Category Archives: Psychology of the Deal

Investment psychology

Twitter Updates for 2009-08-14

  • RT @mktbot From 10 Aug $CXN:ASX ConnXion Limited is $CXN:ASX ConnXion Ventures Limited http://is.gd/2gBot #
  • RT @mktbot From 12 Aug $ETC:ASX Entertainment Media #
  • RT @mktbot From 12 Aug $ETC:ASX Entertainment Media & Telecoms Corp.Ltd is $NBS:ASX Nexbis Limited http://is.gd/2gB5m #
  • RT @mktbot As of 14 Aug $GLI:ASX GoldLink IncomePlus Limited is now $BIV:ASX Blue Capital Limited http://is.gd/2gAeb #
  • ASX-listed Companies price sensitive announcements 14Aug $ACX $AGS $AVJ $AVO $BAR $BAU $BEL $BIV $BPT $BSR $CAB $CDI http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $CER $CGM $CKK $CNP $CNX $CRE $CUE $CWN $CXU $DCG $DDT $DEG http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $DGO $DIO $DLS $DMX $EMG $FNT $FUN $GCG $GCR $GMG $GPG $GRT http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $GXY $HAW $HAZ $ICN $IDG $IEF $IGR $LEI $LKO $LLC $LLP $LML http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $MAE $MAH $MAP $MCP $MCR $MEO $MMA $MOC $MPA $MSR $MTU $NEM http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $ODG $ORG $OTI $PDM $PMP $PRV $PTN $PXS $RAU $RHD $RHM $ROG http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $SEG $STU $SYM $TCQ $TGX $VBA $WCN $WHN $WOT http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $ABM $ACK $ACZ $ADA $AGO $AGX $AHC $AIB $AIO $AIQ $ALF $ALK $ALR $AMP $AMU http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $AMX $ANZ $AOD $AQP $ARO $ARU $ASP $ATJ $AUP $AUZ $AVG $AVJ $AVO $AXY $BBG http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $BBI $BCS $BIV $BKN $BLP $BMN $BPH $BPT $BUL $BWN $CAM $CBA $CDI $CDM $CEY http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $CHN $CLO $CSJ $CSR $CSU $CSW $CTW $CUE $CXM $CYA $DBS $DCG $DIO $DLS $DUE http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $ECE $EHL $EMA $EMR $EON $ERC $ESG $ESN $EVE $FAC $FAS $FAT $FMG $FND $FPH http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $FUN $GIP $GMG $GMI $GRT $GUD $HAP $HAW $HAZ $HDN $HHV $HHY $HJB $HLS $HRL http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $HSN $HZN $IBC $IDG $IFL $IMA $IMD $IMU $INE $JVG $KAT $KIL $KNH $LBY $LEP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $LLC $LLP $LML $LUM $MAK $MAP $MBL $MBN $MCK $MCL $MCP $MCW $MGO $MIF $MLE http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $MMR $MMS $MMX $MPJ $MPS $MQG $MRI $MSO $MTH $MWG $MXQ $NEU $NGE $NHC $NSP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $NVT $OLH $OMI $ONC $ORC $ORN $PBA $PBB $PHG $PMH $PMP $PRG $PRV $PTN $PTR http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $PXS $QBE $QGM $QMN $QPN $RHD $RMS $ROG $ROY $SAK $SBS $SFY $SHX $SLF $SLV http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $SNB $SPI $SRE $SSS $STE $STO $STW $STX $SUL $SYG $SYL $SYM $SYS $TEN $TES http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $TGG $TLS $TOD $TON $TOV $TRS $TSF $TWD $TXN $TYS $UBS $UNX $UOS $URL $VBP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $VIL $VMT $VTP $VXR $WAA $WAM $WAS $WBC $WDC $WHC $WHF $WHN $WIL $WME $WOT http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $XEN http://bit.ly/6LMUV #

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Strategic Mergers and Acquisitions for Fast Growth Firms

I’m working on a “How To” series on Strategic Mergers and Acquisitions for Fast Growth Firms. It covers the tools, skills and processes needed by firms pursuing acquisitions as a tempting path to growth. This is an audio presentation accompanied by detailed notes, checklists and templates.

