Tag Archive: Buy Low Sell High


“For the American generation which has grown up since the downfall of the USSR, socialism is no longer the boo word it once was.” The Economist, Feb. 16, 2019

The youngest of all Millennials were gestating in 1980.

Reagan called upon Gorbachev to “Tear Down This Wall” in 1987.

The Berlin Wall came tumbling down in 1989.

The Soviet Union collapsed under its sheer weight in 1991.

The last of the Millennials arrived in the millennial year, 2000.

The largely overlooked question: How many Millennials personally remember the USSR?

Alas, the answer is very, very few.

Only the oldest Millennials may have any memory of the Wall coming down when they were nine or the Soviet Union imploding without a shot being fired when they were 11.

For the vast majority of Millennials including all of the younger members of the Y-Generation, none of them remember the USSR and most of all, its authoritarian brand (being charitable) of socialism/communism.

To top it off, they are thus easily impressionable for exploitation by politicians, entertainers and academics who absolutely adore all things Karl Marx including some wearing red star hats and sporting Che Guevara t-shirts and posters.

Instead of “We the people” and liberty, it’s “Dictatorship of the Proletariat.”

When someone says government can provide a whole cavalcade of goodies – government-paid health insurance, college, jobs — for free, including Universal Basic Income (UBI) for those “unwilling” to work … don’t you just know there will be Big Brother Orwellian strings attached?

Back From The USSR

“I’m back in the U.S.S.R.
You don’t know how lucky you are boy
Back in the U.S.S.R. (Yeah)”
– Lennon (Not Lenin) & McCartney

For Almost DailyBrett, a 1981 two-week trip to Leonid Brezhnev’s “Evil Empire” was an eye-opening, life-changing journey.

Kevin in Moscow – 1981

The flood-lit Wunder of Red Square (Красная площадь) in Moscow, the Swan Lake performance of the Bolshoi, the splendor of the Czar’s winter and summer palaces in St. Petersburg (Leningrad at the time) are all must see for any student of history and politics, let alone art.

Your author has placed a return-venture to modern-day Russia on his Bucket List, particularly what has changed and unfortunately what has remained the same (tyranny).

It’s safe to say that Russia has transformed itself after attempted Glasnost and Perestroika into an authoritarian oligarchical capitalist state with widespread corruption.

You can take the Vladimir Putin out of the KGB, but you can’t the KGB out of Vladimir Putin.

Looking back to your author’s trip to the Soviet Union, there were the wonders of Russia. There was also the socialist/communist police state reality of the USSR.

There were the jammed horrible motor coaches,

There were the lines for food and the basics of life.

There were well-stocked Beriozka or “little birch” stores, which accepted all currencies except for Russian rubles. It must suck to be you, Ivan and Tanya.

There were the tiny little cars with lawn-mower engines for the fortunate few (10 years wait), while Zil limousines carried Communist big shots to their exclusive dachas.

The Most Equal Of The Equals

“In an ideal socialist society, “the people” own the means of production. Everyone’s basic needs are met. Leaders are elected democratically. When implemented, however, human nature intervenes. Powerful elites take charge.” – Alex Berezow. USA Today Board of Contributors

Bummer.

There is so much discussion about the haves and the have-nots of American society.

There are cries for social justice: Translated some all-powerful state entity must level the playing field.

The question, which remains: Did socialist/communist USSR really even the score for everyone?

Whattya think AOC? How’s Venezuela working out? Is history repeating itself?

Even more to the point: Do Millennials in their lack of deep direct knowledge/remembrance of the USSR appreciate the stark dark truth of government provided socialism?

Karl Marx may be turning over in his grave but sorry to say, his idea did not work, and will not work regardless of the nation. Too many people want to achieve, and to do better for themselves and their families.

And yet there is hope for Millennials, and proof that many have not consumed the red cool aid.

