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Posts Tagged ‘WSJ’

The Force Behind Bitcoin’s Meteoric Rise: Millions of Asian Investors

Posted by hkarner - 14. Dezember 2017

Date: 13-12-2017
Source: The Wall Street Journal

Retail investors, mostly in Asia, are pushing the price of bitcoin to new heights

Soaring Bitcoin: If It’s a Bubble, When Will it Burst?

Behind bitcoin’s stunning rise lies a new force in global financial markets: millions of individual Asian investors.

Despite the attention focused on the launch of bitcoin futures in the U.S. last weekend, the center of gravity for trading the virtual currency, measured by volumes, has been in the East—starting in China, before shifting earlier this year to Japan and recently to South Korea as the latest hot spot.

Unlike past financial frenzies—such as the dot-com bubble of the late 1990s, when U.S. retail investors only piled in at the later stages of the rally—individual investors have been first to the party, fueling bitcoin’s 1,600% rise this year.

“Bitcoin is one of the few markets we’ve ever had in history where you’ve seen these astronomical gains around the world and the retail investors in Asia are the ones driving it,” said Chris Weston, chief market strategist at IG Group, one of the world’s largest online trading platforms. “It feels like this whole thing is being driven by the average Joe who isn’t nearly as financially literate as a professional fund manager.” Den Rest des Beitrags lesen »


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Economists Think Potatoes Helped Promote World Peace

Posted by hkarner - 13. Dezember 2017

Date: 12-12-2017
Source: The Wall Street Journal

New study suggests widespread adoption of potato cultivation led to a lasting decline in violent conflict

New research suggests that potato cultivation may have helped reduce conflict during the 18th and 19th centuries in parts of the Old World.

The humble potato may have caused a dramatic and lasting decline in bloodshed during the 18th and 19th centuries in parts of the Old World, according to new research by three economists.

The study found areas of Europe, North Africa and the Middle East that were better suited to growing potatoes—a hardy, high-calorie crop native to South America—saw significant reductions in deadly fighting after 1700, when the tuber was entering widespread cultivation. Den Rest des Beitrags lesen »

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The First Women in Tech Didn’t Leave—Men Pushed Them Out

Posted by hkarner - 12. Dezember 2017

Date: 10-12-2017
Source: The Wall Street Journal

In computing’s early years, when it was considered women’s work, all six programmers of America’s first digital computer, ENIAC, were women

Sexism in the tech industry is as old as the tech industry itself.

Memos from the United Kingdom’s government archives reveal that, in 1959, an unnamed British female computer programmer was given an assignment to train two men. The memos said the woman had “a good brain and a special flair” for working with computers. Nevertheless, a year later the men became her managers. Since she was a different class of government worker, she had no chance of ever rising to their pay grade.

Today, in the U.S., about a quarter of computing and mathematics jobs are held by women, and that proportion has been declining over the past 20 years. The situation is generally worse at the biggest tech companies: Only one in five engineers at Google or Facebook is a woman, according to the companies’ recent diversity reports. A string of recent events—from women coming forward about sexism, harassment and discrimination in the industry, to the controversy over a memo written by a Google employee arguing that women overall are biologically less suited to programming—suggest the steps currently being taken by tech firms to address these issues are inadequate. Den Rest des Beitrags lesen »

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Meet Your New Boss: An Algorithm

Posted by hkarner - 12. Dezember 2017

Date: 11-12-2017
Source: The Wall Street Journal

Companies are using artificial intelligence and other elements of the work-on-demand business model to automate workforce management tasks

Uber Technologies Inc. and other pioneers of the so-called gig economy became some of the world’s most valuable private companies by using apps and algorithms to hand out tasks to an army of self-employed workers.

Now, established companies like Royal Dutch Shell PLC and General Electric Co. are adopting elements of that model for the full-time workforce. Den Rest des Beitrags lesen »

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Alibaba’s Jack Ma Tells U.S. Companies to Stop Whining About China

Posted by hkarner - 7. Dezember 2017

Date: 06-12-2017
Source: The Wall Street Journal

Magnate tells firms to ‘follow the rules’ and plan for the long term

Alibaba Group Executive Chairman Jack Ma speaks during the World Internet Conference in Wuzhen, China, Dec. 3.

WUZHEN, China—Amid rumblings of a U.S.-China trade conflict, Alibaba Group Holding Ltd. founder Jack Ma defended China against complaints that it creates barriers against outside competitors.

