W magazine has some advice for billionaires on Getting Things Done.
Delegate. Name any task -- somewhere, a billionaire is outsourcing it. One well-known mogul favors shabby chic cashmere sweaters but doesn't have the patience to let them get slightly worn at the elbows, so he employs a man to wear them around for him first.
I can't tell if this list is a joke or not...
Longish but interesting profile of Larry Gagosian, the world's foremost art dealer.
Gagosian attracts artists and collectors alike because he understands the intense coupling between art and money. In 2004 the top price for a painting by Takashi Murakami at auction was $624,000. Since then, Gagosian has sold Murakamis to Cohen and others, and in November one was auctioned for $2.4m. He has repeated that trick time after time. Not long after joining his stable in 2003, the painter John Currin made his auction record of $847,500; his highest price before joining Gagosian was a little over half that. Recently Adam Sender, the head of the hedge fund Exis Capital Management, reportedly sold a Currin painting through Gagosian for $1.4m. Before Glenn Brown began showing with Gagosian, in 2004, his top price at auction was $46,000; in June 2007, a painting of his made $969,000. In May, when Anselm Reyle was still represented by Gavin Brown, his work was fetching at most around $200,000 at auction. In October, after he had joined Gagosian's stable, a work of his made nearly four times that amount
The big tech/business news of the day is Yahoo's stock "plunge" following the withdrawl of Microsoft's takeover offer. I'm sure plunge headlines sell newspapers and all, but the more long-term story is more interesting.
On Jan 31, the day before Microsoft offered $31/share for Yahoo, YHOO was at $19.18/share (market cap: $26.4 billion) and MSFT was at $32.60/share (market cap: $303.6 billion). At the close of trading today, YHOO closed at $24.37/share (market cap: $33.5 billion) and MSFT was at $29.08/share (market cap: $270.8 billion). In other words, the Microsoft offer increased the value of Yahoo! Inc. by more than $7 billion and decreased the value of Microsoft Corporation by almost $33 billion. In still other words, in attempting to take Yahoo by force, they let an amount equal to Yahoo slip through their fingers. Why isn't anyone writing about Yahoo's amazing stock gains and Microsoft's plunge?
Craigslist posting by Rich Bigdollars (not his real last name) looking for a lady to spend some time with.
I am so rich. Goodness, gracious. My, my, my. I am so, very, very wealthy. How many dollars do I have? That's a question only my team of ten fat accountants can answer, because they have golden calculators which I bought for them with my money. And what is on those golden calculators? Numbers. And those numbers equal the dollars in my bank accounts, which are huge.
The 7th in a series of helpful posts for the time traveller**: here's how to invest your money wisely in 1998.
If you'd bought 3,298 shares of Apple stock in 1998, for $99,995, at $30.32 a share, it would now be worth $1,997,797. The stock has split twice, so you'd now have 13,192 shares at (as of last week) $151.44. Buy yourself an iPhone to celebrate!
** The first six posts will be published at some point in the future.
The bracket for Market Madness (aka the Fed 2008 Final Four Rate Cuts) pairs the biggest banks in the world against each other. Who'll be bailed out next? See also: Bracket Madness.
Yay! Today is sub-prime mortgage day on kottke.org, I guess. The collapse of the sub-prime mortgage market took everyone on Wall Street by surprise...except Goldman Sachs, which earned $11.6 billion in 2007 when everyone else lost money. How'd they do it? Michael Lewis says that Goldman went against the flow in shorting sub-prime mortgages by assuming that the entire rest of the industry, including their own expert and extremely well-paid traders, were, as Lewis puts it, "a bunch of idiots".
