5 Tips to Manage Your Finances Before a Recession

Strategy Driven

Here are five tactics to make your finances recession-proof: 1. See the products which have cheaper alternatives, and see what you can replace. Savings is an integral part of personal finance management. Hedge Your Income Sources.

When an Activist Hedge Fund Thinks a Company’s Salaries Are Too High, Who’s Right?

Harvard Business Review

The hedge fund founded and run by billionaire Paul Singer just announced that it now owns 6.2% Attempts to branch out into new product areas (security and enterprise switching) haven’t gone well. Most activist hedge funds are simply pushing a less extreme version of the same basic idea. The activist approach is clearly good business for hedge funds; activist funds have dramatically outperformed their hedge-fund peers in recent years.

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The Future of Cities Depends on Innovative Financing

Harvard Business Review

Investors from hedge funds to insurance companies are operating in an environment of low yields, near-zero interest rates, and a glut of savings. In traditional financing models, it’s just not possible for investors to see their way to a financial return based on some abstract added value of the integrated whole. This is where a new financial product, social impact bonds (also known as pay-for-success contracts), can play a role.

How Banks Can Compete Against an Army of Fintech Startups

Harvard Business

Recent analysis by Bain and SAP found that only 7% of bank credit products could be handled digitally from end to end. By comparison, online lenders face capital costs that can be higher than 10%, sourced from potentially fickle institutional investors like hedge funds. Moreover, in instances where borrowers want to shop and compare myriad options in one place, they turn to online credit brokers like Fundera or Intuit’s QuickBooks Financing for a one-stop shopping experience.

The Fastest-Growing Cause for Shareholders Is Sustainability

Harvard Business

Ask someone to name the demands that activist hedge funds make of companies and they’ll likely list corporate governance issues like board changes and executive compensation, or perhaps some form of restructuring. In contrast, fair marketing and advertising of products are very important for companies in these sectors. Financial markets Finance & Accounting Social responsibility Sustainability Digital ArticlePaul Garbett for HBR.

5 Leadership Lessons I Learned from A Billionaire Investor: Ray Dalio

Strategy Driven

The name of hedge fund billionaire Raymond Dalio triggers emotions of adoration, admiration, and even dislike. Born in 1949, the American investor, philanthropist, and hedge fund manager is the founder, Co-Chief Investment Officer, and Co-Chairman of Bridgewater Associates, one of the world’s leading hedge funds with a more than $130 billion in assets under management. billion, Dalio started investing at the age of 12 and his life has revolved around finance.

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The Marketing Strategy: What You REALLY Need To Know

Strategy Driven

This is something where a lot of small businesses fall into murky waters because they either don’t invest the time or finances into their imagery. Ask yourself, why you are selling these products? What are these products communicating to people about your business? By aligning product with business image , this is how you start to get a clearer idea of your target market, which then links into your marketing plan.

How To Make Companies Think Long-Term

Harvard Business Review

Many companies face quarterly or even more immediate pressure from their shareholders (increasingly made up of hedge funds, program traders, and day traders) to deliver short-term performance. For corporations to make the required long-term investments in production, marketing, etc., A huge hedge fund that buys 2% of the shares of the company but holds them for two days is worth less to the corporation than a long-term investor that holds a fraction of 1% of the shares for a decade.

Why Consensus Kills Team Building | N2Growth Blog

N2Growth Blog

The gist of the argument seems to be that for teams to be productive, employees have to feel “empowered&# by having an equal voice. And as odd as it may sound, one of the greatest impediments to building productive teams is practicing management by consensus. In a highly productive organization the power and influence of your voice is earned through trust and performance, and not entitlement.

Great Leaders Make Decisions | N2Growth Blog

N2Growth Blog

It was Andy Grove the former Chairman and CEO of Intel and Time Magazine’s 1997 Man of the Year who said “You have to take action; you can’t hesitate or hedge your bets.

