Business

THE NUMBER ONE ENEMY OF ANY INVESTOR: EMOTIONS If you are among the lucky and shrinking few who have lived above paycheck to paycheck, you may have noticed that 2022 has not been a good stock year. In fact, not only has 2022 wiped out most of the market gains so far, but it has wiped out over five years of stock growth for some companies.  Most people try to sell and cut their losses; according to CNBC, that seems to be the primary source of falling stock price at writing (5/10), and they are just glad they bought high and sold not too much lower. This is a recipe for losing money in the stock market, and today I will reiterate lessons from David Lynch and Benjamin Graham to help you navigate this upset. When you buy stocks, you have effectively invested in that company; you buy into a company because you trust that company. It is the fundamentals that you should be buying it for, not for any emotional sense. Even when the market is in turmoil, a good company will remain. This means the good company will recover when conditions improve, while a bad company may never recover the heights it reached when the market felt jovial. When a price change occurs, you need to ask, “Why did that occur?” There are two reasons: the fundamental evaluation has changed, or the overall market conditions have changed. In today’s market, we see inflation problems, thanks to wanton money printing of FED, the continuing pandemic, and the war in Ukraine. This, of course, had caused the markets to downturn until these problems were resolved. These issues are compounded by the retail investors, which is the fancy name for individual, smaller investors, selling their shares to cut their losses—plunging the markets even further. Benjamin Graham likens the market to a madman who comes to your office whenever you open your stock account and tells you the price he will buy or sell a piece of the company. At times, this madman is fearful; a good investor buys these companies at lower values than they are fundamentally worth. When the madman is greedy, he believes and sells them at higher levels than they are fundamentally worth. This naturally makes you think that you may be able to time the market right and buy when it is low and sell when it is high. Sadly, there is little way of knowing how the market will react to a particular news piece, but it certainly always comes around. For intelligent investors, now is the time to buy what they can and hold what they have. Otherwise, you fall into the #1 enemy of any investor: Emotions. Read More From This Writer All Post Art Books Business Culture Education Entertainment Food Government Health Interviews Lower West Side Business & Economic Development Medical Military & Veterans Our Community Peace People Sports Who We Are THE NUMBER ONE ENEMY OF ANY INVESTOR: EMOTIONS June 13, 2022/No Comments POST TITLE (CAPITAL) Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus Read More UKRAINE May 13, 2022/No Comments UKRAINE While the war is raging on in Ukraine, Russia is suffering significant defeats on the Northern Front and is Read More UKRAINE, MEDIA, AND DONATIONS April 13, 2022/No Comments UKRAINE, MEDIA, AND DONATIONS What Russia is doing to Ukraine is unforgivable! Unfortunately, most people familiar with the region had Read More Load More End of Content.

WANTREPRENEURS Last time we saw what red flags the wantrepreneur types tend to show. This time, I would like to address the unseen victims of these failed businesses when they are funded enough to have employees or even clients, at times thousands of them. I like to explain the tale of Basari School, the company that according to its owner, had “grown too fast”. In the early 2000s, one of the fastest-growing wine “cram schools” in Turkey had decided to their school which seemed like a good idea at the time.  If they had more control over the children outside of the few hours a day, then they could increase their test scores even further. They advertised like crazy, and they had a few years of student test results to back it up. However, it is impossible to tell if the success of the students was because of the cram school, or if was it because they managed to give generous scholarships to students that were already successful. The public could not tell the difference; all they knew was this school was getting successful students and it was expensive, a perfect recipe for an educational con. They even had foreign teachers which was a huge privilege. What compliance goes wrong? For about 5 years nothing did. That was until the bills started coming due, and banks no longer cared about “growth.” They wanted to see the cash.  I had won a partial scholarship there and went there. In the first year, it was just like it was advertised —  foreign teachers, fancy uniforms, lots of schoolwork, cutting-edge facilities, etc. At the end of my first year, there were rumors that teachers were not being paid, and that some were no longer coming to class, getting substitutes instead. No official information everything was hush-hush. The owner was known to be an angry man who fires staff and expels students at the slightest provocation.   At the start of my 2nd year (7th grade), the cracks began to show. Teachers not coming in became the norm, and we would simply watch TV or be left alone to our devices for the year. It was great but suspicious. The owner made more and more public appearances, and we would hear more and more excuses. We would see posters saying how great the company was, however, their argument seemed to be centered around how many new cram schools they opened. Parents were growing skeptical but continued to be kept in the dark. Any rumors of unattended classes or teachers not showing up would be dismissed. This was before social media —  and before the time and technology in Turkey would be viewed with skepticism and outright bans from authority. In the end, the news broke that the owner built his educational empire on loans, coming from various sources, and paying existing loans with new ones. Rumors of mob involvement came to light. Not long afterward the school was demolished, and the lot remained empty for many years. Teachers not part of a union are left without pay, and thousands of students are left with no education. The staff ended up without jobs or pay. Others who were indirectly responsible washed their hands and testified against the owner — the only one that went to jail for fraud.  We do not hear from the media about that trillion-dollar company collapsing.  It is said that every OSHA regulation is written in blood; perhaps we should not wait long enough for every SEC regulation to be written in blood-soaked dollars. Note: A cram school, informally called crammer and colloquially also referred to as test-prep or exam factory, is a specialized school that trains its students to achieve goals, most commonly to pass the entrance examinations of high schools, or universities. Read More From This Writer All Post Art Books Business Culture Education Entertainment Food Government Health Interviews Lower West Side Business & Economic Development Medical Military & Veterans Our Community Peace People Sports Who We Are WANTREPRENEURS March 13, 2022/No Comments POST TITLE (CAPITAL) Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus Read More WANTREPRENEURS – Part 1 of 3 February 13, 2022/No Comments WANTREPRENEURS – Part 1 of 3 Ever seen start-up hipster types always talking about their “killer business idea” in vague Read More FLASHPOINT: TAIWAN January 13, 2022/No Comments FLASHPOINT: TAIWAN In this column, I try to discuss things that I think people should know, although I was hoping Read More Load More End of Content.

