tag:blogger.com,1999:blog-72491403934097683712012-02-18T10:52:07.834-06:00A blog about economics, business strategy, communications and governance by an Indian from New York, whose career has spanned international organizations, equity research and investment banking, and corporate consulting. I've served as a public company CFO and as a board member for a public and private company.Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.comBlogger3081100tag:blogger.com,1999:blog-7249140393409768371.post-29374951469278257392012-02-14T17:06:00.001-06:002012-02-14T17:49:40.218-06:00

Long term forecasts are always wrong, almost by definition.  So, when I read that Arvind Subramanian wrote in Foreign Affairs, "China's dominance is a sure thing," I can comfortably feel, "That must be wrong."  It's a clever assertion  because I'm not sure what it really means. Enough semantics, though. Michael Beckley's article, "China's Century? Why America's Edge Will Endure," provides an

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-39783769207049725572012-02-07T18:00:00.000-06:002012-02-07T18:00:56.528-06:00

Professor Greg Mankiw's blog referred to an article by his Harvard economics colleague, Professor Andrei Shleifer, a Russian born, American trained economist.  Shleifer writes about things he learned about economies transitioning from Communism, with the benefit of twenty years of history, which is still a relatively short time period.  A few of his point struck me as interesting and different

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-62868015780682298162012-02-07T17:35:00.004-06:002012-02-07T17:35:47.455-06:00

I just received a copy of the November 30, 2011 Annual Report for the Vanguard Wellington Fund (VWELX), a balanced fund with a long, consistent track record  Ed Bousa, manages the equity portfolio which was about 66% of net assets at fiscal year end.  The management team wrote this about  Microsoft (MSFT). "We increased our position in Microsoft, as we see an extremely attractive

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-45310827224630056212012-02-07T08:34:00.000-06:002012-02-07T08:34:14.846-06:00

We've always believed that resolution of the euro crisis had to include a Greek exit from the currency union. Now, many the consensus-driven financial community are busy hedging towards a similar position.  For example, from the Wall Street Journal, we read: "Citigroup on Monday raised its estimate of the likelihood of a Greek exit from the euro area over the next 18 months to 50% from a prior

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-62664887358259231452012-01-31T13:11:00.001-06:002012-01-31T13:11:27.583-06:00

There's always a suggestion that banks' reluctance to lend has been a factor in lackluster GDP growth.  Domestically, leading middle market lenders like Wells Fargo have said that their better tier clients are flush with cash and don't need access to credit.  The issues for bank customers are risk aversion and a lack of confidence.  Wells Fargo said that middle market commercial lenders would

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-78631556672257433442012-01-30T11:08:00.000-06:002012-01-30T15:47:26.206-06:00

Ward McCarthy's group at Jeffries, commenting on the latest FOMC communications, noted the following: "Also, by setting a long-term target for unemployment of 5% to 6%, the FOMC is also acknowledging that labor market conditions are not likely to improve enough to allow inflation to take hold for years. YoY average hourly earnings have held to a range of roughly 2% to 4% for the past thirty

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-68281625949706698992012-01-29T22:39:00.000-06:002012-01-29T22:39:34.482-06:00

The Minnesota Chapter of the Association for Corporate Growth co-hosted its annual forecasting dinner with the CFA Society of Minnesota, and it was a full boat with about 450 people in the audience.  The investment recommendations too were things I have heard before from Merrill Lynch's CIO list to many others.  The Fed's recent pronouncements may have taken the edge off investors skepticism. 

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-20468478266496658752012-01-29T16:48:00.002-06:002012-01-29T16:48:53.310-06:00

Schools have been enlisted into the vanguard of society's fight against obesity, by revamping their cafeteria  lunches.  Cafeteria managers are being told to eliminate "fast food options" and to substitute healthy alternatives, whatever that means.  The first problem has been that the customers don't like the changes.  Newspapers  report of students rebelling against their tofu wraps with Swiss

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-37149810520441488052012-01-26T10:38:00.000-06:002012-01-26T14:20:51.400-06:00

source: yahoo.com/movies.  Batman Forever Warren Buffet's terse characterizations of private equity investors in his shareholder letters were on point: he portrayed bad PE actors who destroyed companies by drowning in them in debt while sucking blood out in management fees and special dividends.  Today's Star Tribune trots out the case of Buffet's Inc., which was beset by a predatory private

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-27666240802507085582012-01-23T15:37:00.000-06:002012-01-24T22:01:20.527-06:00

IMF Managing Director Christine Lagarde, speaking in Berlin, said, "It (stepping up to a bigger bailout fund) is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand." These profound insights are said by the Wall Street Journal to constitute a "dire" warning.  We've been talking "dire" since last summer.  I must say that

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-29199412543480317432012-01-21T23:26:00.001-06:002012-01-21T23:27:18.118-06:00

We wrote in July 2011 about how Microsoft shouldn't give up its foray into search with Bing!  Looking at the most recent quarter, the WSJ notes a few items from the corporate earnings release: Revenue for the company's servers and tools products, which form the backbone of enterprise networks and private clouds, jumped 11%, as the unit's income improved 17%. At the business division, which

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-70072084858309363562012-01-21T20:00:00.003-06:002012-02-10T22:00:38.327-06:00

Back in July, we felt that Ecolab was being overly conservative about potential 2012 synergies from the integration of Nalco.  We wrote, "Nalco management gave itself a target of $75 million in annual cost savings from streamlining its operations. Nalco recently embarked on a hub-and-spoke operation for its water treatment offices in the Midwest in order to squeeze smaller, local and regional

