A Half-Dozen Ways to Look at the Unit Economics of a Business

3 01 2017

25iq

 

McCaw Cellular Communications sold to AT&T for $12.6 billion in September 1994. And yet the business did not show an accounting profit on its income statement until the second quarter of that year (after the deal was announced on August 17, 1993). The McCaw  Cellular example shows that you can create a tremendous amount of value for shareholders without showing any profit on an income statement. Or not. Here below is a picture of a real letter from Craig McCaw sent in July of 1994 which documents what I said above.

mccaw-pic-3

Amazon and Netflix are examples of the same value creation phenomenon as are many businesses that John Malone has created over the years. This post will try to help people understand why this is true.

The drumbeat of people (especially reporters) saying a that a business is “losing money” and is therefore doomed is constant. People with a…

View original post 919 more words

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One Month Since #Demonetisation : Linkfest

11 12 2016

On December 8th, 2016, it is one month since the Demonetisation was announced. After 30 days, many columnists and commentators have written pieces to look at this rather disruptive event in Indian economic history. This topic refuses to leave the headlines, as India is struggling to get hold of cash to get on with their daily lives. The Government has gone on a overdrive to make India adopt digital payments and become a cash-less society.

  1. Twists on the road by T.N.Ninan in Business Standard
  2. India’s cash bonfire is too much too soon by Kenneth S.Rogoff in Financial Times
  3. Fifth column : Murmurs of trouble by Tavleen Singh in The Indian Express
  4. Demonetization will cause grievous injury to the honest Indian by Manmohan Singh in The Hindustan Times
  5. “‘Modi has intense desire to do something but lacks imagination”says Ashis Nandy in The Wire
  6. India’s demoetization debacle by Sadanand Dhume in Wall Street Journal
  7. India’s botched war on cash by Bhaskar Chakravorti in Harvard Business Review
  8. Modi’s attempt to crush the black economy is hurting the poor in The Economist
  9. April 2017: Earliest India will get it’s cash back by Sahil Kini in IndiaSpend
  10. War on black money : Demoentization is a courageous reform that will bring substantive benefits by Jagdish Bhagwati and others in Times of India
  11. A monumental disaster in offing by James Wilson in his blog
  12. Costs and benefits of the currency swap I and II by V.Ananta Nageswaran in Mint

 

Newspapers are conducting surveys to assess the impact of Demonetization in the ground

  1. Demonetisation: Consumption down, but cash ban gets a thumbs up in Economic Times
  2. Express survey : 41 % feel government did not plan well for demonetization in The New Indian Express

The link to the earlier Linkfest on Demonetisation is here.Link 





#BestBooks of 2016 According to EconFinance Twitter

5 12 2016

By @toby_n

EconFinanceTwitter is great. Here people refer me to papers and stories I  would never have otherwise read, and this happens many times a week. As we come to the end of th…

Source: I asked EconFinanceTwitter what their best books of 2016 were – this is what they said





RIP Anand Halve

23 11 2016

I follow Kiran Khalap, co-founder of Chlorophyll – India’s first end-to-end brand consultancy firm on Twitter. His twit today on Anand (Andy) Halve’s untimely death made me very sad. To Andy, another co-founder of Chlorophyll goes the credit of shaping the hitherto fledgling discipline of  brand planning in India . And the careers of hundreds of young advertising professionals.

Albeit for a few months, I had  the good fortune of working with Andy in Enterprise in the mid-90’s. His brilliance in fusing rigorous analysis with wild imagination set him apart from his peers.

Andy’s dazzling wit could  lit up even the dreariest of moments. I had never seen Andy losing his cool. Or, short of words. Andy’s joie de vivre was truly infectious.; his  parents were prescient in choosing his name.

In the days and months to come, Andy’s countless friends will be reminiscing about the episodes in their lives made unforgettable by the grace, warmth and joyousness of a gentle soul.

Rest in peace, Andy!

 

 

 

 





Why Do NRI Professionals Find India So Difficult ?

22 11 2016

As Indian companies want to expand overseas and become globally competitive, one often cited prescription is to get the best people particularly NRI professionals to work in India.

Some NRIs are keen to return to India for various reasons, sometimes professional and sometimes personal or both. Compensation at the top is hardly a constraint these days for top professionals.

Yet, I see from several anecdotal evidences that the NRIs who choose to return to India taking plum assignments in top corporates or even government, wish to return back and many do.

Raghuram Rajan is back to teaching at Chicago. Kaushik Basu is back to US as a World Bank Economist. The recently fired Nirmalya Kumar after being in Mumbai for three and a half years is also leaving India, though he has not announced where he is heading.

I have spoken to a few friends who chose to return back after spending a few years here and this is their gripe about India and Indian organisations.

1. Professionalism in even the so-called professionally managed organisations is a 3 Micron gold plating. Beneath the coat is feudalism, bureaucracy, nepotism and a deep seated hatred for outsiders. Factions based on state, caste, village and colleges prevail. Merit is often the casualty. Mutual respect and valuing other persons time is more an exception than a rule.

2. The families find it very difficult to navigate the daily life in India. Be it the school or the traffic or getting simple things done at home. Unlimited patience and perseverance is required. Also, one can hardly trust anyone, because falsehoods and promising more and delivering less is the norm here.

3. The high pressure school environment in India with almost total focus on academics often puts off children who started studying in a western system.

4. India is no longer inexpensive. For global class goods and services, you pay dollar prices.





Aswath Damodaran On Tata-Mistry Feud

19 11 2016

Aswath Damodaran, Prof of Finance at the Stern School of Business at NYU is considered an authority on valuation. He has written an interesting blog post on the Tata-Mistry feud.

Here is the link





Indian IT: As growth cracks, acquisitions the only way forward

17 11 2016

Big IT companies are parking their cash in mutual funds and bank FDs now

Source: Indian IT: As growth cracks, acquisitions the only way forward








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