New Advisory, On Finance

You know the type, went to Princeton or CalTech, got a PhD in atomic physics, but prefers to work part time in a bicycle shop instead, with a simple and inexpensive lifestyle yet would never tell you they had an advanced degree.  Minimal, calm, more or less content, relative to the scale of all the things that can become a man or woman–rancorous if not expensive divorced with kids, stuck holding the bag on back taxes, due to the malfeasance of a former if not long departed business partner, ill health, or depression.  Relationships, finance, health, and soul.

I used to manage 40M at Morgan, inches shy of becoming a Senior VP and, at this point, probably bought and sold 200 or even 300M in stock or equivalents since my ignomious end in 2000.  Lessons learned.  Compliance.  Integrity of agreements.  Impeccable disclosure, etc.

So years latter, when folks approach me, about helping them with their money, you could imagine how many hundreds of things go through my mind, when occurs.

Recently, in addition to the 200k I have been managing in the last year or two, for A & S on a fee basis, a gent I have worked for in the last three years approached me recently, about helping him with his portfolio.  East street.  Yet what is not so easy:

I am not a stranger to this situation.  In fact, not only do I know ALL his situations, but have worked in his home, for YEARS, on all his administration.  In addition to organizing his stuff, I have seen ALL his accounts, if not authorized administrator on several accounts.  And when not signed, surely get to see it all…… Yet over years, not once, not once did I ever offer and opinion about his stocks.  I asked once, a year or two OK, ‘How do you decide what to sell?’  That is all.

Its like being a serious free climber, and asking a new climber, ‘I see you can get up there.  But how do you plan to get down?’  Very gentle and understated.  Not ‘Dude!  You wanna die??  WFT are you doing??  Nuts!’

Recently I was asked–by him–to look after his 250k.  But not only do I not have TPA, ‘third party trading authorization’, but his brother is an attorney.  A big one.  Like 10M+ type wealth.  He was lead on the Enron litigation.  Writes letters to SEC, on observed issues.  Lord.  Yet K and I get along well, and have well earned trust.

It all changed Monday.  He said, ‘Sounds good to me’, as to my being a lot more involved.  Finally.  Three year rapprochement.  Now, the small matter of directing activity, as executed by the Client directly, without HIS Schwab broker having a heart attack, by feeling threatened.  Lets see what happens.

 

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Posted in Advisory, Clients, Creative, Engagement, Establishing, Financial, Investment, Markets, Roles, Services, Special Projects, Special Roles, Trading

Market Analysis and Lead Development

A successful and very well established and radio podcast on Ecology and Climate approached me in December, wanting to know exactly what I did and how much my standard rates were.

This was due to my having supported a well known climate systems scientist, by having continuously developed and furnished his website since September of 2015, and in due course, having interacted with this podcasts founder and producer on matters of content and distribution.  This show has been furnished for nine years and is broadcast in 93 locations.

Not only did we–the founder and I–always get along well, but this scientist had said he valued the opinion of two specific persons, for key matters at HIS site–this podcaster and me.  Moreover this podcaster was the favorite interviewer of scientist I have been supporting.   So it was all an easy and comfy approach, within a circle of confidence.

What is interesting to me and very unique, is that I never approached the radio show about consulting, but they approached me, given my reputation for consistency, accuracy, and performance.  AKA results.

They needed two things:  one, practical insights as to how to improve their webpage, and two, my expertise in developing then deploying a direct sales process.

Since they already had a complete web rebuild, this was a matter of helping them be more effective–a good site which could still be better.

On the other hand, they had no direct sales process, and we both agreed that it was money well spent, to find out the feasibility of cold calling.  ‘Unsolicited email’ is proven, as NOT effective.  Folks dont read email like ‘this’, or if they do, can hardly attend to.   We can bearly read what we get from our dearest friends.  But strangers?

So what I did, was a value chain analysis of the demographics of fifty US states, according to a mix over overlayed factors, ranging from red-blue, attitudes to gun control, gay marriage, and conventional religion.  I then narrowed down a list of ten or twelve states likely as favorable to caring about Rapid Climate Change, to a sample of six representative states to start out with–two in the northwest, one in north central, one in the northeast, mid atlantic, and south.