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What Markets Do and Don’t Get About Innovation

Harvard Business Review

In 2007, Clayton Christensen co-founded Rose Park Advisors, a hedge fund devoted to investing in disruptive companies. Disruption theory reveals four innovation types that could shape an investment thesis: Low-end disruptive – a dramatically cheaper way of producing worse products for customers who are over-served by existing options. New market disruptive – a cheaper, more accessible, and worse-performing product that turns non-consumers into customers.

Why the U.S. Needs More Worker-Owned Companies

Harvard Business

Agricultural cooperatives Land O’Lakes and Ocean Spray have become major players in dairy production and fruit farming, earning hundreds of millions in annual revenue. Third, as a result of strong performances by worker- and employee-owned companies, it is becoming easier for workers to overcome arguably the biggest hurdle to worker buyouts: financing. Klaus Meinhardt/Getty Images.

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Why Bankers Need to Be Put Into Little Boxes

Harvard Business Review

There's a beguiling little moment in the financial-crisis documentary Inside Job where hedge fund billionaire George Soros describes the principles of oil tanker design. If they're compartmentalized, the risk of crisis is much lower than if all sorts of financial products and institutions are allowed to mix together in a giant sloshfest. Compensation Ethics Finance

3 Things Driving Entrepreneurial Growth in Africa

Harvard Business

Here are three things that Western investors should want from African entrepreneurs: a focus on the top of the pyramid, control over factors of production, and innovation in distribution rather than in products. Factors of Production. Where supply of basic inputs is thin, controlling land and other factors of production is a pathway to success. Today his Nice Rice Mill processes 70% of the region’s rice production.

What If Socially Useful Jobs Were Taxed Less Than Other Jobs?

Harvard Business

Our data shows, for instance, that 18% of multimillionaires work in finance, while only 1% of them are professors and scientists. Moreover, career choices are highly sensitive to changes in compensation; as salaries in finance professions rose sharply from 1980 to 2005, the share of workers in investment banks, hedge funds, and similar financial establishments more than doubled. This fall, college seniors across the U.S.

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What the Great Fama-Shiller Debate Has Taught Us

Harvard Business Review

I think he got the Nobel nod (instead of somebody like Andy Lo , or Mordechai Kurz , or Roman Frydman ) because he was (1) very early to the game, (2) a macroeconomist (the Nobel people generally seem more comfortable with macro than with finance), and (3) most suited to being shoehorned into a narrative of steady scientific progress. Shiller’s paper was hugely controversial at the time, and if you bring it up with old-guard finance professors they still tend to grumble about it.

Idle Funds are the Devil's Playground

Harvard Business Review

But in general, prior to the development of a sophisticated banking system, capital was invested in illiquid assets, meaning tangible, productive ones. And by the late 1990's investment banks and hedge funds were in the business of betting for and against currencies. They would have had their capital tied up in productive assets. Finance Global business Venture capital

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Is Economics Ready for a New Model?

Harvard Business Review

and Europe, though (and Japan's long struggles were seen as the product of peculiarly Japanese economic traits). Doyne Farmer , a Los-Alamos-National-Laboratory-scientist-turned-hedge-fund-manager-turned-Santa-Fe-Institute-professor, has bent over backwards not to be ignorant and arrogant about economics. Disruptive innovation Economy FinanceEconomic theories based on rational behavior have been called into doubt by recent events.

The Dark Side of Efficient Markets

Harvard Business Review

They are simply trading based on their beliefs about the future value to hypothetical future users of the product in question. They are the product of human imagination, which is ruled alternatively by fear and euphoria. It has spurred the growth of an entire industry that exists only to exploit volatility: the hedge fund business. Economy Finance It is generally accepted that efficiency represents the optimal, aspirational state for any market.

High Frequency Trading: Threat or Menace?

Harvard Business Review

There’s a wonderful scene (one of many) in Michael Lewis’s new book, Flash Boys: A Wall Street Revolt , in which John Schwall, then the head of product management at RBC Capital Markets in New York, decides one day in 2011 to figure out how stock trading had evolved into a high-speed, unfair race he thought it had become. but it’s especially stark when the product being sold is financial returns and every penny taken out by intermediaries makes that product worth a little bit less.

Should Tim Cook Care About a 10% Stock Drop?

