The Haiku of Finance for 11/11/20

One November day

Know who defends our country
Thank you for serving

James Bond Belongs On Wall Street

Wall Street often undervalues military veterans. Snobs who've never broken a sweat look down their nose at people who've worn muddy boots and dirtied their hands. The only veterans that might be exempt from the categorical cold shoulder are those with intelligence backgrounds. The appeal has little to do with qualifying skills and aptitudes. It has everything to do with a popular culture phenomenon that romanticizes intelligence work as something exclusive to a small elite, just like how Wall Street sees itself.

Intelligence analysis has a lot in common with financial analysis. Both rely on open source material for background data on geopolitical conditions and economic trends. Analysts in the US military and intelligence community use detailed methodologies for tracking changes in a competitor's strength. Private sector analysts have the same mentality when tracking a company's financial statements and news releases. Both types of analysts take the protection of confidential and proprietary information very seriously, and they take pains to safeguard privileged information from disclosure. It should be easy to make the argument that intelligence people would be assets on Wall Street. It's even easier to use a movie icon as shorthand for the advantages of having an intelligence pro in a financial house. That icon is none other than Agent 007, James Bond.

Anyone who's seen a Bond film knows the guy's fictional lifestyle. He travels the world with ease, wears a tuxedo to gambling tournaments at five-star hotels, drinks martinis, wears an expensive watch, drives a customized luxury car, and comes face to face with the most powerful and intriguing people in the world. James Bond is the archetype of alpha achievement and unquestioned competence, with a healthy serving of of sociopathy. Stereotypical financial titans think of themselves exactly the same way. Plenty of senior investment bankers and private equity fund managers negotiate high-stakes deals with intriguing international counterparts. They can afford a James Bond lifestyle in real life. 

Your typical high-powered Wall Street type gets deal flow from peer referrals, and hiring also works the same way. Image and prestige matter more than actual qualifications. An investment banker who sees a resume labeled "intelligence veteran" doesn't think about the candidate's analytical skills, geopolitical outlook, or cultural expertise. They think, "It's Agent 007. This person must have a lifestyle just like mine." That's all that matters.

Military veterans aiming for Wall Street careers can make this irrational bias work in their favor. Executives who think they need a Bond-like presence on their team are suckers for an intelligence veteran's pitch. The dumb trust fund kids running around Wall Street's mid-levels make hiring decisions on instinct. Action movies form their entire picture of military life. They'll hire for a "killer" advantage if they think a veteran brings shock and awe to a deal. You don't have to be a James Bond (or Jane Bond for the female equivalent) to close the deal, but the image's unspoken power just might open a door that would otherwise be closed to veterans.

Right this way, Mr. Bond. We've been expecting you . . . in the Fortune 500 boardroom.

Veterans' Health Matters To NCIRE Supporters

I accepted an invitation to attend tonight's introductory lecture for NCIRE's annual conference on brain health. Gen. George Casey (US Army, Ret.), former Chief of Staff of the US Army, gave his talk after Medal of Honor recipient Paul Bucha introduced him. One of the people on hand told me that every VA hospital that has some affiliation with a university medical school has a non-profit fundraising entity like NCIRE.

I like what Mr. Bucha said about how integrity builds trust and leads to successful leadership, and that the best leaders are compassionate. It's great that an MOH recipient recognizes things that many military leaders regard as mere lip service rituals. Gen. Casey shared the sobering findings from multiple military health assessments that drove him to change Army practices when he was Chief of the service. The one survey finding I noticed most readily was the disturbing lack of fidelity to ethics among Army people. I learned that firsthand as a lieutenant and captain. Righting wrongs is always the best way to live.

I am fortunate that I do not have PTS from my active duty tour in Iraq. I used to feel some stress when my fellow alumni from the University of Notre Dame and the University of San Francisco told me my military background was worthless. I no longer feel that way because I don't need negative forces cramping my style. Removing bad people from one's life is always the right thing to do.

I can't see a business connection here relevant to Alfidi Capital. Kudos to NCIRE and the VA for inviting private sector partners to participate in their research. The VA's tech transfer program deserves Silicon Valley's interest. I am in no position to fund NCIRE's research, but I'll give them free publicity here on this blog.

3 Crucial Skills for US Military Veterans Seeking Corporate Careers

I served in the US Army after my studies at the University of Notre Dame.  Some of my ROTC program classmates stayed on active duty for the long haul, longer than I thought would be sane.  They are now approaching their 20-year service milestones, which means some of them are considering life on the outside.  I have them in mind when I think about the references I used years ago when I started my own transition to civilian life.  The published works available to help military veterans make career transitions could fill a whole library shelf.  Most of that material is general and repetitive.  Hardly any guidance is tailored for someone with a more technical career goal.  Fear not, senior veterans, because Alfidi Capital is here to fill the knowledge gap.  

