I once wrote a column headlined “Buffett deserves his D-grade”. It prompted a one-line e-mail from Jim Cramer, the CNBC investment pundit: “You have cojones.”
Not that my assessment was particularly ballsy: the D was Warren Buffett’s own self-critical grade in March 2000 for his capital allocation decisions the previous year. And, of course, I was wrong. Publication of that annual letter to shareholders called the trough in the share price of his Berkshire Hathaway and the peak of the internet bubble. As Mr Buffett pointed out in the same letter, he and vice-chairman Charlie Munger had avoided technology sector investments because they had “no insights into which participants in the tech field possess a truly durable competitive advantage”. It turned out they weren’t alone.
The financial sector should be a laboratory for sensible new ideas about incentives – rather than a morgue for dead bonus programmes. So it’s distressing to read that investment banks are lagging behind insurers and retail banks in their efforts to design effective new rewards for their chief risk officers.
CROs are supposed to be the linchpin of tighter self-regulation of post-crisis institutions, at least according to the blueprint prepared by Sir David Walker, the City of London panjandrum. He drew up a report in 2009 on how governance at financial institutions should be improved. But research by Hedley May, a City headhunter, points to a lack of consistency among investment banks in the UK about how to tackle risk officers’ remuneration – and to a worrying lack of individuals who can fulfil all the Walker report’s requirements.
The Oscars were last night, and my first prediction for 2011 was utterly wrong. Not only did The King’s Speech, a classic independent drama of the kind the Academy loves, win best picture but Tom Hooper, its director, achieved an upset by being named best director.
Here was the first of my predictions in an end-of-year column:
This blog is about to evolve as I welcome a co-author – Andrew Hill, the FT’s new management editor and columnist. From next week, he will be adding his own posts on business and management from London to mine from New York.
Andrew and I are old colleagues and friends and we also look a bit alike – tall with (in my case greying) blond hair and glasses. I hope that our blog contributions will be a little more distinctive than our appearances.
Does Arianna Huffington have staying power?
I have agreed to act as a judge on this question as part of a bet between Felix Salmon, the Reuters financial blogger, and Robert Cottrell, my former FT colleague who now owns a Latvian bookshop and is co-founder of The Browser website.
Maersk Line, operator of the world’s biggest container fleet, this week announced plans for a very big ship indeed. The Danish company has ordered, from a South Korean yard, 10 vessels bigger than aircraft carriers that will carry vast quantities of Chinese-made goods from Asia to Europe.
My column last week on stock exchange mergers included some disturbing figures on the fall in the number of initial public offerings in the US since the 1990s.
I mentioned one possible reason:
It is time to declare a winner of my competition to find a name for the proposed merger of Deutsche Börse and NYSE Euronext.
You will recall that Chuck Schumer, the New York senator, declared that “New York” should come first in the new name because otherwise it would be a signal that “the Germans” were taking over.
Time Warner’s dismissal of Jack Griffin as the head of its magazine division Time Inc. is a cautionary tale about egotism in creative organisations. The lesson is that creatives are expected to be like that but business-side executives are not.
Jeff Bewkes, Time Warner’s chief executive, was admirably clear about why he asked Mr Griffin to step down. Mr Griffin was upsetting a lot of people in an organisation where executives are expected to rub along with editorial types.
Some very important questions are raised by the proposed merger of the Deutsche Börse and NYSE Euronext, but Chuck Schumer, a New York senator, has zeroed in on the most trivial one: its name.
Thanks to Senator Chuck Schumer’s absurd intervention to try to make sure “New York” comes first, the biggest controversy over the proposed merger of Deutsche Börse and NYSE Euronext is what to call it.
Some highly paid consultants will soon be on the job, but FT readers should be able to save some money by coming up with something suitable. I am awarding a bottle of champagne for the best suggestion (two if it is actually adopted).
Apple’s new regime for subscriptions to newspapers, magazines and books on the iPad will take many publishers aback but the most interesting standoff is with Amazon.
The two companies have been battling for supremacy on electronic tablets, with Apple’s adoption of the 30 per cent “agency model” having already undermined Amazon’s e-book price regime on the Kindle.
It is a tribute to the poise of Arianna Huffington that when faced on CNBC with the pertinent question – why did she and her fellow investors take almost all their money from AOL’s $315m acquisition of the Huffington Post in cash rather than AOL stock? – she did not bat an eye.
Stephen Elop of Nokia surely wins the Lucy Kellaway prize for blunt speaking in a corporate memo when he warns that the Finnish company has a “burning platform”.
There are lots of things to admire in the memo in terms of clarity and the willingness of the new chief executive to spell out publicly exactly how dire Nokia’s crisis has become: