The History of Creating Value

The History of Creating Value, from Jeff Watson

April 29, 2013 | Leave a Comment

the-history-of-opportunity

I really enjoyed this article “The History of Creating Value“. It has a great timeline showing how people made money through the ages. Stefan Jovanovich writes:

Warrior — “We can plunder grower’s food for the King”. Actually, not. Food is grown and taxed under the King’s authority so that the King can afford a standing army that picks fights with other standing armies.

Craftsman — “If we make things and found cities, warriors won’t get us.” Kings need palaces and priests need temples and they are sure as hell not going to be stuck out in the boonies.

Skipping forward…

Oil Driller — “since industrialists need to feed cars, oil” . Oil was used first for illumination, then for furnaces (both for direct heat and for steam), and only then for gasoline, which begins its history because the Russian oil production has created a kerosene glut.

Corporate Executive — “cars made large factories into corporations” – So this is why the East India Company and the Pennsylvania Railroad are really outliers.

Ms. Vital is the new winner of the Historicity Prize and is entitled to a full case of scuppernog.

Gibbons Burke writes:

The underlying thrust of this timeline is to argue that being a startup founder is the route to wealth and value creation today. Which is a great idea, and in line with Distributist economic organization, which holds that the main problem with capitalism is not when you have too many capitalists, but too few. The more owners there are in the society, the better.

But while the idea is a good one, the reality is that the road to wealth proposed by these startup evangelists is not to found and create a company which will provide a way to generate value for the owner over his lifetime, but to come up with a novel idea, develop it to the point where it has a proprietary advantage, and sell it to some corporate behemoth who has decided it it easier and much less risky to outsource its research and development to masses of proles living the startup dream. When one emerges with a good idea, simply snap it up and bring it into the corporate umbrella, and either monetize it and develop it further, or kill it because of the disruptive threat it poses to the existing herd of corporate cash cows.

The History of Creating Value

Anna Vital  /  April 24, 2013

At this point in history, startup entrepreneurship has become the fastest way to create value, and thus the fastest way to move upward in life. But this opportunity is unlike other opportunities humans had in history. Here is how you could create value before:
The Hunter Age. After hunter-gatherers became growers and herders, some people realized that it is faster and easier to go take other people’s crops and cattle than grow your own. War became popular. And wealth got a bad reputation. Read more of this post

Sun Yat-sen portrait up on Tiananmen Square for May Day

Sun Yat-sen portrait up on Tiananmen Square for May Day

2013-05-01 03:42:19 GMT2013-05-01 11:42:19(Beijing Time)  SINA.com

A portrait of Dr. Sun Yat Sen, a revered revolutionary leader who played a pivotal role in overthrowing imperial rule in China, is now up on Tiananmen Square for the May Day holiday.

SYS

Warren Buffett’s Analogy About About Boobs And Porn Shop Operators Is Just Brilliant

Warren Buffett’s Analogy About About Boobs And Porn Shop Operators Is Just Brilliant

Sam Ro | Apr. 30, 2013, 10:02 PM | 6,067 |

This week is the annual shareholder meeting for Berkshire Hathaway, the gigantic conglomerate run by billionaire Warren Buffett.

Buffett has a way of explaining complicated finance topics so that they’re fun and understandable.

Carleton English of Belus Capital Advisors points us to this gem of a quote from 2008 where he takes a jab at private equity.

Someone had asked the Oracle of Omaha why people sell their companies to him instead of private equity firms.  This is the type of question that you might hear later this week.  Here’s Buffett’s response: “You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever. Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.”

According to Bloomberg, Buffett delivered this doozy during some Q&A with a 300 executives in Toronto. He’s basically explaining that there is more than one way for a company to get to a certain market value. Private equity often involves a lot of debt, a lot of cuts, and usually a lot of risk before a company is turned around and sold back on the market. Berkshire and Buffett, on the other hand, often take a more passive approach.  Typically, Buffett seeks out what he considers to be undervalued, yet well run companies.  And then he just waits for them to get to their intrinsic values. Anyways, we hope this weekend’s events in Omaha yield some more great quotes.

Warren Buffett Says Sell to Me, Not `Porn Shop,’ as Growth Dips

By Richard Teitelbaum – Jun 25, 2008

June 25 (Bloomberg) — Warren Buffett is in Toronto, fielding questions from a crowd of 300 executives. One asks what makes people want to sell their companies to him.