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-76154354048029900022012-01-18T21:18:00.001-06:002012-01-19T10:46:41.917-06:00

I was reviewing the New York Times mutual fund performance tables, which are based on Morningstar performance numbers, and then I went to Smart Money and used their screen to find the "best" Large Cap Core equity funds, based on one-year performance.  I hardly recognized any of the funds. There are some well demonstrated propositions about mutual funds and about retail investor behavior: Most

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-8186738600245749462012-01-17T09:37:00.000-06:002012-01-17T09:37:00.079-06:00

Bret Stephens in the Wall Street Journal has a witty, barbed piece about the recent cruise ship sinking as a metaphor for the sinking of a politically mismanaged Europe.  Readers of this blog know that I've been a skeptic on the notion of European political leaders Merkel and Sarkozy being able to rescue the flawed euro concept.  However, my approach has been to look at it through the regular

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-65661385985925310682012-01-12T16:06:00.004-06:002012-01-12T16:09:11.041-06:00

Microsoft's stock price performance over the past 3 and five years has about equalled that of the SP500, while it trails that index significantly over ten years.  Any way you look at it, the share price performance has been dismal, except as a trade here and there.  My most recent posts took the position of not "piling on" as market negativism suggested some foolish strategies for the company

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-63360706170172937712012-01-10T18:07:00.003-06:002012-01-12T10:54:49.795-06:00

The Public Company Accounting Oversight Board's Chairman James Doty made a speech last December entitled, "Auditing in the Decade Ahead: Challenge and Change."  As someone whose career has involved using and issuing public company financial statements, I find the current reform discussion a bit arcane. We have lawyers in Congress writing abstruse regulations which are translated into plain

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-73122802306464991312012-01-09T13:04:00.000-06:002012-01-10T14:46:50.905-06:00

From: Wall Street Journal Online Edition.  Credit to Zuma Press.  What do these two EU leaders have in common, and why are they smiling?  Answers are : "Very little," and "Mandatory Photo Op."  After a year of meetings in hotels, beach resorts, chateaux and medieval castles, nothing of substance has changed.  Ostensibly, the German and French leaders are trying to (1) restore

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-59702304687308959822012-01-05T15:29:00.000-06:002012-01-05T15:29:53.111-06:00

Merrill Lynch's Chief Investment Strategists are trying very hard to sound bullish on European investment prospects for 2012, in their most recent report.  How do they come up with this thesis, which might kindly be called counter intuitive? ML opines that the initial auction of the LTRO, or the $500 billion bazooka, being oversubscribed by a factor of two is a positive sign for investors.  Say

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-11888583138024463002012-01-04T10:41:00.000-06:002012-01-06T15:31:46.724-06:00

I heard from a friend in New York that the most reasonable scenario he heard for higher oil prices in 2012 came from Goldman Sachs.  Unfortunately, she didn't have the report at hand, and I can't get a copy either.  The argument, she said, was that OPEC, and particularly Saudi Arabia, had lost its idle production capacity. This has long been a rumor about Saudi Arabia, normally the swing producer

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-43874466619274580402012-01-03T10:48:00.000-06:002012-01-03T10:48:21.003-06:00

My good friend, Phillip Gary Smith--serial entrepreneur, successful private investor, and Zen snowshoer-- suggested that I check out George Soros' pronouncemnts on oil.  I've seen some huffy pronouncements from Mr. Soros about dictatorships and oil, but I couldn't find any detailed numbers to work through.  I appreciate the suggestion, Phillip.  Looking back on 2011, here are some crude oil

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-7510653859067984122011-12-31T12:19:00.001-06:002012-01-02T15:02:43.431-06:00

  Everyone in the economic forecasting business is admitting that they had the 2011 worldwide GDP growth forecasts all wrong, and that goes from the Federal Reserve to established investment bank and private forecasters, and to all the talking heads on television, who crib their numbers from others anyway. China is slowing significantly from its 8% rate of GDP growth, Europe as a whole may be

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-37994130820868543172011-12-29T16:06:00.001-06:002011-12-29T21:05:10.310-06:00

 A blogger at Wall Street Rant called attention to a full release of the Federal Reserve's Emergency Lending Program 2007-2009.  The charts he shows were from a Bloomberg analysis of a half trillion dollars in currency liquidity swaps which did not identify the borrowers who used this facility. Soon after this, the Wall Street Journal carried both a video and and article by Dr. Gerald O'Driscoll,

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com1tag:blogger.com,1999:blog-7249140393409768371.post-37902309110516370462011-12-29T01:03:00.001-06:002011-12-29T01:03:52.615-06:00

Back in February, in a post about the dubious benefits of shareholder control, we noted Sears as an example: "The recent case of Sears comes to mind. Much was made, rightly so, of the fact that the management simply couldn't run or merchandise stores very well. Shareholders voted with their feet and sold the stock. The story then became the value of the underlying prime real estate that Sears

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-43212168207941071532011-12-21T13:45:00.001-06:002011-12-21T13:45:31.944-06:00

U.S. markets are in an uproar about the failure of the ATT-DT deal for T-Mobile.  The management of Deutsche Telekom has, in our opinion, bungled its US investment right from the start.  An acquisition of Sprint by one of the U.S. wireless behemoths has already been deemed anti-competitive, as has now the acquisition of T-Mobile.  If maintaining some semblance of competition is important then

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-21173259646496988842011-12-19T15:14:00.002-06:002011-12-19T18:13:41.168-06:00

