Business Insight Zone

[A shortcut to the good stuff -- the month's most-viewed posts -- for anyone who visits the archive.]

1. Ground control to Lincoln: What are you thinking?
2. Self-management tip: change verb tenses.
3. How do you fire someone? Or lots of people?
4. Ford’s Sustainability Focus.
5. Sony management deserves no pity.

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Image by Kevin Dooley.

Estragon: I can’t go on like this.
Vladimir: That’s what you think.
–Waiting for Godot

Well, it’s official — ZERO companies carried out an IPO on the major U.S. exchanges this month.

We’ll be tabulating all the IPO data in advance of this quarter’s IPO Scorecard release, but for now let me just echo what I wrote last week and say, “It’s bad.”

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(Photo source, used under a CC-Share Alike license.)

This time last year, crude oil cost $81 per barrel and threatened to crack the $85 threshold. As 2008 began, oil temporarily touched the psychological barrier of $100 per barrel; soon, the $100 mark lost any novelty value, and we became accustomed to oil above $125.

Yesterday, the markets lost 6 – 9 % of their value on the heels of Congress’s failure to pass a bailout bill. This ringing non-encouragement to Wall Street — and thereby the U.S. economy — sent the price of crude tumbling by more than $10 per barrel. And even then, oil still stood at more than $96. (It came back up to $100 today as markets rebounded somewhat.)

My point: after a decline in market speculation that took $30 out of the price of a barrel of oil over the summer, and after the Dow Jones Industrial Average’s worst point-loss ever took out another $10, oil was still higher than we could fathom a year ago, and stratospherically higher than it was a couple of years ago.

Now, maybe oil will decline still further — some experts think so. But look at this chart, which is easy to understand even at low resolution:

The jagged line shows the progression of oil prices since 1 January 2000. The red line is $90, and the heavy black line just above it is $100.

Look at aaaaalll that time, in the early years of this decade, when $90 oil would have rocked the world’s markets and upset everything we thought we knew. Imagine all the earlier decades that aren’t even shown on this chart.

Yet this morning, when I checked oil prices like I always do, I found myself saying, “Down in the $90s? That’s low.”

I’m not claiming it’s a breakthrough insight. But sometimes it’s worth it to pause and reflect upon the recent history we’ve seen, and think about what it might imply in the years to come.

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(Barrels picture by XcBiker; chart derived from Energy Information Administration figures.)

In the wake of yesterday’s venture into political economy, I thought it might be useful to tell you what I read when I’m looking for financial insight. My daily journeys through the business media are many, lengthy, and diverse — but here are a few sources I come back to again and again.

• Google News’s business headlines — The widest trawl I’ve found, this page makes sure that I get a sampling of U.S. and international stories from hour to hour, including the best sources around (NYT, WSJ, Bloomberg, Reuters, etc.).
• The paper version of the Wall Street Journal.
• Two Wall Street Journal blogs — Marketbeat and Deal Journal. They typically point to more in-depth stories (especially, but not exclusively, from the Journal itself), and they provide well-informed, hour-to-hour coverage leavened with considerable wit. (No subscription required, by the way.)
• How the World Works, by Andrew Leonard of Salon. Be aware that his politics lean leftward, but Leonard is an intelligent, prolific examiner of many different angles of economic globalization. (You’ll have to sit through, or skip through, an ad if you’re not a Salon subscriber.)
• Bloomberg’s energy prices page — for constant updates on oil prices throughout the day.

If it need be said, my go-to source for company financial data is Hoover’s. The historical company financial summary, in particular, is incredibly useful for getting a snapshot of a company’s financial position over time.

Where do you get your financial news? And what do you think I should be reading?

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(Photo by Alex Barth.)

Here’s a question to get you thinking about your work:

What’s the hardest, richest, most worldchanging
thing you could finish . . .

. . . before lunch?

~ ~ ~

The moral of this story:

• Pick an important problem to solve.
• Start making progress on it right away.

~

(Photo of Newton’s Principia from Wikipedia; photo of lunch by Moe_.)

A bipartisan majority in Congress voted down the bailout engineered by Secy. Paulson (R – Wall Street) and Congressional leaders (D – San Francisco, Nevada, others), a bad market promptly turned much worse, and by the time the markets closed the major U.S. indices had lost 7 – 9 % of their value on the day.

Chris Cillizza of the Washington Post suggests that the defeat of the bill came because many members of Congress, following the old adage that “all politics is local,” believed they were better served to respond to their constituents’ mistrust of the bailout bill than they were to pass a law that Paulson, Democratic Congressional leaders, the President, and Warren Buffett had all said was vital for shoring up the rickety U.S. financial sector.

Buffett’s opinion is apparently shared by many investors, since they headed for the exits in droves after the bill was defeated.

But what was the motivation of all those constituents who put the fear of the ballot box into those “Nay”-saying members of Congress — who had to go against their co-partisans in either the House leadership or the White House? Maybe the same sentiment that Adam Smith expressed 232 years ago when he published The Wealth of Nations:

The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

Most of the businesspeople I know are honest and upright. My personal opinion is that Paulson and Bernanke are smart, sober, and incorruptible. I hope that no member of Congress would willingly throw the U.S. economy in the tank.

But I know that the U.S. electorate — like the Wall Street class — often acts from the gut. From where I sit, it looks like the fears and doubts of voters, by proxy of Congress, have only stoked the fears and doubts of investors.