The Berkshire Hathaway Inc. chief executive officer replies that he tells a prospective seller to think of the company as a work of art.

“You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever,” he says at the February meeting. “Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.” Read more of this post

The Ozery brothers, who have expanded Pita Break into their market into the U.S. and come up with new product lines, say innovation is in the company’s DNA

Ozery’s Pita Break makes healthy eating its bread and butter

Denise Deveau | 13/04/30 | Last Updated: 13/04/30 2:53 PM ET

0430pita

Alon Ozery’s success story started out in a small neighbourhood sandwich shop in Toronto. Within 15 years, he grew his fledgling bakery operation into the renowned Ozery’s Pita Break brand. After numerous expansions, he and his brother Guy continue to introduce new flatbread and snack products to a market hungry for healthy baked goods. In 2010, the brothers decided it was time to take the biggest leap of faith since the business started. Not only did they invest in doubling production capacity, they made their first serious efforts to expand into the U.S. market in earnest. Mr. Ozery says throughout the growth and upheaval, the key to success was staying true to the brand’s quality standards.

Read more of this post

Don’t fear the fire: Why entrepreneurs need all the criticism they can get

Don’t fear the fire: Why entrepreneurs need all the criticism they can get

Rick Spence | 13/04/29 8:54 AM ET
Last week, I took part in a business event in Peterborough, Ont., called Bears’ Lair. As you might guess, it’s a Dragons’ Den type format where entrepreneurs compete to win prizes for making the most compelling pitch for their business.

Sponsored by the local Workforce Development Board and organized by three dynamic women entrepreneurs, Bears’ Lair was done right. The competition started in January with 25 entrepreneurs entering on Facebook, and ended in April with four finalists facing off in front of a panel of four judges and 150 boisterous fans. The winner received $5,000 in cash and $20,000 in products and services from various sponsors, which included office equipment, advertising credits, Web development, Internet marketing coaching, accounting services and even fashion consultation. That the runners-up also won a number of free services showed the generosity of Peterborough’s business community.

But this event got me thinking: Why bears? Why dragons? Why do we associate entrepreneur pitch-offs with such violent concepts? “If you don’t win, you’ll be eaten by bears. Or consumed in dragon fire.” This doesn’t happen to aspiring singers (they become “Idols”) or apprentices (after being fired by Donald, they go home in a limo).

Still, I think there’s good reason for adopting this carnivorous imagery. Entrepreneurs deserve it. Read more of this post

How to Influence People with Your Ideas

How to Influence People with Your Ideas

by John Butman  |  11:00 AM April 30, 2013

One of my young clients, let’s call her Julie, is on a mission. Julie has an idea, one that has been gestating in her mind for quite some time, but now she realizes that for her idea to have any impact at all she will have to “go public” with it. Julie believes there are countless intelligent, talented but disadvantaged kids who, for a variety of reasons, have been shut out of traditional educational pathways and are therefore at risk of never achieving their full potential. Her idea, which she is passionate about, is to help these forgotten kids realize their potential by offering them practical guidance for achieving their goals and dreams. She has done some public speaking on the topic to educational groups and associations, and her ideas have been featured in various content venues, but now she wants to crank it up a level. She wants to start a movement.

She asked me: What do I have to do to get my idea out there? Should I blog and tweet? Write a book? Conduct a survey? Try for TEDx? Lead a seminar? In what combination? In what order? In essence, Julie wants to become what I call an “idea entrepreneur” — a person who builds a coordinated effort around a deeply-felt idea with the goal of achieving influence, affecting how people think and behave, and thus making some change in an organization or system. Aspiring idea entrepreneurs are everywhere: in businesses, classrooms, and communities of all kinds, all over the world. Maybe you know one. Maybe you are one. But you don’t have a massive influence-creation machine behind you (few people do) and you wonder how to get your idea heard above all the others competing for attention. How do you proceed?

