meek-investor

The news yesterday that two former executives of Bristol - Myers Squibb (a pharmaceutical giant) have had prosecution charges dropped against them , spurred this post. These two were top executives 5 years ago and apparently indulged in “channel stuffing” – the practice of dumping stocks into the wholesale or retail trade in order to show higher sales for a quarter or a period. As happens with such practices, if taken too far, one day they catch up with you. In the case of Bristol-Myers, it did and they had to publicly state this and their stock market value fell ; this was what led to the attempt at prosecuting these two executives. Every consumer goods company in the world does this, to some degree or the other. Consumer goods companies do not sell directly to the end consumer, which is you or me. They sell to a complex distribution chain – wholesalers, retailers, etc etc. What they show as sales in their books is what they sell to their first link in this distribution chain . Its q...

Of all the travel “companions” I have had, there has been none more interesting than the cabbie. Just today, I was returning back from the airport, wondering if it would be the first Sunday post I would miss and what do I get ? – an amazing experience on the cab ride back home. There’s something about cabbies that makes them fascinating conversationalists. Maybe because they bump into all sorts of people every day. They see life in all sizes and shapes. Not all of them are great to be with , especially if they are mobile phone addicts, but most are and I’ve had some interesting experiences in different parts of the world that have stayed on with me. The guy in Jo’burg. He was a white who revealed that he was actually a qualified Chartered Accountant. But then there’s a sort of reverse apartheid in South Africa these days. He said jobs were hard to come by for whites and he was better of driving a cab ! The guy in Woking who drove me to Heathrow. He was from Muzzafarpur in the Pakistan ...

The financial markets have gone gaga over the Chinese central bank’s announcement over the weekend that they would allow the Yuan to rise gradually. There has been almost unanimous international pressure on Beijing to let this happen for sometime. But then Beijing does not like others telling it what to do (after all, who does ?). It will do what it wants, when it wants. But Chinese reluctance has little to do with foot dragging in international diplomacy. It is caught in an almighty quandary. If the Chinese central bank does not intervene as it does daily, the Yuan would have surely risen a fair bit by now. And probably suddenly. That would be disastrous for China. China is an export led economy. It’s export operating model is huge scale, low costs and wafer thin margins. Costs are under pressure as wage costs rise and general inflation bites. It can only be partly offset by moving factories to the interior where costs are lower than the coastal provinces. Firstly factories are not so...

This blogger is prone to swings of a sartorial nature in the Sunday posts. Considering that he is a recipient of several "Worst Dressed" awards, this is a tad curious. But then you can hardly answer tags that ask “what are you wearing ?” (a matter of sublime importance to the fairer sex), in a non sartorial way. And if you have strong views on the necktie (aired here ) and on that horrible abomination that Indian ladies wear (aired here ), then perhaps it is inevitable that such a matter finds its way into this blog. This post is instigated by one of the most awful sights in the football World Cup in South Africa. No its not the vuvuzelas , awful though they are. No its not the utter depths that the England football team has descended to. It’s the sight of Diego Maradona in a suit ! I have long been intrigued by what is worn on the sports field. When you play, or coach, or do whatever, on a sports pitch, you ought to look elegant. But its amazing how many manage to dress in ...

Yesterday was a theatre that has now become a regular feature of US political life. A self righteous and pompous Committee of the US House or Senate “summons” a CEO of some company and harangues him. Political windbags fall over themselves to misbehave with a foreign national. Yesterday was the turn of BP’s CEO Tony Hayward. It got so bad, that one of the Representatives in the Committee, Joe Barton, actually apologised to Hayward and then the howls from the lynch mob made him recant the apology. The White House and the US Senate and Congress has forced BP to fund a $20 bn escrow account for “damages” with regard to the oil spill and for it to be administered by an “independent” third party and pay out claims. What they have essentially done is to ask BP to write a blank cheque. BP has no choice really; and it duly has written a blank cheque. Make no mistake. BP is at fault. For taking safety too lightly. For not having a backup plan at all – in the companies I have worked in, you get ...

