Letter to Frau Merkel

Tuesday, June 30, 2015 Francisco Carneiro 0 Comments

TAGS:

Let GREECE vote !


A man in debt is so far a slave.
Ralph Waldo Emerson


I am afraid Europe is going to do a bad deal with Greece not to have them vote next weekend.

I am sure they will vote yes. That will pave the way for a better Europe. Don't be fooled by the Greeks. Don't do an 11 hour deal.


Read More

0 comentários:

Europe in 2035 ?

Tuesday, June 30, 2015 Francisco Carneiro 0 Comments

TAGS:

Fixing the exchange rate inside Europe was an “original sin” as countries
with different productivity levels cannot coexist in an inflexible exchange
rate system.

Charles Gave , Gave Kal

Notes:

If Europe is a Country what would happen in 30 years?

I guess the best place (lowest cost) to produce potatoes is slowly going to produce for the whole Europe

The best place to produce car's (Germany) is slowly going to produce to .......

When there were exchange rates France could devalue their currency the Franc and Peugeot would survive.

In my country, Portugal, there are parts of our country that don't produce anything, people there only want to came live in Lisbon, they want to study in Lisbon, they want to work here. Those regions live from handouts from the central government but that's it. Those regions are not catching up....they are slowly lagging.

The difference between the center Lisbon & the Countryside has grwn big time in the last 30 years.

That is the way i see Europe.

Some places will produce almost everything and the Bureaucrats in Brussels are going to figure out a transfer system to keep the poor zones of Europe alive. In Portugal i see tourism, Wine & the Florida of Europe.

Yes if you have money you don't want to live in Germany, you want to live in Portugal because of the weather, peace & food and of course the prices are very very cheap.

I am positive about the future but i don't see a future where every country has his car manufacturer anymore.

more about the same:

http://thoughtmeme.blogspot.pt/2015/03/smart-turks.html


Here is a pic of a Place in Estoril where you could live (not cheap) in front of the Ocean. You could go down and have a swim in the beach. This is Florida of Europe.


Read More

0 comentários:

Bye Bye Syriza

Monday, June 29, 2015 Francisco Carneiro 0 Comments

TAGS:

Much more importantly, the week-long economic and financial collapse between now and the Greferendum, virtually guarantees a vote against Tsipras. And given that Tsipras’s suicidal incompetence in the EU negotiations has made a change of government the most plausible way out of the Greek crisis bringing forward this “regime change” must surely be good news.

Anatole Kaletsky
Gave Kal


As is often the case, Anatole is right. Greeks are going to send Tspiras home. Podemos and all the left wing parties are going to disappear from Europe. When there is no bread people focus. Greeks are going to send Syriza home . I agree.



more about the same

http://thoughtmeme.blogspot.pt/2015/01/hollande-n2.html







Read More

0 comentários:

Portugal sold Oceanário to private investors

Thursday, June 25, 2015 Francisco Carneiro 0 Comments

TAGS:

It was a good move. Oceanário is not going to move anywhere and privates can manage the asset much better than the Goverment.

 Oceanário one of the best places to see fish in the world . A very therapeutic experience, almost no noise and a beautiful light. I go there often with my kids and just sit there for a long time watching the fish passing by.






























Read More

0 comentários:

Why Americans Work So Much !

Thursday, June 25, 2015 Francisco Carneiro 0 Comments

TAGS:

In 2004, Edward Prescott, who was awarded the Nobel prize that year, showed that the higher the effective marginal tax rate on labor income -- that is, the share of each next dollar earned that the government chooses to redistribute -- the fewer hours people put in. Importantly, the tax rate in this equation includes the employer's part, and companies, too, are less interested in getting more work out of people if they have to give up more of the resulting income.

 The finding was unexpected even to Prescott himself. "I am surprised," he wrote, "that virtually all the large differences between the U.S. labor supply and those of Germany and France are due to differences in tax systems. I expected institutional constraints on the operation of labor markets and the nature of the unemployment benefit system to be of major importance."

 When Government takes 61% of what you make, you work only enough to survive!

 When a Government increases the top income tax and the economy goes down it could be because people are not stupid!

 People don't want to work for others and that is the reason why when Government increases tax rated sometimes the receipts go down! Surprise? of course not.

