Newsletter September 2014
Newsletter September 2014 Volume 18 Issue 3
Quad Cities SCORE 1601 River Drive, Suite 310
Moline, IL 61265 309-797-0082
Quad Cities SCORE SCORE
BOB FERRELL'S TEN RULES FOR INVESTING Bob Ferrell is a motivational speaker and observer of the stock markets. His ten observations on investing cut to the bone. Few investors who read his ten rules will take issue with them. And item ten will no doubt amuse them. Who needs a market strategist with an MBA when he has this kind of simple wisdom at his disposal?
1. Markets tend to return to the mean over time. 2. Excesses in one direction will lead to an excess in the opposite direction 3. There are no new eras - excesses are never permanent 4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways 5. The public buys the most at the top and the least at the bottom 6. Fear and greed are stronger than long-term resolve 7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names 8. Bear markets have three stages - sharp down, reflexive rebound and a drawn-out fundamental downtrend 9. When all the experts and forecasts agree - something else is going to happen 10. Bull markets are more fun than bear markets.
PAYOUT FOR LOSSES FROM MALAYSIA AIRLINES CRASH Did you ever wonder about the amount and timing of insurance payouts for major transportation disasters? Insurance policies for planes and ships are based on arcane traditions and rules. The ancient traditions for transportation losses are long established at the offices of Lloyds of London where announcements of major events have traditionally been announced by ringing the famous Lutine Bell--one ring for bad news and two for good. In the current world of delays and uncertainties for most legal issues, transportation insurance policies are usually crystal clear as to the amount and the timing of the payment to the transportation companies that own policies. Transportation companies usually buy "hull insurance" with disaster payments are for "involuntary conversions." The insurance policies cover the entire new cost for ships and planes even though they may be old and written down on the books. Payments are made within a few days. Payments of more than one hundred million US dollars have already been paid to Malaysia Airlines for the Indian Ocean disaster. Additional payments may be paid when and if the plane is ever found and the cause of its disappearance is known. In many past events, the payment amounts for major disasters are the largest item ever occurring on the books of the ship and airplane companies that own the policies. Air disasters are so rare, with safe modern planes, that it is a challenge
for the financial officers of airlines to adequately explain the huge and unexpected positive, one-time jump in their financial reporting after a disaster. But for the families of the unfortunate ones who lose their lives it is another story. Legal battles often occur and clear evidence is sometimes lost in the sea or inaccessible land areas. The value of lost lives and injuries is subject to uncertainty. Jurisdictional disputes occur depending on the laws of the states or countries where the tragedies occur. There is no incentive for the insurance companies to make prompt payment and there is no obligation to pay interest for delays in payment. Payment to the unfortunate families of people lost when the Malaysia plane disappeared in the Indian Ocean will likely drag on for years.
CEO OF GALLUP, INC. SPEAKS TO QUAD CITIES CHAMBER OF COMMERCE ABOUT SMALL BUSINESS
Jim Clifton Jim Clifton, chairman and CEO of Gallup, Inc., a global polling and consulting firm, spoke at the Quad Cities Chamber of Commerce annual meeting in Davenport. One thousand people attended the meeting.
Clifton said, "The US is really a country of small businesses. Of the six million total US employers, four million have an average of fewer than two workers." He went on to say that new business formations are lagging behind business failures. Although four hundred thousand new businesses are created each year, the figure should be five hundred thousand for sustainability. SCORE, counselors to America's small businesses, provides free business consulting services to companies with fewer than five hundred employees and is uniquely positioned to assist people who want to start new businesses and improve or expand existing businesses. SCORE's thirty seasoned local members are available to give free business advice based on their lifetime experiences in almost every aspect of business operations. SCORE can be contacted at WWW.SCORE.ORG.
ARE WE A NATION OF SERFS? Is our minimum wage law just? Who can live on the federal minimum wage of $7.25 per hour? Those who must, can only live like medieval serfs. They share little of the prosperity that surrounds them. When Henry Ford grossly raised wages for his factory workers in 1914, he did not do it to be nice; he did it to reduce absenteeism and turnover. At first his competitors saw him as a renegade with no business sense. They soon came around and emulated him. When employers looked at the big picture, is it possible that if they paid their employees a living wage, they would have a more stable and loyal work force, employees would work at improving and growing their businesses, and employees would earn enough to purchase the products offered by their employers? When Henry Ford upped the wages of his shop floor employees to $5.00 per day, the higher wages improved worker attitudes. It helped Ford reduce costs to $265 per car. Many employees were then able to buy Ford cars.