Harvard Business Review

Shiller and his allies posit that this excess volatility is the product of investor error, herd behavior, feedback loops and the like. (My Fama and his allies say nobody knows if the volatility is “excess,” and describe it as the product of something they call “time-varying expected returns.” (My Apple’s string of product successes over the past decade has been so spectacular that there are few if any parallels in business past or present to compare it to.

Designing the Machines That Will Design Strategy

Harvard Business

LTCM was founded, in 1994, by some of the best minds in finance theory, including two Nobel Prize winners. LTCM’s model continued to predict that it was properly hedged against a potential Russian default; the insight that it actually needed — that it was under-hedged and exposed to liquidity risk — could only have come from outside of the model. kenneth andersson FOR HBR.

How the Carl Icahns of the World Benefit Firms but Not Workers

Harvard Business Review

There are two stories you can tell about finance in America. ” Both stories contain some truth, as a forthcoming study of activist hedge funds demonstrates. The early activists were pension funds, but starting in the 1990’s some hedge funds adopted the strategy. The number of companies targeted by activist hedge funds has increased dramatically since then, to more than 200 in 2013.

Case Study: A Short-Seller Crashes the Party

Harvard Business Review

When the well-known hedge fund manager and short-seller Jeremiah Hughes first put Terranola in the spotlight, issuing ominous warnings about unsold products, a looming patent expiration, and flawed growth projections, the considered judgment of the executive team was to do nothing. “I By now everyone has heard the story of how the company’s flagship product, the Express bar-making machine, came to be. Finance

Who Killed the GE Model?

Harvard Business

Unlike a pure holding company or a modern hedge fund, the GE model intended to create value by actively sharing capabilities among its disparate businesses, which, with one important exception, were all rooted in manufacturing. The model was honed by Jack Welch in the 1980s and 1990s, with new portfolio restructuring strategies and a headlong expansion into finance. afp/stringer/Getty Images. Who killed GE? Of course, GE is not dead, and it may well revive and flourish as a company.

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What Initial Coin Offerings Are, and Why VC Firms Care

Harvard Business

ICOs are the Wild West of financing — they sit in a grey zone where the U.S. For blockchain startups, ICOs are a win-win — they allow startups to raise funds without having equity stakeholders breathing down their necks on spending, prioritizing financial returns over the general good of the product or service itself. ” Many of them are in China, but there are also hedge funds and bitcoin investment funds who hold massive amounts of bitcoin.

Robo-Advisers Are Coming to Consulting and Corporate Strategy

Harvard Business

This data is both financial (revenues, profits, growth) and non-financial (customer sentiment, employee engagement, marketing effectiveness, product feedback, and partner ecosystems). Companies in every industry can benefit from making more data and algorithm-based decisions in areas of internal operations and finance. It seems only logical that they would extend into corporate strategy and finance. CSA Images/Printstock Collection/Getty Images.

The Salary Gap Between Stingy and Generous Companies Is Growing

Harvard Business Review

While wage inequality between firms appears to be growing across geographies and without regard to worker productivity, it does vary by industry and pay grade. The increasing inequality between companies is sharpest in finance, insurance, and real estate, followed by communications. So rising inequality is less about every CEO getting paid more than it is about the top finance executives leaving their peers in the dust.

Why Quants Should Manage Your Supply Chain Risk

Harvard Business Review

When last year's massive earthquake hit Japan, the effect on electronics production was severe, and it also resulted in extended business disruptions for many in the automotive industry. Risk in supply chain is not a potential cost — it is an actual cost, very real and borne by every product and service company, whether they understand it or not. This is a concept fundamental to finance but that, for some reason, has not migrated into supply chain risk management.

What Good Is Impact Investing?

Harvard Business Review

Or you could participate in projects financed in part by conventional investors and in part by non-profits. Abigail Noble: The other thing that we’re seeing is from the customer side — that they want things that have social impact and environmental responsibility and products that serve those needs. Whether it’s Warby Parker eyeglasses or Method home products or any one of a variety of other consumer products. Impact investing is on the rise. But, um, what is it?