It’s called Buy Low Sell High, and that beautifully simple concept applies to Millennials too.

https://www.economist.com/leaders/2019/02/14/millennial-socialism

https://www.economist.com/briefing/2019/02/14/millennial-socialists-want-to-shake-up-the-economy-and-save-the-climate

https://www.usatoday.com/story/opinion/2018/02/21/cnn-thinks-socialism-cool-my-grandparents-ussr-would-disagree/349830002/

https://www.marketwatch.com/story/millennials-communism-sounds-pretty-chill-2017-11-01

“Can’t decide whether you are a Democrat or a Republican …”

Bless these two students, who on separate occasions, refreshingly relayed their puzzlement to your author.

Almost DailyBrett does not believe that classrooms should ever be the venue for the indoctrination, let along the formation of young warriors in the fight between noble socialism and evil capitalism.

Gee … maybe … just maybe these students are smart enough to make up their own minds on these issues?

Even though long-time Almost DailyBrett readers and contemporaries know or at least suspect your author’s political predilection, it was rewarding to know at least some of my students weren’t so sure … and that is how it should be for all professors or instructors.

There seems to be a contagious disease among tenure-track or tenured academic types (e.g., professors and instructors) that university students are there to endure for hours on end their personal political pontifications and bloviations.

Is that why students are taking out loans averaging $30,000 each, waiting tables or asking mom and dad to dig deep … real deep … for their college education?

Don’t think so.

Buy Low, Sell High

As Almost DailyBrett fondly looks back to more than five years teaching public relations, integrated marketing, corporate communications and investor relations, one particular moment always brings back tears to the eyes.

More than 30 of my Central Washington University PR students chanted in unison … “Buy Low, Sell High!” … at my retirement party.

Upon receiving the Central Washington University Department of Communication Faculty Spotlight Award, they gathered around me for a group picture. Your author will always remember this moment.

Isn’t Buy Low and Sell High the essence of capitalism, particularly publicly traded corporate capitalism?

The answer is “yes.” Keep in mind that buying low and selling high is easier said than done. More importantly this phrase is the backbone to the practice of fiduciary responsibility on behalf of the 54 percent of Americans investing in stocks and stock-based mutual funds.

America’s investor class — planning for retirements, funding higher education for their children, opening up a new businesses — require accurate and complete communication about a company’s business plan, financials and simply … how does a corporation make money.

The highest expected communications professional compensation levels … usually in six figures … are directed to students adept at financial communications, who are studying at today’s schools of journalism and mass communication.

Almost DailyBrett believes wholeheartedly the purpose of universities/colleges is to prepare students to attain and sustain salaried professional positions with full benefits … and maybe even employee stock purchase plans (ESPP) and/or stock options.

Universities and colleges should be professional schools, providing students with lifelong learning skills and tools to succeed in our increasingly complex digital world … including beating artificial intelligence (AI).

If students wish to Occupy Wall Street that should be their choice, not their command.

By the way, how did that movement work out?

Students should always be fully aware of the imperfections of Capitalism. For example, watching The Smartest Men In The Room (Fortune’s Bethany McLean’s tome on the Enron bankruptcy) was required for each of your author’s Corporate Communications/Investor Relations classes.

In addition to the aforementioned Fiduciary Responsibility, a publicly traded company needs to complement this requirement with Corporate Social Responsibility (CSR). Besides doing well, a company should be mindful of doing good … including giving back to communities, protecting the environment … that make success, possible.

Certainly, students can be taught to live in tents, recite cumbersome theory or rail at the world back in their own bedrooms at mom and dad’s house.

They also can learn how to decipher an income statement, a balance sheet, a cash-flow statement and to understand the significance and formulas associated with market capitalization, earnings per share (EPS), and price/earnings (P/E) ratios and related multiples.

Looking back at your author’s professorship, there is no doubt about political disposition. There was also a comprehension that students are to be prepared for the professional world, and many of these graduates have done well, real well.

And if a couple of students or more, can’t tell whether Almost DailyBrett or any other professor/instructor, drifts left or right that’s the way … it should be.

 

 

 

Ever wonder how Venezuela became … Venezuela?

Almost DailyBrett at one time expected that Amazon would announce Austin, Texas as the recipient of HQ2 with its estimated $50 billion total investment and upwards to 50,000 technology positions with full benefits.