WHERE ARE THE WORLD'S BIGGEST COMPANIES LOCATED? Many of us would guess that most large corporations are located in the US. We would be wrong. Of the ten largest revenue companies in the world, three are in China, two are in the US, the rest, with one company each, are in the Netherlands, Britain, Germany, Japan, and Switzerland. Annual revenues range from $476 billion for Walmart in the US to $232 billion for Glencore (diversified natural resources) in Switzerland. From 2012 to 2013, the number of Chinese companies on the list of 500 largest global companies increased by six; the US dropped by four. Some of the data for this article was supplied by Fortune Magazine. IMMIGRANTS IN THE US We often read of immigrants taking away jobs from US citizens. In fact, they have created a large number of businesses and jobs over the years. Immigrants founded such iconic giants as AT &T, P & G, Goldman Sachs, eBay, Google, and Intel. In 2011, they created 28% of the new jobs in the US even though they made up 13% of the population. They contributed to half of the international patents created by multi-national companies. Immigrant companies generate $776 billion of annual revenues. They employ one out of every ten workers. And yet many say the Federal Government is a hostile roadblock to allowing talented people to work and live in the US. Our Federal Government seems to be letting political considerations deprive us of the golden goose that contributes so much to our economy and prosperity. Part of the information in this article was provided by Fortune magazine.
WASHINGTON OIL EXPORT POLICIES AT ODDS WITH CURRENT OIL FIELD REALITIES In the Permian Basin in south Texas and the Bakken Basin of North Dakota, new technologies are allowing oil production to skyrocket. Production from "tight oil" fields-the kind of formations in south Texas and North Dakota-has increased six fold in the last six years. It recalls the wild Oklahoma and Texas oil booms of a century ago. Many predict that by 2020 America will bypass Saudi Arabia as the world's biggest oil producer. Labor is short in the oil fields; truck drivers make $80,000 annually. Hotels rooms in south Texas and North Dakota are almost impossible to find. A business jet airplane pilot recently had to sleep in his cockpit or drive hundreds of miles to find a room. A Texas producer worries that there will soon be an oil glut in the US. For decades, the US has been banned from exporting oil. Most of the reasons for the ban no longer exist. It is a detriment to the US to let it continue. Washington law makers are not yet willing to rescind the law even though it would be to our advantage as well as to most of our European allies. Part of the information for this article was provided by "The Economist."
Fracking Oil Well Pump
FREE SCORE SERVICES For the best source in town for free small business mentoring call on SCORE volunteers: SCORE volunteers are men and women who represent all walks of business and professional life. SCORE volunteers are experienced active former accountants, business owners, management and marketing personnel, and other professionals. SCORE volunteers are willing to share their knowledge gained from years of business experience. SCORE volunteers are counselors, mentors, and workshop leaders. SCORE volunteers have helped thousands of small businesses achieve success. SCORE volunteers are part of a team dedicated to the success of small businesses. SCORE volunteers listen and help make entrepreneurial dreams come true.
For more information see: Web Site: www.quadcities.score.org.
Quad Cities SCORE 1601 River Drive, Suite 310
Moline, IL 61265 309-797-0082
Quad Cities SCORE SCORE
BOB FERRELL'S TEN RULES FOR INVESTING Bob Ferrell is a motivational speaker and observer of the stock markets. His ten observations on investing cut to the bone. Few investors who read his ten rules will take issue with them. And item ten will no doubt amuse them. Who needs a market strategist with an MBA when he has this kind of simple wisdom at his disposal?
1. Markets tend to return to the mean over time. 2. Excesses in one direction will lead to an excess in the opposite direction 3. There are no new eras - excesses are never permanent 4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways 5. The public buys the most at the top and the least at the bottom 6. Fear and greed are stronger than long-term resolve 7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names 8. Bear markets have three stages - sharp down, reflexive rebound and a drawn-out fundamental downtrend 9. When all the experts and forecasts agree - something else is going to happen 10. Bull markets are more fun than bear markets.
PAYOUT FOR LOSSES FROM MALAYSIA AIRLINES CRASH Did you ever wonder about the amount and timing of insurance payouts for major transportation disasters? Insurance policies for planes and ships are based on arcane traditions and rules. The ancient traditions for transportation losses are long established at the offices of Lloyds of London where announcements of major events have traditionally been announced by ringing the famous Lutine Bell--one ring for bad news and two for good. In the current world of delays and uncertainties for most legal issues, transportation insurance policies are usually crystal clear as to the amount and the timing of the payment to the transportation companies that own policies. Transportation companies usually buy "hull insurance" with disaster payments are for "involuntary conversions." The insurance policies cover the entire new cost for ships and planes even though they may be old and written down on the books. Payments are made within a few days. Payments of more than one hundred million US dollars have already been paid to Malaysia Airlines for the Indian Ocean disaster. Additional payments may be paid when and if the plane is ever found and the cause of its disappearance is known. In many past events, the payment amounts for major disasters are the largest item ever occurring on the books of the ship and airplane companies that own the policies. Air disasters are so rare, with safe modern planes, that it is a challenge
for the financial officers of airlines to adequately explain the huge and unexpected positive, one-time jump in their financial reporting after a disaster. But for the families of the unfortunate ones who lose their lives it is another story. Legal battles often occur and clear evidence is sometimes lost in the sea or inaccessible land areas. The value of lost lives and injuries is subject to uncertainty. Jurisdictional disputes occur depending on the laws of the states or countries where the tragedies occur. There is no incentive for the insurance companies to make prompt payment and there is no obligation to pay interest for delays in payment. Payment to the unfortunate families of people lost when the Malaysia plane disappeared in the Indian Ocean will likely drag on for years.