You have to take your idea public, which means entering the “ideaplex” — that glamorous, treacherous place where videos go viral, TED stardom beckons, a thousand new authors publish each day, and think shops like IDEO make a business of idea generation. Julie’s inclinations were right. She would certainly need to do plenty of blogging, tweeting, surveying, speaking — the works. But none of these would be totally effective without answering the following questions, too:

1. What is my purpose? People are driven to go public for all kinds of reasons, from the thirst for fame and fortune to the dream of leading a crusade. Those who gain genuine, long-lasting influence are the ones who want to create positive change for other people. So ask yourself: Why am I doing this? Idea entrepreneur Cesar Millan (he has built quite an empire around his ideas including books, tv shows, DVDs and merchandise) is a dog behavioralist (“the dog whisperer”), but his deeper motive is to reduce maltreatment of animals — and kids — in our society.  Read more of this post

Tensions in Korea could freeze electronics manufacturing: IHS; South Korea owns half of all DRAM, two-thirds of NAND flash and 70 per cent of tablet display production

Tensions in Korea could freeze electronics manufacturing: IHS

South Korea owns half of all DRAM, two-thirds of NAND flash and 70 per cent of tablet display production.

Adam Bender (Computerworld), 01 May, 2013 10:43

If war comes to the Korean peninsula, there will be “chaos” for the global electronics supply chain, according to an IHS analyst. “Any type of manufacturing disruption of six months would prevent the shipment of hundreds of millions of mobile phones and tens of millions of PCs and media tablets,” warned IHS analyst Mike Howard. IHS views that “such a major conflagration and disruption” is “unlikely,” but said the industry should be prepared for the worst, given escalating tensions in the region.

“South Korea now plays a more important role than ever in the global electronics business,” said Howard. Read more of this post

Chinese Way of Doing Business: In Cash We Trust; Many experts say it is not a refusal to enter the 21st century as much as wariness, of the government toward its citizens and vice versa

April 30, 2013

Chinese Way of Doing Business: In Cash We Trust

By DAVID BARBOZA

SHANGHAI — Lin Lu remembers the day last December when a Chinese businessman showed up at the car dealership he works for in north China and paid for a new BMW 5 Series Gran Turismo — entirely in cash. “He drove here with two friends in a beat-up Honda,” Mr. Lin recalled. “One of his friends carried about $60,000 in a big white bag, and the buyer had the rest in a heavy black backpack.” Lugging nearly $130,000 in cash into a dealership might sound bizarre, but it’s not exactly uncommon in China, where hotel bills, jewelry purchases and even the lecture fees for visiting scholars are routinely settled with thick wads of renminbi, China’s currency. This is a country, after all, where home buyers make down payments with trunks filled with cash. And big-city law firms have been known to hire armored cars to deliver the cash needed to pay monthly salaries.

For all China’s modern trappings — the new superhighways, high-speed rail networks and soaring skyscrapers — analysts say this country still prefers to pay for things the old-fashioned way, with ledgers, bill-counting machines and cold, hard cash. Many experts say it is not a refusal to enter the 21st century as much as wariness, of the government toward its citizens and vice versa. Doing business in China takes a lot of cash because Chinese authorities refuse to print any bill larger than the 100-renminbi note. That’s equivalent to $16. Since 1988, the 100-renminbi note, graced by Mao Zedong’s visage, has been the largest note in circulation, even though the economy has grown fiftyfold. (The country’s national icon, Chairman Mao, appears on nearly every note: the 1-, 5-, 10-, 20, 50- and 100- renminbi note.) Read more of this post

Qianhai zone may become China’s Cayman Islands

Qianhai zone may become China’s Cayman Islands

Staff Reporter

2013-05-01

Many foreign private equity firms are interested in registering their companies in the Qianhai Special Financial Zone in Shenzhen, although most have no interest in actually operating there. This makes the zone akin to a Chinese version of the Cayman Islands tax haven, the Guangzhou-based 21st Century Business Herald reports.

At least two private equity firms have already registered in Qianhai, and several others are considering a move. The firms are less interested in actually operating within the zone but instead are seeking the tax breaks offered to businesses there, the report said. The zone is desirable because it enables the inflow of overseas-held renminbi, since firms registered in the zone can invest in China’s economy using assets they raise overseas. The zone will start to look something like the Cayman Islands if firms don’t actually rent offices or hire staff in Qianhai, effectively negating the government’s plans to boost the local economy, said one accountant.