WANTREPRENEURS – Part 1 of 3 Ever seen start-up hipster types always talking about their “killer business idea” in vague terms because they are afraid someone will steal it as if the idea is the hard part of starting a company?  If yes, then you have seen this bane of actual businesses. These wannabes Steve Jobs types come from many walks of life. I have noticed that they take pleasure in talking about the startups rather than you know, working on the product and getting it out there — which is exactly why a lot of actual potential value has gone to waste. Companies like Theranos (valued at 10bn at a time WITH NO WORKING PRODUCT) or Nikola (Again no working product, insane valuation, and General Motors buy-out deal) are just the tips of the iceberg. These companies not only lose investors billions of dollars (investors such as your average people to retirement fund managers) but also their employees who could have been working on a viable product (instead of the mad fantasies of someone who has watched too many Sci-fi movies and spent too little time in a lab). One would expect for SEC to have regulations against such things — such as not accepting investments without a working prototype and approval process. These 2 components are important because, as you dig deeper into the minds of these wantrepreneurs, you will find they like to talk about something called “exit strategy”, namely being valued high enough that they can dump all their stock and live comfortable or be acquired by a larger company and wash their hands clean of it: like Myspace and other products. Unlike those products, however, these people have little to no intention of turning a profit. This is of course dangerous, and a trend of this can easily cause another .com bubble.  Now that we have learned what a wantrepreneur is, let’s talk about how to recognize such companies. Every investor wants to beat the market but for every Amazon, 100 Nikolas are operating on the same operational procedure, namely, making no profit for over a decade to increase market share. Wantrepreneurs are a clear dangerous investment. They can hide quite well and usually are very convincing on the surface, led by charismatic manipulators who have little to no technical knowledge or interest. They think that if they throw their “magic” which can be anything besides actual technical work and other people’s money at the problem, the problem will be solved. It worked for every other problem in their usual, very privileged lives. I have observed from multiple angles (unwitting client, employee, and technical partner) how these people will cause so much wasted value, and as such, have noticed a few common patterns in companies like this. I hope by sharing this information, my readers will be able to recognize and avoid such companies. In my next column (part 3), I will try to highlight the effects of such people on those that do not make it to the news.  The first red flag you should be looking for is when they always talk about everything surrounding the product or service but never the actual product. When asked about the product, they explain they need to be careful or afraid that their great idea will be stolen, the reason for not sharing.  In truth, they are afraid of being found out. Quite frankly, as soon as I hear the latter part, I just tune out….. (Part 2, March Issue) Read More From This Writer All Post Art Books Business Culture Education Entertainment Food Government Health Interviews Lower West Side Business & Economic Development Medical Military & Veterans Our Community Peace People Sports Who We Are WANTREPRENEURS – Part 1 of 3 February 13, 2022/No Comments POST TITLE (CAPITAL) Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus Read More FLASHPOINT: TAIWAN January 13, 2022/No Comments FLASHPOINT: TAIWAN In this column, I try to discuss things that I think people should know, although I was hoping Read More GREAT RESIGNATION December 13, 2021/No Comments GREAT RESIGNATION The word, “Great Resignation”, has been going around recently, referencing a recent economic phenomenon where people would, en Read More Load More End of Content.