If you ever made the ill-conceived wish to live in interesting times, that wish has come true.

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(Image via Wikipedia.)

Last week my friend Marcia Conner posted this to Twitter:

Marcia knows that it pays to think, and especially when events start whirling around you.

I keep coming back to this idea as I read the daily headlines of the latest financial blowups. (The weekend crop: Fortis tumbling, Wachovia bought out, the Fed gets busy, et cetera.) The best firms are making hay right now (see my encomium to JPMorgan and Berkshire Hathaway from Friday). The best managers are finding bargains, serving customers, and generally taking Tom Peters’s advice to “Work the damn phones!”

In short, they’re taking enough time — it might not need to be much — to think through what they’re doing, and then they’re executing the heck out of things.

Not running around on “fire drills.”

Not complaining to their inner circle of guaranteed agree-ers.

Not feeding a cycle of negative news and opinion.

Not flailing like a swimmer caught in the undertow.

This morning, I took Marcia’s advice to heart by getting up extra-early, because I know that’s when I do my best thinking. (If I shock people with my wakeup time, I’ve got it about right.) It was the equivalent of swimming in the tranquil pool that Marcia favors.

The other day I alluded to the old saw, “When the going gets tough, . . .” But now that I’ve had more time to reflect on it, I don’t want my version of that saying to end “. . . the tough get going.” No, I much prefer this:

When the going gets tough, the tough think hard — then act swiftly.

It may not have the cadence of the original, but it fits everything I know about excelling in the world of business.

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(Photo by ltdan.)

Here’s a tiny trick that might help you get more small nagging tasks out of your way — and keep the ball rolling on bigger projects:

When you’re writing an e-mail (or drafting a presentation etc.) that includes a progress report, see if there’s anything you can change from future tense to past tense — by DOING that thing right now, before you send the e-mail.

Instead of writing this:

“I still have to get in touch with Becky about the specs for the project.”

Dash off an e-mail or leave a quick voicemail for Becky — two minutes, tops — and then rewrite your original message like this:

“I just pinged Becky about the specs for the projects; I’ll report back after she and I talk.”

Why this is a good approach:

• Be they ever so tiny, actions speak louder than words.
• Actions also LOOK better than words. You’ll look better to your boss or the people working on the project with you if it’s obvious that you’re taking steady action.
• Setting aside what anybody else thinks, steady action is usually the algorithm by which even the biggest projects get done.

This little trick will shorten your to-do list and keep your mindset geared toward constant action. Try it!

Consider these three current items . . .

1. From Bloomberg News: JPMorgan Buys WaMu Deposits; Regulators Seize Thrift

• Short version: JPMorgan buys loads of excellent assets from the failed Washington Mutual, expanding its U.S. retail footprint (it’s now the biggest retail bank in the country) while limiting its risk.
• Key quote: “We think we got this at a price that protects us, where if we were wrong, it still protects us.” — JPMorgan CEO Jamie Dimon
• Thesis supported: Jamie Dimon is smart.

2. From George Colony, CEO of Forrester Research: CIO best practices for thriving in a recession

• Short version: Smart CIOs and the CEOs they work for are using the current economic downturn to make their companies better and to make life harder for their competitors.
• Key quote: “Use a recession to make tough decisions.”
• Thesis supported: When the going gets tough . . .

3. From the Wall Street Journal: Buffett Drove Hard Bargain With Goldman

• Short version: The current Wall Street crisis drove the mighty Goldman Sachs, hat in hand, to the Oracle of Omaha. Fortunately, he had the odd $5 billion handy to invest.
• Key quote: “Mr. Trott had approached Mr. Buffett before with at least one offer to invest in Goldman. ‘They had sounded me out in the past, as everyone else had,’ Mr. Buffett says. The previous offer, he says, was ‘nothing I would say “yes” to.’ “
• Thesis supported: It’s good to be Warren Buffett.

The moral of this story: Go and do likewise.

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(Photo of gunpowder kegs in the Tower of London by Gaspa.)

After toying with the idea for a while, I’ve taken the advice of several friends (heh) and joined Friendfeed. This means that all of my Facebook, Delicious, and Twitter updates — along with an RSS feed of this blog will feed into my account there, where other Friendfeed members can comment on them.

If you use Friendfeed, you can find me by following this link, then talk to your heart’s content on anything I say. Of course, you can also use the plain ol’ comments below, or talk to me on Twitter or by e-mail. (By the way and for future reference, you can always find my e-mail address and other online contact info via the author page of the blog.)

How will I use Friendfeed? Dunno. But to find out, I’ll be turning to the inestimable Chris Brogan, Knower of All Manner of Social Media Knowledge and all-around good guy, who has written several useful-looking posts about Friendfeed on his blog:

• How to Use Friendfeed as a Collaborative Business Tool
• How Do I Add FriendFeed Comments to My Blog
• Alert Thingy Helps Make FriendFeed Indispensible

If YOU have used Friendfeed and can offer advice on how I could best use it to (a) spread the ideas I talk about here, (b) make myself more available to answer questions about the business world, (c) find like-minded or otherwise stimulating folks with whom to talk, (d) promote worldwide harmony and other Good Things, (e) et cetera — if you can help me with these things, please don’t hesitate to raise a shout. I’ll be grateful for the guidance.