As a major technology hub, Austin offers a well-trained workforce, the capital of a right-to-work state, no state income taxes, and politicians’ favorably predisposed to corporate capitalism. In addition, Amazon bought Whole Foods in 2017 for $13.7 billion, which is based in … Austin.

Instead, Amazon selected Northern Virginia with it well-educated workforce and proximity to the infinite wisdom emanating within the Beltway. The other choice, which raised more than a few eyebrows, was heavily unionized and über-taxed Long Island.

The original thinking was Amazon would be welcomed with the prospect of providing 40,000 real positions with annual salaries averaging $150,000 and full benefits – not strip mall jobs – and $27.5 billion in new tax revenues during the course of 10 years. Yes, there were $3 billion in tax incentives from the State of New and New York City and these are always controversial.

Let’s see $3 billion in exchange for $27.5 billion in new revenues and 40,000 direct high-paying positions, not counting all the indirect economic activity supporting Amazon HQ2 in terms of suppliers, vendors and utilities.

Buy Low, Sell High?

Alas the United States is a divided nation, not just Democrats vs Republicans … but more to the point: Socialism vs. Capitalism.

Some wish to punish Amazon and its wealthiest dude on the planet boss, Jeff Bezos, for pioneering digital retail, employing 613,300, generating $232 billion in annual revenues, and stimulating $798 billion in investor market capitalization.

Amazon was greeted to Gotham by a buzz-saw of those who disdain capitalism in favor of command-and-control socialism.

As a former gubernatorial press secretary, the author of Almost DailyBrett imagined what it would be like to be relaying really bad news to the boss – New York Governor Andrew Cuomo – and answering the flood of media calls.

The alternative of a root canal is looking real attractive right now.

Ever hear the one about banging your head against the wall?

It only feels good, when you … stop.

Is Amazon Serious?

Is Amazon just firing a shot across the bow?

“It (loss of Amazon investment) would certainly undermine confidence in governance. You can’t empower anti-capitalist ideologues and expect the capitalists to embrace them. I still think they will work this out, because the embarrassment would be severe.” – Joel Kotkin, Chapman University professor of Urban Studies

“You have to be tough to make it in New York City. We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity.” – New York Mayor Bill de Blasio

“Threw away” constitutes fighting words.

These provocative words make it more difficult for the City of New York and Amazon to “work this out.” Why did da Mayor challenge Bezos’ manhood (we know it exists) in the first sentence of his prepared statement, and then charge the company with throwing away an opportunity in the concluding sentence.

Hey Mr. Mayor ever heard of the words … “disappointed”? … “concerned? … “let’s talk”?

If New York bids adieu to 25,000-to-40,000 Amazon positions and $27.5 billion in tax revenues in Alexandria Ocasio-Cortez’ congressional district, will those who are cheering today be demanding social justice from New York state and city tomorrow?

Even China with its brand of authoritarian capitalism figured out that buying low and selling high is the best way to provide prosperity for its people.

New York had the prospect of becoming a lucrative technology hub … but it “threw away” that opportunity.

https://www.nytimes.com/2019/02/14/nyregion/amazon-hq2-queens.html

https://www.forbes.com/sites/alyyale/2019/02/13/leaving-long-island-city-what-losing-amazon-hq2-would-mean-for-nycs-future/#18d48f01127c

https://nypost.com/2019/02/14/de-blasio-amazon-threw-away-great-opportunity-in-nyc/

 

 

“This is a dangerous moment for the life sciences industry that is increasingly vital to the U.S. economy.” — Lead Wall Street Journal editorial, Sept. 23, 2015

There are dirty-little secrets out there …

If one buys low and sells high, there is a resulting profit.

If demand is high and supply is low, prices rise … profits are likely.

And some forward-looking companies may take those profits and plow them right back into R&D (research and development), resulting technological breakthroughs may ensue, which may lead to more profits … and more R&D. Sounds like a plan to Almost DailyBrett.biotech

There are some who just don’t agree with buy low, sell high. There are some who are not enamored with supply and demand. In fact, they are declaring war on capitalistic “profiteering.”

The target du jour is bio-technology, the very folks who produce cures (e.g., Hepatitis C) and management regimes to control diseases (e.g., AIDS). One would think these biotech superstars, such as Gilead Sciences (NASDAQ: GILD), would be regarded as heroes. Alas, you would be wrong.