Companies that struggle here may simply not be taking the right approach, Mr. Ma said Tuesday at a prominent internet forum.

“I gave advice to Jeff Bezos 10 years ago,” Mr. Ma said, referring to Amazon.com Inc.’s chief executive. “I said: ‘Please send people with entrepreneurial spirit, not professional management. Because wherever you go, doing business in another country is very difficult.’”

‘When you determine to come, prepare for it. Follow the rules and laws and spend 10 years.’ —Jack Ma, Alibaba

An Amazon spokesman had no immediate response to the comments from Mr. Ma, whose online shopping portals compete against the Seattle-based company. Amazon dominates e-commerce in the U.S., but is the underdog in China. Den Rest des Beitrags lesen »

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The 250 Most Effectively Managed U.S. Companies—and How They Got That Way

Posted by hkarner - 6. Dezember 2017

Date: 06-12-2017
Source: The Wall Street Journal

Amazon is on top, followed by Apple and Alphabet, in a landmark ranking, the Drucker Institute’s Management Top 250

Amazon, Apple and Alphabet are innovation and customer-satisfaction standouts because so many of their products are reshaping industries and social behavior.

A nearly century-old timber company is an unsung management gem. Investor-favorite blue chips haven’t lost their luster in terms of how well they are run. And the tech giants shaping much of today’s society are the most effectively managed U.S. companies.

Those are among the many insights revealed in the inaugural Management Top 250, a landmark ranking marking the first time the ideals and teachings of the late business guru Peter Drucker have been used to analyze and compare the performance of major U.S. companies. http://www.drucker.institute/rankings-2017/

Hailed as the father of modern management, Mr. Drucker influenced generations of business leaders with his writings, including a regular column in The Wall Street Journal. His principles of what makes a well-managed organization have never before been translated into a quantitative model to measure how effectively a company is run.

The Management Top 250 does just that. The ranking—compiled by the Drucker Institute, founded in 2007 to advance the ideals of the management sage—differs from other “best of” lists in that it doesn’t measure any single aspect of a company’s prowess, such as profits or productivity. Rather it takes a holistic approach, examining how well a business does in five areas that reflect Mr. Drucker’s core principles: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength.

Amazon.com Inc. tops the list of the nation’s most effectively managed businesses. On the online retail juggernaut’s heels are Apple Inc. and Google parent Alphabet Inc . , in second and third place, respectively. Tech behemoths International Business Machines Corp., Microsoft Corp. and Cisco Systems Inc. and Silicon Valley up-and-comer Nvidia Corp. take four of the other top 10 spots. Rounding out the Top 10 are old-line stalwarts Johnson & Johnson (No. 4), consumer-products giant Procter & Gamble Co. (tied with Microsoft at No. 6) and 3M Co. (No. 8), the company behind Post-it Notes and Ace bandages.

To measure a business’s success in each dimension, the Drucker Institute—part of Claremont Graduate University outside of Los Angeles—scored how companies stacked up in 37 specific metrics, from market-share data to patent applications to employee ratings on the career-review site Glassdoor. The companies listed in the Management Top 250 are the highest scorers among 608 U.S. corporations studied that in the fall of 2016 belonged either to the S&P 500 stock index or Fortune 500 list or had a market value of more than $10 billion. The ranking methodology hasn’t been formally peer reviewed.

Tech success
Why do so many of the biggest names in tech—some of which didn’t even exist three decades ago—make the Management Top 250 list?

For the most part, the tech companies at the top get high grades across all five categories, landing in all but a few instances in the upper 15% to 20% of the more than 600 companies analyzed by the Drucker Institute.

Amazon, Apple and Alphabet are innovation and customer-satisfaction standouts because so many of their products—from cloud-computing platforms to smartphones to the burgeoning field of drones and driverless vehicles—are reshaping entire industries as well as social behavior.

Tech firms such as Alphabet and Microsoft also contract out much of their front-line work. The official staff that remain tend to be highly paid and enjoy generous perks, a likely factor in those companies’ high employee scores, says Rick Wartzman, director of the Drucker Institute’s KH Moon Center for a Functioning Society. “Their workforces are the winners of the knowledge economy,” he says.

An innovation powerhouse
There is more than one way to the top. No. 1 Amazon is actually one of the Management Top 250’s most uneven performers. Within the larger universe of analyzed companies, it scored in the bottom 20% on social responsibility. The lackluster grade comes after years of critical news reports about the working conditions of its warehouse workers and poor marks from activists for not being more transparent about its environmental record. Yet, its mighty innovation score—so high that it lies off the charts compared with other companies’ scores—catapulted it to first place.