I have identified three skill sets germane to a large corporate environment.  These skills are portable to any corporation and are particularly useful in very technical fields.  Acquiring them requires mastery of peer-reviewed bodies of knowledge.  These qualifications are vastly more credible with corporate recruiters than any military-specific skills a veteran possesses.

Six Sigma certification is the first skill set that veterans should acquire if they want corporate careers.  Completing a Six Sigma project within the US Department of Defense confers a resume bullet more valuable than experience with real bullets.  The American Society for Quality (ASQ) maintains extensive references on Six Sigma and related topics.  The International Association for Six Sigma Certification (IASSC) lists options for completing the qualifying exams.  Completing the appropriate training and exams is not cheap but is absolutely necessary for official qualification.  

Knowledge management (KM) is the second skill set.  Practitioners become the go-to people when an organization translates the DIKW Pyramid into real operations.  Experts read KMWorld for the latest developments.  The American Productivity and Quality Center (APQC) defines many KM best practices.  The KM business discipline does not yet have a universally recognized body of knowledge and several organizations have emerged with competing certification standards.  I believe that mastering the APQC material through independent study is sufficient at present to claim expertise.  

Operations research (OR) is the final skill set.  The Allied Powers in World War II invented the modern field of OR, and today select US Army officers maintain qualification in the operations research / systems analysis (ORSA) specialty.  The Institute for Operations Research and the Management Sciences (INFORMS) is the US governing body for the OR profession; they have all the resources needed for someone seeking qualification.  

Mastering these skills enables a veteran to compete for corporate jobs that have prerequisites beyond entry-level experience.  Combining them with certification as PMI's Project Management Professional would make a veteran's resume very compelling.  Lacking these hard skills can be a serious handicap.  It is an unfortunate fact of modern life that business skills have diverged far enough from the generalist "soft skills" of military leadership to disqualify many veterans from white collar occupations.  Veterans who wish to avoid confinement to the low-income ghetto of permanent entry-level career paths should master widely accepted business knowledge.  This means hitting the books all over again.  

I recently attended a talk by US Marine Corps combat veteran David Danelo about his book The Return:  A Field Manual for Life After Combat.  The audience at San Francisco's Marines Memorial Club recognized that veterans' passion for a meaningful life should carry over into a civilian career once they leave the military.  Passion hits a brick wall when civilian employers find a veteran's resume devoid of recognizable prerequisites.  Veterans who master the three disciplines above prove they have the passion to carry on as relevant civilians.  

The Haiku of Finance for 11/11/14

The price of freedom
Unlimited cost in life
Vets pay forever

(special Veterans Day edition)

Veteran Startup Incubators And Accelerators

I met with an entrepreneurial colleague earlier this week to brainstorm some concepts for helping veterans start businesses that leverage their backgrounds.  I mentioned NaVOBA and its franchisee population but we were looking for venues specifically focused on veteran-owned high-tech startups.  Fortunately, we don't have to reinvent the wheel.

Startup America Partnership has a veterans working group.  They are growing startup ecosystems across the country, and I believe they are part of the White House's "Startup America" initiative.  The working group has support from the VA Center for Innovation so they must be the real deal.  

Vet-Tech is a Silicon Valley startup accelerator specifically for veterans.  I should probably contact them to see what's up because my connections and insights may be useful.  I totally respect their partnerships with the Angel Capital Association and Plug and Play.  

The Founder Institute's "Startup Our Veterans Fellowship" waives the typical applicant and course fees for their accelerator programs.  I get this group's emails all the time and they're full of growth hacking wisdom.  

Vetransfer is a Wisconsin-based accelerator doing something that more organizations should do.  They want their participants to use the free tools available from MOOCs and venture investing best practices.  Military veterans are quite familiar with doctrinal templates refined in military branch schoolhouses that dictate baseline references for unit operations.  The emergence of Lean Startup, CustDev, and the business model canvas serve the same doctrinal role among entrepreneurs.  

VetBizAccelerator isn't an accelerator for startups despite its name.  It's more of a vocational how-to guide for veterans exploring self-employment.  It builds on material from the VA's VetSuccess and IMHO more vetrepreneurs should point themselves toward SBA programs and loans specifically for veterans.  The SBA's Office of Veterans Business Development should be of particular interest for veterans wanting to do business with the federal government.  

Techstars' Patriot Boot Camp is a three-day immersion program in Washington, DC.  I think it would be most useful for vetrepreneurs who have a serious business concept but need preparation before entering an accelerator.  

