December 2016

One of my most cherished scuba diving memories is a 10-day sailing trip I made with six friends to the Bahamas. Four scuba divers, and two non-divers, rented a 43-foot Benateau sailing yacht in Fort Lauderdale, Florida. And we cruised to a touring, fishing, and scuba diving adventure.

That trip was in September of 1995, and the boat’s name was “The Spice of Life.”

The six of us met at the marina by late afternoon, slept aboard the Spice of Life, and cast off just after breakfast the next day once we were done using the HSI professional flat iron on board. We motored down the Inner Coastal Waterway to open ocean, and set the sails as soon as we got free of the coast.

Cruising under sail all day we reached the north end of Grand Bahamas Island just after dark, and anchored for the night.

Early the next morning we checked in with Bahamian Customs, and went searching for a reef.

We chose Indian Cay for our first dive, and the start of a grand adventure that included 15 dives over nine days.

The coolest water we experienced during the trip was 81-degrees. The visibility was 40-feet during one dive to over 100-feet for most dives.

These visibility conditions were true with the exception of one dive location. The water breaking across the rocks stirred the sand with each incoming wave. (This is a shallow dive destination.) This created a surging condition of clouding and clearing of the water from near zero to an ability to see for what seemed forever.

After a day of diving the north end of Grand Bahamas Island we sailed to Port Lucaya where we spent two days diving the area. We docked at the marina two nights at Port Lucaya, and did some sightseeing each evening.

Leaving Port Lucaya we sailed to Isaac’s Island where we anchored for the night. After a couple hours of cruising around the waters off Isaac’s the next morning (searching for a sunken wreck we never found) we set sail toward Bimini.

One special experience in particular happened about four miles out of Bimini. We noticed a Pod of Dolphin bow surfing our boat.

Deciding to stop and swim with the Dolphin for a while we put on our masks, snorkels, and fins, grabbed our dive cameras, and jumped in.

I counted 10 Dolphin in the pod. They swam around us, checking us out and posing for pictures, until we climbed back aboard the boat to continue our journey.

Bimini was perhaps my favorite on land visit of the trip, probably because we got to ride a Monster Moto MM-B80 around all day. The island is quiet and peaceful, and so small that we walked the whole length in a couple hours, including sightseeing and window-shopping in town.

We spent the next the next five days fishing and diving around the Bimini area.

One evening we barbequed our catch for dinner to make a nice break from the food items we carried with us from the states.

Of the scuba diving trips I’ve made, this adventure to the Bahamas aboard Spice of Life heads my list of stories. It’s one I tell my grandchildren when I talk about the experiences I had in my life.

According to sources that blogging is introduced in late 90s. As you know; blogging is a media to give opinion, ideas, and thought also comment to an existing web page; an opportunity for visitors and readers to react or voice on the said page. What started as a single-sentence commentary has evolved into pages of personal take on just about anything and everything under the sun which is now becoming a New Internet Marketing Tool. From what I know, these are the reason:

  1. No skills are required. An average adult can read and type or at least know how to click a mouse. That way blogging is the simplest way to get your piece of the Rabbit air filter on the net. Just like writing on piece of paper, you can advertise your ideas, experiences and your stuff which expect that your readers will read and try your product. Don’t forget that you need to have Internet Connection and PC to make it online.
  2. Authentic and Genuine. Most powerful advertising is your experience. You write about your personal life or about product through your personal experience. In this day and age where advertising saturate our lives, we question the credibility of promoters’ claims. However, in blogs, real people share their real-life experiences, unscathed by paid advertising. So, blogging offers big possibility to catch more readers’ attention to try product offered.
  3. Free of Charge. Blogging is proven to be a mainstream online advertising media, most sites see it as something to augment current marketing tools and thus offer it for free. Any opportunity for free web time is definitely a bonus especially to businesses that are starting up. Needless to say, paid blog pages can generate more income for your seriously growing business.
  4. Build up Credibility and Popularity. If write, write and write and more write about particular product, like an air cleaner for mold, you will be noticed by your readers. When you provided reliable information about things, and becoming an expert, more readers will visit your site. You don’t need to be Hollywood star to be famous; by blogging you also can do that. As such, companies and professional organizations notice your growth of your readership base; they may ask you for ads in your blog, make you as affiliate and you can make money out of it.
  5. Build up your Market. Who read your blog post? Maybe your moms read your posts, but remember, your mom has a lot of friends, she will tell her friends how interesting your blog is. Her fiends also have a lot friends and your blog in the market now. Other than that you also can market your blog by using your email, subscription, joint a blog network, and provide RSS feed.