Certainly, there is a poster-child villain in this story.shkreli

His name is Martin Shkreli, the chief executive officer of Turing Pharmaceuticals, guilty of raising the price of parasite infection drug, Daraprim, by 4,000 percent. The 32-year-young hedge-fund manager beat a hasty retreat last week in the face of a chorus of cat calls. He is a walking-talking, first-rate public relations disaster.

Having made this point, should the entire life sciences industry, its scientists and patients, some in desperate need of breakthrough drugs, be punished for the sins of a hedge-fund manager and presumably a few others?

Here are a few more troubling price-control questions:

  • Will after-tax R&D expenditures of life sciences and by natural extension, technology companies, become the subject of regulatory-imposed quotas (e.g., no more than x percent of net income can be used for R&D)?
  • What impacts will these Washington D.C., or Sacramento-initiated command-and-control limitations have on finding cures for diseases or next generation killer apps? Will there be fewer newer drugs on the market? Will there be less “destructive” game-changing technologies?
  • Will other operating expenses on the income statement also be subject to governmental expenditure controls, such as SG&A (selling, general and administrative)? For example, will life sciences, software and/or hardware companies be restricted in how much they can spend to market a breakthrough product? What impacts will these restrictions, if they become reality, have on the fiscal health public relations and advertising agencies?
  • What happens to heart disease, cancer, Alzheimer’s patients and others facing potentially fatal diseases, if the political class imposes draconian controls on new drug development … pharmaceuticals that potentially could save their lives?

Guess life’s tough, right?

Steve Jobs Turning Over in His Grave?jobsmemorial

There are ballot initiatives circulating in California – the home of Silicon Valley technology and some big league life sciences companies – that would impose price controls on pharmaceuticals and limitations on after tax R&D, marketing and presumably other operating expenditures.

Do you think that once emboldened the political elites will stop at the income statements of life sciences companies? Or would they march onto the next battle: social, mobile and cloud companies in Silicon Valley and San Francisco?

Let’s see, the price for an Apple 6s smart phone is $849.99. There are no deals or discounts on Apple smart phones. Is that price too high? Are we all entitled to have a smart phone? Should price controls be imposed on Apple smart phones, tablets, watches, Macs, iPods …?

Whattyathink Tim Cook?

Looking at the income statement for Q3, Apple generated $49.6 billion on the top line (Is that too much?).

The company paid $3.79 billion in taxes (Is that too little?).

Apple devoted $2.03 billion for R&D and $3.56 billion for SG&A (Are these figures simply way too much for research and marketing respectively?).

The company also devoted $29.9 billion for COGS or the cost to make its breakthrough products. (Does Apple really need to spend that much? Your collectivist thoughts, Sacramento and/or Washington?)

Worse yet, Apple produced a profit of $10.67 billion. Is the company (and many others) guilty of “profiteering.”

These figures are reflections of not only extraordinary success, but engineering breakthroughs, entrepreneurial spirit, calculated gambles of consumer acceptance, and of course, the risk of failure.

The whole notion of venture capital is to spend private equity on ideas that may stick to the wall, but then they may also flop. An idea may be good, but too early for consumer acceptance (e.g., HDTV in the 1990s).

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One of the distinguishing characteristics of America, which makes it the land of opportunity, is calculated risk-taking of entrepreneurs. Ultimately, they have the super ideas that may lead to landmark products and with them literally tens of thousands of new jobs – not family wage jobs (whatever they are), but career path jobs.

Should we literally kill the goose that is laying golden eggs?

http://www.wsj.com/articles/the-assault-on-drug-innovation-1442964103

http://www.wsj.com/articles/the-biotech-rout-1443484644

http://www.wsj.com/articles/hillary-vs-cancer-treatment-1443007218

https://gma.yahoo.com/company-lower-drug-price-critics-called-4-000-002025809–abc-news-health.html#

http://www.apple.com/pr/library/2015/07/21Apple-Reports-Record-Third-Quarter-Results.html

 

 

 

 

 

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