Why top talent earns so much money: Malcolm Gladwell

"There was a time, not very long ago, when people at the very top of their profession—the “talent”—did not make a lot of money. In the postwar years, corporate lawyers, Wall Street investment bankers, Fortune 500 executives, all-star professional athletes, and the like made a fraction of what they earn today. That era was an upside-down version of our own: when society gazed upon captains of industry and commerce, it marvelled at how ordinary their lives were. The truly rich in the nineteen-fifties and sixties were people who had inherited money. And then, suddenly, the world changed..."

Representing one of my favorite writers, Malcolm Galdwell presents an interesting take on the evolution of salaries and our increased interest for "talent", money and recognition.

Is money the only way to acknowledge talent? I believe it is not. Recognition is much more than how much we get paid. Even though money is important and it provides us with certain "social status", we should re-consider our set of social values and principles. For me, an individual's contributions to society and to the well-being of those around him should provide the base upon which society and corporations acknowledge talented individuals.

"Invest in people...a management that is full of integrity and talent" Warren Buffett

Read more about "Talent Grab" article at http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_gladwell#ixzz17MNAqeDX

Read the complete article at http://www.scribd.com/doc/40469336/Talent-Grab

"What good is Wall Street?" The New Yorker Article

Wall Street, investment bankers, and social good: newyorker.com

Is our financial and economic model out of place? Can we justify the fact that the most profitable industry in the world is one that doesn't produce, build or sell a single tangible thing?

As investment banks and wall street "smartypants" investors come back on track with millionaire gains, mainstreet keeps wondering whether Wall Street it's absolutely neccessary for the world's economic and social development.

Here is an interesting article on how key players in the industry, such as Citigroup's Vikram Pandit, are assuming new leadership approaches whithin their industries and organizations.

What good is Wall Street?

Two lessons from Mary Buffett and Ferran Soriano

Last Thursday, I had the opportunity to attend the “Management Lessons 2010” conference sponsored by HSBC Premier and ExpoManagement 2010. The conference took place in México City at Centro Banamex and had Mary Buffett (Best-seller author and Warren’s daughter in-law) and Ferran Soriano (Former Barcelona F.C’s CEO) as guest speakers.

Of course, my primary interest was to hear what Mary Buffett had to say about her father in-law and to learn some valuable insight on his personal life, his numerous investment principles, and strategies.

Mary Buffett began her speech explaining why she was so interested in Buffett’s strategies and knowledge: she was not only married to Buffett`s younger son, Peter, but she was also a business consultant and analyst herself. “If you like business and you are sitting beside one of the most successful investors in history, it would be stupid not to ask him questions and not to write his answers down…” she said. I couldn’t agree more.

Mary spent a great amount of time listening to Warren talk about business with industry tycoons, politicians, decision-makers and influential leaders. Through participation on Trips, conferences, family dinners, and vacations, she took advantage of almost every single minute she got to spend with him during the past 12 years and turned all that knowledge into 7 best-seller books.

“Buffett has 4 principles upon which he makes investment decisions… (1)Trust your Judgment, (2)Look for a durable competitive advantage,(3)invest in good companies at a fair price and (4)look for a good management”. Sounds quite simple, and it actually is, but the key is to know how to find those undervalued companies that fulfill Buffett’s principles.
For Mary, the most important of these principles is the fourth one: invest in a good management.

For her, the key to Warren’s success as a value investor is to evaluate a company for its good or bad management. Warren always says “Invest in people…good managers always lead to profits, good managers usually lead to a reputation crisis”. Hence, whenever he is in the search for a company to invest in, he always pays close attention to the people in charge of running the business.

Businesses are people, and if we understand that management is a key factor in the value equation, we will start making better investment decisions. That’s the first lesson from last week’s conference.

The second lesson came when Ferran Soriano made his appearance. To be honest with you, I was quite surprised by his approach to soccer as a 360º business. When he assumed the position of Barcelona’s CEO in 2003, the team was roughly making US$130 MM in sales and assuming US$72 millions in annual losses.

For Ferran, the opportunity couldn’t be better. Changing Barcelona’s business model from one of a circus (with tickets sales accounting for more than 70% of the total income) to one based on Walt Disney Co. was a challenge of great proportions. “At that time our business model was obsolete and that we need to change immediately. Barcelona had a great brand, great stadium and great players so we needed to understand that our business wasn’t selling tickets but selling entertainment content”

According to Soriano, the Barcelona turn around needed to begin by transforming the stadium into a theme park. “In Europe we have great stadiums and it is no secret that Clubs make a lot of money not only by selling tickets during game days, but also by selling tickets for guided visits to their stadiums during normal days”. Guided visits to Barcelona`s “Nou Camp” add US$40 MM to the club`s total income.

The second great change came when Ferran invited a group of professional specialists to assume key positions as top managers. For marketing he brought a former P&G expert and for Finance he brought a well-known Colombian banker. “The people who know about business should run the office. The people who know about soccer should run the team”. Professionalizing the executive team meant having a good management onboard. That makes absolute sense if we consider the lesson we learned from Mary Buffett.

