Tag Archives: Investments

Secular Bear Market Is Not Over History

Secular bear markets refer to economic conditions where stocks, real estate, commodities and the general economy are extremely volatile with a downward bias. This is caused by underlying fundamental forces of excesses that were created for long periods of time in the previous growth cycle. Secular bear markets differ from cyclical bear markets due to the fact that they have a long-running (15 to 22 year range) and well established fundamental and cycle driven downward trajectory in markets.

 

They result in a change of behavior and perception among society towards investments and the financial system.

 

This article will examine the last two secular bear markets that have occurred in the modern/post industrialized world economy.

 

ForMore:http://www.financialpolicycouncil.org/fpcnew/articledetails.aspx?id=44/Current-Secular-Bear-Market-Is-Not-Over-History-Should-Be-Our-Guide

 

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What Venture Capitalists will not tell you

To hear them tell it, venture capitalists aren’t too different from entrepreneurs. They build great companies. They create jobs. In short, they feel the entrepreneur’s pain.

 
But one of the first steps to a decent relationship with a VC is accepting just how different the two of them really are. It is a fact that compared to entrepreneurs, VCs have different loyalties, sometimes diametrically opposed interests, and a lot less at stake.

 
Having been interacting with VCs for around three decades now, I thought of sharing with you what a VC will not tell you.

 
So here we go…

 
1. Savvy VCs understand that less than 1% of venture-backed technology startups will ever achieve a $1B+ mark cap. As a result they seek category potential, not current company performance. They look to identify companies leveraging technology to build and dominate new market categories. If the category is big enough and the category king is dominant enough, current valuation is almost irrelevant. The key to making their investment decisions is understanding category potential and the ability of the category king to define, develop and dominate the space over time. As a result legendary VCs study category potential.

 

For More: http://ziadabdelnourblackhawk.com/what-venture-capitalists-will-not-tell-you/

Blackhawk approaches Business and Investments as Industrialists

The underlying philosophy of Blackhawk Partners’ investment approach consists of funding its private equity sponsored transactions with a combination of equity and debt.

 
Unlike most private family offices:

 
1. Blackhawk does not place money with other funds or investment managers;
2. Blackhawk is not in the money management, brokerage or securities business;
3. Blackhawk is a “strategic advisor” and “investor” in private equity transactions with a focus on the energy, industrial, technology and security sectors.

 
Strategy

 
Blackhawk underwrites the equity portion of a transaction, both directly and through a core group of associated family offices, on a deal-by-deal and no-fee basis, allowing its partner clients the opportunity to co-invest in its equity transactions. This model reflects our preference for investment discretion, with many high-net-worth investors themselves being hands-on business owners.

 

For More: http://www.blackhawkpartners.com/services/investing/

Can we separate Economics and Politics?

Some people criticize the injection of politics into economic discussions.

 

But economic historians tell us that economists used to understand and accept that economics is wholly interrelated with politics, and that politics affects our economy.

 

They note that modern economists have artificially tried to somehow separate the two, like Descartes tried to separate the mind from the body.

 

Indeed, the father of modern economics – Adam Smith – talked a lot about politics in relation to economics.

 

For More: Can we separate Economics and Politics?

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How do you Create Real Wealth in an age of Intense Competition and Wealth Destruction?

I am in the money business; always have been and always will be. No surprise I am approached by hundreds of young ambitious entrepreneurs every year asking:

How do you create real wealth in an age of intense competition and wealth destruction?

Let me keep you give you my 2 cents…. and allow me to be as blunt as I can. Political correctness is not and has never been my forte.

1. Don’t be delusional. You need to see reality as it is first, not as you would want it. Most people do the latter and plan and live by wishful thinking. It is a fact that the vast majority of people want to LOOK rich, not BE rich. The two are opposites: the first requires spending money, and the second requires saving it. Don’t pretend to do both. Most importantly, know your probabilities and statistics. Lotteries are statistically the same as burning your money, as far as your profit is concerned. You’re probably more likely to slip and crack your head open, die in a car accident, drown, or be murdered TODAY than EVER make big money as a novelist or artist.

2. Know what the standards are. When polled, 80% of Americans believe they’re above average in many different fields. It’s because a lot of them have no clue what average is. That extends to the standards of the fields you’re trying to compete in. A man thought he was “good at math” because he could balance his checkbook, thought he could be an engineer, and failed remedial geometry, long before reaching the three semesters of calculus and several other math courses most engineers take. A man who thinks he’s tough may not make it through military basic training, let alone Special Ops.

3. Find a wealthy and accomplished mentor early in your life, offer to work for peanuts and learn everything you can. If you want to make and keep money, you need to know how successful people have done it and are likely to do it in the future. Beware though of confirmation bias: If you only like hearing what confirms your beliefs, you’re digging yourself a hole. Always be on the lookout for evidence that you’re wrong, then analyze the heck out of it. The intent in here is not just to study millionaires and billionaires, and understand how they made their money but go beyond the veneer and see what really makes them the way they are.