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The Danger of Turning Cynical About Silicon Valley

Harvard Business Review

Perhaps most damning to entrepreneurs, inclined to pride themselves on what they produce, is the charge that many of the products Silicon Valley has been churning out are trivial. Tech-world denizen Jesper Andersen tweeted a similar sentiment: “Change ‘startup’ to ‘hedge fund,’ ‘ecstasy’ to ‘cocaine’, and ‘douche-bag’ to ‘douche bag’ and you too can see SF is just another Wall St.” Silicon Valley is losing its luster, at least among elite opinion-makers.

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End the Religion of ROE

Harvard Business Review

As the industrial revolution progressed, society was enjoying enormous benefits from mass production, which brought former luxuries within middle class reach. Just as electronic commerce would later sweep business, mass production came to one industry after another. GM represented an important channel for Dupont's lacquer, artificial leather, and other products, and Pierre du Pont was on GM's Board.) More products at more pricepoints" is their name for this strategy.

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How Exactly Will We Move Away from Fossil Fuels?

Harvard Business Review

But he also bragged about increased production of natural gas and oil. Bloomberg New Energy Finance has estimated that between now and 2030, around 70% of the power generation the world will add will be renewables. Investors who have significant money tied up in the fossil fuel industry — every pension and market fund, essentially — are facing a massive risk.

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More and More CEOs Are Taking Their Social Responsibility Seriously

Harvard Business

Jana Partners, the activist hedge fund, isn’t known as a tree-hugging hippie sort of firm. Companies are beginning to realize that paying attention to the longer term, to the perceptions of their company, and to the social consequences of their products is good business. BlackRock is a giant, too, and finance is another industry where a small number of big players dominate. Ryan McVay/Getty Images.

3 Emerging Market Risks Companies Should Watch for in 2018

Harvard Business

The cost of doing business — and especially the cost of local production — would go up, and budget-busting government spending increases would erode long-term business confidence despite short-term stimulus. This would come at a delicate time for the European economy, making it more difficult for leaders to assemble coalitions to back complex EU reforms to put European finance on sound long-term footing. miragec/Getty Images.

Stop Waiting for Governments to Close the Skills Gap

Harvard Business

Examples of this phenomenon have emerged already: The world’s largest hedge fund is developing a capability for an algorithm to make hiring and firing decisions. Policy makers can and should do more to align the incentives of companies and workers, for example by providing tax incentives for profit-sharing schemes , by providing health benefits, by hiring new employees, or by linking workplace practices to government procurement and financing programs.

McDonald’s Has to Do More than Manipulate Its Stock Price

Harvard Business Review

The company’s executives said that to help finance the plan, McDonald’s would increase refranchising (turning company-owned restaurants into franchises), take on more debt (even at the risk of lowering its bond rating ), and find $300 million to cut in general and administrative expenses. Wall Street investment banks and hedge fund activists, some of whom began targeting McDonald’s a decade ago , also gain from the temporary boosts that buybacks produce.

A Brief History of America’s Attitude Toward Taxes

Harvard Business Review

Financing WWII could have been used as an excuse for these highly confiscatory rates, but rather than dropping after the end of war, they continued to rise. Instead, the new theory was basically that all income should be considered to be the product of exercising talent and that people should be taxed less so that they had a motive to work.

Corporate Strategy Is a Fool's Errand

Harvard Business Review

For example, a firm may move from steel into engineering products because they require steel, then into engineering services, and then become big in elevators causing them to set up a separate division for that too. Fund managers, equity analysts, hedge fund managers, and so on can analyze the numbers perfectly well and listen to the PowerPoint presentation of the CEO on his or her road show.

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Business Should Focus on Sociality, Not Social "Media"

Harvard Business Review

That business, or any other institution, dictates life to you (Oh, wait, that's what they already do — just not in ways that benefit anyone who isn't already the Gangnam-Style scion of a mummified vampire hedge fund quadrillionaire). That the job of managers isn't just to "deliver product" — but to impact lives. Is it "productivity"? The majority of people worldwide wouldn't care if two thirds of brands disappeared tomorrow.