* "If
past history was all there was to the game, the richest people would be
librarians." -- Warren Buffet
* Fun Facts About Macau, the Chinese gambling capital (NYP):
Macau,
which returned to Chinese rule in 1999, is the only place in China that
allows casino gambling. For 40 years, the industry was controlled by
local tycoon Stanley Ho. But Ho's monopoly ended in 2002 when the
government began shaking up the market and inviting new competition
from Las Vegas.
Only two Las Vegas companies were allowed into Macau: Wynn
Resorts and Las Vegas Sands - run by Wynn's arch nemesis, Sheldon
Adelson. Sands - the world's largest gaming company - got established
first in Macau. In 2004 it opened the gleaming Sands Macau, which has
been wildly successful.
Last year, Macau's income was about even with the $5.3 billion
earned on Las Vegas strip, according to figures from both places. Many
analysts expect Macau to surpass the Las Vegas strip if the new casinos
prove to be a good bet. To be successful, the newcomers must transform Macau into an Asian
Las Vegas: a multiday destination for people who want to shop, see
shows, eat in fancy restaurants and attend conventions - as well as
gamble.
Macau has never been like this. It has been a seedy day-trip
destination with old, smoky casinos, prostitution and organized crime.
It mostly pulls in high rollers from mainland China or Hong Kong.
Chinese gamblers are notorious for being solely focused on gambling.
They only take breaks for cheap meals.
* Just 43% of mutual fund managers invest in their own funds:
Fund managers investing in their own funds is not new. However, a new
federal stipulation that they disclose their investments did go into
effect this year. The SEC began requiring mutual fund managers to tally
their investments in 2005, but gave them a grace year.
The money managers themselves say that a personal investment makes
them better stewards of the monies they are guiding. The only reason
for not investing in their own fund would be if it didn't line up with
their investment objectives, area managers said.
The moves to encourage manager ownership could be benefiting
investors as research shows that funds with managers who owned shares
performed better. Researchers at the Georgia Institute of Technology and London Business School
found that funds with managers who had personal investments at the end
of 2004 chalked up an average return of 8.7 percent in the next year.
That beat funds without manager ownership, which delivered an average
return of 6.2 percent in the same period.
The study examined about 1,400 U.S. mutual funds and found that for
each incremental increase in a manager's personal investment, fund
performance bettered three times as much. It also found that only 43
percent of funds carried an investment from their manager.
* Did you know that ethanol is Bad for Boats? (NYP):
Mechanics
and manufacturers say that while a 10% ethanol blend causes few
problems in a car's closed fuel system, it can be a big problem in
boats, whose gas tanks are ventilated. Ethanol absorbs water from the
air, which can cause a motor to lose power or stall. A solvent, ethanol
also picks up contaminants from storage containers. And when mixed with
non-ethanol gasoline already in a tank, the blend can form a gelatinous
glob that clogs fuel filters.
* Washington Post looks back at Valerie Plame, and regrets:
WE'RE
RELUCTANT to return to the subject of former CIA employee Valerie Plame
because of our oft-stated belief that far too much attention and debate
in Washington has been devoted to her story and that of her husband,
former ambassador Joseph C. Wilson IV, over the past three years. But
all those who have opined on this affair ought to take note of the
not-so-surprising disclosure that the primary source of the newspaper
column in which Ms. Plame's cover as an agent was purportedly blown in
2003 was former deputy secretary of state Richard L. Armitage.
Mr. Armitage was one of the Bush administration officials who
supported the invasion of Iraq only reluctantly. He was a political
rival of the White House and Pentagon officials who championed the war
and whom Mr. Wilson accused of twisting intelligence about Iraq and
then plotting to destroy him. Unaware that Ms. Plame's identity was
classified information, Mr. Armitage reportedly passed it along to
columnist Robert D. Novak "in an offhand manner, virtually as gossip,"
according to a story this week by the Post's R. Jeffrey. [...]
Nevertheless, it now appears that the person most responsible for the
end of Ms. Plame's CIA career is Mr. Wilson. Mr. Wilson chose to go
public with an explosive charge, claiming -- falsely, as it turned out
-- that he had debunked reports of Iraqi uranium--shopping in Niger and
that his report had circulated to senior administration officials. He
ought to have expected that both those officials and journalists such
as Mr. Novak would ask why a retired ambassador would have been sent on
such a mission and that the answer would point to his wife. He diverted
responsibility from himself and his false charges by claiming that
President Bush's closest aides had engaged in an illegal conspiracy.
It's unfortunate that so many people took him seriously.
* Michael Masdea - CSFB's own "Eminem" - I haven't heard anything quite as ridiculous as this in a while, but it did
get my attention. And, if Masdea is right on semis, then this is quite
clever, as I have now heard his message. Still...where's the dignity in
being a sell-side analyst? Gone, out the window, kaput.
Meet Mike Masdea, a well-respected semi-conductor analyst at Credit
Suisse in San Francisco. Recently it seems* Mike decided to add a
little color to the blast voicemails the bank sends out to
institutional clients with market recommendations. And by color we mean
making his recommendation in the form of a version of Eminem’s “Lose
Yourself.” He begins: “If you have just one shot, a single opportunity
to seize the bottom of the cycle, one moment, would you capture it? Or
just let it slip?”
* Seth Godin: There's a Burger in my Milkshake!
When I was in business school, we did the McDonald's case. Part of
our preparation was to go to the nearby McDonald's with a stopwatch and
clipboard. We walked in the door and stood just long enough to get
noticed. Boy did those guys hop to attention. Then we went to another
McDonald's and performed the following experiment (please, please do
not try this at home, just take my word for it).
We ordered a milkshake
and a Big Mac. Ate half the Big Mac. Drank half the milkshake. We put
the Big Mac remainder into the milkshake cup and went to the counter,
"I'm sorry, I can't drink this shake, there's a Big Mac in it." They
gave us a new one. Why?
Because McDonald's didn't want counter people making decisions about
who to say "no" to. It was worth the expense of humoring idiots like my
study group for the brand power of knowing that counter people didn't
alienate people on a sliding scale.
* I like the sound of this business - Prosper.com - microlending for the Modern World. Now anyone can be a lender, or borrower:
You’ve
likely heard of Prosper. The company has a unique (and potentially
highly disruptive) business model: the idea is to use the Internet cut
out the consumer lending industry’s middlemen, such as banks and card
companies, by bringing individual borrowers and lenders in contact with
each other directly.
Would-be lenders bid against each other to make
loans to the borrowers they select. Prosper provides some help in
underwriting, handles the back office work such as billing and
collections, and collects a slight fee for its efforts. Individual
lenders, meanwhile, earn a higher risk-adjusted return than they likely
can otherwise, while borrowers get a better deal on loans.
Look for Ed to be building a diversified book of high yield loans...coming soon!