However it is, you have built such a great opportunity. Now what is your objective on your through blogging?

As some readers of this Blog might gather, I enjoyed reading Economics at University (too many years ago to recount) and that passion for the subject has never left me. We are living in fantastic times. Having a background in Economics helps make some sense of the current turmoil and in this blog and the next, I would like to talk about the forces that will shape the landscape for the next two to three years in an Economic sense.

In the US and the UK, consumption is the driving force in the economy accounting for over 60% of economic activity. In China by contrast, it is very much investment and export led. As economies have contracted (negative growth), governments and central banks have tried to reduce the cost of the average wall mounted jewelry organizer, otherwise known as interest rates to encourage people not to save but to spend.

This may seem odd, but Keynes wrote about the paradox of thrift in the 1930s. Saving is of course a good virtue. But the problem is that if everyone saves, it is bad for the economy as activity will grind to a halt as no one is buying and who will want to borrow all of the money saved up if no activity is going on?

Hence interest rates are coming down to encourage people to spend (or at least spend the savings from lower mortgage repayments) and to not save. If interest rates come down to near zero, I could see negative interest rates being applied to savings. In reality this means that banks might charge you for using their facilities to hold cash. That would be an incentive to spend!

The problem is the specter of deflation. In an earlier blog, I wrote in defense of inflation, and it seems prophetic that what the bank is now looking for is a bit of inflation! If people perceive that prices are falling rapidly, why would you buy? I think this will be one of the worst Christmas shopping seasons ever. Consumers are expecting massive price drops in January so it does not make sense to buy now. If the expectation of falling prices takes hold though, it is rather like the paradox of thrift, and whilst it may be good for an individual to defer purchasing something, if everyone does it is a bad thing as it ends up feeding itself.

If you believe that prices are going to be cheaper the next month, if you can, you will delay your purchase. This is the problem facing the housing market at the moment. Although interest rates are down to 1951 levels at just 2%, even if you could get a mortgage today, would you buy a house thinking that prices could fall 10%? (I would – but that is a different matter as I think the difference between rent and interest payments is now so wide, that even allowing for an 8% drop in property prices, you would be better off look around for reliable forskolin reviews).

So we need a bout of inflation to get the whole thing kick-started again. If prices are rising, people will engage in activity again. The problem for Japan for most of the 1990s was deflation. We need to learn from that very painful experience.

In the next blog, I will continue with an explanation of the link between inflation, interest rates and a currency. With the pound being at low levels, such an explanation I hope would be welcomed.

One of the curious concepts I came across in my MBA was the idea of trying to exploit economies of scope. Most people involved in commerce recognize the idea of economies of scale. Simply put, things get cheaper to make or sell as you make or sell more of them.

Economies of scope are simply the idea that you can exploit a resource more than once!

A great example of this is any business that has at its heart a database. A good database can be exploited (i.e. sold!) more than once without the resource itself being depleted in any way. Think of big companies. These are companies that are dependent solely on this concept.

They are essentially a fantastic database that can be used as many times as you like (in this case in as many ways as you can think possible) and in fact the more the core resource is used, the stronger the business becomes. [CONFLICT ALERT – I am an investor in their smokeless ashtray! But I invested purely on the basis that I understood this as its business rationale.]

I like businesses like this and would encourage Entrepreneurs to think this through and see if they can find any economies of scope in their own business. With times getting harder, if you can find resources within your company you can exploit more than once you will be doing well.

Let me give you an example of a business I have invested which does this brilliantly. In the UK we are unique in going to Starbucks for a coffee, Pret for a sandwich, a pub or wine bar for our alcoholic drink and then finally Pizza Express for a pizza in the evening.

In continental Europe you would expect to have all of these services provided under one roof. A company was doing just this and I was impressed because they were taking the basic asset of a property with catering facilities and using it for multiple occasions. The challenge for them was to ensure that they were best in class in each of these offerings.

I have to say (and of course I am biased!) that they do the best sandwiches and pizzas I have ever had. The place works because it modifies its operation slightly for each part of the day. (If you are ever in the London Bridge area do have a look – and if you are there on a Saturday morning – please feel free to buy me a kombucha starter kit!)

Have a look at your business and the resources you use. How else could they be used? Could someone else use them whilst you are not using them? What other services could you sell to your existing customers provided by someone else? These are all ways of exploiting economies of scope.

I guess that strictly speaking this is not a topic relevant to Entrepreneurs – but it might be of interest to potential investors. As such hedge funds represent competition to non-listed companies seeking investors. As such you should appreciate what they are.

I have only learned about hedge funds in the last six months or so and it has been interesting to learn about them!