CADRE is an accelerator focused on veteran-owned businesses that specialize in cybersecurity solutions for the federal government.  Cyberwar is a growth industry in the federal government.  Even if the NSA changes its monitoring programs, big private corporations will still need computer network defense and intrusion forensics.  Vetrepreneurs trained to chase Uncle Sam's cyber contracts can easily pivot to private sector clients.  

I came across a San Diego veterans accelerator named VeteranWorks a few months ago but their website seems to be down; their LinkedIn profile remains live.  I read their info when it was up and now I wonder what happened to them.  

I do not have any relationships with any of these programs at this time.  Business leaders with strong relationships are welcome to graft onto these organizations.  They need corporate sponsorship.  I think big companies seeking government contracts would obtain a competitive advantage by hiring veterans, buying from veteran-owned small businesses in their supply chains, and sponsoring veterans' accelerators.  

Oh, BTW, none of these programs will tolerate Stolen Valor frauds who wore falsified decorations and want to rip off procurement programs with contract fraud.  Yes, "Mickey Ronin," that means you and anyone associated with you.  Don't even think about contacting any of these organizations, Michael.  It will be enough to finally put you in prison where you belong.  

Full disclosure:  I am a veteran.

Hip-Pocket Analysis of Resturant Chains Offering Veterans' Day Specials

Military veterans are familiar with the "hip-pocket training" that junior NCOs and company grade officers conduct when there's white space on the unit training schedule and no one has anything better to do.  Well, I can still pull this off for the finance sector.  Here comes my hip-pocket analysis of a few restaurant chains I sampled this Veterans' Day weekend.  These chains offered free meals to veterans yesterday and today.  I found their service to be excellent.  Let's see if that service pays off in the bottom line of their financial statements.  

I had dinner last night at McCormick and Kuleto's in San Francisco's Ghirardelli Square.  It's part of the McCormick and Schmick's chain, owned by the Landry's multi-brand collection.  Its old ticker symbol was LNY but it's now privately held.  Their financial performance numbers aren't publicly available and I don't have time to talk to their investor relations folks.  I'm on a deadline here.  I will give them props for the fried shrimp and french fries.  In years past I've had the seared chicken on Veterans' Day.

I had breakfast today at Denny's.  The all-you-can-eat pancakes hit the spot but I could only handle two servings.  My metabolism is slowing down and I'm not out to bankrupt a company with free pancakes.  

Ticker:  DENN

P/E:  23.17

Profit margin:  5.77%

EPS Growth (5yr):  -5.02%

ROE (5yr):  unavailable?!

I had lunch at Red Robin Gourmet Burgers.  The free Red's Tavern Double Burger and bottomless fries came with a little US flag stuck in the burger bun.  God bless America, land of burgers.  I could only handle two servings of bottomless fries after those pancakes for breakfast.  I would have preferred a bottomless waitress (and topless) but I can't have it all.  

Ticker:  RRGB

P/E:  36.15

Profit margin:  3.13%

EPS Growth (5yr):  1.17%

ROE (5yr):  6.85%

I had dinner at Olive Garden.  Those rustic sausages and bell peppers were just fine, and I even got a take-home plate to enjoy that stuff tomorrow.  They were generous with the soup bowl and I got more than my fill of sausage, potato, and leek spiciness.  Darden owns the Olive Garden and other chains, so that's where I have to look for data.  

Ticker:  DRI

P/E:  18.53

Profit margin:  4.28%

EPS Growth (5yr):  4.25%

ROE (5yr):  23.82%  

These numbers are disappointing.  DENN trades in single digits but only a moron with a single digit IQ would think that's a good value given its high P/E and thin profit margin.  Reuters didn't have an ROE listed for Denny's but I don't care enough to calculate it myself.  I could easily say the same for RRGB, another let-down.  DRI has an impressive ROE but I am doubtful they can sustain it with such a high debt load (more than 2x net income).  

None of these investments are for me.  I have probably said before that retail food outlets are very sensitive to changes in middle class consumer spending.  If I haven't said it before then I'm saying it now, woop-de-doo.  The Fed's eternal monetary easing will squeeze middle class incomes and force consumers to stop dining out.  It will also force up commodity prices and make national supply chain management costs prohibitive for branded restaurants, unless they're smart enough to lock in long-term food contracts right now.  Hyperinflation will turn microeconomics into an art form for those locally owned chains lucky enough to have pricing power in their markets and dedicated local suppliers.  I'm thankful for the free meals on Veterans' Day but these national chains can ill afford to give away food.  

The Haiku of Finance for 11/07/13

Get vets into tech
High-skill job and startup launch
Innovation force

VetsInTech National Launch in San Francisco

The Honorable Edwin M. Lee, Mayor of San Francisco, attended the national launch of VetsInTech at Rackspace in SoMa. I was privileged to stand with the mayor as veterans from all around the country launched this program via Google Hangout.  The mayor is in the photo below; I was next to him while the webcast rolled.