MoneyWatch's Bruce Jaffe today bestowed a 2011 "Lump of Coal" award on  Bruce Berkowitz of the Fairholme Fund.   It's a funny piece, and it's tongue-in-cheek, but this is serious business.  Both retail investors and 401(k) programs can wind up putting bad investment options into their portfolios because of the inordinate market influence of  ratings from Morningstar and Lipper.  Any investment

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-8795124256232432032011-12-18T22:27:00.002-06:002011-12-18T22:27:48.346-06:00

Ward McCarthy's Fixed Income Group at Jeffries (JEF) issued their bond market update last week.  To follow up our previous post on China's ability to forestall a hard landing, JEF had some good statistics from the U.S. Treasury on foreign holdings of Treasury securities.  As of the October 2011 reporting period, China's holdings of U.S. Treasury securities were $1.134 trillion.  The next biggest

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com1tag:blogger.com,1999:blog-7249140393409768371.post-39216812458424965292011-12-16T15:00:00.000-06:002011-12-16T15:27:16.784-06:00

Back in March, we posted about a declining phase in Chinese growth and the need for a new economic model.  Hedge funds which have made bets on a "hard landing" for China are likely to be disappointed.  The reasons are rather simple.  In Western financial markets, shocks are transmitted quickly through financial speculation, markets turn volatile and overshoot before a new equilibrium is found.

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-11275307648209058702011-12-11T17:28:00.001-06:002011-12-15T09:45:30.942-06:00

Morningstar and Lipper are the market leaders in mutual fund ratings, just as Standard and Poors, Moody's and Fitch are for credit ratings.  Their benchmarks for mutual fund ratings are widely used by sponsors and consultants for corporate defined contribution plans.  Morningstar uses traditional MPT statistics in their evaluations, but the reports are still like beauty contests, formerly based

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-58056353231631913162011-12-09T11:17:00.001-06:002011-12-15T09:44:55.863-06:00

Guaranteed To Fail is one of the best books on the global financial meltdown and its aftermath. If you have any interest in these issues, I offer it as recommended reading. It reflects some pioneering applied research by Professors Viral Acharya, Matthew Richardson, Van Niewerburgh, and Lawrence White. It is concise and well written.  Many of the points they make have been corroborated by other

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-50586513784096266672011-12-02T11:42:00.001-06:002011-12-15T10:48:59.133-06:00

Let's start with a simple picture about the natural gas picture in the United States.  According to the Energy Information Administration, 2009 proved reserves of natural gas were 284 Tcf (trillion cubic feet).  Proved reserves are those volumes of natural gas that "geologic and engineering data demonstrate with reasonable certainty to be recoverable under existing economic and operating

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-26885604120840079042011-11-30T15:23:00.001-06:002011-11-30T16:00:14.370-06:00

Responding to widespread consumer sentiment, the FCC has opposed Deutsche Telekom's proposed sale of T-Mobile and its subsequent merger with ATT.  The FCC draft study released today forcefully rebuts all the benefits of the merger to US wireless services, consumer pricing, and job creation.  I went to T-Mobile's IR site and looked over their recently reported fiscal third quarter results.  It's

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-44030810010116857182011-11-28T12:41:00.001-06:002011-12-15T10:50:46.532-06:00

                                                                    Source: Radio Free Europe/Radio Liberty An Afghani mother brings her child to a village distribution center for drinking water. Alexander Star's thoughtful New York Times Book Review article on recent books about Afghanistan quotes an observer who characterizes the situation as "a perpetually escalating stalemate." 

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-84910834721421790842011-11-26T15:20:00.001-06:002011-12-15T10:51:58.536-06:00

Fyodor Lukyanov has an interesting article in the Spring/Summer 2010 issue of the Journal of International Affairs, published by Columbia's School of International and Public Affairs.  We had a recent post about the Nord Stream gas pipeline and its importance for the growing Russo-European relationships.  The author notes that Russia "has not acquired a new identity on the world stage since the

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-66962366220497698082011-11-25T12:17:00.001-06:002011-12-15T10:52:59.088-06:00

Perhaps the most curious remark made by new CEO Meg Whitman on the recent HP conference call was her characterization of HP as a company that grows at GDP-like rates (it was a bit inaudible on the webcast).  While this kind of remark makes total sense from a longer-term perspective, it isn't what an institutional investor wants to hear. Trees don't grow to the sky, and to be sure "long term

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-6052461937870747442011-11-23T09:25:00.001-06:002011-11-23T14:45:58.674-06:00

Last Sunday in church, the priest's homily had a long, rambling discourse about "brokenness," which for him was a broken health care system, broken roads, broken schools, a broken Catholic church and so on in the endless drum beat of the modern, secular political religion.  Ironically, he and the rest of the congregation had arrived easily by car over great roads and were sitting comfortably in a

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com1tag:blogger.com,1999:blog-7249140393409768371.post-15399318545358238582011-11-22T21:25:00.001-06:002011-12-15T10:53:55.158-06:00

HP's 4th Quarter and fiscal year-end conference call marked new CEO Meg Whitman's debut after eight weeks on the job; it gave no comfort for investors, and analysts from Goldman, Morgan Stanley and Citigroup seemed almost comatose, not challenging the disjointed and contradictory presentation.  The stock sunk immediately after the call, on healthy volume. One fundamental comment concerns the

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-37647180455233188372011-11-17T17:10:00.001-06:002011-12-15T10:54:57.559-06:00

I noted this comment from my former colleague, Dr. Ward McCarthy, Chief Monetary Economist for Jeffries: "...the logjam in the banking system is evidence that QE2 has not filtered into the real sector of the economy to any significant degree. So long as this persists, it will be an indication that the monetary policy transmission mechanism has not worked efficiently." Yet we continually, and

