On the Balance Sheet as Earthquake Kit

Here in California, many of us maintain earthquake kits to provide us with food, water, medical supplies and other necessities (like coffee!) to ensure our survival after a major quake. A strong balance sheet can be a company's survival kit after a credit earthquake. In good times (or even bad times that do not include a complete credit freeze), good companies can find capital at reasonable terms. In horrific times such as the present, even great companies struggle to secure capital. 2010 bonds for Wrigley (now part of Mars, Inc.), which is not struggling for capital, yield nearly 10% today!

Read more...

Categories:

0 comments - Posted by Dean Zatkowsky at 9:30 AM

What it will Take to Prosper

I generally ask marketing workshop attendees to share their best and worst customer service experiences. The stories, while always entertaining, also skew heavily toward negative experiences.  Everyone can remember the bad times, but people struggle to find examples of exceptional customer service.

Increasingly, I'm pleased to experience simple competence and graciousness, and I encountered three good examples yesterday.  As long as I have this forum available, I see no reason not to publicly praise the Getty Museum, The Stinking Rose restaurant, and the Los Angeles Police Department.

Read more...

Categories: Corporate Culture | Customer Service | Leadership

0 comments - Posted by Dean Zatkowsky at 6:25 PM

Troubled Assets

It will be a while yet before we know for sure whether the Troubled Assets Recovery Program (TARP) has been a benefit, a hindrance, or a scam. Within days of the act's passage, it became clear that the program's intentions - purchasing "toxic" assets from incompetent banks - would be clouded by the fact that no one could clearly identify the toxic assets or place a value on them.

That didn't stop the Treasury Department from spending $350 billion, but it got me wondering whether we've done a good enough job understanding the range of troubled assets threatening our economy. Bad loans held by reckless investors are trouble enough, but the quality of these so-called assets must be questioned also. Huge numbers of houses unsold or facing foreclosure are in suburbia, locations dependant on cheap oil and increasingly recognized as an untenable community structure. Adding insult to injury: many of the homes themselves, thrown together rapidly during an easy-money building boom, are not built to last. We call them troubled assets, but they are not assets at all. Will we throw good money after bad to prop up ghost towns?

Read more...

Categories: Entrepreneurialism | Finance | Economics | Investing

1 comments - Posted by Paul Orfalea at 10:03 AM

Resolve to Respect Liquidity

For most long-term investors, a temporary loss of liquidity isn't too much of a problem. By temporary, we do not necessarily mean "short-term." Even a long-term illiquid investment presents little trouble for someone with liquidity elsewhere. The market historically shows tremendous resilience and those who can ride out the storm for a few years need not turn temporary losses into permanent ones by selling during a liquidity panic.

Read more...

Categories: Finance | Economics | Investing

0 comments - Posted by Dean Zatkowsky at 11:01 AM

Ethical Elasticity

For experimental purposes, three men are locked in a basement with only half a loaf of bread and a pint of water. One man is given a copy of Adam Smith's The Wealth of Nations. Another man gets a copy of Karl Marx's Das Kapital. The third man receives a Glock 9mm semi-automatic pistol and fifteen rounds of Remington Golden Saber brass-jacketed hollow point ammunition. After two weeks, researchers enter the basement and learn everything there is to know about economics.

Read more...

Categories: Finance | Economics | Ethics

0 comments - Posted by Dean Zatkowsky at 12:42 PM