Saturday, December 20, 2014

The Haiku of Finance for 12/20/14

Last shopping weekend
Encourage needless spending
Finish Christmas strong

Friday, December 19, 2014

The Haiku of Finance for 12/19/14

Hacking at Sony
Offline systems lose money
North Korean smirk

Thursday, December 18, 2014

The Haiku of Finance for 12/18/14

Opening Cuba
Travel and tourism boom
Light up a cigar

Wednesday, December 17, 2014

The Haiku of Finance for 12/17/14

Trading floor action
Wave at others like crazy
High adrenaline

Tuesday, December 16, 2014

The Haiku of Finance for 12/16/14

Ruble trading halt
Await capital controls
Bearish on Moscow

Monday, December 15, 2014

The Haiku of Finance for 12/15/14

Taxi app pricing
Charge extra in a crisis
Really price gouging

Financial Sarcasm Roundup for 12/15/14

This particular batch of sarcasm uses the Commonwealth Club "Week to Week Political Roundtable" event for inspiration.  I attended that panel tonight and listened to local journalists hold forth on some newsworthy events.  I will address a few of those events below, laden with sarcasm that no one else in the financial sector can deliver.

The Salesforce Foundation is pushing its Pledge 1% program to startups.  I first heard about this philosophy at Dreamforce 2013.  It's hard for me to be sarcastic about something so generous, but I'm pretty sure only later stage startups or early-stage VC-funded startups have a chance of fulfilling the pledge. Any startups who can afford such a commitment are welcome to check out the official Pledge 1% site.  The startups that make it work will somehow leverage their donations and employee contacts into new revenue streams.  It's really a wake-up call for sharp CMOs to tie non-profit relationships into their marketing channels.  If some employee's volunteer hours with the local soup kitchen merits a business development follow-up that closes some ERP software sales, then it's bonus time all around.

Uber has earned itself two more black eyes, first for charging surge pricing during the Sydney hostage crisis and then for one of its executives disputing something trivial with a landlord.  Their PR head must be fuming.  I recently blogged about Silicon Valley's jerk culture but no one with serious money seems to care.  Facebook and Microsoft both had significant growing pains as they achieved monopolistic control of their sectors.  They got over those episodes by bringing in experienced senior executives who grew up in other corporate cultures.  Uber desperately needs an outsider to make a cultural hairpin turn before this taxi hits a guardrail.

The "cromnibus" federal spending bill is through Congress and headed to the President's desk.  In case you missed it, the name is a hybrid of an "omnibus" normal appropriations bill and a "continuing resolution" for stopgap funding.  It contained a special gift for Wall Street by weakening Dodd-Frank rules.  The important lesson for the financial sector is that Washington still isn't serious about restoring fiscal sanity, regulating Wall Street, or enacting the entitlement reforms pushed by the Bowles-Simpson commission.  The Alfidi Capital investment thesis of a severe US financial crisis triggering a hyperinflationary policy response remains unchanged.

I can't close this roundup without shaking my head at the US Senate Select Committee on Intelligence report on the CIA's interrogation practices.  A lot of this has been in the public domain for years.  Collecting it into an accusatory summary after much of what it describes has already been reformed will needlessly embarrass the intelligence professionals charged with implementing further reforms.  Social justice warriors who relish the chance to humiliate security professionals have no understanding of international relations.  The US intelligence community has a long memory.  I am not being sarcastic at all.  

Sunday, December 14, 2014

The Limerick of Finance for 12/14/14

Speculators waded into oil
Falling price set their plans up for spoil
Some producers go bust
Wells reverting to dust
OPEC pumping keeps shale in the soil

Saturday, December 13, 2014

The Haiku of Finance for 12/13/14

Dropping bad people
Liability no more
Focus on winners

Piercing the Dark Clouds Over San Francisco's Young Professional Culture Groups

I have supported San Francisco's leading arts and cultural institutions for as long as I have resided in The City.  The institutions themselves are fine, despite the problems their labor unions cause out of spite for the audience.  I used to think the young professional support groups associated with the arts were just as fine.  I no longer believe that to be the case.  My membership in those support groups no longer makes sense.

That's me, posing at the War Memorial Opera House in a publicity shoot for the San Francisco Ballet's planned giving program.  The arts matter to me and I once believed The City's young professionals I met at cocktail receptions felt the same way.  Some do, but most do not.

My decade of networking with like-minded people over cocktails bore a lot of fruit.  I connected with dozens of intelligent, ambitious people who are mature enough to handle professional responsibility.  I also encountered hundreds of forgettable people who were not worth my time.  I periodically dropped such people from my circle of contacts.  Let's review a recent sample of these losers, complete with pseudonyms . . .