Update: Here's the WSJ article mentioned by Lewis in the above piece. (thx, andy)
n+1 magazine has a fascinating Interview with a Hedge Fund Manager. Topics of conversation include the sub-prime mortgage crisis. I gotta admit that I didn't understand some of this, but most of it was pretty interesting. (via snarkmarket)
Hedge fund manager John Paulson and investor Jeff Greene both became insanely wealthy over the subprime mortgage crisis. But how? (Parsing the Wall Street Journal is hard!) So Paulson "had to think up a technical way to bet against the housing and mortgage markets." His guys bought up "collateralized debt obligation" slices, which are repackaged mortgage securities. (Kind of lost already!) His firm also bought up "credit-default swaps." Paulson then opened a hedge fund shop, taking $150-million in mostly European money to back his scheme. Then he hung on. Now "he tells investors 'it's still not too late' to bet on economic troubles." Neat! Paulson's ex-friend Greene did much the same thing, getting an investment bank's participation for assets for the swap. Then... something happened and he bought three jets and a 145-foot yacht. Finance for idiots explanations eagerly sought! (And is there any small-scale way to do such things? Or do the abilities of regular people to make money on a crisis stop at short-selling and investing in Halliburton?)
Rich Kid Syndrome...how do you properly raise a kid who flies private jets everywhere and stands to inherit millions of dollars when he turns 25?
America's burgeoning money culture is producing a record number of heirs -- but handing down values is harder than handing down wealth.
(via andrea harner)
What if you traded Apple stock around Steve Jobs' January Macworld keynotes...would you make any money? Short answer is yes but buying Apple stock 10 years ago and holding would have been the better move. Also interesting is the market's reaction to OS X and Jobs' installment as CEO...Apple lost 7.3% of its market cap the day after the announcement.
Jay-Z as economic indicator? In his new video for Blue Magic, the rapper flashes Euros, not US dollars.
When I start seeing rap stars flashing euros instead of U.S. dollars, I know our economy is in trouble.
Relatedly, supermodel Gisele Bundchen wants to be paid for her modeling and sponsorship gigs in euros, not dollars. (Or maybe not.)
The newly designed US$5 bill is the worst one yet...the phrase "typographic train wreck" comes to mind. The purple 5 in the lower right, while useful, is one of the most amateur design choices I've seen on something that's destined for such a wide market. (thx, tom)
NY Times columnist Paul Krugman writes, in the introduction to his new blog:
The story of modern America is, in large part, the story of the fall and rise of inequality.
Note that he says "fall" and then "rise", not the other way around. A graph in the post illustrates his point nicely.
The personal lives of CEOs have come under scrutiny lately because what a CEO does in his off-hours seems to have a bearing on how well his company's stock performs. "It found that on average, the stocks of companies run by leaders who buy or build megamansions sharply underperform the market. The researchers don't claim to know why. They theorize that some of these executives might be focused more on enjoying their wealth and less on working hard." (via mr)
Also, I loved that the WSJ published the nickname of "Frederick E. 'Shad' Rowe Jr." Shad Rowe!
This is interesting. The PGA offers a non-traditional pension plan for their players that depends on how they perform throughout their careers. Tiger Woods, who performs quite well, could be eligible for almost $1 billion for his retirement if he keeps playing and winning. Billion. Wow.
From a paper on adaption to wealth and status: people on the right of the political spectrum adapt to higher status but not greater wealth and those on the left adapt to wealth but not status. (via marginal revolution)
Update: I had the two things mixed up earlier...it's correct now. (thx to everyone who wrote in)
Tiger Woods tops this year's list of top-earning American athletes. He makes $111M a year, more than twice as much as the fellow in second place. A list of the top-earning non-American athletes is available as well. (via cyn-c)
Out to dinner with friends: split the check evenly or not? "I find if you don't split it evenly, and everyone pays 'what they owe' many people will pay much less than they owe, forgetting tax and tip. Then they avert their eyes while the generous ones pony up the extra bucks."
James Simons, hedge fund manager, earned $1.7 billion last year. $1.7 fucking billion! His company charges fees of 5% of assets and 44% of profits while the fund grossed 84% this year. Can one person add $1.7 billion of value to the economy? Something is wrong here.