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-80410451365003103122011-11-12T09:03:00.001-06:002011-11-12T09:50:34.302-06:00

Pimco has always been a bond house, but lately they've made a concerted effort to develop mutual fund products for equity investors.  The equity mutual fund field is like the favela in Sao Paulo: dangerous and overcrowded.  Neel Kashkari, a Goldman and U.S. Treasury alumnus, is leading that charge into equity.  In a recent interview with Morningstar, Neel  didn't take a sunny view of equity

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-66200448499668473982011-11-08T20:28:00.001-06:002011-11-08T20:28:34.039-06:00

The Western press front pages were replete with Italian Prime Minister Berlusconi looking heavenward as he contemplated his announced resignation. Or was he thinking about AC Milan's recent run of form in Serie A?  There was nothing new in today's tedious play-acting in Greece and Italy.  The news of fundamental economic importance was the opening of phase I of the Nord Stream underwater gas

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-48138854919379356602011-11-03T11:23:00.001-05:002011-12-15T10:55:43.207-06:00

Last night's post talked about the precarious nature of the ECB's balance sheet, based on a paper by a Columbia Business School professor.  I just saw this discussion in today's online Wall Street Journal: "The reality is that efforts to leverage the European Financial Stability Facility are in disarray – and will remain so until the current political uncertainty over Greece, and maybe now Italy

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-72027514173061831342011-11-02T15:45:00.001-05:002011-11-05T10:39:07.275-05:00

For all the hectoring that Greek Prime Minister Papendreou may soon face from the German Chancellor and French Prime Minister, his gambit of calling for a referendum seems politically and economically rational.  Under a scenario of further fiscal discipline mandated by the EU, economic growth prospects are dismal which means growing political unrest and instability in Greece.  The Greek political

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-5966251983583514072011-10-28T11:13:00.001-05:002011-10-30T22:34:14.701-05:00

There have been some interesting meetings about using algae as a renewable fuel source, which motivated a quick review of what's been happening with alternative fuels.  As corn-based ethanol has rightly been fading as a meaningful solution for our hydrocarbon dependency, cellulosic ethanol once seemed extremely promising.  One of the emerging leaders was Iogen Corporation in Canada (http://

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-41516263655004235062011-10-25T16:00:00.000-05:002011-10-26T21:46:15.774-05:00

Kent Osband's book, Pandora's Risk from Columbia University Press is the best book on financial markets I've read this year.  It's not an easy read, but stimulating and worthwhile.  He made a related presentation in 2005 to the Irish Society of Actuaries titled, "How to Mismanage Portfolio Risk: A Guide for the Fiducially Challenged."  I can't find a link to the slides on the Web, but it's got

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-88666619660379353512011-10-24T17:14:00.000-05:002011-10-24T20:05:18.478-05:00

I just finished John Kiser's fine book, "The Monks of Tibhirine," which provided the basis for the screenplay of Xavier Beauvois' wonderful movie, "Of Gods and Men."  Kiser's deft treatment of Christian-Muslim relations is depicted against the violent background of French colonialism in Algeria. The Western press has romanticized the so called "Arab Spring," as a prelude to a golden age of

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-74695617885823670962011-10-20T11:00:00.001-05:002011-10-25T10:39:40.273-05:00

What could be better than daily deal coupon issuer Groupon giving a rebate on itself?  Back in June, we posted on the absurd $15-20 billion valuation range  being suggested  for Groupon. Many investment bankers are probably poker wizards with the requisite "poker face," which allows them to make the most ridiculous statements without blushing or bursting out laughing. In today's Wall Street

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-44366111152013764372011-10-19T11:28:00.001-05:002011-10-19T11:28:37.184-05:00

Arthur Levitt, former SEC Commissioner, has weighed in favor of "auditor term limits."  This will do nothing but impose costs on companies, and, as usual, those costs will fall disproportionately on smaller companies which don't have armies of people in finance, tax, treasury and accounting.  As a stockholder, already facing meager returns, I wouldn't get excited by this proposal. It will also

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-86100112436680045572011-10-17T09:27:00.000-05:002011-10-17T09:27:41.603-05:00

I have nothing but admiration for Mayor Mike Bloomberg as a successful entrepreneur, builder of a global business and as Mayor of one of the world's most ungovernable cities; but in his third term as Mayor, he has stayed on too long and appears to have lost any enthusiasm for the shin whacking necessary to exert leadership in Gotham. Inviting the Occupy Wall Streeters to be our guest and see New

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-22135692658344851862011-10-13T09:58:00.000-05:002011-11-14T11:01:54.525-06:00

A previous post tried to put a damper on the Jobs hagiography in its most quasi-religious version.  I had to laugh when I saw a blog posting that the Jesuit journal La Civita Cattolica had compared the late Apple CEO to St. Ignatius Loyola and Pope Piux XI.  As Johnny Carson often said, "I kid you not!" True engineering cultures are often inimical to running product businesses with fickle,

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-41917322875330163042011-10-09T22:08:00.000-05:002011-10-12T15:49:49.918-05:00

With the recent passing of Apple CEO Steve Jobs, the financial press has gone into paroxysms of religious fervor in writing about this refreshing and iconoclastic business leader.  The blogosphere is flooded with Tweets of ecstatic reverie, calling him a "prophet."  Here is the ridiculous, pandering headine from the online Wall Street Journal: "Steve Jobs turned Eve's apple, the symbol of

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-7735637170239453012011-10-03T16:27:00.001-05:002011-10-11T14:08:11.925-05:00

