This idea doesn’t mean that there’s no value created by financiers, arbitrageurs, banks, and such. There is—to a point. However, it seems that more often than not professionals plying their trade in these endeavors seem to cross the line from addressing social needs and creating value to becoming parasites on society by transferring wealth through unbecoming and outright questionable practices.
So, perhaps we can strive to be more like George Bailey and less like Mr. Potter in our daily lives.
Adding a talented full-time CFO to manage a small or medium-sized company’s high-finances such as acquisitions, banking/investor relationships, strategic financial analysis/planning, and financial policy (including oversight of a controller/bookkeeper) is not cheap.
Now, let’s be clear: the important duties of a bookkeeper, accounting manager, and controller are not necessarily interchangeable with the duties of a CFO, as Janine Popick, CEO and co-founder of VerticalResponse can attest. The latter is where big picture strategic insights and analysis, competitive advantages, and proper policies are best formulated. It is where a finance guru seems to "think different," to reference Steve Jobs' statement.
Likewise, a quality CFO or Investment Banking Kiosk should be able to understand business models and value drivers, distill and communicate these concepts, and devise and oversee implementation of improvements (including financial/accounting policy and scalable systems). One alternative objective measurement to assess the latent talent of a potential CFO (or CEO for that matter) is to determine whether that individual is a good investor (this prowess is a direct relation to one’s ability to refine business models, assess competitors, and implement winning strategies/tactics), which is one of the rarest talents in the marketplace (less than 1% of professional investors can perform better than a common index over a 10 year period).
Nevertheless, how do some savvy Silicon Valley emerging growth companies leverage this talent affordably? Answer: Investment Banking Kiosks and Remote Contract CFOs.
Accordingly, here are the Top 4 Questions for owners/operators, boards of directors, and CEOs to ask to decide whether their organization can create value by using a Remote Contract CFO or Investment Banking Kiosk (Coventry League provides both, incidentally):
All this said, Coventry League would gladly provide counsel regarding the use of contract CFOs, investment banks, investment banking kiosks, and other business related initiatives. Of course, we can provide referrals or guidance to other firms and talent–since we may not necessarily be the best fit for each and every potential client.
So, please use the contact form or our direct email addresses (email@example.com) to request more information, receive a quote, and retain our services.
And, as always, Compete Like a Champion.
Apparently, one would need more than 200x the amount of U.S. dollars and 6x the amount of gold to buy a ticket for Super Bowl XLVIII versus a ticket for Super Bowl I (1967).
Sources: Coventry League; Bloomberg; Zero Hedge
Large scale solar energy projects heated-up in 2013.
According to EcoWatch’s recent blog and Mercom Capital Group’s white paper titled 2013 Fourth Quarter and Annual Solar Funding and M&A Executive Summary, dollar amounts of projects financed increased from $8.7 billion in 2012 to $13.6 billion in 2013, representing a 56% increase year-over-year.
Below is a chart provided by Mercom Capital Group:
And, if you are wanting a little something to show your solar energy enthusiasm, below is a creative product offered by the T-shirt Guy (and, no, we are not getting paid in any way by sharing this link):
Source: Cleveland Scene Magazine
Baseball is a game of skills and probabilities. Baseball is also “six minutes of action crammed into two-and-one-half hours,” as Boston Globe’s Ray Fitzgerald describes it.
So, if you like geeky analysis, economics, or baseball, then you might like the article titled Baseball’s Fiscal Cliff by Pete Kotz of Cleveland Scene Magazine.*
* The story was reprinted with permission of Voice Media Group in this week's issue.
Star Trek (Next Gen): Jean-Luc Picard
A growing number of folks are becoming aware that the performance of most mutual fund managers over an extended period does not exceed that of benchmark indexes such as the S&P 500. More specifically, 99.6% of all mutual fund managers failed to beat (i.e., only 71 funds out of 17,785 matched or beat) the performance of the S&P, net of fees, over a ten year period according to data compiled from the Mutual Fund Screener of The Wall Street Journal. Please reference the entire article titled “Wall Street Is a Rentier Rip-Off: Index Funds Beat 99.6% of Managers Over Ten Years” at the blog Of Two Minds.
Talented investors are often not managing formal, traditional funds but rather managing one’s own accounts or a small number of accounts (e.g., friends and family). These individuals are more likely to fit the mold of idiosyncratic entrepreneurs or founders of technology start-ups.
Nevertheless, one of several takeaways is “don’t judge a book by its cover.” In other words, just because a money manager is nicely dressed, displays stereotypical good credentials, and has friends in high places (partly enables said manager to either procure capital or secure the fund management role), shouldn’t imply an above average talent for investing. One can present a similar case against most (not all, of course) hedge fund and venture capital fund managers, as highlighted in two Zero Hedge articles titled “Most Hedge Funds Underperforming The S&P 500 For Fifth Year In A Row - Full YTD Performance” and “Venture C(r)apital: Myth And Reality.”
According to Thomson Reuters and the DealBook, edited by Andrew Ross Sorkin of the New York Times, the pace of worldwide M&A during the first quarter of 2013 was relatively slow. The summary, highlighted below, reflects announced transactions and ranks them by value. Goldman Sachs is on top of Thomson’s League Tables in both number and value of announced deals in the quarter.
For those who want a free, interactive graphic regarding investment banking activity, then reference the Investment Banking Scorecard compiled by Dealogic and the Wall Street Journal.
And, lastly, for a comical perspective on League Tables, spend a few minutes to read The iBanker’s blog titled “Lies, Damned Lies and League Tables.” The art of presentation, however, is nothing new to bankers and the most discerning clients.
Yuan Dynasty Banknotes (circa 14th century)
Let's end the year with some humor from The Daily Capitalist and its recent post titled “Top Ten Reasons Why Fiat Currency Is Superior To Gold (Or Silver) Money.”
The Top 10 Reasons are below; the commentary can be found at The Daily Capitalist.
Number 10: There Is Not Enough Gold (Or Silver) In The World To Serve As Money
Number 9: Gold And Silver Are Old-Fashioned, Cumbersome Money
Number 8: Gold Restrains Growth
Number 7: The Gold Standard Caused The Great Depression
Number 6: Rules Can Be Broken
Number 5: Gold-Backed Money Favours The US Versus The Rest Of The World
Number 4: Gold Favours Gold-Mining Countries Over Others
Number 3: Gold Favours The Rich
Number 2: PhDs Know What’s Good For Us
Number 1: If Given A Choice, We Would All Prefer Fiat Over Gold-Backed Money
Samuel L. Clemens stamp, 1940
November 30th is Mark Twain's birthday, which makes me think of some of his witty quotes such as this one:
“It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.”
Keeping that quote in mind, the webcomic xkcd has a fine infographic cheat sheet of the economic vortex appropriately titled “Money Chart.” It's available in a wall poster, which could make for a unique holiday gift for any finance geeks among you. Also, Chris Turner, a sustainability blogger and author wrote a short article referencing a few interesting sections of the diagram such as cost externalities of electricity (upper right corner; coal).