An anticorruption group in India is printing zero-rupee notes designed to be handed to officials demanding bribes. The note is "a symbol to express refusal to grease the palms of officials". (via tmn)
LeBron James' new house: 35,440 sq ft, 2200 sq ft master suite (with 2-story walk-in closet), theater, casino, barber shop, bowling alley, and a limestone bust of LeBron wearing a headband.
Ben Stein on "what's new and hot and exciting" in the world on money: "The most sought after jobs in the United States now are jobs in finance in which basically almost no money is raised for new steel mills or coal mines, but immense sums are raised to buy companies, recapitalize them -- which means pay the new owners immense special dividends and other payments for going to the trouble of taking over the company. This process results in fantastically well-paid investment bankers and private equity 'financial engineers' and has no measurably beneficial effect on the economy generally. It does facilitate the making of ever younger millionaires and an ever more leveraged American corporate structure."
Brad Duke won $85 million in the Powerball lottery in 2005. Here's how he's spent the money so far. (via cyn-c)
An interview with Ootje Oxenaar, who designed a whole range of Dutch banknotes in the 60s, 70s, and 80s. "On the 1000 guilder note, it became a 'sport' for me to put things in the notes that nobody wanted there! I was very proud to have my fingerprint in this note - and it's my middle finger!"
David Pennock on the steep rise of Apple's stock after announcing the iPhone: "Jobs's speech could not possibly have revealed over $8 billion in previously undisclosed information".
Update: On the other hand, analysts think that Steve Jobs' mere presence at the company is worth $20 billion.
A couple worth $2 billion did their own divorce in an afternoon over a bottle of wine. "Life's too short, they figured. And why give the lawyers all the money if you can work it out yourselves?"
A record-breaking year for Goldman Sachs; they're setting aside $16.5 billion for salaries, benefits, and bonuses. That's $622,000 (!!!!!!) for each employee. Instead of the typical business puff piece telling us about what these i-bankers are going to do with their money (cars, houses, expensive dinners!), how about investigating where all this money is coming from and what, exactly, Goldman does that's so beneficial to the economy to earn such incredible profits.
Muhammad Yunus, who came up with the idea of microcredit, received his Nobel Peace Prize yesterday. His Nobel lecture is available in text and video formats.
Ben Stein muses about taxes, but the Warren Buffett stuff at the beginning of the article is the most interesting bit. "In conversation it came up that Mr. Buffett doesn't use any tax planning at all. He just pays as the Internal Revenue Code requires."
$2 bills are growing in popularity in the US...$1 bills just don't cut it for bartender's tips and lapdance gratuities anymore. Peter Morici, professor of business at some long-named school, says that the $1 coin is taking off as well, but when my wife tried to pay at a store using one of them the other day, the cashier looked at her like she was trying to use Monopoly money.
Hot on the heels of Muhammad Yunus receiving the Nobel Peace Prize for 2006, the New Yorker has an overview of the various approaches to microfinance and microcredit.
"Fisher Island millionaire Bruce McMahan loved his daughter so much, he married her." See also genetic sexual attraction.
You know those spams you get touting penny stocks? It turns out they actually work. "The team found that a spammer who bought shares the day before starting an e-mail campaign and then sold them the day after could make a return on his or her investment of 4.9%. If he or she were to be a particularly effective spammer, returns to this strategy would be roughly 6%."
Update: NPR report on the spam stocks study. (thx, jeff)
A new version of Monopoly will do away with the cash and replace it with Visa debit cards. (thx, janelle)
During the depths of the dot com bust, Julian Dibbell looked online for a job and found one as a commodities trader in the Ultima Online virtual world. During one particularly productive month, he made almost US$4000. Dibbell has a book coming out about the experience, Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot. In addition to being available at bookstores in meatspace, Play Money will also be on sale in the virtual world of Second Life in the currency of that world (Linden dollars). From the press release:
In-game versions of Play Money designed by Second Life coder/publisher Falk Bergman are available for L$750. These copies can be signed by Dibbell at his in-Second Life interview with journalist Wagner James Au on July 27th. For the Second Life resident who needs something a bit more tactile, L$6250 buys a real-life copy of Play Money, shipped with care to the buyer's real life address, in addition to the standard in-game version.