AON Risk Solutions released its 2011 "Global Risk Management Survey," which covered 960 respondents worldwide, about equally divided between public and private companies.  The Top 10 Risk Issues for the managers were: Economic slow down Regulatory/legislative changes Increasing competition Damage to corporate reputation/brand Business interruption Failure to innovate and loss of customers

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-33162041238107435402011-10-03T15:31:00.002-05:002011-12-15T10:56:49.551-06:00

The capital markets have Eurozone fatigue.  Day after day, hour after hour, we await the same news: an answer is forthcoming from the next meeting of EU finance ministers.  There's a Monty Python sketch in which the characters play around with an innocent question, "How big is it?"  Well pundits at the IMF conference have suggested a rescue/bailout/fiscal equalization fund of 1.4-4.0 TRILLON

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-69264298807668287812011-09-29T10:40:00.001-05:002011-10-02T20:55:42.882-05:00

HP's embattled board hired Goldman Sachs to assist it with anti-takeover defenses in wake of its unparalleled streak of value destroying activities. In a very limited sense, the board does have a duty to be prepared for the appearance of an activist investor, and so the move could be regarded as a good defense.  They have certainly hired the best to help them, but that's as far as it goes. We

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-84351681759004370762011-09-23T12:26:00.000-05:002011-09-23T12:26:33.235-05:00

Analysts who claim that a "sum of parts" valuation of HP at $37 per share justifies a "buy" are whistling in the wind, putting forward numbers without a reasonable basis.  Projections for sales, earnings and cash flow are all contingent on a capable management team, a motivated organization in tune with the strategic plan, and on a board that is itself of one mind and supportive of management and

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-39950892058236157812011-09-22T16:27:00.000-05:002011-12-11T12:14:47.540-06:00

According to the HP website, about 409 million (20% of O/S) shares are held by institutional value investors, split about evenly between value and deep value.  HP has lured in Dodge and Cox, which appears to be its single biggest investor with about 5.1% of the O/S. Dodge and Cox has a distinguished, long-term record as a core value investor through its mutual fund family, and HP is spread out

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-64630040541296255192011-09-17T14:36:00.000-05:002011-09-19T12:11:03.385-05:00

             Photo credit: Philip Montgomery for the Wall Street Journal, Online Edition AIG has a new "risk czar," Peter Hancock, an economist by training I'm happy to see, who heads up the Chartis unit charged with doing "enterprise risk management."  I have yet so to meet a public company director who can describe in concrete terms what this means for their company, and especially so for

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-67630276104207835932011-09-14T13:30:00.000-05:002011-09-14T13:30:20.151-05:00

Best Buy shares have gone on a yellow tag sale, as their price has fallen 32% year-to-date.  There is some good news for shareholders, namely in the current maturity cycle for their stores and without any significant plans to expand retail footage, the stores are throwing off cash.  Sales growth, however, is another story. I've followed this stock from its early days when it was forecast by Wall

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-69734426029273903352011-09-12T15:26:00.002-05:002011-09-12T15:26:48.785-05:00

I found an interesting ECB press release form 1999, in which  Tomasso Padoa-Schioppa, a Member of the Executive Board of the ECB talks about the founding and construction of the European currency.  The discussion is all from a central banker's perspective, and the "primary objective assigned by the Treaty.." is "price stability."  This is to be achieved by a coordinated lowering of interest rates

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-77010630934745674252011-09-08T20:47:00.000-05:002011-09-08T20:47:16.751-05:00

Chairman Bernanke's suggestion that the Federal Reserve System has tools available to address extraordinarily high unemployment rates goes against basic economics, whose mechanisms are described in the web sites of the Fed's own Regional Banks, such as the Dallas Fed to pick one of many. It isn't a matter of dissent for Philadelphia Fed President Charles Plosser to say, "I am really doubtful

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-78942147208402647552011-09-08T10:53:00.000-05:002011-09-08T10:54:00.713-05:00

Germany's high court ruling saves face for Chancellor Merkl, but it isn't a resounding endorsement either.  It's unclear to an English speaking reader what the basis was for rejecting the constitutionality of the German government committing taxpayer funds to sovereign bailouts.  However, it does require that the Chancellor seek approval from the parliamentary budget committee before taking on

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-1436829861877157902011-09-07T17:11:00.000-05:002011-09-07T17:11:52.134-05:00

Watching Bank of America's management take continuing headers on banana peels, I thought it a good time to pull back and think again about governance issues and the banks.  I still can't get away from the fact that the banking sector needs to de-concentrate and get more competitive. Ironically, as we are rightly bemoaning the anti-competitive aspects of AT&T's merger with T-Mobile, we seem to

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-63747661289419081052011-09-04T13:56:00.000-05:002011-09-04T13:56:59.317-05:00

A "click tax" on high frequency trading would be a very good idea, if for no other reason than being a controlled experiment.  The Wall Street Journal has a convoluted story about the idea, where it gives space to the conflicted, self-interested apologists for HFT, who are laughable in their special pleading. The market for large capitalization stocks is very efficient.  If you follow the

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-60253869661217207962011-09-02T12:19:00.000-05:002011-09-09T16:09:40.749-05:00

The emergence of a U.S. solar energy industry with leading edge technology seemed like a no brainer, especially given the Obama Administration's policy of favoring wind, solar and biofuels with taxpayer largess.  Recent developments reported by the New York Times are not encouraging, "In addition to Solyndra, Evergreen Solar of Massachusetts and SpectraWatt of New York also filed for bankruptcy

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-20031193393551236952011-09-01T10:09:00.002-05:002011-09-01T10:34:09.359-05:00