Read more of this post

Economic revolution sprung from China’s grassroots rather than top-down approach

Economic revolution sprung from China’s grassroots: scholars

Staff Reporter

2013-05-01

China’s economic reforms, which begun under the late Deng Xiaoping more than 30 years ago, are often thought of as a top-down revolution presided over by the ruling Communist Party. The country’s rapid economic growth in the last three decades proves that the party’s plan was well-conceived and executed and the credit for China’s economic miracle thus accrues to them, says the Beijing-based Economic Observer.

This view has been challenged however by Nobel laureate Ronald Coase, an economist at the University of Chicago, and his coauthor Wang Ning. Coase and Wang have pointed to the vital role played in China’s economic reforms by people at the grassroots level. Read more of this post

Puffer-fish protests and Xi’s China dream; ordinary Chinese have been watching their unelected representatives gorge themselves on their tax renminbi for decades

April 30, 2013 6:19 pm

Puffer-fish protests and Xi’s China dream

By Patti Waldmeir in Shanghai

Officials are discovering the power of the middle-class Nimby, writes Patti Waldmeir

Something about the tale just did not add up: several hundred people turn up to protest because officials of a provincial city in China are eating swordfish, puffer fish and other forms of lethal seafood at the taxpayer’s expense?

Sure, there’s an austerity drive on in China: these days, bloated bureaucrats are not meant to be eating, drinking or being merry at public expense. But ordinary Chinese have been watching their unelected representatives gorge themselves on their tax renminbi for decades. Surely it takes more than another government anti-corruption campaign to rouse them to revolution? Read more of this post

Korea behind Japan in entrepreneurship; Only 11 of Korea’s top 50 richest businesspeople are self-made, the rest inherited their fortunes

2013-04-30 17:13

Korea behind Japan in entrepreneurship

By Na Jeong-ju
Only 11 of Korea’s top 50 richest businesspeople are self-made, the rest inherited their fortunes from their father or grandfather, a survey showed Tuesday.
In contrast, 34 of the 50 richest people in Japan earned their success through Their own means.  Read more of this post

North Dakota Has Way More Energy Than We Previously Thought, US Government says

US GOVERNMENT: North Dakota Has Way More Energy Than We Previously Thought

Rob Wile | Apr. 30, 2013, 3:58 PM | 2,905 | 15

The USGS just doubled the amount of oil it thinks can be recovered from North Dakota’s Bakken formation. According to its release, the agency now puts the figure at 7.38 billion barrels, compared with 3.65 in their 2008 estimate. They also tripled their gas estimates for the area — to 6.7 trillion cubic feet of undiscovered, technically recoverable gas and gas liquids. The revisions are almost entirely the result of adding a new section, Three Forks, to the estimates. Anne-Berry Wade told us hydraulic fracturing — fracking — in that section has allowed geologists to up their estimates for what is technically recoverable.  Here’s new Interior Secretary Sally Jewell’s comment:

These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation’s dependence on foreign sources of oil. We must develop our domestic energy resources armed with the best available science, and this unbiased, objective information will help private, nonprofit and government decision makers at all levels make informed decisions about the responsible development of these resources.

Peak oil: still dead.

In Venture Capital Deals, Not Every Founder Will Be a Zuckerberg; dream can be dashed as the venture capitalists make millions in a sale, leaving the founders with nothing

APRIL 30, 2013, 4:52 PM

In Venture Capital Deals, Not Every Founder Will Be a Zuckerberg

By STEVEN M. DAVIDOFF

It’s the dream of entrepreneurs to sell their company for millions of dollars. But the dirty secret of venture capital is that the dream can be dashed as the venture capitalists make millions in a sale, leaving the founders with nothing. A recent Delaware court case arising from the 2011 sale of Bloodhound Technologies illustrates how this happens.

Bloodhound was founded in the mid-1990s by Joseph A. Carsanaro to create fraud-monitoring software for health care claims. After several years of going it alone with a handful of colleagues, Mr. Carsanaro was able to raise Bloodhound’s first venture capital round for $1.9 million in 1999, followed by a second $3.1 million round in 2000. When the Internet bubble burst, the company underwent rocky times. It was then that the venture capitalists seized control. Mr. Carsanaro was pushed out as chief executive. By 2000, he was gone from the company, as were four other members of his founding team.

