ebook essays pieces of the puzzle
Friday, August 27th, 2010
par for the course

In case you were wondering, “3PAR, Inc. offers utility computing storage services to large and medium enterprises, business-oriented service providers, consumer-oriented Internet/Web 2.0 companies, and government entities.”  Two weeks ago today, it closed at $9.65.  A couple of industry behemoths (OK, a recently tarnished behemoth and more of an ex-behemoth) have money to throw around and are convinced that they must have this prize.  The latest bids for PAR (one from each of the players) are at $27, with the stock in pre-market trading pushing $29.  Maybe this will all make sense some day, or maybe it will end up in a Harvard Business School case study.  For now, it is both late-summer entertainment and a hint of the market road we appear to be on.  (Company description and chart:  Bloomberg terminal.)

embracing the debate

Mike Mayo is leveling a serious charge about Citigroup, and Citigroup apparently doesn’t like it much and is freezing him out.  Why does it seem like every time this happens the analyst ends up being right?  Never mind that, though — when will companies learn that it’s just best to allow the differences of opinion in the marketplace to be heard?  Not letting those negative on your stock onto conference calls or mailing lists is just silly.  The reality will trump the spin (from the company or from the analyst) soon enough anyway; firms should learn to embrace the debate rather than control it.

those misbehaving clients

A recent press release was titled, “John Hancock Funds Educates Financial Advisers With Behavioral Finance Program.”  The program, dubbed “Hard Wired,” is supposed to help advisors to “understand the connections between human biases and investment behavior, and apply that knowledge to their clients and their clients’ portfolios.”  I’m all for advisors being trained in the principles of behavioral finance, but I’d rather that they learned of it from a truly independent and objective source.  Furthermore, while there are observable destructive behaviors exhibited by clients, there are the same for advisors as well, so I hope the toolkit has gadgets for that too (and not just a ruler that says, “stay the course”).  Hopefully John Hancock has also taken the pledge internally.  Most asset management organizations sell what can be sold and create new products based upon yesterday’s winners, amplifying the behavioral tendencies of the clients.  And the investment departments?  Well, don’t get me started.

new proxy rules

The SEC approved new proxy rules on Wednesday, the 3-2 vote with Republicans in the minority presaging the talking points that you see in the comment sections of those blogs covering it.  The Conglomerate provided a summary for those of us not willing to wade through the hundreds of pages of the order.  shareowners.org cheered on the decision, while the Chamber of Commerce decried it, a spokesman saying that, “Rather than focusing on good corporate governance, the SEC has given special interests the ability to hold the board hostage on narrow issues at the expense of other shareholders.”  If the Chamber was a credible advocate of the rights of owners rather than managers, its views would be taken more seriously.

the dean of recreation economics

I love to read the obituaries of interesting people, so I’ll pass some along from time to time.  I had never heard of Harrison Price, but a review of his life in the Times indicates that it would be hard to overemphasize his importance on the business of fun.  His work was a great example of how scientific methods affected decision making and business operations during the last century.  One critically important factor, however:  Such work needs to augment and integrate with a stream of good ideas, not dominate it.  Walt Disney understood that.  According to Price, “Walt was a dreamer, but he had a very workmanlike curiosity about how things functioned, and whether what he was talking about would actually work.”  Putting the skills of the two of them together, you could create a magic kingdom.