Today's WSJ reports on a Goldman strategist's report to hedge fund clients that takes a "head for the hills" view of European banks. The report, according to the WSJ, opines that "as much as $1 trillion may be needed to shore up European banks." This report is not a product of GS's Research department, which is interesting. It also is explicitly tied to trading desk revenues as it offers hedge

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-4399123905014342272011-08-29T15:13:00.001-05:002011-08-29T15:53:31.773-05:00

Steve Jobs' tenure produced a almost eight-fold increase in Apple's stock price, something which will likely not be duplicated in the next five years, no matter who is at the helm of Apple. In the nineties, Apple was a generator of mediocre products that were neither innovative nor priced to deliver value to their customers. The list includes corporate gaffes like Newton, Pippin, Lisa ($9,995 in

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-63362526814942023832011-08-26T11:13:00.003-05:002011-08-26T11:39:04.523-05:00

The Godfather of American investing, Warren Buffett, came calling on Bank of America's CEO Brian Moynihan, who apparently told Godfather that his company didn't need the capital. Perhaps after some espresso and biscotti, Moynihan reconsidered and accepted the offer that couldn't be refused. The offer, a whited out rewriting of the Goldman Sachs proposition, was for 50,000 shares of cumulative 6%

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-67966344732838149212011-08-23T11:10:00.002-05:002011-08-23T11:35:21.614-05:00

Scenes of exhilaration on the streets of Tripoli abound in the world press today. Fouad Ajami, a respected and knowledgeable commentator on the Middle East, is too hard on the Obama Administration's handling of support to the Libyan rebels. He dismissively calls our strategy, "leadership from the back." I look at it a bit differently. It appears that the regime of a despotic leader who

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-22934170651249477512011-08-17T10:22:00.003-05:002011-08-17T10:40:52.528-05:00

Sure enough, like crabgrass, it's back: calls for a tax holiday on foreign profit repatriation. The argument is being cloaked in desperate tones of a "stimulus." It will provide no relief from the economic slowdown: why would it? The Wall Street Journal wrote, "...a 2009 study from the nonpartisan National Bureau of Economic Research found that for every dollar companies brought back to the U.S.,

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-58393992584536391392011-08-16T09:37:00.004-05:002011-08-16T10:06:41.865-05:00

Google's acquisition of Motorola Mobility quickens the path towards what looks like the classic duopoly in the consumer technology space, namely Google and Microsoft. Much of the discussion in the financial press seems to center on how handset manufacturers feel and if Google wants to be in the handset business. The Android experience varies substantially on different phones, which is a natural

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-21011178627810384832011-08-14T22:31:00.003-05:002011-12-29T22:57:24.751-06:00

I finally read through the transcript of Bank of America's conference call, "hosted" by Bruce Berkowitz of the Fairholme Fund. There was really no visibility offered into the very few good questions. There was a discussion about selling "core versus non-core assets." The discussion then turned to Merrill Lynch, at the behest of a questioner. I was truly flabbergasted by the response of CEO

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-15843160605343135872011-08-12T16:14:00.003-05:002011-08-12T16:34:09.357-05:00

The New York Times this morning quoted 30 year conforming mortgage rates at 4.22%. The ten year Treasury yield fell after today's trading to 2.24%. The 30 year mortgage spread over the ten year Note is then 198 basis points. A 2009 paper by Glenn Hubbard and Chris Mayer of the Columbia Business School shows that the normalized spread is 160 basis points. Although the spread has come down from

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-43515564683035266072011-08-10T10:15:00.003-05:002011-08-10T10:42:53.393-05:00

The Federal Reserve Bank once and for all showed that it's abdicated its role as a central bank versus the being the monetary arm of the executive branch. As much as I abhor Fed Speak, a certain amount of opacity in language is desirable. For example, there's the customary practice of committing to low rates "for an extended period." Wall Street takes that language and processes it, and the

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-64586147706149639172011-08-09T14:30:00.005-05:002011-08-09T15:20:23.572-05:00

With all the whining about our high statutory corporate tax rates, the effective rates paid by many large corporations are often so far away from the statutory rates as to be laughable. The poster child for this phenomenon is General Electric which, according to the New York Times, posted $26 billion in U.S. income over the past five years, with a net tax benefit of $4.1 billion. 975 GE employees

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-68355511556867031482011-08-09T11:19:00.007-05:002011-08-09T13:58:20.389-05:00

The current week's stock market meltdown took me back to October 13th, 2008 when then Treasury Secretary Henry Paulson summoned the CEO's of ten leading banks to an emergency meeting in Washington, D.C. The worst weekly decline in stock market history, to that time, precipitated the meeting. Pietro Veronesi and Luigi Zingales of the U of Chicago Booth School of Business wrote a paper, "

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-63657220507450602622011-08-08T10:51:00.002-05:002011-08-08T11:10:38.677-05:00

It seemed to us in July, that Treasuries would continue to be a safe haven for investors after any downgrade, and today's news confirms this. The Wall Street Journal writes that the two year Note's yield of 0.232% is a record low and below the top end of the Fed's policy band for the rate. The financial press seems to forget that safety and liquidity are very closely intertwined. Perhaps a Swiss

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-37046073302452454002011-08-05T12:30:00.005-05:002011-08-05T13:46:42.204-05:00

I don't know who said this, but I'll paraphrase: "An electorate gets the leadership it deserves." Well, the recent demonstration of legislative and Presidential brinkmanship about the debt ceiling certainly doesn't reflect well on we the people who elected them. The good news is that it could be worse. We could be the European electorate, who get whipsawed by their own national leaders and by

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-1650172253657655082011-08-03T10:57:00.006-05:002011-08-05T13:48:25.494-05:00

Photo credit: J. Emilio Flores for the New York Times.When the Panel of Wise People meets to eventually decide on $1.2 trillion of "spending reductions," they are to fall on defense and social expenditures. Let's not cut defense spending on our troops, as we continue to ask fewer and fewer troops to do so much more. When they come home, we don't keep up our end of the bargain with them either.