For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing. In April 2011, the company was sold for $82.5 million. It was a time for Mr. Carsanaro and his founding team to celebrate their millionaire status. But venture capital investments are structured to ensure that the venture capitalists are paid before founders and employees. When venture capitalists invest, they typically demand preferred shares that accrue a yearly dividend of about 8 percent. The dividend goes unpaid until the company is sold. In a sale, the original amount and the interest all come due. It must be paid out before the common shares, which are typically held by the founders and other employees. Read more of this post

Craving Wi-Fi, Preferably Free and Really Fast; “If everybody flushes the toilet at the same time, you wouldn’t want the building to come down. I’m not sure why they wouldn’t design the Internet service the same way.”

April 30, 2013

Craving Wi-Fi, Preferably Free and Really Fast

By SUSAN STELLIN

TRAVELERS hitting the road with their mobile electronic devices have three questions about staying connected away from home: will there be Wi-Fi, how much will it cost and how well will it work? Increasingly, it is that last question that matters most.

Hotels, airports and airlines are struggling to keep up with customers streaming movies on their tablets and hosting online meetings on their laptops, with varying degrees of success. While hoteliers and airport authorities have been fighting the bandwidth battle for years, airlines are still installing Wi-Fi on many aircraft and are already confronting challenges. Travelers who want Wi-Fi in the air cannot always tell if a plane will have Internet service when they book their tickets. Prices for service are still evolving, and the quality of the connection does not come close to matching what most people are used to on the ground. Read more of this post

Electric car maker Coda files for bankruptcy after selling just 100 of its all-electric sedans, another example of battery-powered vehicles’ failure to break into the mass market

Electric car maker Coda files for bankruptcy

3:18am EDT

By Nichola Groom

May 1 – Green car startup Coda Holdings Inc filed for Chapter 11 bankruptcy protection on Wednesday after selling just 100 of its all-electric sedans, another example of battery-powered vehicles’ failure to break into the mass market. The filing with U.S. Bankruptcy Court in Delaware will allow the Los Angeles company to exit the auto sector and refocus on energy storage, a far less capital-intensive business. The company uses the same technology it used in cars to build systems for utilities and building operators to store power. Read more of this post

Best Performing Russell 3,000 Stocks YTD

bestytd430

S&P 500’s Best and Worst Months of May Since 1928

S&P 500’s Best and Worst Months of May Since 1928

TUESDAY, APRIL 30, 2013 AT 10:22AM

With the month of May beginning tomorrow, we wanted to highlight the best and worst S&P 500 performances during the month since 1928.  Overall, the S&P 500 has averaged a decline of 0.15% during the month, which is among the weaker average monthly performances of the year.

While investors debate the merits of sell in may and go away, we thought it was worth pointing out that May has increasingly become a volatile month in recent years.  As shown in the table below, two of the ten worst months of May going all the way back to 1928 have both occurred during the current bull market (2010 & 2012).  Furthermore, one of the ten best Mays of all time also came during the current bull market (2009).  In other words, three of the four Mays during the current bull market have qualified as one of the ten best or worst Mays of all time.  That leaves 2011 as the only year where May was not one of the ten best or worst Mays ever.  In that year, the S&P 500 declined 1.4%.  With the month of May averaging a decline of 2.64% during the current bull market, you can’t blame bulls for wanting to take the month off in 2013.

Mays best and Worst

Using MD&A to Improve Earnings Forecasts

Using MD&A to Improve Earnings Forecasts

Khrystyna Bochkay Rutgers, The State University of New Jersey – Rutgers Business School at Newark & New Brunswick

Carolyn B. Levine Rutgers, The State University of New Jersey – Rutgers Business School at Newark & New Brunswick

April 17, 2013

Abstract: 
We estimate and compare quantitative and text-enhanced earnings forecasting models to evaluate the extent to which MD&A disclosures improve earnings forecasts. Incorporating MD&A disclosures into forecasting models significantly improves forecasting accuracy. The gains in accuracy are much greater following regulatory reforms, providing some of the first large-sample empirical evidence on the success of recent MD&A regulatory actions. The MD&A section is less informative between 2007-2009, particularly for those firms hardest hit by the financial crisis (i.e., firms with low cash and large changes in performance). Further, we find that text improves forecast accuracy most for firms in the consumer staples sector, firms with low profit margins, large changes in performance, high political and/or legal costs and high complexity. Last, we find that models enhanced by MD&A disclosures are generally less accurate than analysts’ consensus forecasts for large and medium sized firms, but equally accurate for small firms.