Strategic Mergers and Acquisitions for Fast Growth Firms, Series 1 – Buy Side, Capturing Value Beyond Price

Highlights from Series 1: Buy Side

  • The M&A Process from the buy side
  • The Wealth Esteem M&A Checklist Methodology
  • Special types of M&A deals
    • the true “merger”
    • “Bolt-on” acquisitions
    • Vertical and horizontal integration
    • Diversification
  • M&A target identification and deal flow
  • Managing the M&A Project
  • Key roles and members of the M&A team
  • Valuing the business
  • M&A Negotiation
  • Earnouts
  • Financing the deal
  • M&A Due Diligence
    • Finance
    • Legal
    • Intellectual Property
    • Human Resources, learning & development
    • Marketing
    • Sales
    • Manufacturing and operations
    • R&D and innovation
    • Logistics and distribution
  • Integrating the Acquisition – the forgotten part of the Deal
    • the whole is greater than the sum of the parts
    • mitigating risk
    • integration planning
    • measuring integration success
    • practical integration improvement
  • Good to great: Post-Acquisition Review

Coming soon: Strategic Mergers and Acquisitions for Fast Growth Firms, Series 2 – Sell Side, Your Exit Strategy.

ASIC Lifts Ban on Covered Short Selling

From today covered short selling of non-financial stocks is allowed again on Australian stock markets. Obviously if you are a short seller you’ve known this for a week. What does it mean to us?

The disclosure and reporting details are in this Market Advice. Australian Securities and Investments Commission – Requirements for disclosure and reporting of short sales from 19 November 2008.

So naked shorts are still banned. Naked shorts means the seller has not yet borrowed the shares before placing the sell order. The seller expects to borrow or buy the shares in order to deliver on the trade.

Covered shorts are allowed for non-financial stocks. Covered shorts means the seller must actually borrow the shares before placing the sell order.

The financial stocks that are still banned from covered short sales are listed at the end of this post. But of course there are some exemptions to that ban

From today all sell orders must be identified as either long sale, short sale (for non-financial stocks) or Covered short sale exempt (you knew there would be an exemption somewhere for financial stocks). Sellers are required to indicate which category their order matches.

Ticker Name
ABP Abacus Property Group
AMP AMP Ltd
ASX ASX Ltd
ALZ Australand Property Group
ANZ Australia & New Zealand Banking Group Ltd
AUW Australian Wealth Management Ltd
AXA AXA Asia Pacific Holdings Ltd
BCM Babcock & Brown Capital Ltd
BJT Babcock & Brown Japan Property Trust
BNB Babcock & Brown Ltd
BOQ Bank of Queensland Ltd
BEN Bendigo and Adelaide Bank Ltd
BWP Bunnings Warehouse Property Trust
CER Centro Retail Group
CFX CFS Retail Property Trust
CGF Challenger Financial Services Group Ltd
CBA Commonwealth Bank of Australia
CPA Commonwealth Property Office Fund
DXS Dexus Property Group
FKP FKP Property Group
GMG Goodman Group
GPT GPT Group
HGG Henderson Group PLC
HFA HFA Holdings Ltd
IIF ING Industrial Fund
IOF ING Office Fund
IAG Insurance Australia Group Ltd
IFL IOOF Holdings Ltd
LLC Lend Lease Corp Ltd
MCW Macquarie CountryWide Trust
MDT Macquarie DDR Trust
MQG Macquarie Group Ltd
MOF Macquarie Office Trust
MGR Mirvac Group
NAB National Australia Bank Ltd
PPT Perpetual Ltd
PTM Platinum Asset Management Ltd
QBE QBE Insurance Group Ltd
SGB St George Bank Ltd
SGP Stockland
SUN Suncorp-Metway Ltd
SDG Sunland Group Ltd
TSO Tishman Speyer Office Fund
TAL Tower Australia Group Ltd
VPG Valad Property Group
WDC Westfield Group
WBC Westpac Banking Corp
Five additional Securities (being APRA regulated businesses)
WES Wesfarmers Limited
ROK The Rock Building Society Limited
WBB Wide Bay Australia Ltd
FCL Futuris Corporation Limited
CIX Calliden Group Limited

Credit Crisis Explained

A number of people have asked me if there is a simple explanation of the financial crisis. It is difficult to give a simple explanation that doesn’t paint the exclusive cause as naive greed. The credit crisis is one contributing factor to the financial crisis (I see these as two different issues).

I see four major factors as contributing to the credit crisis.

