Thursday, September 03, 2009

25 insightful investment sayings from legendary investor Warren Buffett:

25 insightful investment sayings from legendary investor Warren Buffett:

1. "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1"

2. "In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond."

3. "The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable."

4. "Be fearful when others are greedy. Be greedy when others are fearful."

5. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

6. "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact."

7. “You only find out who is swimming naked when the tide goes out.”

8. "Risk comes from not knowing what you're doing."

9. "If I was running $1 million today, or $10 million for that matter, I'd be fully invested. Anyone who says that size does not hurt investment performanc e is selling. The highest rates of return I've ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that."

10. "Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down."

11. "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."

12. "Price is what you pay. Value is what you get."

13. "I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."

14. "If a business does well, the stock eventually follows."

15. "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

16. "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well."

17. "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderell a at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands."

18. "Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."

Wednesday, February 04, 2009

Innovation Strategies

Innovation Strategies
When talking about Innovation Strategies, I mean by how do we get new products and services implemented in our companies.
How do we come up with new ideas,
How do we validate new ideas and make sure it makes sense.
This concept is not for design design teams or just senior management but critical for your engineers and middle management.

1. Customer Shadowing
- Understand client work requirements, why are they doing certain items, what are they trying to accomplish those tasks.
- Understand how they are going about doing it. Eg - What are their work flows.
- Identify areas of improvement, this could be both product and service oriented improvement.
- Product oriented improvements are basically either productivity improvements, new data collection mechanisms and archival mechanisms. application of technology .
- Service Oriented improvements are new services your company can offer in a cost effective manner such that can improve client
[ Most importantly sales people get involved in this innovation process because they provide market intelligence. This type of innovation is very incremental. This has maximum payback since you are not venturing into the unknown space]

2. Rapid Prototyping

- Prototype new ideas continuously
- Implementing by Experimenting
- Prototypes should be small
-Prototypes should be easy to produce
[This innovation has a lot of risk and payback because you are venturing into the unknown. Prototyping minimizes risk but still this innovation method can be used to leap frog the competition.]

3. Pattern matching other Industries
- Study successful companies in other industries
-Understand their processes and produucts.
- Find if there are patterns you can emulate in your industry.
[This is the most overlooked part of innovation circle, when we do Pattern matching the ideas generated already are in place in other industries and they work. What you will have to do is to bring them over and vet them properly to make sure they fit.]

Tuesday, January 27, 2009

Sales Process

Sales Process

Well defined sales process helps the sales person stream line his activities such that it acts as a road map to every opportunity possible. It makes the sales repeatable such that the once you have a successful process in place you can just repeat the process for 90% of the situations. This also helps Sales Managers to train new Sales Executives such that they can up and running in a short span of time.

There are three major steps in your Sales Process-

A lead comes from a marketing campaign or you are browsing a trade magazine and you find a prospect in your area whom you can contact to get more business.

First and Foremost you need to have a confident script which would do the following -

Cold Calling Strategy
- Introduce yourself and the company you work for in a clear manner that the prospect understands
- Provide a gist problems you normally solve for a client like theirs.
- Provide a list of associations or other clients he is working in his area.
- Schedule an appointment for a later date to go over the challenges the client faces.

"Good Morning Tim,
- My name Jay Balapa, I am calling from Advanced Technologies Group, Inc. and I work as the the Director of Enterprise Solutions . We are in the business of assisting health care facilities similar like yours in Planning, Compliance and management of buildings.
- In your area we are privileged to have Northwestern Memorial Hospital and Rush Presbyterian as our clients.
- Iam calling in to see if there is an opportunity for us help you overcome your challenges and provide a solution which meets your needs.
-Can we schedule a follow up conference call such that I can better understand your operations and see if there is an oppurtunity for us to work together."

If there is a lead from a Marketing




Sunday, January 25, 2009

Economic Indicators

1. Yield Curve

To draw the yield curve plot the 3 month treasury bill, 10 year bond and 30 year bond.
Normal yield is curve is upward slopping since the bond investors want higher yield for a 30 year duration instead of 3 month.

What is an inverted yield curve, it means 30 year rates fall below the 3 months rates it means that long term investors are indicating the economy is going to cool down in the future or a recssion is in the cards.

2. Average number of initial applications for unemployment insurance

The increase in this number indicates bad for the economy but decrease creates an upcoming bull market.

3. Michigan Consumer Sentiment Index

Shows how the consumer sentiment decrease would be bad for the market in general.

4. S&P 500 50 day moving average

This is a good indicator because it gives you all the above trends priced in if the S&P 500 goes below 50 dma a good place to get out of equities and start shorting stocks.