Private Equity’s Struggle to Spend It; Buyout Firms’ Biggest Challenge Next Year Could Be Finding Deals in a Crowded Market

Private Equity’s Struggle to Spend It

Buyout Firms’ Biggest Challenge Next Year Could Be Finding Deals in a Crowded Market

RENÉE SCHULTES

Dec. 31, 2013 5:59 a.m. ET

Nothing says froth like an initial public offering for a ski-jacket maker that is 31 times oversubscribed by investors. Yet the pristine conditions that greeted Italy’s MonclerMOV.MI +7.12% when it slid onto the public markets in December had already supported a record $41.3 billion in other private equity-backed IPOs in Europe this year, according to Dealogic. Read more of this post

Mexico’s Amazing Year

Mexico’s Amazing Year

Spare a thought for Mexico’s President Enrique Pena Nieto. After engineering an ambitious reformist pact among Mexico’s three major political parties, he whirled through his first year in office rewriting laws on everything from energy to television and education to elections. Yet Mexico’s economic performance in 2013 was disappointing, and Mexico’s businesses and foreign investors aren’t exactly exuberant. It’s enough to damp a reformer’s spirits. Read more of this post

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

January 1, 2014

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

By NATALIE KITROEFF

Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning. Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.” Read more of this post

Latvia brings dirty money trouble to EU; Eurozone creates mixed feelings in Central Europe

Latvia brings dirty money trouble to EU

Eurozone creates mixed feelings in Central Europe

AP, AFP-JIJI

DEC 31, 2013

WARSAW/RIGA – When Latvia adopts the euro on Wednesday, it will bring with it a banking sector that is swelling with suspicious money from Russia and the East — just as the currency bloc is trying to clamp down on such havens. Read more of this post

Glasnost must be embraced by central bankers

January 1, 2014 10:47 am

Glasnost must be embraced by central bankers

By Julian Callow

With the intensification of the financial crisis in 2008, central banks cut rates sharply and rapidly ran into the zero interest rate bound, necessitating a recourse to non-conventional measures. Read more of this post

Fiat is cleverly buying out Chrysler, using Chrysler’s own money

Fiat is cleverly buying out Chrysler, using Chrysler’s own money

By Jason Karaian @jkaraian an hour ago

vehicle-production-2012-current-market-cap_chartbuilder1

More than four years after it first bought a stake in Chrysler, Fiat is finally taking full control of the American automaker. The deal is valued at $4.35 billion for the 41.5% of Chrysler that Fiat does not already own. The transaction is expected to close by Jan. 20, according to Fiat (pdf). The markets clearly think Fiat boss Sergio Marchionne got a good deal—the Italian car company’s shares are soaring today: Read more of this post

Billions Vanish in Kazakh Banking Scandal

Billions Vanish in Kazakh Banking Scandal

Kazakhstan’s BTA Bank Accuses Former Chairman of Fraud

CHARLES FORELLE

Updated Jan. 1, 2014 10:38 p.m. ET

Mukhtar Ablyazov’s wife, Alma, with their daughter Madina. European Pressphoto Agency

LONDON—A Ukrainian lawyer named Olena Tyshchenko traveled to the Royal Courts of Justice on the afternoon of July 22 as a bit player in one of the most complex legal dramas ever seen here. Read more of this post

A Few Brave Investors Scored Huge, Market-Beating Wins

A Few Brave Investors Scored Huge, Market-Beating Wins

Gold Bears and Stock Bulls Were 2013’s Victors

GREGORY ZUCKERMAN, ROB COPELAND and NICOLE HONG

Updated Jan. 1, 2014 8:26 p.m. ET

P1-BO615_WINNER_G_20140101185407

A trader who made more than $100 million from a $10 million bet against gold. A hedge fund that gained 42% after a bullish wager on stocks. A firm that saw returns of 48% thanks in part to soaring Japanese stocks. Read more of this post

Erdogan Resignation Call Chokes Lira Prop-Up Plan: Turkey Credit

Erdogan Resignation Call Chokes Lira Prop-Up Plan: Turkey Credit

Turkish central bank Governor Erdem Basci’s attempt to buy himself time to boost the lira amid a corruption probe took a beating after a third minister resigned and urged Prime Minister Recep Tayyip Erdogan to do the same. Read more of this post