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-79208082295131353502011-08-01T10:28:00.004-05:002011-08-01T14:52:52.585-05:00

A comment often made as to why Google still has the dominant share of U.S. search is the notion that "it's automatic," i.e. the default choice, the top of mind. Paradoxically, even though Internet Explorer still dominates Web browsing share, it does absolutely nothing to bring Bing to the top of mind. Google Chrome may have a somewhat too spartan look, but it seems work fast, and web pages

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-62340238180127749672011-07-31T16:22:00.010-05:002011-08-05T10:46:36.300-05:00

We've been reflecting on Microsoft since 2009, a company which often seems like a statistical value, but which often disappoints. Divesting its Bing search engine effort would be the worst thing Microsoft could do, both strategically and from the point of view of transforming investor perception of the company. Hedge fund managers and industry analysts are rightly frustrated with the deployment

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-53324625948856176812011-07-29T14:07:00.005-05:002011-07-29T14:41:40.938-05:00

U.S. Coach Bob Bradley was probably unfairly dismissed as US Soccer's Men's coach, precipitated by the team's dismal showing against Mexico, and with three years to go until the next World Cup. Jurgen Klinsmann, a talismanic striker who proved himself in the top leagues in Germany, Italy and England has taken the job, after turning it down once before.The reason for his first refusal was

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-46565749183833557152011-07-29T10:08:00.002-05:002011-07-29T10:46:14.277-05:00

Japan has 19 of its nuclear reactors off-line on March 10th, according to the Wall Street Journal. Today that number has doubled, which I believe is higher than any observers initially estimated. Electricity to Tokyo is down 20%. If anyone owns an international mutual fund with Japanese holdings, most of them have behaved as if the holdings were marked down to zero. Brokerage companies in Tokyo

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-39072558880604579912011-07-28T19:36:00.003-05:002011-07-28T20:40:57.776-05:00

A New York Times blog has taken the blatantly political position that debt limit or spending reduction "fixes" could be what tips the economy back into a recession. Think of the economy as a house in which the two elderly residents have been slowly asphyxiated by a gas leak. As they lie moribund on their living room floor, a tornado comes and destroys their house crushing the poor couple. They

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-82494356125244878642011-07-26T13:29:00.004-05:002011-07-26T13:55:05.271-05:00

I hate to bring this up, but the minute-by-minute, mind numbing countdown to the debt ceiling expiration date reminds me of the Y2K commentary, printed in respected sources like the Wall Street Journal, telling of nuclear power plants melting down and planes falling from the sky as their internal calendars couldn't deal with the new millennium. As I recall, absolutely none of that folderol came

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-65298719802573631472011-07-25T19:30:00.006-05:002011-07-26T07:58:04.592-05:00

Uruguay beat Peru 3-0 in the Copa America final at the Monumental in Buenos Aires. This was to be the South American Championship when Argentina's soccer team, playing as the host nation, would beat arch-rival Brazil in a final, powered by two-time World Player of the Year, Lionel Messi.Alas, this perfectly crafted media script was torpedoed by realities that have some parallels in the business

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-83780962532936559052011-07-22T14:42:00.003-05:002011-07-22T15:20:26.734-05:00

Ecolab's management seems as if it may have timed the financial markets well in order to make a very strategic acquisition of Nalco Holding Co. ECL has always carried a premium P/E and EV/EBITDA compared to its peers because, as Credit Suisse points out, it has high returns on invested capital and relative earnings stability. With its equity valuation high and corporate cost of debt low, ECL can

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-27765257886675930532011-07-21T10:56:00.003-05:002011-07-21T11:16:26.569-05:00

The June Index of Leading Economic Indicators was up 0.4% compared to the consensus estimate of up 0.2%. What drove the increase was not reassuring, namely the steep yield curve and the M2 spike at the end of June. However, the magnitude of the boost from M2 is troubling to me. An increase of $76.9 billion for the week ended June 27th, and an increase of $88.6 billion for the week ended July 4th.

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-72838598341030706212011-07-18T19:42:00.006-05:002011-07-19T14:07:45.662-05:00

Homare Sawa wears a number 10 on her jersey (she is second from the left in this BBC picture). Her influence on the Japanese team reminds me of Michel Platini, when he skippered the great French sides in international competition. He controlled the ball and held it in tight traffic, then looked to find the right team mate with a perfect pass, and he inspired his team, even when the "ball was not

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com2tag:blogger.com,1999:blog-7249140393409768371.post-36081557954611027022011-07-10T22:19:00.008-05:002011-07-12T17:35:24.696-05:00

China has taken dead aim on territorial claims in the South China Sea, which run into often conflicting claims by the Phillipines, Malaysia, Vietnam, and Brunei. The Third United Nations Convention on the Law of the Sea established workable concepts for territorial seas, exclusive economic zones, and a framework for waters under international jurisdiction, including special arrangements for

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-11737291520862245692011-07-07T12:03:00.004-05:002011-07-07T14:34:44.739-05:00