"The Continental" . . . a Silicon Valley engineer who routinely spends more than he makes, and only avoids bankruptcy because his recent employers got acquired and gave generous severances to terminated employees like him . . .

"The Singing Jerk" . . . a very irritating man-child with no verifiable employment history, who inexplicably breaks into Rolling Stones lyrics in the middle of a conversation . . .

"The Fashionistas" . . . some gaggle of aspiring supermodels throwing all of their disposable income away on wardrobe and makeup, living for the chance to be featured in 7x7 Magazine or the Nob Hill Gazette . . .

"The Gold-Digging Barflies" . . . aging single women who would rather prospect for sugar daddies than hold down paying jobs . . .

The barflies have become particularly annoying because some of them became fixated on dating me, literally pushing away other high-quality women I would rather pursue.  I reached my breaking point with these idiots when I recently became aware of some totally unacceptable behavior.  It is the kind of conduct more typically associated with a certain alternative festival in the Black Rock Desert of Nevada than with a coterie of young professionals.  I don't have time to dig around separating factual narratives from spiteful rumors, because the rumors of this behavior are enough to put me off.  Where there's smoke, there's usually fire, and I don't need to know whether someone is actually burning.  I never witnessed this conduct, nor can I produce evidence that it occurs, but people I trust now corroborate its persistence.  The possibility of a pervasive problem is too alarming to ignore.  I am now compelled to take decisive action.

I declined to renew my memberships in several of these young professional groups.  One remaining membership expires in 2015 and I shall allow it to run out naturally.  I have also dropped a large number of people from my contact list, more than I have ever dropped in one sitting.  Three figures worth of useless humans are totally gone from my life this December.  These people had very little in common with me anyway and I won't miss them.  I still attend performing arts events, including galas, where these losers congregate.  I will not let them cross my path to blight my life.  The San Francisco War Memorial and Performing Arts Center was named for veterans.  I go there to represent my absent companions, and for my own well-being.

The effort I make in meeting people just to weed them out is now a burden on my schedule.  I have discovered that I am more efficient at meeting worthwhile people at strictly business-oriented events.  There's a common saying that a person is the average of their five closest contacts.  If I picked five people at random from those cultural clubs, I'd have a handful of arrested development jerks whose adolescent flights of fancy belong with Peter Pan.  If I picked five random entrepreneurs or freelancers from my business event calendar, most of them would belong in a boardroom.

Yuppie social groups were useful to me a decade ago when I had few friends in San Francisco.  Diminishing returns set in after age 40.  These social groups are to real philanthropy what a cargo cult is to a real economy.  Going through the motions of success makes little sense if participants can't back up their incantations with competence.  I would rather apply my competence elsewhere than go through motions with permanent aspirants.

I have overstayed the time I needed to spend in several young professional groups.  I will say goodbye to some people at a few remaining social events and ignore a large number of people who do not deserve my goodbyes.  I have been free of debt, addictions, and irresponsibility for my entire life.  Most of the people I used to know in the San Francisco yuppie crowd do not share those preferences.  It is time for me to go.  

Friday, December 12, 2014

The Haiku of Finance for 12/12/14

Market watching junk
Energy debt going south
Impair bond traders

Thursday, December 11, 2014

The Haiku of Finance for 12/11/14

Court ruling result
Harder to charge insiders
Traders get off free

Wednesday, December 10, 2014

The Haiku of Finance for 12/10/14

Continual fraud
Raising a stream of red flags
No one even cares

Tuesday, December 09, 2014

The Haiku of Finance for 12/09/14

Berkeley violence
Radicals hate wealth and law
Disturbing the peace

Alfidi Capital Attends Mobile Monday's 2014 Year in Review

Mobile Monday's year-in-review for 2014 and predictions for 2015 was one of those can't-miss San Francisco events.  I trekked over to Adobe HQ on Townsend Street to absorb the night's wisdom.  I've been over there often enough to know that any startups seeking street credibility need to attend those events.  Bear in mind that the observations below are all my own.

First, allow me to orient my readers to the Adobe gathering place past the front entrance.  Anyone who's ever visited Adobe has seen the employees' creative expressions around their public meeting space.  Sketches adorn the walls and they're much better than your kids' etchings hanging on the fridge.  I guess the Adobe folks are taking classes after hours to add right-brain creativity to their left-brain work.  You might even see something like this unique branding interpretation below.

That's a whole bunch of gumballs arranged in a Plexiglas cube resembling the Adobe logo.  It's really cute but the gumballs are not available for consumption.  I thought about adapting the Alfidi Capital logo in this style but I don't have a physically impressive space where I can display it.