4. Go to a high ranked program at a highly reputed school (ideally top 5), to gain skills/knowledge/connections that are directly applicable to an industry that pays extremely well and has a shortage of highly skilled workers (e.g., finance or tech). Some will argue that they get the same education at a lesser school, but you won’t get the same reputation, connections, and network. A master’s or other graduate degree is often worth the additional investment and sometimes necessary. Besides the experience, it signals you as being able to go through the rigorous and competitive admission process and prevail. The education must be cheap relative to the earning potential it provides, or paid by someone else. It’s a bad investment if it costs more than it makes. As a side note: Not everyone wastes their college years partying and “discovering themselves.” While you’re out getting drunk, someone else is studying their rear end off, both in school and how to increase their wealth, and doing their absolute best to beat the crap out of you to those lucrative jobs. Education never ends. I’m always reading and learning. Learn how to do that too.

5. Forget about slaving at a pathetic corporate job. If you’re employed, you will be laid off when you don’t expect it or can least afford it. No job is safe. And if you have one of those jobs, if you expect to work 40-hour weeks or less, you will probably be out-competed, and at the very least you’re leaving a lot of profit uncollected. The very rich own businesses. Being paid a salary means that someone else is paying you money to make even more money for them. Time to wake up. Some people dream of great accomplishments, while others stay awake and do them.

6. Be a problem solver at something you really love. Integrating passion into a profession is often underrated/overlooked when it comes to making money because people only focus on the big bucks. But when you love what you do, you’ll advance your skills and want to keep learning. Be the absolute best at what you love doing. You will be paid in direct proportion to the value you deliver according to the marketplace. You have to leverage on the right platform at the right time using your highly profitable skill. Above all, it must be the right “YOU”. You wake up and you say “I have a problem.” Can you say a million people have the same problem?” Go find a solution for a million people.

7. Pick and start your own business. Everyone is always on the lookout for “the next big thing.” The next big thing is finding rare earth minerals on Mars. That’s HARD WORK. Don’t do it. Pick a business that every merchant in the world needs. You don’t have to come up with the new, new thing. Just do the old, old thing slightly better than everyone else. And when you are nimble and smaller than the behemoths that are frozen inside bureaucracy, often you can offer better sales and better service. Customers will switch to you. If you can offer higher touch service as well, they will come running to you. Remember John D. Rockefeller’s (the world’s first billionaire) priceless wisdom: “The secret of success is to do the common things uncommonly well.”

8. Surround yourself with the right friends. Your income is the average of the income of the 5 people that you are usually surrounded with. So get in the company of the millionaire or better billionaire. They know better ways to make millions than most the losers out there.

Read More: How do you Create Real Wealth in an age of Intense Competition and Wealth Destruction?

 

The current VC or Entrepreneurship worlds are In a Mess?

I have finally come to the realization; after 30 years on Wall Street and Silicon Valley, that our capital markets are simply obsolete and that it’s high time for a new technology that allocates money and other resources far more efficiently than both our actual technology and government.

The current VC/entrepreneurship worlds are in a mess, and to their credit, the players are doing some serious introspection. But mostly, it is still business as usual.

I have nothing against VCs and angels. Most are extremely smart people. But the world of problems and opportunities is now so complex and fragmented that any system that relies on “bottleneck star-spotting talent” is doomed to hit its limits in short order.

Read More: The current VC or Entrepreneurship worlds are In a Mess?

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Terms of Expansion and Investments on Brazil Market

Although the value of investments in emerging markets has been hit hard by the financial crisis, we should keep in mind that the sources of the crisis were definitely not the emerging countries. These markets did not suffer any severe credit crises. Mortgages, which triggered the crisis, are not a cause for concern in this region.

The Latin American economies were spared, in large part, because their mortgage systems are completely different from the U.S. system. Most Latin American mortgages are subsidized by the government. As a result, there was none of the speculation of housing prices and method of finance that we experienced here in the United States.

Some Latin American economies might, in fact, be better prepared to recover from the crisis than several of the more developed economies and are, in principle, in better economic shape as a number of them have generated stabilization funds to support their respective economies. A lot of those Western hemisphere countries are resource rich.

They have enjoyed significant additional benefits from the economic development in China while the Chinese have used their recent economic muscle in an effort to corner the world’s most strategic natural resources. This has contributed significantly to Latin America’s rise.

I see the Latin American – Asian relationship strengthening further as China spends billions to gain access to Latin America’s natural resources and create an infrastructure in the region that will not only enable resources to flow back to China, but provide a basis for further economic development and consequent political stability in South America.

Continuous Reading: Investments on Brazil Market