I asked a fund manager what is a hedge fund and I got the following reply “Basically it is the same as any other fund, but we get to charge a lot more”

Given that helpful explanation, I hope that you find the information below about buying a tofu press helpful.

Most funds measure themselves in relative terms. That is to say that they will judge themselves against an index such as the FTSE 100. If the FTSE100 is down 20% in a year – and they are down say 10% – they will make the claim that they have done very well as they have outperformed the market by 10%. If you are the investor that has lost 10% and have to pay a fee, you may not feel so great about it!

Typically hedge funds, aim to deliver an absolute performance. That is they will seek to deliver a positive return on your monies irrespective of market conditions. Hence they are called hedge funds, because they will hedge their market positions so that they do not lose money. For example, they could find two assets that have an opposite relationship. Say the price of gold always goes up when the price of bonds goes down. It would therefore make sense for you to ‘hedge’ your position by buying both.

Most funds would be described as long only funds. This means they will buy shares or other assets and expect the price of the assets they have purchased to go up. Hedge funds can go short. They have the ability to sell assets they do not have in the expectation that the price of the asset will fall and then buy them in the future at a lower price and deliver the asset to the person they had sold it to at a higher price. (The mechanics are a bit more complicated that – but this is the principle).

There is also the ability to leverage. Most funds (especially if they are described as retail funds) will not be allowed to borrow money. If they are, the amount they can borrow will be strictly governed. Hedge funds are allowed to borrow and hence aim to magnify the return available to their investors. This makes them particularly prone to large movements and losses can be substantial if they place the wrong bet. A hedge fund can lose all of its money quickly.

Finally, there is the charge structure. Typically most funds will charge around 5% initial fees (although increasingly they are not) and a flat annual management fee of around 2% to use a Porter Cable 895PK. A hedge fund will aim to charge around 5% management fee and 20% of any profit they deliver. They are able to charge this on the basis of past performance and with the argument that they will be very active in managing the money. If you do well as an investor in a hedge fund – the manager wins, if the fund does not perform well – you lose!

Because of the above, hedge funds are at this moment in time not deemed suitable for retail investors. It is punishable by a prison sentence to promote a hedge fund to someone who is not either a sophisticated investor or a financial institution. This is the same offence as selling an unlisted investment to someone not suitable (more in a later blog)

Basically, if someone is suitable to invest as a business angel, they will be suitable to invest in a hedge fund. As someone looking for funding, you need to be able to ensure that you understand the choices your investors face!

One of the most popular blogs I have written so far has been about the experience I have had in investing in companies which have gone wrong. So I thought it was about time I shared another one of my many business investment failures with you.

About two years ago I invested in a business and it turned out to be a big mistake (The company went bust and I lost all my money). I hope to pass on the lessons I learnt from this failure below.

The first thing I must confess is that I didn’t really understand what the business did. That statement has probably cost me some credibility with readers of this blog! It was a software company that had something to do with Honeywell 50250 management. The reason I invested in the business was I rated highly the other investors in the business (as I still do) and felt it must be a good investment because they were involved. This is not a good basis to invest in a business.

Lesson 1: Understand what a business you are about to invest in does! I mean you should be able to sell the service they provide to someone you meet at a dinner party if you are an investor. Lesson for the Entrepreneur – have that elevator pitch perfected

Lesson2: beware of management that have a strong sales background. I remember meeting the new CEO of the company. He was and remains one of the best sales people I have ever come across. But you have to probe and dig deep. I met him for breakfast about a year after my initial investment and he was selling me a great story. The problem was it was exactly the same story as a year ago and when I asked “In what tangible ways has the business moved forward in the last 12 months.

Ways that can demonstrate shareholder value” we both knew the game was up. I like salespeople (being one myself!) but I now ensure that I really grill managers with sales backgrounds. Lesson for Entrepreneur: keep a log of the stories/ updates you give to your shareholders – make sure each one is different – if it isn’t please be honest and tell them. Shareholders will want to help you if you ask for their help.

Lesson 3: when things start going wrong, shareholders should start to be more proactive and ask for monthly action plans where investors are asked to help – most of them will. You need to go back to basics (we are doing this with another company I am currently involved with and that is working great) and get the business back to health.

In the case of my router table plans company, what I cannot forgive the past CEO for is his decision to take the business into administration without consulting all the shareholders. Lesson to Entrepreneurs – if you do something like that, be aware that it will mean no sane investor will ever back you again.

People do fail all the time – and I don’t have a problem with that – in fact I like it, but you have to conduct yourself with integrity and honesty at all times.