Finance Geek

A report released by the Nielsen Norman Group shows that many iPad apps are confusing users by being too subtle about the gestures needed to navigate them, and some are not sensitive enough to the accuracy limit of fingertips. The authors also found that many companies with perfectly functional websites are wasting their time making a less-functional iPad app.

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Wolfram Alpha, the geekiest search engine on the net, turns two this month, but its founder, Steven Wolfram, says the world is just getting started figuring out how it needs his baby.

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It has come to this. A year after rescuing Greece from default, Europe is staring into the abyss. The bailout has proved insufficient. Greece needs more money, and it can’t borrow from private markets where it faces interest rates as high as 25%.
But Europe’s governments are reluctant to advance more funds unless other lenders - banks, bondholders - absorb some losses by writing down their debts. This, however, would constitute a default, risking a broader banking crisis that might torpedo Europe’s fragile recovery in France, Germany and elsewhere. There is no easy…

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House Majority Leader Eric Cantor turned the policy temperature down on austerity this week by rolling out a strong economic-growth agenda. Headlined by a 25 percent top tax rate for individuals and business, the Cantor package includes regulatory relief, free trade, and patent protection for entrepreneurs. It’s job creation and the economy, stupid.
Sounds Reaganesque? Well, Eric Cantor has a lot of Reagan blood in him. Back in 1980, while Cantor was still in high school, his father was the Virginia state treasurer of the Ronald Reagan presidential campaign. So the apple never falls far…

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In “Reckless Engagement,” co-authors Gretchen Morgenson and Josh Rosner, examine the origins of the crisis, starting in the early 1990s. The co-authors pull no punches and aren’t shy about placing blame. (See: Reckless Endangerment: Morgenson, Rosner Name Names — Point Finger at Fannie Mae ) Having taken a long, hard look back, I asked Morgenson [...]

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After years of consistently high unemployment in this country, the job situation is finally start to look up and the hope is this positive trend will continue. (See: The Employment Report: The Private Sector is in Good Health) Conventional wisdom says employers are looking for employees who have the perfect skill set for the job [...]

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In Reckless Engagement, the latest book about the financial crisis, co-authors Gretchen Morgenson and Josh Rosner do what many of their high-profile counterparts failed to do: Name names for those responsible for the crisis. “Instead of it seeming like it was an ‘act of god’ that couldn’t have been prevented, we try to single out [...]

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Bill Gurley put a great post up on Tuesday which discusses valuation drivers, and why different businesses achieve very different revenue multiples.  It is no coincidence that he covers much of the same ground as I did in last week’s 50 Questions post on barriers to entry.

The whole post is a good read, but the piece I want to pick out is his explanation of why discounted cash flow analysis isn’t appropriate for startups.  I consider myself a financial purist and would value businesses on discounted cash flows if I thought it worked, but I don’t and wrote about my reasons for not doing so back in March.  This excerpt from Bill’s post is a simpler and less technical explanation than mine (and hats off to him for that ):

Those of us with a fondness for finance will argue until we are blue in the face that discounted cash flows (DCF) are the true drivers of value for any financial asset, companies included. The problem is that it is nearly impossible to predict with any accuracy what the long-term cash flows are for a given company; especially a company that is young or that might be using an innovative and new business model. Additionally, knowing what long-term cash flows look like requires knowledge of a vast number of disparate future variables. What is the long-term growth rate? What is the long-term operating margin? How long will this company hold off competition? How much will they be required to reinvest? Therefore, from a purely practical view, the DCF is an unruly valuation tool for young companies. This is not because it is a bad theoretical framework; it is because we don’t have accurate inputs. Garbage in, garbage out.

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Some people call him the Monkey Man. His goofy public appearances have provided millions of YouTube viewers with endless entertainment. And under his leadership for the past 11 years, Microsoft’s performance in the stock market has been limp. That’s Microsoft CEO Steve Ballmer, everyone. And one high-profile investor is sick of him.

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Google rolled out its highly anticipated mobile-payments system on Thursday, with company officials unabashedly declaring the advent of “a new era of commerce.” Dubbed Google Wallet, the new product launched with a closely related initiative: Google Offers, a targeted daily-deal service that will compete with the first-mover likes of Groupon and LivingSocial.

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What was once unthinkable for mainstream economists has now become irresponsible to dismiss: The dollar’s reserve status is in jeopardy, thanks to soaring U.S. deficits, political gridlock and the Fed’s super-easy policies. The lack of a suitable replacement is probably the best thing the dollar has going for it right now. Europe’s debt crisis has [...]

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More signs today that the global economy could be slowing as predicted by the Economic Cycle Research Institute last week. (See: Global Slowdown to Hit by Summer, Even for U.S., Says Achuthan) Here at home, there was no revision to the first quarter’s sluggish 1.8% GDP growth. Yet personal consumption fell to 2.2% from the [...]

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The Greek debt crisis is not on the official agenda at this week’s G8 meeting, but it’s certainly top of mind for policymakers gathering in Deauville, France. “It is a fantasy and a folly” to believe a Greek debt restructuring can be avoided, says economist Peter Morici, a business professor at the University of Maryland. [...]

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Mark Littlewood, the organiser of Money in Mobile forum has kindly offered a free ticket to the reader who can come up with the best question to ask on the day.  He put it like this:

I thought it might be fun to offer a ticket as a prize for an Equity Kicker reader – they are such a sparky bunch.

To win a free guest pass to the Money in Mobile Forum on 14th June. Drop us a note to question@thebln.com by Monday 6th June saying who you are, and the question you would like to ask a speaker – http://moneyinmobile2011.thebln.com/speakers/

The person posing the best question will come to the event as our guest and get to ask the question.

Thanks Mark!

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I will be a judge at the Money in Mobile Forum on June 14th.  Mark Littlewood of the BLN always puts on a good show and this one looks to be no different.  The theme of making money out of mobile is an important one and Mark has got a decent line up of speakers (including my co-author Nicholas Lovell).  There is also a startup competition for companies that fit the following criteria:

• Are privately held
• Have paying customers
• Make money for them
• That’s it

(this is what I will be judging, along with a few other VCs and other notable folk).

The entry process is designed to be quick and easy, and you can apply here.  The winner gets the kudos of being picked as a winner, an iPad, and a free ticket to the event.

If you are a startup that fits the criteria above and are looking to build your network with VCs then applying for this competition would make a lot of sense.  Winning it would be even better

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