Emerging Markets Go to the Polls; Elections in Brazil, Elsewhere Add Uncertainty for Investors

Emerging Markets Go to the Polls

Elections in Brazil, Elsewhere Add Uncertainty for Investors

NEELABH CHATURVEDI And SERENA RUFFONI

Jan. 1, 2014 10:26 a.m. ET

For emerging-market investors, 2013 was a year of stomach-turning gyrations induced by the words of global central bankers. For 2014, add another dash of uncertainty: elections. Read more of this post

Denver Real Estate Booms as Ski Slopes Trump NYC Bustle

Denver Real Estate Booms as Ski Slopes Trump NYC Bustle

Lyndsey and Sameer Lodha had their pick of cities to call home after Sameer, a former equities trader who’s now a hand surgeon, got several job offers upon completing his residency. Read more of this post

Bond Funds Post Record $80 Billion in Redemptions in 2013

Bond Funds Post Record $80 Billion in Redemptions in 2013

Bond mutual funds in the U.S. posted record investor withdrawals of $80 billion this year as investors fled fixed income in anticipation that interest rates will rise further. Read more of this post

Bitcoin Is a High-Tech Dinosaur Soon to Be Extinct

Bitcoin Is a High-Tech Dinosaur Soon to Be Extinct

For all the regulatory crackdowns on Bitcoin in recent weeks, the cryptocurrency’s advocates remain unfailingly optimistic. Bitcoin is the future, they tell us; it heralds a future where private, stateless currencies will dethrone the dollar and other monetary dinosaurs. Read more of this post

Anger of factory workers poses a challenge for Cambodia’s Hun Sen

Anger of factory workers poses a challenge for Cambodia’s Hun Sen

Thursday, 02 January, 2014, 9:26pm

Reuters in Phnom Penh

Opposition party taps into resentment among 350,000 low-paid toilers to demand election re-run

Cambodian garment factory workers Then Any and Vong Pov are not showing up for work any more. Read more of this post

Batista’s Losers Shout and Sue as OGX Meltdown Casts Pall

Batista’s Losers Shout and Sue as OGX Meltdown Casts Pall

The 23-story Serrador building rises gracefully in downtown Rio de Janeiro, a rounded granite-and-glass art deco masterpiece that conjures the opulence of another era. Completed in 1944 and named for Spanish cinema-house promoter Francisco Serrador, it once held a luxury hotel with a nightclub that attracted a mix of Rio elites and visiting American movie stars. Read more of this post

As 2014 Dawns, Fortunes Hinge on Central Bankers

As 2014 Dawns, Fortunes Hinge on Central Bankers

Investors See Little to Shift Attention Away From Monetary Policy

TOM LAURICELLA

Jan. 1, 2014 11:40 a.m. ET

The new year kicks off much where 2013 began, with investors riding waves of money pumped into global financial markets by the world’s major central banks. Read more of this post

‘Credit Cassandras’ say strong demand for risky bonds is a sign of frothy markets

January 1, 2014 7:00 pm

2014 outlook: Sugar high

By Tracy Alloway and Michael Mackenzie

‘Credit Cassandras’ say strong demand for risky bonds is a sign of frothy markets

As snow fell in New York City on a December afternoon, waiters bearing trays of cookies fanned out among the group of bankers and investors gathered at the New York Athletic Club. The sweet biscuits were courtesy of Leonard Tannenbaum, chief executive of Fifth Street Management, who had a message for those attending the financial conference. Read more of this post

5 of Canada’s biggest market winners and losers in 2013

5 of Canada’s biggest market winners and losers in 2013

John Shmuel and David Pett | January 1, 2014 7:00 AM ET

We take a look at five of the best- and worst-performing stocks in the Toronto Stock Exchange’s S&P/TSX 60 index during 2013.