(At the time of this press release, Linden dollars are trading at approximately L$300.00 to the US$1.00. Adjusted to US dollars, an online copy costs US$2.50, and the price of a real-life copy bought in-game is around US$20.85.)
Dibbell will be signing his virtual books in Second Life on July 27th. Caterina read Play Money and has some thoughts on its relation to her work/play at Ludicorp. And here's a preview of Chinese Gold Farmers, a documentary on gold farming sweatshops in China.
A quick study shows that stocks of simply named companies do better than those of more complexly named companies. Even companies with pronounceable ticker symbols did better than those with unpronounceable symbols.
Lottery idea: instead of earmarking revenues for education, why not use the money for individual retirement accounts? The piece includes this startling fact: "Some 20 million Americans spend at least $1,000 a year on lottery tickets". !!!!
Absurd luxury markets..."some khaki pants are now selling for AS MUCH AS $1055" (emphasis mine). Holy shit.
Friends and finances in 21st century America: "More friends and acquaintances are now finding themselves at different points on the financial spectrum, scholars and sociologists say, thanks to broad social changes like meritocracy-based higher education, diversity in the workplace and a disparity of incomes among professions."
Guidelines from the Secret Service on the printed reproduction of currency. I once photocopied a dollar bill at the office on our uber-photocopier and was astounded how good it looked...I don't envy the SS's task here.
Do rich artists make bad art? "When you become as rich as [Warhol or Dali], being as rich as this becomes your story. If you don't make art about being a multimillionaire, you are being dishonest. If you do, you can hardly claim the universality of great art." (via rw)
People are changing how they spend their money, opting for buying experiences rather than things. "Just as we moved from a goods to a service economy, now we are shifting from a service to an experience economy." (thx, malatron)
Larry Ellison spends tens of millions of dollars in borrowed money every year, which is worrying his accountant, who wants him to diversify by selling some of his Oracle stock.
Phil Greenspun on retiring young. "Retirement forces you to stop thinking that it is your job that holds you back. For most people the depressing truth is that they aren't that organized, disciplined, or motivated."
In 2005, 34 poker players earned $1 million playing tournaments, compared to 78 golfers earning the same playing their sport.
The Del Monte Note is a $20 bill with a Del Monte banana sticker that was affixed to it during the printing process so that the serial number and Treasury seal are partially printed on the sticker. "In the summer of 2004 a college student in Ohio received it as part of an ATM withdrawal and shortly there after posted it on eBay where it sold to the highest of 12 bids."
If you want to sell your web startup, don't take that much money from VCs or bootstrap the whole thing yourself. Too much money invested means that no one wants to buy your company for what your VCs require you to sell it for...especially if your business has limited prospects to begin with.
We've arrived safely in Vietnam. Saigon is by far the most European stop on our trip, which makes sense because Thailand was never colonized by a European power[1] and Hong Kong was British and therefore not European[2]. There are cafes, French restaurants, European architecture, public spaces like squares and parks, etc. It feels like Europe here.
And there are a lot of dongs here. The Vietnamese currency is the dong[3]. Our hotel is just off of Dong Khoi. I've seen several restaurants and shops with "Dong" in the name. Beavis and Butthead would love it here; I myself have been making culturally insensitive jokes pertaining to the currency and my pants pocket all afternoon.
[1] The only SE Asian country never to have been so colonized.
[2] Hello, angry Brits! Of course you're European, but you know what I mean. For starters, you've got your own breakfast, as opposed to the continental.
[3] The 50,000 & 100,000 dong notes are plastic and see-through in a couple spots. US currency is so not cool.
New feature from Bank of America: Keep the Change. When you use your bank card, you can have your charges rounded up to the nearest dollar and the difference automatically deposited into your savings account. I think this is the first neat thing I've ever seen a bank do. (via coudal)
James Surowiecki on insider trading and members of Congress. From 1993-1998, "senators beat the market, on average, by twelve per cent annually". Here's a piece on the same study from the FT early last year.