Craig Newmark was in VetsInTech's New York office and I recognized some former colleagues in the Portland, Oregon office.  Craig spoke briefly about engaging the human resource community so they could recognize the non-traditional qualifications veterans bring to corporate employment.  The Mayor also introduced venture investor Ron Conway of SV Angel.  Ron wanted to engage San Francisco veterans who had achieved success in business and venture investors who would fund veterans' startups.

I'm grateful that these distinguished leaders are taking action to help veterans succeed.  A lot of non-veterans believe that veterans are incapable of contributing to society.  Many successful professionals have thrown my veteran status in my face to disqualify me from employment.  I'll never forget the degrading career advice that my Notre Dame and USF alumni gave me to collect government handouts and find miscellaneous sources of income.  Recruiting firms told me my resume was an embarrassment because they just wanted me to go away.  It is going to be very difficult to change our society's attitudes toward veterans but someone has to try.  Respecting veterans is more than saying "thank you for your service."  It means ensuring they can function in society without handouts.  I am very willing to do my part.

Helping Veterans Isn't My Calling In Life

My loyal readers recall that I publicly broke with the San Francisco veterans' community some time ago.  It was a gradual break.  I tried to make a difference by serving on the city's Veterans Affairs Commission and volunteering with the American Legion.  It was all for naught.  I can only relate to high-quality people and this particular veterans' community is overwhelmed with bottom-feeders.

I can only take so much stupidity in life.  I got tired of hearing veterans scream for more government benefits when they could easily be working for a living.  I did not want to be around liars and scammers who were perennially unemployed.  I did not want to deal with emergency calls to the War Memorial Veterans Building for drug overdoses or explain open flames to city officials.  I detested in particular one Stolen Valor fraud who got a free pass for years and still runs around town claiming victimhood.  That fake "ronin" guy claimed a background in real estate that no one could verify.  He will eventually face indictment for his schemes but that won't stop the other frauds running around who are very much like him.  The few real leaders in the community who were doing great work considered me to be their heir apparent.  I ran away from that role once I realized I could not save the rest of the veterans' community from itself.

There are such things as "professional veterans" whose primary aim in life is to exploit the compassion of the non-veteran population.  These pros don't want careers.  They want society to pay them to do nothing.  I don't think the professional veterans comprise more than a small sliver of the entire veteran population but they give the rest of us vets a bad name.  I don't like having my reputation dragged through the mud by association with walking leeches.

Veterans who want to be productive in civilian life should join VetsinTech.  They launch nationally this week and I'll be on hand at their San Francisco kickoff event.  These veterans are not the whiny losers that the media and other veteran "leaders" like to portray.  Join us at Rackspace in San Francisco this Thursday to watch veterans build their own projects.  Stolen Valor scammers will not be allowed entry.  Whiners and leeches need not apply.  Veterans pursuing tech careers don't need handouts from me or anyone else, because they're proving they can help themselves.  

People Lie About Wanting Financial Advice From Ex-Military

I don't enjoy being angry.  I read something today that made me boiling mad.  Some survey claims that Americans value military veterans as financial advisers, and that this estimation increases with a respondent's affluence.  I need to state for the record that nothing could be further from the truth.

I spent over a year as a financial advisor at a major wealth management firm.  I worked harder than I ever have in my life to acquire clients.  Every prospect I encountered - with two exceptions - completely ignored my military experience as a selling point for my abilities.  The two exceptions were unique; one had very little liquid net worth to invest and the other was a phony who had zero net worth.  All of the other prospects regarded my military background as something to disregard.

People with serious money to invest want it managed by someone who's achieved a comparable level of success.  I find it telling that the Edward Jones survey above mentioned households with incomes of $100K or so.  I hate to break this to the 1300 ex-military advisors they employ, but their careers will be short if they focus on acquiring people at that income level.  Wealth management firms are increasingly discarding advisors who pursue clients with net worth under $1M.  Making $100K/year isn't going to get anyone to millionaire status in an America beset by price inflation, equity overvaluation, creeping hyperinflation, and a rapacious elite bent on regulatory capture and financial repression.

I employed all of my military-acquired skills to establish trust, build rapport, demonstrate an extreme work ethic, prove my integrity, and persevere in the face of adversity.  All of those traits turned off people with serious money.  All of those attributes got me terminated.  Most veterans hired as financial advisors don't realize that they're just filling an affirmative action quota and will be gone in a year.  That's why brokerages can afford to brag that some percent of their sales force is comprised of veterans.  They know that annual turnover for lack of production enables them to keep hiring and firing unsuspecting veterans over and over again.  Americans who say they want military veterans as financial advisors probably don't make enough money to afford an advisor in the first place.  Too many people just don't know what they're talking about.