  1. Poor quality loans on high risk mortgages and lending practices
  2. Securitized high risk loans tainted asset pools that investors purchased
  3. Easy money to avoid a recession since dot crash
  4. Unchecked naked short selling in the market (allegedly by hedge funds)

When the asset inflation driving US housing bubble stopped, it’s like the music stopped in musical chairs. The scramble to get out drove prices further does and undermined asset prices further.

Here is a funny and slide show that explains the first point

Credit Crisis Pictualized

View SlideShare presentation or Upload your own. (tags: presentation comic)

URGEN MESSAGE FROM NIGERIA, ER, AMERICA

I received this overnight – what a hoot!

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

Snaps to whoever thought this one up.

Update 21 October 2008 Sorry for the error that made this post unreadable to my IE readers. All fixed now

Fee split etiquette

I am an active networker and I see many requests from recruiters to find a suitable candidate for a role. Sometimes someone replies with a request to split the fee.

Can we talk about good etiquette for a fee split?

If you work as a recruiter then it is quite reasonable to accept a fee split of some sort. However if recruiting is not the finder’s profession should they charge a fee for helping out a friend/acquaintance?
Will the finder participate in the guarantees the recruiter provides? Will we consider sharing expenses? Overhead charge?

What about the friend of the finder who is suitable for the role? Would you not refer a friend to what might be a great role because the recruiter will not split a fee?

Take this beyond recruiting and consider your professional skills or requests for assistance. If you put out a request for an introduction for some new business, how would you feel if an intermediary hit you up for a commission?

We share of ourselves not because there is something in it for us in this transaction. It’s the goodwill generated across a range of favours.

Let me know what you think.

Just start!

Over the years I’ve attended various “… for beginners” Q&A’s for writing, film making, script writing, blogging, and other creative endeavors. I remember a fan asking Harlan Ellison what computer software he writes with and thinking “If you met Shakespeare would you want to know how he trimmed his quill?”.

Sure that’s a but sarcastic, but really you should have some content ready before you worry about the technology. Otherwise there is always a better camera/microphone/software/whatever just accept what you’ve got and get started.

That’s my philisophy and sometimes I forget it. Why wait for something to be perfect? Once the project is underway then spend time perfecting if that will increase results.

This came up mainly because I was coaching a blogger today and they wanted everything perfect before launching into podcasting. Just start!

Moving on from Oldfields

I’ve moved on from my role as Divisional Manager – Treco Garden Sheds at Oldfields Holdings Limited. At the end of my two year contract and am very happy with the results we achieved. The Directors’ Operations Review in the Preliminary Final Report to the Australian Stock Exchange for the year ended 30 June 2008 says:

Treco Garden Sheds

The Garden Sheds division performed well. This business is a solid contributor to the Group. This was assisted by the division’s management focus on better manufacturing efficiency. The company congratulates the Management for their Group contribution.

I’d like to thank my team at Treco for all their hard work and support over the last two years. Without them it wouldn’t have been possible to make record divisional EBIT in each of those two years. Thanks to Ian C, George D, Les J, Mario A, as well as my fellow ex-Treco’s Susan R and Brett C.

In manufacturing, I’d like to thank the production team: Tan Dat Ho, Minh, Frank, Ted, Ho, Tan Dat Ha, Suri, Michael T, Noelene, Toni, Neil, Mark, Maurice, Micko, Mick C, and Gabriel.

What did we do?

  1. Focused on low hanging fruit, grab what orders we could without huge retooling.
  2. De-hassle the workflow. We spent time and effort removing obstacles from our processes.
  3. Use subject matter experts. I didn’t tell them what or how to do it, I set the goal and trusted them to find a way. Then I cheered from the sidelines. This worked for both sales and manufacturing experts
  4. Use common sense. Just because we’ve always done something doesn’t mean we should still do it. Everyone can ask “why are we doing this?”

I will do a personal WWW/TALA on this over the next month (What Went Well/Take A Look At). Manager Tools podcast by Mike Horstman and Mike Auzenne taught me that acronym.

Anyway on the the next challenge which is with a fast growth firm. More later.

E MBA bloggers don’t update often

I was wondering that when I was investigating doing an MBA. May bloggers started to post on their experiences but then dried up.

Is the workload so onerous that they can’t find 10-30 minutes in a week to provide the update?

In my case AGSM MBA (Executive) is quite busy – it takes 8-10 hours of study per subject per week. When work gets busy I have to give up my family time or my online time. Sorry guys but my family comes first. Have you heard MBA = Marriage Breakup Academy?