Amazon, which has assembled a high-profile corporate-responsibility team over the past few years, declined to comment for this article.

The company’s $20.85 billion research-and-development spending in the 12 months through September outstripped all other U.S. companies, according to S&P Global Market Intelligence data. It has kept ahead despite its swelling size by moving quickly and sticking to its founding principle of starting with the customer, says Reid Greenberg, executive vice president of digital and e-commerce at research and consulting firm Kantar Retail.

Its agility, he says, comes from grouping workers in small teams. Chief Executive Jeff Bezos instituted the “two-pizza team” concept, where the ideal team size is one that can be fed on two pizzas. When it was instituted in the early 2000s, it was “really jarring,” says Eric Heller, CEO of Marketplace Ignition, a consulting firm for brands and retailers, and a former senior manager at Amazon. But by getting rid of bureaucratic layers, it fueled innovation. Each team owned projects as small as a single button on the website and was responsible for improvements.

The 250 Most Effectively Managed U.S. Companies—and How They Got That Way

At Amazon, potential product ideas get written up into dummy news releases that get marked up. Creators must answer questions such as the cost of the project, how much the product or service would sell for and the launch date.

It’s always day one for Amazon—”today we’re starting day one of the next five years or the next 10 years and we’re not dwelling in the past”—says Mr. Greenberg. “That’s really how the company thinks and breathes, and…that helps them maintain a competitive advantage.”

The company’s early emphasis on frugality led to creative ideas, the most impressive of which were rewarded with a highly coveted “door desk award,” a trophy that looked like a typical worker’s desk. Ideas ranged from how to better affix shipping labels to packages to how to save money on conference-room equipment.

Hidden strengths
In contrast to Amazon, six companies were particularly consistent in their strengths, scoring in the top 15% to 20% in all five categories: Apple, Alphabet, P&G, 3M, Nike Inc. and Colgate-Palmolive Co.

The ranking and its approach can highlight strengths and weaknesses that might be otherwise harder to spot. While this is the first year the list has been published, the Drucker Institute calculated the performance for most companies back to 2012 to be able to identify potential trends. For instance, the score of Intel, ranked No. 14 overall, has steadily slipped over the past five years, weighed down by its customer-satisfaction grade as the chip maker has struggled to catch up to the mobile revolution. Intel has made big bets in artificial intelligence and autonomous driving as it moves into data-centric growth markets, but they have yet to bear fruit.

The ranking reveals a handful of hidden management champions that typically fly under the radar, such as Jack Daniel’s maker Brown-Forman Corp. , electrical-equipment maker Eaton Corp. and commercial real-estate firm Jones Lang LaSalle. And who knew that 17th-place Weyerhaeuser Co., a forest-products company with little public name recognition outside of the lumber and wood-products industry and its base in Washington state, would score in the top 1% of companies in terms of innovation?

Weyerhaeuser, which owns or controls about 13 million acres of timberland in the U.S. and manages additional timberland under licenses in Canada, stands out for the resources it continues to dedicate to research and development, says Mark Wilde, managing director at BMO Capital Markets. Unlike many other forestry companies, many of which rely on universities and other outside institutions for research, Weyerhaeuser spent $17 million on R&D last year, much of which goes toward forestry management and determining which trees and methods yield the most valuable timber growth where.

In the timber industry, “they are the last man standing in terms of their own independent forestry research,” Mr. Wilde says.

Insight into critiques
The Management Top 250 also provides both a counterpoint and insight into the critiques of activist investors who have targeted corporate stalwarts such as P&G and General Electric Co. Both companies score high—P&G at No. 6 overall and GE in 20th place—despite coming under pressure from Nelson Peltz’s Trian Fund Management LP to revitalize profits.

P&G in particular scores in the top 2.5% of the more than 600 analyzed companies in terms of innovation and financial strength, the latter because brands such as Tide, Gillette and Tampax dominate so many consumer-product markets. Yet two of Mr. Peltz’s chief criticisms are that the company isn’t innovating enough and has let upstarts such as Dollar Shave Club cut into its market share.

Indeed, a closer look at the metrics behind P&G’s overall score affirm a slip in the company’s overall market dominance in recent years, but from a very large position to begin with. “Yes, there are some red flags,” Mr. Wartzman says of the data. But what you also see built into the ranking, he says, “is the excellence of their management over incredibly long periods of time.”

