-18T14:23:01.922-05:00Satya Nadella Shuffles Executives: Microsoft Still Too PonderousOne of our best read and most forwarded posts was about the accession of Satya Nadella to the Microsoft CEO chair, which really excited us, in the midst of all kinds of Wall Street consternation.
Perceptions about Microsoft among its customers, developers and Wall Street really picked up quickly, and the contrast with the imperial Ballmer Reign was also a refreshing change.
Microsoft continues Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com3tag:blogger.com,1999:blog-7249140393409768371.post-78145533075907320852015-06-16T10:06:00.001-05:002015-06-16T10:06:42.822-05:00Greek Default Without Leaving the Euro? The Wrong Question.The Wall Street Journal online header asks this question, which John Cochrane of Chicago Booth and many others have answered, "Most definitely, yes."
However, it is the wrong question to ask. For Greece, its political leaders and the electorate have to decide about the rising costs and declining benefits of staying in the eurozone, including the never spoken about effective loss of nationalEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-5887791827000516152015-06-16T09:39:00.000-05:002015-06-16T09:39:59.435-05:00Uber Plans to Master Delivery? It Hasn't Yet Mastered Its Core Business. The $50 billion implied valuation of Uber must have everyone scrambling to come up with a new twist on the story while putting their brains on the sideline.
According to the Wall Street Journal, " Investors are counting on Uber to upend the delivery business much as it has for taxis.."
The first problem is that Amazon, a public investor darling which has actually proven that itEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-72038539673761521022015-06-15T16:44:00.000-05:002015-06-16T08:59:04.469-05:00Starr CEO Greenberg Wins Against the Lawless and Discriminating FedsThe Federal Claims Court today ruled in favor of Starr International Company, the largest shareholder of AIG, against the Federal government's treatment of AIG during the "Lehman Weekend" and its unprecedented, claimed illegal extraction of equity in exchange for an $85 billion rescue loan. No damages were awarded, and though that outcome seems inconceivable, Judge Wheeler's logic had some Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-42293447643478252692015-06-12T22:16:00.000-05:002015-06-12T22:16:05.581-05:00Twitter's Blue Bird Has the BluesI confess that I have a Twitter account, at the suggestion of a tech industry CEO/founder friend who said it is essential to life on earth, but I also confess to not using it at all. I acknowledge that without Twitter, mainstream and cable news shows would almost certainly have less to talk about and therefore less broadcast time during which they can generate ad revenue. They owe Twitter aEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-75010397411950339742015-06-11T10:00:00.000-05:002015-06-11T10:00:15.350-05:00Mickey Drexler's Outdated PlaybookHaving been a retailing industry analyst on the equity side, I came across Mickey Drexler many times in my travels. I know that I have visited many hundreds of stores all round the United States, looking at my companies, their competitors and emerging concepts. I had a passion for what these businesses were doing, and the best place to learn is on the ground. As Sam Zemerray's Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-51950912223527035922015-06-07T20:28:00.000-05:002015-07-18T23:34:15.250-05:00Engineers Are Often Too Smart for Our Own GoodGoogle's venture into what are now called "autonomous cars" seems yet another example of engineers being, in their own minds, smarter than everyone else. What problem are these really smart, Googly folks addressing?
There are so many ways to make driving safer for everyone on the road, using technologies about which so much is already known. A meaningful example would be the issue ofEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-34700325513697415282015-06-06T12:19:00.001-05:002015-06-06T12:21:34.941-05:00T-Mobile and the Dish Network: Please Let It Happen!The corporate merger dance can be a protracted one, with partners eyeing each other and making inviting gestures, before suddenly leaving the dance with another partner; or, it can be a case of eyeing each other and suddenly the suitor aggressively carries off the apple of his eye.
T-Mobile badly needs a merger partner, and more than that it BADLY needs spectrum, more towers and better service Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-19934355956040709012015-05-27T11:37:00.000-05:002015-05-27T11:37:24.152-05:00HP's 2Q FY 2015 Conference Call: Restructuring FatigueI listened to the entire conference call for HP's 2Q 2015, and it was all I could do to stay awake, and I have a huge appetite for these calls after twenty or more years doing them as the CFO/emcee or as the analyst/shareholder consumer.
Just for the context, here are the big numbers. Revenue of $25.5 billion, down 7% year-over-year and down 2% in constant currency. Nothing new hereEapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-58893706880551598532015-05-25T12:01:00.000-05:002015-05-25T12:01:09.949-05:00A Greek Exit May Be the Lesser of Two EvilsOne of my favorite financial commentators, Professor John Cochrane of Chicago Booth pooh-poohs talk about a Greek exit from the euro, saying essentially that we are used to sovereign defaults and this issue is separate and distinct from a decision by Greece to exit the euro. He writes,
"Greece no more needs to leave the euro zone than it needs to leave the meter zone and recalibrate all Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0