BEST

By John Shmuel

Valeant Pharmaceuticals International Inc. (VRX/TSX)

Annual return: 110.01%

Canada’s largest publicly-traded drug company was also the biggest winner on the S&P/TSX 60 Index in 2013. Valeant Pharmaceuticals International’s stock price more than doubled for the year as investors rewarded the company for its active and profitable acquisition streak. Valeant’s most recent deal, on Dec. 16, was an offer to buy U.S.-based medical-device company Solta for a 40% premium. RBC analyst Douglas Miehm gave the deal a big thumbs up, saying it showed Valeant’s ongoing efforts to expand its business. He also hiked his price target for Valeant to $120 from $117 following the announcement. Adding further allure for investors heading into 2014, Valeant’s management in October said they continue to hunt for profitable acquisitions and that Valeant would even be open to a “merger of equals.” Read more of this post

Impatient Optimists Vs Value Investors in the New Year 2014: The Billion Dollar Stories of Bill-Melinda and Lupin (Bamboo Innovator Insight)

The following article is extracted from the Bamboo Innovator Insight weekly column blog related to the context and thought leadership behind the stock idea generation process of Asian wide-moat businesses that are featured in the monthly entitled The Moat Report Asia. Fellow value investors get to go behind the scene to learn thought-provoking timely insights on key macro and industry trends in Asia, as well as benefit from the occasional discussion of potential red flags, misgovernance or fraud-detection trails ahead of time to enhance the critical-thinking skill about the myriad pitfalls of investing in Asia at the microstructure- and firm-level.

Dear Friends and All,

Nearly ten years ago, the Bamboo Innovator had met with the founder of a Chinese drugmaker who was seeking to list his firm in Singapore. As this Chinese entrepreneur hails from the northeastern Shandong province and Shandong men are generally stocky like rugby players, this particular entrepreneur stood out for being unusually small-build. So the Bamboo Innovator asked him and found out that he had been afflicted with polio when he was young and he managed to recover from the disease. The gritty entrepreneur remarked that I am the only fund manager who observed this condition and made an effort to ask; he is usually bombarded by questions about profit margins and guidance on sales figures. The Bamboo Innovator is positive on people who have overcome personal adversities in life as they tend to be resilient in creating value for others. We invested in the shares of this Chinese pharmaceutical company and not only did the market value climbed four-fold from around $75 million to $300 million, but importantly it was also possibly the only Chinese S-Chip firm whose accounting was clean and did not suffer when the wave of accounting fraud revelation swept across the statistically-cheap Singapore-listed Chinese firms during the 2007/09 Global Financial Crisis.

******

As we step forward into the New Year 2014, the Bamboo Innovator was captivated by a WSJ article “What I Learned in the Fight Against Polio” written by Bill Gates on Nov 10. It talks about how the Bill and Melinda Gates Foundation has helped India stayed polio-free for more than two years and the lessons for solving other human welfare issues worldwide. Impatient Optimists is the name of the blog (www.impatientoptimists.org) of the influential Bill & Melinda Gates Foundation featuring the work and stories of the people working every day to help alleviate suffering, poverty, diseases, promote health, and to help students realize his or her full potential. These are all urgent problems requiring innovative solutions that have long-term investment implications which we will discuss shortly with the story of the Indian compounder Lupin (NSE: Lupin, MV $6.5 billion) and how its focus in the neglected niche of anti-TB drugs transformed the firm into India’s third-most valuable listed pharmaceutical firm, compounding shareholders’ wealth by over 138-fold. Bill Gates wrote in a blog post on Dec 23 about a summary of “Good News You Might Have Missed in 2013” that include how we got smarter and faster at fighting polio and that funding commitment to the Global Fund to fight TB and malaria was renewed. Gates also shared a tweet expressing his excitement on what he is looking forward to seeing in 2014: a new vaccine called pentavalent that can prevent five diseases.

Gates

Lupin

Lupin (NSE: LUPIN) – Stock Price Performance, 1995-2013

To read the exclusive article to find out more about the story of Lupin, of Australia’s CSL which is up 85-fold to $29 billion and how value investors can potentially gaze at the next Lupin/CSL, please visit:

  • Impatient Optimists Vs Value Investors in the New Year 2014: The Billion Dollar Stories of Bill-Melinda and Lupin, Dec 27, 2013 (Moat Report AsiaBeyondProxy)

Impatient Optimists

 