This gets into my bread and butter, which is not just to evaluate and operate and market/sell, but to establish feasibility.  As we say in Wall Street, ‘you cannot kiss all the girls’.  So we will find out, the yield, productivity, cost, and odds of success for a campaign of cold calling to college, commercial, and public radio and thus evaluate cost versus benefit.  This has real value, after operating for nine years.  No one knows and we will find out, without undue cost.

I have to not only analyze the market, but to get the leads, build the CRM, and make the calls.  There are things which you cannot hire a specialist for, but only a strong generalist who can see all the elements and operate them.

Lastly, sometimes you do a small project and it might not pay a large fee, but is very valuable for what you can give, what you learn, and what it can lead to.  Aka a great opportunity!

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Posted in Accessment, Analytics, Approach, Clients, Communications, CRM, Effectiveness, Engagement, Getting Started, Mapping, Marketing, Markets, Outreach, Podcasts, Projects, Short Term Engagment, Starting, Sustainability

When It is Time To Go

20180129_225337I once casually dated a wonderful woman once named J, who told me how she gave up her number one client, who generated over 60% of ALL her fees for public accounting, because she did NOT agree with how they wanted their accounting done.  Talk about brass.  Yet she could no longer accept things as they were, and said, let the chips fall where they may.  We were not a match, and friendship was the clear outcome.

Here is the real essence of the story.  She told me how, within ONE week of this decision, THE Bill and Melinda Gates Foundation contacted her, and wanted her to do their public accounting.  Can you imagine?  They grabbed her and hired her immediately.

So three weeks ago, I resigned from the American based, Chinese start up, which I had been intimately involved with, since early December of 2016.  Yet there are no recriminations.  It was an invaluable experience.  Lots of good memories and things I so much appreciated.  I am not being political–doubt there are those who would bother to read or check.  Just a fact.  Yet there comes a point, among husband and wife, old friends, or associates, where you just know its not an ideal fit, and shed tension for the good of all.

Its so important, that if you work closely with persons, that not only do you appreciate them and they you, but that you share a vision of how work gets done and how business is done.  A core as it were.  And I must save my precious resources, to give my time and attention to those who I fit, who fit me, and who I can help.

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Posted in Announcements, Controls, Discipline, Effectiveness, Elevating, Ethics, Long Term Project, Major Roles, Organizational Development, Roles

When You Know What To Do, But Remain Silent

I have worked for K for the last three years, sorting his paperwork, memorabilia, and possessions.  Every other week, twice in one week or four visits per month.  Besides his having given 40,000 golf lessons and ‘still swinging’ at age 85, we have had, by now, a long and complex and emotionally intimate relationship and am trusted by his key constituencies–senior lead attorney brother, estate planner, admin on some medical, access to banking records, the whole nine yards.  Sometimes, I even find $750 cash hidden in junk mail, so tell him, ‘don’t throw anything out, unless it’s through me!’  I know all his stuff.  98% of it anyway…

Months ago, when after he was ‘this close’ to ready to allow me, to set up online access, to his banking, which I surely get to see the results of, he decided to squelch it and said he ‘did not want to do it’.

And I used to manage $40,000,000 in capital at Morgan Stanley, yet it was not my place to offer an unsolicited opinion as to his risk or lack of risk, results or lack of results, balance or imbalance on his brokerage account, looked at thing as they came through, and never once offered a thought.  So if banking real time view privileges was out, surely not all the investments?

Yet in the course of conversation, two or three weeks ago, when the market tanked, he took a real interest in my views.  So we agreed for HIM to get online access, to his major broker, de facto, so I could see his account and be better able to look along, as distinct from month end prints……….. This is progress.

How hard it was, to establish pins, authentications, so as we got through it, first it was his broker concerned about red flags since K does NOT use the internet or email, then emails to and from his brother, notes, everyone upset or disturbed or affected.  Told them all  I cannot take this risk.  Not a relationship risk.  Not a financial risk.

I was asked to look at this.  That is all!  If I am right, I am a hero.  But if I am wrong, loose trust with everyone.  Know your place and tread lightly.  In the end, up or down seven or eight thousand dollars in a week is no joke.

Get over being so sensitive, and get over territory and help the dear man.  Yet I know why the broker was concerned.  I understand.  Yet mark my words.  Global stocks, aka the ‘synchronized global recovery’ is long in the tooth, and unmanaged portfolios will suffer when untended.

When you know exactly what to do, but cannot, and are in a group of persons, and where each one has a good opinion, and many shades of gray in confidence, trust, disclosures!  Help others.  That is my path.