Adobe's meeting space has all of the fun tech gadgets you'd expect, like cameras and projection systems to capture the audience.  That's me taking a selfie of my image on the big, fancy projection screen before it rolled up.  I have no idea what these other people were doing.  I did not come to Mobile Monday for them.

Mario Tapia kicked off the event with his special rendition of a Christmas rhyme, "Twas The Night Before Funding."  I hope he puts it on the Mobile Monday website.  Every startup dreams that their primary investor will be some kind, grandfatherly type pushover like Santa Claus.  That's why it's a fun fairy tale, kids.  Reality is a VC who wants to cram down the founders' stake and push for a premature exit.

Let's get to the panel already.  I did not write down much of what they said because I was too busy generating my own thoughts, which I shall now share with you out of generosity.  The bubble charts from a tech sector investment bank still projected huge mobile revenue growth even though it means cannibalized growth in other online services.  Mobile subscriptions and advertising are very sensitive to economic downturns, and consumers will do without either in the next recession.  I'm not sure why the panelists think Millennials' preference for smartphones as data carriers means they're less likely to use it as a phone.  Other generations use the devices to make voice calls.  The world does not revolve around Gen-Y people even though the ones in Silicon Valley think it does.  Mobile sector analysts all seem to be Millennials anyway, so their research is becoming self-referential.

Games dominated every bubble chart and quad chart the Mobile Monday panel discussed.  Analysts expecting non-game app categories to overtake games are foolish.  Mobile users' preference for amusement on demand is now so thoroughly ingrained that only other gamified apps can satisfy the craving.  App makers targeting business functions still have not figured out how to incentivize users with playable levels and token rewards, and that's why they won't see growth that displaces games.  The obvious way to jump start growth in any other app category is with gamification.

There may be some growth left in sectors that provide on-demand services specific to locations.  Yes, Uber and Lyft, I mean you.  The mobile sector forgets those companies aren't just mobile apps, but analysts who don't leave their desks much won't understand logistics in the physical world.  Virtual services are a different story.  Lots of sectors don't have enough workers who are mobile enough to justify a device and app for everyone, so traditional seat count metrics for ERP systems still matter.  I can only see mobile "virtual back offices" for SMBs viable only for those businesses with localized services (gardeners, junk haulers, whatever).  The mobile sector is too much in love with itself if it thinks every cubicle dweller is destined to go mobile.

I may be one of the few analysts on Earth who understands what drives M&A in mobile.  It's not corporate development targets or cultural fit.  It's really cheap capital from the Federal Reserve's ZIRP that makes mobile deals look better than than they would without steroid dollars.  The next most important deal driver is the collection of billionaire tech egos who use cheap capital to buy threatening startups.  Really, that's it.  None of the things I learned in my MBA coursework about strategic fit are driving mobile deals.  It will take a severe stock market correction and the removal of the Fed's monetary stimulus to bring old-school methods back to dealmaking.

No way are mobile startups going to keep rocketing from zero to exit in two years.  Stratospheric acquisition prices, especially those measured by price paid per employee in startups with low headcounts, are an unsustainable phenomenon unique to bubble economics.   I'll believe that WhatsApp and others are viable when their acquiring parents' public financial statements show their line item revenue.

The panel's best insight was the difference between acquisition strategies of tech companies run by different generations.  Gen-Y billionaires (Mark Zuckerberg at Facebook) buy messaging startups because that's what Gen-Y uses to communicate.  Gen-X firms like Microsoft and Yahoo buy email startups, but I wonder how entrenched Gen-X culture is at those companies.  Generational difference in corporate management cries out for a Harvard Business Review case study.

I just LOL at VCs endorsing strong encryption.  No way will the NSA allow it.  I expect any US-based startups pushing encryption to be bought out by the big firms that have already agreed to cooperate with the NSA, just to see their tech absorbed.  Non-US startups offering encryption will have a hard time entering the US market, if you know what I mean.

I heard one of the attendees at this event who mentioned Ashley Madison in the same breath as other dating site success stories.  That site caters to adulterers but apparently some people in mobile don't mind.  I will not link it here.  My readers who approve of that site should never read me again.  I take personal integrity very seriously and keeping a marriage vow is a reflection of one's character.  Mobile enthusiasts who equate breaking marriage vows with business success might as well invite business partners to betray them.

The panel closed out with their predictions for 2015.  They were all over the map expecting disruption in real estate, wearables, wealth management, and other sectors suffering from friction.  I agree with the trend of emoticons and short-form messages dominating communication in post-literate society.  Maybe the next hot mobile startup will have a hieroglyphics UI.

Mobile Monday's 2014 close-out left me satisfied that I know more about mobile use than most VCs and analysts.  I expect more of the same from the sector, particularly from the continued growth of games.  The mobile sector can expect to see more of me in 2015.