Founder, manage thyself

Founder, manage thyself

BY JUSTIN YOSHIMURA 
ON DECEMBER 30, 2013

buddha

Ben Horowitz summarizes the hardest job of CEOs as, “managing your own psychology.”  Until recently, I believed that I was pretty good at this. After all, despite not taking more than a few days off since I was 15 — even after I sold my previous companies I would immediately start working on the next thing — I’ve never felt “burnt out.” Read more of this post

Anyone Who Thinks We Need A ‘Catalyst’ For A Market Crash Should Brush Up On Their History; There was no “catalyst” in 1929. Or 1966. Or 1987. Or 2000. Or 2008…

Anyone Who Thinks We Need A ‘Catalyst’ For A Market Crash Should Brush Up On Their History

HENRY BLODGET

DEC. 30, 2013, 7:57 AM 7,240 19

There was no “catalyst” in 1929. Or 1966. Or 1987. Or 2000. Or 2008… The stock market continues to push higher, on route to posting one of the best years in history. This advance comes in the fifth year of recovery from the financial crisis, and it has seen the S&P 500 nearly triple off its low of March, 2009. These years of gains have gradually made investors more comfortable again, and now there appears to be a widespread consensus that it’s finally “safe” to own stocks. I own stocks, so I’m certainly enjoying the advance. But unlike some other investors, I’m not feeling more comfortable as they move higher. Rather, I’m feeling less comfortable. Why? Read more of this post

Transparency the crux in China’s struggle to deal with rising debt; Fears after key China debt level soars 70% to $3 trillion

Last updated: December 30, 2013 7:36 pm

Fears after key China debt level soars 70%

By Tom Mitchell in Beijing

Local government debt levels in China have soared to almost $3tn in less than three years, according to an official audit highlighting one of Beijing’s most daunting challenges as it attempts to sustain economic growth while avoiding a financial crisis. Read more of this post

How to Worry Less About Money; What Goethe can teach us about cultivating a healthy relationship with our finances

How to Worry Less About Money

by Maria Popova

What Goethe can teach us about cultivating a healthy relationship with our finances.

The question of how people spend and earn money has been a cultural obsession since the dawn of economic history, but the psychology behind it is sometimes surprising and often riddled with various anxieties. In How to Worry Less about Money (public library) — another great installment in The School of Life’s heartening series reclaiming the traditional self-help genre as intelligent, non-self-helpy, yet immensely helpful guides to modern living, which previously gave us Philippa Perry’s How to Stay Sane, Alain de Botton’s How to Think More About Sex, and Roman Krznaric’s How to Find Fulfilling Work — Melbourne Business School philosopher-in-residenceJohn Armstrong guides us to arriving at our own “big views about money and its role in life,” transcending the narrow and often oppressive conceptions of our monoculture. Read more of this post

6 Ways To Create A Culture Of Innovation: Reward employees with time to think, while providing them with the structure they need

6 Ways To Create A Culture Of Innovation

REWARD EMPLOYEES WITH TIME TO THINK, WHILE PROVIDING THEM WITH THE STRUCTURE THEY NEED.

Every organization is designed to get the results it gets. Poor performance comes from a poorly designed organization. Superior results emerge when strategies, business models, structure, processes, technologies, tools, and reward systems fire on all cylinders in symphonic unison.

EDITOR’S NOTE

12/30/13

Happy (almost) New Year! We’re saying good-bye to 2013 by revisiting some of our favorite stories of the year. Enjoy. Savvy leaders shape the culture of their company to drive innovation. They know that it’s culture–the values, norms, unconscious messages, and subtle behaviors of leaders and employees–that often limits performance. These invisible forces are responsible for the fact that 70% of all organizational change efforts fail. The trick? Design the interplay between the company’s explicit strategies with the ways people actually relate to one another and to the organization. Read more of this post

10 Extraordinary People and Their Lessons for Success

10 Extraordinary People and Their Lessons for Success

by Sarah Green  |   9:00 AM December 30, 2013

From presidents to hip-hop producers to poets, the last page of every issue of Harvard Business Review is always an interview with someone who has succeeded outside the traditional corporate world. Here, some of our favorite lessons from the class of 2013:

Justice Sandra Day O’Connor on having long-term colleagues: “Treat people well. Don’t mislead them. Don’t be prickly. Don’t say things that are aggravating. Try to be as agreeable as you can be. Try to be helpful rather than harmful. Try to cooperate.”