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Posted in Advisory, Analytics, Approach, Assets, Capabilities, Clients, Communications, Controls, Ethics, Financial, Globalization, Representation, Roles, Services

Contact Management for an Entire Industry

Industrial cold calling is hard work.  Really hard work.  In another way, its also very easy work.  After a year or more, not only did I establish target markets for the entire United States, but I had to be the one to go in, and take the early bows and arrows.

Its all well and good to say, ‘yes, we know the energy industry uses Industrial Fabrics’ but you cannot call up Exxon, Chevron, Or BP and just talk to them.  So you try to find end users and distributors.  The big ones do not need a fifth or sixth supplier nor another relationship.  And the small ones either do not buy or, when they do, only sporadically.

I looked up ALL 1200 locations shown by a major competitor, as distributors, then did it a second time for a second major competitor, and either called them, or led a team to do so.  Thus we found 95% of the main distributors.

So I had to map an entire value chain, ‘process map’ the entire United States.  First refineries, then welding suppliers, then manufacturer representative.  Then the ah hah moment, getting to end users, some good, some bad.  Shipyards are a lot easier to talk to than chemical companies.  Glass making and aluminum, very hard to engage.  Foundries and fabricators sound so good, but hard to also talk to.  Key personnel do not want to sit by the phone, or when they do, know better than to talk to you.

You pretty much need to build a CRM–I prefer Google Sheets–in what would otherwise be Excel, but then when you hire other persons, needs to be sharible.

Early on, having left the distributor-importer start up, then came back, I had to unravel all the chaos.  No blame.  Senior sales guy we hired, was by himself.

Most important of all, assign a date or value to all leads as open, closed, or pending, what I call ‘yes, no, or maybe’?  And when in the grey zone, how hard do you try and how to account for that in a group process.

Then curating those evaluations–when you last spoke, when to talk next, when blocked and have the case notes so a group of FOUR persons can share the data and act.  That is what I proudly set up.

You cannot always get your say, but in the end, the group said the sheet got too big, and asked to split it between supplier, industrial-insulation, MRO-shipbuilding, and enterprise-reps.  Yet I took gigantically undefined areas and make a structure first for my boss, and me, then a senior sales person, then a junior associate.

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Posted in Sales, Structure

Distorted Rates, Prolongs the Lives of Marginal Businesses

2018-03-01_9-32-41

Above graphic, added from 3/02/2018

James Grant. Smart guy: ‘Markets Trust Too Much in the Presence of Central Banks‘, ref also by Zero Hedge:

Well said:  ‘Interest rates are prices. In fact, they are the most consequential prices in a market economy because they discount future cash flows and they help us to set investment hurdles and to measure financial risks. In short, interest rates are prices and prices convey information and distorted prices convey misinformation. So if you want to build a factory or estimate the financial risk in a given security today’s interest rates are just the information you don’t need to make an informed decision.

What’s the fallout of distorted interest rates?  The great Frédéric Bastiat, a French economist, statesman, and author during the 19th century, published a famous essay called »That Which is Seen, and That Which is Not Seen».

In essence, he writes that when you do something there are to be two outcomes: First, the one which you intend and second, the one you didn’t actually intend but then nonetheless occurs.

So when we judge the effect of these unconventional monetary policies it’s important to take into account not just what the policy makers intended but also what they brought about, although not intending it.

It seems to me that the unintended consequences are very much adverse of these policies. Namely, the world-wide distortion of interest rates because markets are connected by arbitrage.’
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‘Why is that so concerning?  One of the unintended consequences – and this is truly unseen or at least is rather subtle – is that these policies tend to prolong the lives of marginal businesses. That’s because they can be sustained through the issuance of very cheap debt. Certainly, in the case of Japan it’s clear that one of the consequences of this great post boom hangover that’s now a generation long is to perpetuate the lives of zombie companies.

Capital is like a forest: It needs death as well as life. It reduces the dynamism to an economy if unsuccessful businesses don’t make way for new ones: new ideas, new people and new capital. So these very low interest rates act as a kind of a drug. They perpetuate the status quo, as unprofitable that status quo might be.’

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Posted in Investment, Shared
About David
David Korn Special Projects has over twenty years experience in the creation, planning, operation, delivery, and refinement of the complete life cycle of complex and demanding projects. These can involve people, results, or process. Projects can be for events, business planning, financial analysis, construction, litigation, or investment.
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