10 Years Later: Where in the World is Equal Weight Indexing Now?

10 Years Later: Where in the World is Equal Weight Indexing Now?

Liyu Zeng Standard & Poor’s

Frank Luo Standard & Poor’s

April 20, 2013

Abstract: 
Often the most powerful investment ideas are simple. The S&P 500 EWI 10 years ago pioneered the simple concept of equal weighted indexing. It has now expanded in the U.S. into the S&P 100, a MegaCap index, S&P MidCap 400® and S&P SmallCap 600®. The equal weighting idea has also been applied to international equities, as well as in other asset classes such as fixed income indices and commodity indices. It has become one of the most popular alternatively-weighted ideas. While the headline cause of asset flows has been outperformance over market-cap indices, sophisticated investors have realized that equal weighting creates a different set of risk factor exposures than market cap weighting that seem to have worked over the long-term as noted in the paper. Furthermore, the concept randomizes factor mispricings in the market, and it can serve as a performance benchmark for alternative-weighted indices.

Berkshire size, Buffett age cloud annual gathering

Berkshire size, Buffett age cloud annual gathering

12:11pm EDT

By Jonathan Stempel and Jennifer Ablan

(Reuters) – Warren Buffett may be on safari for major acquisitions, which he likes to call elephants, but shareholders may wonder if his Berkshire Hathaway Inc has become the biggest elephant in the room. Berkshire has grown to look more and more like corporate America, as Buffett expands outside its core insurance business into such areas as energy, industrial products, newspapers, and in February ketchup, when he teamed up with Brazil’s 3G Capital investment firm to buy H.J. Heinz Co for $23.2 billion. Few of the 35,000 or more people who will this weekend make a pilgrimage to Berkshire’s hometown of Omaha, Nebraska for the company’s annual shareholder weekend, which Buffett calls “Woodstock for Capitalists,” are likely to criticize that strategy. While Buffett has managed to handily beat the Standard & Poor’s 500 so far this year, outperforming the overall market is getting tougher for Berkshire as it grows and diversifies, investors and analysts said.

Buffett, 82, and Vice Chairman Charlie Munger, 89, will at Saturday’s annual meeting field five hours of questions about the company, governance, the economy and – with a $15 billion cash cushion even after the Heinz purchase is completed – their next elephant. “Larger deals are needed to move the needle,” said Doug Kass, founder of hedge fund Seabreeze Partners Management Inc, who has shorted Berkshire stock partly because its size, including a $262 billion market value, makes it more difficult to record market-beating returns. Kass has been tapped by Buffett as a “credentialed bear” to ask questions and “spice up” the meeting. Buffett himself recognized the performance question when he noted in his March shareholder letter that Berkshire has lagged the broader market since the latter bottomed out four years ago. Read more of this post

Monster parents breeding brats in HK; “The city is at high risk as it is producing spoilt children who are overconfident about themselves”

Monster parents breeding brats in HK

“The city is at high risk as it is producing spoilt children who are overconfident about themselves,” said Associate Professor Annis Fung from City University of Hong Kong. -ST

Tue, Apr 30, 2013
The Straits Times

HONG KONG – “Monster” parents in Hong Kong are turning out a generation of spoilt brats with an inflated view of their abilities and who may resort to aggression to get ahead, the South China Morning Post (SCMP) reported on Wednesday, citing a latest study.

“The city is at high risk as it is producing spoilt children who are overconfident about themselves,” said Associate Professor Annis Fung from City University of Hong Kong.

“Monster” parents, who practise an authoritarian education style and over-emphasise children’s academic performance, could increase their children’s complacency, reported the Wen Wei Po newspaper on Wednesday. Read more of this post

“It grows very well, this virus”: Scientists Infect Chicks in Race to Halt Lethal H7N9 Bird Flu Spread; “If one in five people getting infected die, that’s a pretty frightening infection”

Scientists Infect Chicks in Race to Halt Bird Flu Spread

Deep inside a high-security laboratory an hour from Melbourne, scientists working behind air-locked doors inject six-week-old chickens with a virus that has killed one in five people it’s known to have infected. The pathogen is H7N9 bird flu, and it came to Australia’s second-biggest city 12 days ago in a 0.5 milliliter sample — 10 would fit on a teaspoon — from a patient in China’s Anhui province. Antibodies from the chickens will help create tests for the virus, part of a race to head off a global outbreak. While disease trackers have yet to pinpoint how the 127 human infections in China and Taiwan occurred, they say contact with poultry is the most likely cause. Birds carry the disease without showing symptoms, making tests to monitor farms and markets vital to halting its spread, said Peter Daniels, assistant director of the Australian Animal Health Laboratory.