Cartoonist Scott Adams on using his MBA: ”When the comic strip first came out, it showed Dilbert in a variety of settings—not just the office. I didn’t really know what was working, because I had no direct contact with readers… So way back at the dawn of the internet, I started putting my e-mail address in the margin of the strip… I found out that there was a common theme: People loved it when Dilbert was in the office, and they liked it a lot less when he was at home or just hanging around. So Dilbert became an office-based comic, and that change made it all work.”

Chef Nobu Matsuhisa on starting as an apprentice: “I was 18 and didn’t know anything about fish. My mentor taught me the basics. For the first three years, I didn’t make sushi; I washed dishes and cleaned the fish. But if I asked questions, he always answered. I learned a lot of patience.”

Saturday Night Live producer Lorne Michaels on hiring: “I wouldn’t choose anyone whose side I didn’t want to be on. It isn’t like we hire 12 and figure six will work. We don’t bring in anybody we’re not rooting for. Sometimes they succeed in week five, but for most people it’s two, three, four years before they become who they’re going to be. You have to allow for that growth.”

 

Hip-hop mogul Russell Simmons on meditating twice a day: “Every creative idea, every second of happiness, is from stillness…. But the way you move around the world has nothing to do with the stillness in your heart. Moving meditation—that’s what we have to practice. It doesn’t mean you have to move slow; you just have to see the world in slow motion.”

Golfer Arnold Palmer on learning humility: “One time at Augusta, I was going into the last hole with a one-shot lead to win the Masters, and a friend from the gallery hollered at me, so I walked over and accepted congratulations. And then I proceeded to make six on the hole and lose. My father had warned me about that. I was told all my life not to accept congratulations until it’s over.”

Poet Maya Angelou on courage: “One isn’t born with courage. One develops it by doing small courageous things—in the way that if one sets out to pick up a 100-pound bag of rice, one would be advised to start with a five-pound bag, then 10 pounds, then 20 pounds, and so forth, until one builds up enough muscle to lift the 100-pound bag. It’s the same way with courage. You do small courageous things that require some mental and spiritual exertion.”

Designer Philippe Starck on persuading clients: “I’m very good at explaining. I don’t work like a diva. I don’t say, “Oh my God, that must be pink,” and refuse to discuss it… I am cuckoo, yes. I am the king of intuition. But I am also a serious guy. I explain in a clear way. And then, even if it’s something that looks completely different than expected, something completely against mainstream thinking, clients understand. I explain that it might look strange but why, given the two to five years it will take for development, it will for so many reasons be exactly the right thing to do… And then the clients agree, always, 100%.”

President Mary Robinson on being frank: “At every stage, it’s [a] passion for human rights that has prompted me to speak truth to power, to stand up to bullies, to be prepared to criticize even the United States after 9/11. People told me it wouldn’t help my career as high commissioner, but it seemed much more important to do the job than to try to keep the job.”

Historian David McCullough on hard work: “When the founders wrote about life, liberty, and the pursuit of happiness, they didn’t mean longer vacations and more comfortable hammocks. They meant the pursuit of learning. The love of learning. The pursuit of improvement and excellence. I keep telling students, ‘Find work you love. Don’t concern yourself overly about how much money is involved or whether you’re ever going to be famous.’ …In hard work is happiness.”

How to Find Fulfilling Work: On the art-science of “allowing the various petals of our identity to fully unfold.”

How to Find Fulfilling Work

by Maria Popova

On the art-science of “allowing the various petals of our identity to fully unfold.”

“If one wanted to crush and destroy a man entirely, to mete out to him the most terrible punishment,” wrote Dostoevsky“all one would have to do would be to make him do work that was completely and utterly devoid of usefulness and meaning.” Indeed, the quest to avoid work andmake a living of doing what you love is a constant conundrum of modern life. In How to Find Fulfilling Work (public library) — the latest installment in The School of Life’s wonderful series reclaiming the traditional self-help genre as intelligent, non-self-helpy, yet immensely helpful guides to modern living, which previously gave us Philippa Perry’s How to Stay Sane and Alain de Botton’s How to Think More About Sex — philosopher Roman Krznaric (remember him?)explores the roots of this contemporary quandary and guides us to its fruitful resolution: Read more of this post

7 Things I Learned in 7 Years of Reading, Writing, and Living

7 Things I Learned in 7 Years of Reading, Writing, and Living

by Maria Popova

Reflections on how to keep the center solid as you continue to evolve.