P&G CEO David Taylor argues the company has taken steps to accelerate innovation in the two years since he became CEO and has won customers with new products or enhancements to existing brands.

“The point of contention is the rate of progress—an activist investor often has a shorter time frame than a company that looks over many stakeholders,” Mr. Taylor says, echoing the holistic philosophy behind the Drucker model. Over time, he adds, “it is a combination of a few key capabilities that determine whether you win: superior products that delight consumers, technology that sustains that…and what underpins it all is acquiring the best people.”

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Record Earnings Boost Confidence in Global Markets Rally

Posted by hkarner - 6. Dezember 2017

Date: 05-12-2017
Source: The Wall Street Journal

Earnings per share hit new high, underscoring broad economic recovery

Listed companies are at their most profitable on record after a bumper year of earnings growth across global equity markets.

The earnings-per-share of a FactSet index of over 20,000 listed companies from around the world has now reached an average of $9.69, increasing nearly 19% in the last year.

That is the fastest year-over-year rise since 2011, surpassing the late-2014 high of $9.55. While the FactSet data only stretch back to 2001, increased earnings in emerging markets like China, among other factors, mean that the per-share level has likely never been higher. Den Rest des Beitrags lesen »

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Is It Time to Regulate Bitcoin?

Posted by hkarner - 6. Dezember 2017

Date: 05-12-2017
Source: The Wall Street Journal

As the digital currency grows in size, it will be hard for regulators to resist the urge to step in

Bitcoin has been the ideal proving ground for investment’s most powerful advice: caveat emptor, buyer beware.

Individuals who lose money day trading a cryptocurrency hyped as a way to avoid central bank meddling can hardly expect to appeal to governing institutions when things go wrong. Watchdogs have intervened occasionally to restrict money laundering. But financial regulators have mostly steered clear.

Regulators are unlikely to sit on the sidelines much longer, and that is a shame. People gulled into putting a small amount of bitcoin into a worthless initial coin offering or persuaded to day trade bitcoin on margin are taught important lessons in trust and security. It is better for the bitcoin naif to lose a little quickly and learn that if an investment looks too good to be true it probably is, than never learn and end up losing their life savings on some wild speculation later on. Den Rest des Beitrags lesen »

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Europe’s national politicians ruin everything

Posted by hkarner - 5. Dezember 2017

Date: 04-12-2017
Source: The Wall Street Journal
Subject: Europe Starts Seed Fund to Keep Small Tech From Leaving

Management groups for five new private-public European tech investment funds are expected to be named in coming weeks

BRUSSELS—In the world of corporate R&D, Europe excels at R but struggles at D. Investors and technocrats are trying to fix that.

Despite years of financial crises, European scientific research—the R—remains world-leading. From Estonia to Portugal, Europe’s tech scene is coming to life.

Where the Continent falls short is in developing (the D) breakthroughs into products and companies that generate jobs, profits and tax revenue. Instead, many of Europe’s best ideas become blockbusters for U.S. and Asian companies.

Skype, an Estonian startup, was bought by eBay and is now part of Microsoft. Bluetooth technology was invented by a Dane at Sweden’s Ericsson in the 1990s. Den Rest des Beitrags lesen »

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Will Tesla Die for Lack of Cobalt?

Posted by hkarner - 1. Dezember 2017

Date: 30-11-2017
Source: The Wall Street Journal

Probably not. The dreaded cobalt shortage seems like a story we have heard before

Wedged between iron and nickel on the periodic table, cobalt has suddenly emerged as the electric car killer.

The once-obscure metal, a critical part of batteries, has nearly tripled in price since last summer as concerns grow about whether there will be enough cobalt to meet demand.

The ingredients are certainly there for a shortage. Output is concentrated in the politically unstable Democratic Republic of Congo and refining is dominated by China. Demand is set to soar as companies from Tesla Inc. to Volkswagen AG ramp up production of electric vehicles.

With the price of cobalt hitting $30 a pound, investors have poured into shares of companies that mine or own rights to the metal. Canada’s Cobalt27 Capital Corp., which believes there is already a deficit in supply which will worsen, is up 162% this year.

“I don’t think automobile manufacturers are as concerned about price as availability,” says George Heppel, a consultant at materials research firm CRU International who says the shortage could peak in 2021. Den Rest des Beitrags lesen »

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