“If one in five people getting infected die, that’s a pretty frightening infection,” said Daniels, 64, whose lab is the world’s largest high-security bio-containment research facility. “It may be that it won’t start spreading person to person. But if it does, the world is facing a severe disease situation.” Read more of this post

Lethal H7N9 bird flu virus batters China’s holiday travel bug; number of tourists to some eastern Chinese cities where the outbreak is concentrated has plunged by half

Bird flu virus batters China’s holiday travel bug

The number of tourists to some eastern Chinese cities where the outbreak is concentrated has plunged by half for some tour agencies over H7N9 fears. -ST 
Grace Ng

Wed, May 01, 2013
The Straits Times

Women wear face masks on a street in Shanghai on April 16, 2013 as China’s H7N9 bird flu virus spreads further afield. In spite of the deadly bird flu virus outbreak that has spread to new locations in China including south-eastern Fujian province and central Henan, Beijing housewife Xu Jia, 44, and her family decided to press on with their trip to Xiamen for the three-day Labour Day holiday which started on Tuesday. The family booked their trip to the scenic coastal city in Fujian earlier this month. Last Friday, news broke that one case of the H7N9 virus had surfaced in the province. Still, this has not stopped them from setting off two days ago. “We’re not concerned about the avian flu. There are just 100-odd cases across the whole country and there hasn’t been discovery of human-to-human transmission,” Ms Xu told The Straits Times. But her gung-ho attitude does not appear to be shared by many of her countrymen.

The number of tourists to some eastern Chinese cities – where the outbreak, which has sickened 124 people and killed 24, is concentrated – has plunged by half for some tour agencies over H7N9 fears. This is traditionally a peak tourism period, with tour prices rising as much as 30 per cent last year. Read more of this post

China Manufacturers Survive by Moving to Asian Neighbors

April 30, 2013, 4:00 p.m. ET

China Manufacturers Survive by Moving to Asian Neighbors

By KATHY CHU

MK-CC856_CLABOR_G_20130430141203

SHENZHEN, China—In a corner of a sprawling factory in this coastal southern city, sewing machines that stitched blouses and shirts for Lever Style Inc.’s clients now gather dust. As the din on the factory floor has dropped, so, too, has the payroll. Over the past two years, Lever Style’s employee count in China has declined by one-third to 5,000 workers. The company in April began moving apparel production for Japanese retail chain Uniqlo to Vietnam, where wages can be half those in China. Lever Style also is testing a shift to India for U.S. department-store chain Nordstrom Inc. JWN +0.09% and moving production for other customers. It’s a matter of survival. After a decade of nearly 20% annual wage increases in China, Lever Style says it can no longer make money here. Read more of this post

Chinese President Xi follows in Mao’s footsteps on path to consolidate power

Xi follows in Mao’s footsteps on path to consolidate power

Monday, 29 April, 2013, 12:00am

Wang Xiangwei xiangwei.wang@scmp.com

The president’s push to clean up the party may employ old tactics, but there’s reason to hope he wants more than just another purge

“Look in the mirror, dress properly, take a bath and see a doctor.”

Such advice might strike the ears of most people as plain and harmless. But that kind of order coming from the president and party chief surely sends shivers down the spines of many of the Communist Party’s 80 million members. Most of them understood that when the Politburo announced Xi Jinping’s campaign rid the party of “formalism, bureaucratism and behaviour that suggests mediocrity, laziness, laxity and extravagance”, what it really meant was: “Clean up your act. Or we’ll clean it up for you.” The year-long campaign, unveiled on April 19, requires any officials from the county level or higher to “reflect on their own practices and correct any misbehaviour”, according to Xinhua. It aims is to improve the party’s bond with the people, as well as fight corruption. Read more of this post

China Affair With Cheap Diamonds Heats Mass Market

China Affair With Cheap Diamonds Heats Mass Market: Commodities

China’s burgeoning middle class is buying diamonds so quickly that the price of mass-market stones is rising faster around the world than for top-quality jewels affordable only to the super-rich. Prices for a 1-carat internally flawless “top white” diamond have gained about 7 percent in two years, while a stone of similar size and color with slight imperfections jumped 24 percent, according to consultant PolishedPrices.com data. “The Chinese consumer’s fascination with luxury goods has grown dramatically, along with their pockets,” said Angelito Tan, founding partner of Robert, Tan & Gao, a consulting firm on luxury market strategy with offices in Shanghai and Beijing.