On October 23, 2006, I sent a short email to a few friends at work — one of the four jobs I held while paying my way through college — with the subject line “brain pickings,” announcing my intention to start a weekly digest featuring five stimulating things to learn about each week, from a breakthrough in neuroscience to a timeless piece of poetry. “It should take no more than 4 minutes (hopefully much less) to read,” I promised. This was the inception of Brain Pickings. At the time, I neither planned nor anticipated that this tiny experiment would one day be included in the Library of Congress digital archive of “materials of historical importance” and the few friends would become millions of monthly readers all over the world, ranging from the Dutch high school student who wrote to me this morning to my 77-year-old grandmother in Bulgaria to the person in Wisconsin who mailed me strudel last week. (Thank you!) Above all, I had no idea that in the seven years to follow, this labor of love would become my greatest joy and most profound source of personal growth, my life and my living, my sense of purpose, my center. (For the curious, more on the origin story here.) Read more of this post

“Work as hard as you can, Imagine immensities, don’t compromise, and don’t waste time.”; Fail Safe: Debbie Millman’s Advice on Courage and the Creative Life

Fail Safe: Debbie Millman’s Advice on Courage and the Creative Life

by Maria Popova

Work as hard as you can, Imagine immensities, don’t compromise, and don’t waste time.”

The seasonal trope of the commencement address is upon us as wisdom on life is being dispensed from graduation podiums around the world. After Greil Marcus’s meditation on the essence of art and Neil Gaiman’s counsel on the creative life, here comes a heartening speech by artiststrategist, and interviewer extraordinaire Debbie Millman, delivered to the graduating class at San Jose State University. The talk is based on an essay titled“Fail Safe” from her fantastic 2009 anthology Look Both Ways: Illustrated Essays on the Intersection of Life and Design (public library) and which has previously appeared onLiterary Jukebox. The essay, which explores such existential skills as living with uncertaintyembracing the unfamiliar,allowing for not knowing, and cultivating what John Keats has famously termed“negative capability,” is reproduced below with the artist’s permission. If you imagine less, less will be what you undoubtedly deserve. Do what you love, and don’t stop until you get what you love. Work as hard as you can, imagine immensities, don’t compromise, and don’t waste time. Start now. Not 20 years from now, not two weeks from now. Now. Look Both Ways: Illustrated Essays on the Intersection of Life and Design is an absolute treasure in its entirety, the kind of read you revisit again and again, only to discover new meaning and new access to yourself each time. It was preceded by How to Think Like a Great Graphic Designer and followed by the recent Brand Thinking and Other Noble Pursuits, both excellent in very different but invariably stimulating ways.

What Is Love? Famous Definitions from 400 Years of Literary History; “Love has nothing to do with what you are expecting to get — only with what you are expecting to give — which is everything.”

What Is Love? Famous Definitions from 400 Years of Literary History

by Maria Popova

“Love has nothing to do with what you are expecting to get — only with what you are expecting to give — which is everything.”

After those collections of notable definitions of artscience, and philosophy, what better way to start a new year than with a selection of poetic definitions of a peculiar phenomenon that is at once more amorphous than art, more single-minded than science, and more philosophical than philosophy itself? Gathered here are some of the most memorable and timeless insights on love, culled from several hundred years of literary history — enjoy. Read more of this post

Interview with Calvin & Hobbes Creator Bill Watterson; coming at a new work requires a certain amount of patience and energy, and there’s always the risk of disappointment.

Mental Floss Exclusive: Our Interview with Bill Watterson!

For the December issue of mental_floss magazine, Jake Rossen managed to do something we thought was impossible—he snagged an interview with the legendary Bill Watterson! Since we’re guessing there are a few Calvin and Hobbes enthusiasts in the audience, we thought we’d provide a glimpse of the e-mail exchange. For our full story on the comic strip, be sure to pick up the print magazine. Read more of this post