From a Washington Post article about google.org, Google's philanthropic effort:
Shareholder activists said Google's charitable commitment raises questions about whether this is an appropriate use of company cash or whether company founders Sergey Brin and Larry Page ought to make donations to their favorite causes personally. The foundation of Bill Gates, the founder and chairman of Microsoft Corp. and the nation's richest person according to Forbes, gave away more than a billion dollars last year to fight poverty, hunger and disease around the world. But Gates donates through a personal foundation, rather than through Microsoft itself.
"The board of directors should make it clear to the company's founders what should be personal and what should be corporate," said Patrick S. McGurn, special counsel to Institutional Shareholder Services Inc. "Google is spending shareholders' money, and it raises questions if there is not a valid corporate purpose."
Shareholder activists? You've got to be kidding me. You'd think that stock shareholders are a bunch of babies that need their noses wiped and hands held to go potty or something. If you don't want to support Google's philanthropic efforts and think that they're throwing your money away by doing so, there's an easy way to opt out: DON'T BUY GOOGLE STOCK. It's a free country and open market...vote with your money on what you think is a "valid corporate purpose". There are thousands of other companies to invest in that are doing other things, many of which operate exactly the same...nice and safe and by the book. The information on what these companies are doing with their shareholders' money is freely available...get informed about what you're buying. Given their P/E ratio, unique corporate approach, and incredible rate of growth, Google might just be the riskiest large-cap stock opportunity out there, but the potential upside (as well as the downside) is a lot greater than all of those companies playing it safe. As long as it's stated (and I believe Google certainly has made their views very clear), risk isn't something from which shareholders should be warned away.
Spam Stock Tracker tracked a bunch of penny stocks hyped by spammers to see how you would do if you bought them. Looks like a ~50% loss since May.
The new $10 bill ain't too attractive. Why can't we have nice things?
Update on the Million Dollar Homepage...it's actually starting to fill up. He's sold almost $100,000 worth of space so far. This is beginning to look like an absolutely brilliant idea.
Fun speculation that the purpose of Google's big stock sale is to grease the skids for their entrance into the S&P 500. Lots of new people buy the stock of a company just added to the index and the stock sale would make that inventory available. (Or do they need money to buy Skype? Or are Google execs getting jittery about being in a bubble and want to cash in?)
Supernotes are high quality fake US dollars printed on the same printing presses that the US government uses to make money.
Venture capitalist Howard Anderson on why he's leaving the VC game. Rational markets and an over-supply of technology are two of his reasons.
Daniel Gross on why the financial markets reacted to the London bombings as they did. Stocks dropped (but not too much), oil fell sharply, and transportation and insurance stocks took a bigger hit than most.
The shape of a mobile world. The main purpose of the Personal World Map is to give awareness of your actual position in the world in relation to other places by taking into account the "effort" you need to get to a certain destination.
Money Magazine on the 50 smartest things you can do with your money. Also includes a list of 15 dumb things to avoid.
Presentation: how to make a million dollars. "In America, starting a successful business is the surest, most controllable path available to you for making a million dollars".
Keith Chen is doing economic research with monkeys; teaching them how money works. "When taught to use money, a group of capuchin monkeys responded quite rationally to simple incentives; responded irrationally to risky gambles; failed to save; stole when they could; used money for food and, on occasion, sex."
On shopping cart coin replacement things. The plastic coin replacement thingie is a "perpetually reusable currency for the shopping cart leasing market."
Lauren Greenfield photo series documenting the beauty regimes of 6 New York women. "Some women spend $1700 monthly on beauty, more than many women pay for rent. Does spending more mean looking better?"
Michael Lewis is one of my favorite authors. He's not the smartest or the most clever writer but he weaves deceptively simple stories into larger statements on society and humanity with a skill possessed by very few people doing creative work in any field. I haven't gotten around to reading Moneyball yet, but Liar's Poker is probably his strongest work. It's as hard to put down as any fiction. Great book.
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