The price jump in more flawed diamonds benefits producers such as Russia’s OAO Alrosa, the world’s biggest by volume with 30 percent of output in 2011, and De Beers, the largest by revenue. Chow Tai Fook Jewellery Group Ltd. (1929), a retailer with a $13.5 billion market value, said its average selling price dropped in the last six months as it sold more pieces. Even as shoppers go down market in China, the world’s second-largest diamond buyer since 2011, the gap to top-flight stones is still large: A flawless 1 carat “top white” round diamond would cost about $28,800, according to online retailer Blue Nile, while a benchmark middle-market SI1-category diamond of the same size and color would cost about $7,200. China’s market was initially fueled by a rich elite pursuing the best diamonds available. As the economy grew, a new wave of buyers emerged, opening the market to lower-quality stones that form the bedrock of U.S. and European demand.

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Negatively geared Australian property investors lost an astonishing $13.2 billion in 2010-11, up from $10.1 billion the year before

Negative geared investors lose $13 billion

May 1, 2013

Peter Martin

Negatively geared property investors lost an astonishing $13.2 billion in 2010-11, up from $10.1 billion the year before. The latest Tax Office statistics show the average loss per negatively geared investor was $10,950, up from $9130 the year before. The average loss for a high-income negatively geared investor earning more than $180,000 was $23,800. Higher interest rates and rising property prices during 2010-11 swelled the losses. The figures identify negative gearing as one of the key drains on personal tax collections with one in every seven Australian taxpayers now a property investor and one in every 10 negatively geared.

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How eBay CEO John Donahoe Keeps Founders From Leaving After Acquisitions; “We need to create a culture where they can realize their visions”

How eBay CEO John Donahoe Keeps Founders From Leaving After Acquisitions

FREDERIC LARDINOIS

posted 2 hours ago

At TechCrunch Disrupt 2013 NY, eBay’s CEO John Donahoe talked to Bloomberg’s chief content editor Norm Pearlstine about how the company screens its acquisitions and how he keeps founders from leaving after the acquisition. Since becoming eBay’s CEO, Donahoe said, the company has made about 20 acquisitions. Currently, fifteen of the founders that joined eBay and PayPal after their companies were acquired are still at eBay and most of them are in executive positions. After the company acquired Zong in 2011, for example, Zong’s founder David Marcus became PayPal’s vice president for mobile. After essentially getting tested in that position, he became the President of PayPal last year. Similarly, when eBay acquired Hunch (also in 2011), its team of co-founders, including Chris Dixon, Tom Pinckney and Matt Gattis joined the company (with Dixon leaving after about a year). Today, this team is in charge of eBay’s homepage. Donahoe believes that in order to keep founders from leaving, eBay needs to give them the opportunity to grow inside the company. Because of this, he is also most interested in acquiring companies where the management team believes that they can execute their vision inside eBay. “We are always looking for companies that have a strong vision,” Donahoe said. “And then we allow them to innovate at a higher level.” The kind of founders he likes, he said, are “founders come to us and say we founded our company to do x and would like to take it to the next level.”

In his view, this strategy has been a key ingredient to eBay’s and PayPal’s success. Acquisitions, in his view, drive innovation inside a large company like eBay and bringing in founders as executives – and giving them monetary incentives to stay as well, of course – is a key part of this strategy. As for the details of these incentives, Donahoe noted that “most of the founders make money in the acquisition In some cases the acquisition price is tied to staying for a two-three year period. But yes – we provide incentives to stay. We provide good compensation, but at the end of the day, we need to create a culture where they can realize their visions.” He does, for example, regularly meet with founders to discuss the state of the company. These discussions have, for example, lead to the redesign of the eBay’s homepage. It’s that kind of impact, he believes, that keeps founders at eBay.

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