McKinsey's Quarterly Survey of Corporate Governance shows interesting comparisons with the same poll taken in 2008, before the collapse of Lehman Brothers. The results should be disappointing for shareholders concerned about board effectiveness.44% of the respondents say that their boards simply review and approve the strategies proposed by management. 58% of the board members responding said

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-3475643822184259282011-07-06T17:46:00.003-05:002011-09-02T12:19:19.743-05:00

There's no doubt that natural gas is a much better fuel for electricity generation than coal, particularly if we are serious about safety, land and water use issues and about greenhouse gas emissions. Lately, though, the whole discussion has become a rush to unleash drilling in the U.S. for unconventional gas. In the course of the policy discussion, for which our legislators are severely over

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-38484576120215954852011-07-05T10:33:00.003-05:002011-07-05T11:12:06.847-05:00

As much as US companies and policy makers are concerned about Chinese export controls on rare earth elements, a WSJ story about Japanese identification of deep-sea muds containing rare earth elements in the Pacific Ocean is not something to get excited about. Early in my professional career, I headed up a team at the United Nations which helped fund, coordinate and aggregate international

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-48860131137815409232011-07-05T09:39:00.002-05:002011-07-05T10:07:16.553-05:00

Today's WSJ continues the quest to reconcile the ridiculous valuations of recent IPO's like LinkedIn with the current valuations of tech behemoths like Apple, HP, Microsoft, Google and IBM. It's the wrong optic, turned on the wrong set of questions.These two segments of the market have nothing to do with each other, and broadly speaking, the players who populate these markets are operating under

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-46305121736010131322011-06-28T15:33:00.005-05:002011-06-28T15:54:43.786-05:00

Two of my favorite value-oriented money managers as an analyst and investor are Tweedy Browne and Harris Associates, which runs the Oakmark Funds. Reading the managers' semi-annual report for the Oakmark Equity Fund for the period ended March 31, 2011, we see, "The quarter's largest detractors were Cisco Systems, Microsoft...We clearly have covered ourselves with something other than glory with

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-79584565288925700112011-06-24T11:57:00.004-05:002011-06-24T13:23:14.142-05:00

The Columbia University Club of Minnesota sponsored a talk on "Change in the Ruling Systems of the Middle East." Richard W. Bulliett is Professor of Middle Eastern History at Columbia University. Given that his discipline was history, Professor Bulliett's context for his outlook began in the 11th century, but I'll definitely telescope a lot of that material. He had some interesting remarks about

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-88215652845555999632011-06-23T09:59:00.004-05:002011-06-23T10:33:47.498-05:00

I sat next to some pretty good Fed watchers at Merrill Lynch Capital Markets, and so I couldn't resist taking up my magnifying glass today, reading Louise Story's report in the New York Times. Fed Chairman Bernanke says "a disorderly default in one of those countries would no doubt roil financial markets globally." This seems like either big news or a faux pas. Most of the press talk from the IMF

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-45189949140860847972011-06-20T12:18:00.005-05:002011-06-20T18:50:25.730-05:00

U.S. stocks are up this morning, after a confusing and contradictory hash of press releases from European governments, the IMF and private research groups. Germany has been calling for private bondholders to take their haircuts, for periphery governments to implement meaningful austerity, and finally for Germany to lead a bailout financed by the sovereign Euro-North and the IMF. Instead, nothing

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-79332680442691302342011-06-16T16:03:00.004-05:002011-06-16T16:24:57.859-05:00

Jesper Medsen, CFA is a portfolio manager at Matthews Asia Funds, and he made some interesting points about Asian companies that pay dividends. Jesper noted that 20 Chinese companies whose shares were issued on foreign bourses have been the subject of recent financial scandals and frauds; only one of these companies paid a dividend. Having to pay a quarterly dividend, he feels, generally gives an

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-83084286747744094552011-06-16T10:24:00.004-05:002011-06-16T16:00:29.811-05:00

One of my 2010 posts, "Black and White," has been generating quite a few views recently. In it, among other things, I discuss share buybacks, which are in the media again as the market swoons and companies have excess cash.As CFO of Possis Medical, once our downsizing, business model realignment and strategic focus had taken hold, the company was generating substantial free cash flows, in excess

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-1231005145552115182011-06-08T21:39:00.003-05:002011-06-08T22:13:18.776-05:00

I don't know who can claim coinage of the phrase "Arab Spring," but the phrase needs to be hit with weed killer because it's superficial, inappropriate and misleading. The echo of course is to "Prague Spring." But, let's take a quick trip back and remember what happened in 1968.Alexander Dubcek became Communist Party leader in Czechoslovakia on January 1, 1968. What became the original Prague

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-11422154985947525152011-06-08T14:15:00.005-05:002011-06-08T14:40:15.536-05:00

Brett Arends of MarketWatch says he has waded through the 280 page prospectus for the Groupon IPO. Normally a fairly circumspect type when he wrote for the Wall Street Journal, he describes the transaction as "one of the most ridiculous things he's seen."One fact he cites caught my eye relative to my earlier post on Ask Jeeves. Founded in November 2008, Mr. Arends says that Groupon has run up a

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0tag:blogger.com,1999:blog-7249140393409768371.post-90668609205566325512011-06-05T13:55:00.004-05:002011-06-05T14:37:28.043-05:00

The financial press shows up at investor conferences and picks up quotes from investors who are busy unloading their investments in social media companies and international search engines: "I don't think this is a bubble at all!" Boy, let's take that unbiased opinion to the bank.The other refrain is that this group of companies have revenue and an "open business model." The first comment is

Eapen Chackohttp://www.blogger.com/profile/16989320987808898240noreply@blogger.com0