The third change came with approaching soccer as a selling content business. Good soccer means good spectacle and along with that comes the marketing and merchandising as motors to increase revenue and broaden Barcelona’s presence in the world.
Ferran resumed his strategy as one focused in changing mentalities, embracing change and working hard. But the most important fact for him, once again, was having a good executive team on board.

It shouldn`t surprise us that the lesson from Ferran, is also the same lesson we learned from Mary Buffett: a good management is the key to success.

What a Fed move would mean. Today

http://blogs.wsj.com/economics/2010/11/03/qa-on-qe2-what-a-fed-move-would-mean/

The Federal Reserve is expected to announce a new round of bond-buying today to lower long-term interest rates to boost the economy.

Debate is raging inside and outside the Fed about how much good it will do, if any. Proponents say purchasing hundreds of billions of dollars more in Treasury bonds will provide only modest support for the economy. Foes warn that it could backfire by pushing up commodity prices, sowing seeds of unwelcome inflation in the future, or by undermining confidence in the Fed’s ability to manage — and eventually reduce — its holdings. Ahead of the Fed’s 2:15 p.m. announcement, here’s a rundown of the key issues...

Warren Buffett hires new investment manager: Todd Combs

El día de hoy se hizo pública la noticia de que Warren Buffett y su conglomerado, Berkshire Hathaway, han decidido nombrar a Todd Combs como su nuevo Chief Investment Officer (CIO). Combs, de 39 años, pasó los últimos 5 años de su vida al frente del hedge fund "Castle Point Capital Management" con base en Greenwich, Conn.

A pesar de que es poca la información disponible, y de las dudas sobre si ocupará o no el puesto de Buffet una vez que éste último decida retirarse, los analistas y medios especializados han comensado a especular sobre las funciones que el recien llegado CIO desempeñara y el papel que Buffett jugará en las decisiones de inversión en Berkshire.

Si bien Combs no es un gestor de fondos popular y aclamado, con su nombramiento Buffett apuesta por dar continuidad a su proyecto y asegurar la rentabilidad de Berkshire, con ó sin él al frente del negocio. En numerosas ocasiones Warren ha dejado en claro que los planes para su sucesión ya están sobre la mesa y que su Comité Ejecutivo ya cuenta con un plan de acción definido para seguir sin él.

Se conoce, por diversas fuentes como Wall Street Journal y The New York Times, que Todd Combs ha llevado una exitosa pero discreta carrera como gestor de fondos. Al frente de Castle Point, cuyos activos suman alrededor de US$400 MM, fue responsable de realizar inversiones especializadas en servicios financieros: seguros, reaseguros, crédito al consumo e hipotecas; algo que viene muy bien con la estrategia y diversificación de las inversiones de Berkshire. Quienes lo conocen afirman que se trata de un hombre "que se construyó a sí mismo".

Personalmente, no considero que este nombramiento signifique que el nuevo CIO será el sucesor de Buffett. Hasta ahora, los argumentos son pocos y en el equipo de Berkshire hay hombres y nombres muy fuertes como el de David Sokol, Lu Li ó Charlie Munger . Me parece, que más allá de toda sucesión, el nuevo CIO jugará un papel fundamental en preservar y procurar las estrategias de inversión de Buffett, al mismo tiempo que la compañía se prepara para entrar a una nueva etapa en la que habrá de probar su capacidad para subsistir y trascender al legado de su fundador.

"If I die today, the board has already set a plan to continue without me..."
W. Buffett

Buffett advierte sobre compras de bonos - Economía - CNNExpansion.com

Buffett advierte sobre compras de bonos - Economía - CNNExpansion.com

Todos los ciclos se cumplen, el de los bonos también lo hará. Es necesario tener una estrategia de largo plazo si se apuesta al mercado accionario...pero más importante que la estrategia, es el hecho de apegarse a ella y ser consistente.

Y cuando hablamos de consistencia de largo plazo, no hablamos de 3, 5 ó 10 años. Hablamos de decádas...como Buffett.
"Invest, don't speculate..." W.Buffett

Acciones de Berkshire ¿sobrevaluadas? - Negocios - CNNExpansion.com

Acciones de Berkshire ¿sobrevaluadas? - Negocios - CNNExpansion.com

¿Es posible entender el valor intrínseco en el portafolio de Berkshire? La diversificación del conglomerado, producto de las decisiones e inversiones de Buffett, constituyen una fuente de ventajas competitivas que ante el escenario económico actual son difíciles de cuantificar con precisión.

Personalmente creo que la fortaleza financiera y la capacidad gerencial de Berkshire lo situán muy por encima de las coyunturas económicas. Y es que lo poderoso de la estrategia de Buffett y Berkshire es que ambos han sabido convertir al tiempo en su principal aliado.

Lo apropiado, desde mi punto de vista, sería valuar la posición competitiva de los negocios del grupo, sus activos y su capacidad para generar -sin deuda-flujos de efectivo atractivos. En el largo plazo, y no en el corto, ¿que amenazas existen para el grupo?

Fuera de las coyunturas de los mercados "maniaco-depresivos" , como los calificó Benjamin Graham, Berkshire vale cada dolar de su acción y pone sobre la mesa la incalculable e invaluable capacidad de su máximo lider: Warren Buffett.