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. Read more
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: Read more
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. Read more
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. Read more
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: Read more
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. Read more
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. Read more
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). Read more
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. Read more
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: Read more
Sergio Marchionne of Fiat and Chrysler has got himself into a fine mess with one appearance in San Francisco on Friday in which he managed to scandalise two governments simultaneously.
One of his sallies was foolish as well as offensive. Describing the finance offered by the US and Canadian governments to keep Chrysler afloat with taxpayer money as “shyster” loans was an absurd comment (for which Mr Marchionne has apologised).
To state the obvious, Chrysler would have collapsed in 2009 without those loans and no-one else apart from the US government was willing to make them. I still question whether it was a good idea at all.
The fact that it charged interest on behalf of taxpayers was the least it could do, and Mr Marchionne, who as I previously noted enjoys being the centre of attention, was silly to bite the hands that fed him. Read more
The first week of The Daily, Rupert Murdoch’s iPad-only newspaper has crystallised my evolving view of what does, and does not, make for a successful news publication on the tablet.
What does, I think, is an informative publication with plenty of in-depth content that can be downloaded rapidly because it does not contain a lot of heavy video and data which requires minutes to be transmitted even over broadband.
What does not is an all-singing, all-dancing multimedia production that is probably very impressive but which takes far too long to download and use. Very few people are likely to bother to wait. Read more
Everyone has an innovation policy these days – no prime minister or president is without one. After Barack Obama’s declaration in his State of the Union address that the US faced a new “Sputnik moment”, David Cameron flew to Davos last week to insist that “our biggest ambitions have got to be for innovation”.
To the Guggenheim Museum in New York to watch the launch of The Daily, Rupert Murdoch’s new newspaper – or more accurately newspaper-cum-magazine – for the iPad.
My colleague David Gelles has reviewed the first edition of The Daily here, so I will confine myself to the observation that it looks nice and has lot of moving parts, such as video and slideshows, but lacks urgency.
I increasingly find in using my own iPad that I favour lightweight apps that I know will download quickly, and which are easily navigable, rather than the all-singing all-dancing apps that are long-winded and sluggish. Read more
I am keeping a close eye on my seven New Year predictions – and the fact that The King’s Speech has done so well in Oscar nominations is not a good sign – but one thing which appears to be falling in line is pharmaceutical research.
I stuck my neck out in December and predicted that a large pharma company would drop early-stage research and outsource it instead. Not so far, but Pfizer’s announcement that it will cut back its research operations, including closing its UK research laboratory at Sandwich, is an interesting marker. Read more