Readers of this blog may be forgiven for not being familiar with the late Dr Datta Samant. He was a fiery trade unionist in Bombay in the 1980s who changed the industrial relations scene in India. His style was extremely confrontational ; he specialized in making demands of 700% wage increases, going on strikes invariably and was prepared for an agreement only upwards of a 100% wage hike. The textile industry in Mumbai was virtually destroyed by him . A few workers benefited when managements caved in to his demands ; but on the whole most, and especially Bombay, lost. Not as dramatic, but something on those lines is happening in China. There has been a coordinated strike in Honda’s manufacturing plants in southern China demanding wage hikes. Honda increased wages by 24%. Foxconn, the company at the heart of the unfortunate suicides in its plant in Shenzhen , has increased wages by upwards of 30% to reportedly 100% for some. Guangdong Province, the factory to the world, increased its m...

Of all the places in the world, there’s none so unique and none so disturbing as Jerusalem. This Sunday its a sport free post – while sport is indeed a passion of mine, I appreciate that many fair ladies who visit this space are not exactly enamoured by macho displays of tribalism (which, in one sense, is what sport is). So I turn to the another of my interests, travel, to provide food for this morning’s ramblings. Yet another of my passions instigated this post. I am a self confessed ardent admirer of BBC Radio. In that hallowed place, one of the most enjoyable of broadcasts is “From Your Own Correspondent” , where BBC correspondents around the world take a break from chronicling the world’s miseries and instead talk about life as they see it. Wonderful wonderful series that I heartily recommend. Two days ago I listened to Matt Fry talk about Jewishness and Jerusalem in a brilliant piece that is ringing in my ears; hence this post. I have been there and Jerusalem is like no other p...

Following hearings on the state of newspapers this past year, the U.S. Federal Trade Commission staff has now prepared a discussion paper of potential policy recommendations to support the reinvention of journalism. It is a classic example of policy-making folly that starts from the premise that the government can solve any problem—even one created by consumer choices and an inefficient, poorly managed industry. Most of the proposals are based in the idea of using government mechanisms to protect newspapers against competitors and to create markets for newspapers offline and online. The FTC’s staff ignores the fact that most newspapers are profitable (the average operating profit in 2009 was 12%), but that their corporate parents are unprofitable because of high overhead costs and ill-advised debt loads taken on when advertising revenues were peaked at all time highs. It also fails to make adequate distinction between longer term trends affecting newspapers and the effects of the c...

What a May it has been. If you have been a sports fan, that is. I already posted on the day that the earth shook here . May also saw the world team table tennis championships for the Corbillon (women) and Swaythling (men) Cups. This time it was held in Moscow. China dominates the world of table tennis in a way few countries can dominate in any sport. It is the national sport of China. China wins everything in table tennis, whichever team it sends – its top team or its fifth team. Last Sunday, I settled down on a lazy Sunday late afternoon to watch the finals. Of course China had come easily to both the men’s and women’s finals. They hadn’t lost a match. I wasn’t expecting anything to be different in the finals as well, but when the Chinese play table tennis its sheer poetry. So I settled down to watch even thought I was expecting to see a whitewash. How wrong I was. First was the women’s final for the Corbillon Cup. Pitted against mighty China was tiny Singapore. Singapore can’t play T...

The press coverage of the worker suicides at Foxconn is throwing open the debate on China’s challenges as it seeks to continue its economic miracle. If you have not followed the events, last week was the eleventh time this year that one of its workers , at its factory in Shenzhen, committed suicide by jumping from his dormitory. Li Hai was only 19 years old and had worked only 42 days in the factory before he died. Foxconn is a giant electronics assembling company. Taiwanese owned, its largest factory is in Shenzhen in China. The Shenzhen plant assembles phones for Apple, Nokia, etc etc. It is typical of the industrial might of China – the factory employs some 400,000 workers at its site in Shenzhen and they all live in the factory premises in large dormitories.Its a virtual city by itself. This is the model in China. Migrant workers come from the west to the coastal cities to work and factory complexes are in effect self contained townships. Foxconn is not typical – its huge. Most ot...