CEO OF GALLUP, INC. SPEAKS TO QUAD CITIES CHAMBER OF COMMERCE ABOUT SMALL BUSINESS
Jim Clifton Jim Clifton, chairman and CEO of Gallup, Inc., a global polling and consulting firm, spoke at the Quad Cities Chamber of Commerce annual meeting in Davenport. One thousand people attended the meeting.
Clifton said, "The US is really a country of small businesses. Of the six million total US employers, four million have an average of fewer than two workers." He went on to say that new business formations are lagging behind business failures. Although four hundred thousand new businesses are created each year, the figure should be five hundred thousand for sustainability. SCORE, counselors to America's small businesses, provides free business consulting services to companies with fewer than five hundred employees and is uniquely positioned to assist people who want to start new businesses and improve or expand existing businesses. SCORE's thirty seasoned local members are available to give free business advice based on their lifetime experiences in almost every aspect of business operations. SCORE can be contacted at WWW.SCORE.ORG.
ARE WE A NATION OF SERFS? Is our minimum wage law just? Who can live on the federal minimum wage of $7.25 per hour? Those who must, can only live like medieval serfs. They share little of the prosperity that surrounds them. When Henry Ford grossly raised wages for his factory workers in 1914, he did not do it to be nice; he did it to reduce absenteeism and turnover. At first his competitors saw him as a renegade with no business sense. They soon came around and emulated him. When employers looked at the big picture, is it possible that if they paid their employees a living wage, they would have a more stable and loyal work force, employees would work at improving and growing their businesses, and employees would earn enough to purchase the products offered by their employers? When Henry Ford upped the wages of his shop floor employees to $5.00 per day, the higher wages improved worker attitudes. It helped Ford reduce costs to $265 per car. Many employees were then able to buy Ford cars.
WHERE ARE THE WORLD'S BIGGEST COMPANIES LOCATED? Many of us would guess that most large corporations are located in the US. We would be wrong. Of the ten largest revenue companies in the world, three are in China, two are in the US, the rest, with one company each, are in the Netherlands, Britain, Germany, Japan, and Switzerland. Annual revenues range from $476 billion for Walmart in the US to $232 billion for Glencore (diversified natural resources) in Switzerland. From 2012 to 2013, the number of Chinese companies on the list of 500 largest global companies increased by six; the US dropped by four. Some of the data for this article was supplied by Fortune Magazine. IMMIGRANTS IN THE US We often read of immigrants taking away jobs from US citizens. In fact, they have created a large number of businesses and jobs over the years. Immigrants founded such iconic giants as AT &T, P & G, Goldman Sachs, eBay, Google, and Intel. In 2011, they created 28% of the new jobs in the US even though they made up 13% of the population. They contributed to half of the international patents created by multi-national companies. Immigrant companies generate $776 billion of annual revenues. They employ one out of every ten workers. And yet many say the Federal Government is a hostile roadblock to allowing talented people to work and live in the US. Our Federal Government seems to be letting political considerations deprive us of the golden goose that contributes so much to our economy and prosperity. Part of the information in this article was provided by Fortune magazine.
WASHINGTON OIL EXPORT POLICIES AT ODDS WITH CURRENT OIL FIELD REALITIES In the Permian Basin in south Texas and the Bakken Basin of North Dakota, new technologies are allowing oil production to skyrocket. Production from "tight oil" fields-the kind of formations in south Texas and North Dakota-has increased six fold in the last six years. It recalls the wild Oklahoma and Texas oil booms of a century ago. Many predict that by 2020 America will bypass Saudi Arabia as the world's biggest oil producer. Labor is short in the oil fields; truck drivers make $80,000 annually. Hotels rooms in south Texas and North Dakota are almost impossible to find. A business jet airplane pilot recently had to sleep in his cockpit or drive hundreds of miles to find a room. A Texas producer worries that there will soon be an oil glut in the US. For decades, the US has been banned from exporting oil. Most of the reasons for the ban no longer exist. It is a detriment to the US to let it continue. Washington law makers are not yet willing to rescind the law even though it would be to our advantage as well as to most of our European allies. Part of the information for this article was provided by "The Economist."
Fracking Oil Well Pump
FREE SCORE SERVICES For the best source in town for free small business mentoring call on SCORE volunteers: SCORE volunteers are men and women who represent all walks of business and professional life. SCORE volunteers are experienced active former accountants, business owners, management and marketing personnel, and other professionals. SCORE volunteers are willing to share their knowledge gained from years of business experience. SCORE volunteers are counselors, mentors, and workshop leaders. SCORE volunteers have helped thousands of small businesses achieve success. SCORE volunteers are part of a team dedicated to the success of small businesses. SCORE volunteers listen and help make entrepreneurial dreams come true.
For more information see: Web Site: www.quadcities.score.org.