 If you look at the table below from OECD, Portugal my country takes 61% of what i make each month. Of course things are not well in Portugal. This is like this since Troika arrived in Portugal in 2011 and asked for Budget consolidation. The Government didn't want to cut expenses so they raised taxes instead.
Source: OECD 
Top marginal tax rates
Personal income tax & employee social security contributions (All-in rate) first line is 50,3 highest Income tax in Portugal plus 11% social security = 61,3%
Country
Portugal 50.3 61.3
Slovenia 39.0 61.1
Belgium 45.3 59.4
Finland 49.1 57.2
Sweden 56.9 56.9
Denmark 56.2 56.2
France 54.0 55.0
Netherlands 50.1 53.4
Ireland 48.0 52.0
Spain 52.0 52.0
Japan 50.6 51.1
Israel 50.0 50.0
Canada 49.5 49.5
United States 46.3 48.6
Italy 47.8 47.8
Germany 47.5 47.5
Norway 39.0 47.2
United Kingdom 45.0 47.0
Australia 46.5 46.5
Greece 46.0 46.0
Luxembourg 43.6 45.0
Iceland 44.4 44.4
Austria 43.7 43.7
Korea 39.4 43.2
Switzerland 36.1 41.8
Chile 39.5 39.5
Poland 20.9 38.8
Turkey 35.8 35.8
Slovak Republic
21.7 35.1
Mexico 35.0 35.0
Hungary
16.0 34.5
New Zealand 33.0 33.0
Czech Republic
20.1 31.1
Estonia
20.6 22.6
Read More

0 comentários:

Pope Francis doesn't like capitalism !

Wednesday, June 24, 2015 Francisco Carneiro 0 Comments

TAGS:

From Bloomberg, Francis will present the lawmakers with “the same way of thinking that he expressed” in Evangelii gaudium, his first 2013 encyclical, or major papal writing, according to Maradiaga. In that document, Francis attacked the “idolatry of money” and a financial system “of exclusion and inequality,” adding: “Such an economy kills.”
Free-market laws aim to “to produce the biggest revenue possible and the lowest costs possible,” Maradiaga, 72, said on Wednesday. “Change is needed, making capitalism more human, otherwise inequalities will continue growing and inequalities produce violence, frustration, pain and especially insecurity in every sense.”

Apparently the thousands of Africans crossing the Mediterranean don't agree with the pope. Everybody wants to live in capitalist countries. 

Sorry Francis but the countries that don't like Capitalism are horrible to live everybody wants to leave. 
Read More

0 comentários:

How to make money without a good idea?

Tuesday, June 23, 2015 Francisco Carneiro 0 Comments

TAGS:


This an excerpt of my letter to my investors this month that i reprint here. I am not trying to sell anything to anybody here. In fact with regulation i can't market what i do. My best hope is to grow the existing clients that i have. That is what i am doing. But enough whining let's see how to make money in the market these days.


As our investors are aware equity markets are going up almost in a straight line since March 2009 bottom. Some markets as the USA and the German equity market are at all-time highs. Nasdaq surpassed the mythical all-time high of 2000 this month of June. Multiples are already high. PE which is the price to earnings multiple (how many years of earnings do I need to repay the price I pay for this stock) are reaching 20.

One question we get time to time is how to make money going forward. We certainly hope that since we invest in Hedge Funds to make money in all types of markets. One area that we see more and more activity is M&A. with this kind of multiples and with cheap money it pays to merge with the competition (it always did of course) I will try to explain why:

In Europe we have seen several mergers in many sectors but the Telecom sector has been one of the most active. Borrowing from the letter of one of our HF, Marshall Wace Eureka we have seen in the past 12 months mergers of SFR/Numericable, Eplus/02 Deutschland, BT/EE, Three/02, Telenet/Base, Orange/Jazztel and now ALTICE/Portugal Telecom in our country.

What is the rational for this. As you can see from the nice and clean MW table below when 2 companies in the same sector merge it’s possible to extract at the least 10% of the combined costs ( Some managements extract much more). There are many duplications when both companies are in the same sector.

So in the exemple below the sales of the combined entity just add up to 200 but the costs that should be 150 fall to 135. So EBITDA which means receipts less costs grows from 50 to 65 or 30%. Just like that. On top of that if the combined entity has to invest the same in CAPEX (investments to keep business going) EBIDTA less CAPEX goes up by 75%!!!! I would argue that if two companies in the same sector combine the CAPEX could be lower than the combined CAPEX because they don’t need to keep 2 sets of Telco Towers etc…. Anyway as you can see a Merger of competitors can increase the Free cash flow (EBTDA less CAPEX) by 75% just like magic.


That is one of the reasons why we are likely to see more and more deals. 





Besides the M&A  I see another area of easy money. To cut costs. If the PE of a company is 20 it means that it trades on the stock market at 20 times the profit from one year. Profit is Revenues less costs. If a company can shave 100 million from costs the Profits (If the costs don’t impact the business) go up by 100 million. What happens to the value of a company? It goes up 20 times 100 million or 2 billion!! It pays big time to give stock option to everybody in the company and take car’s, cards , hotels, and all the fat that you could find, namely to squeeze a bit more from the supply chain.


Control your expenses better than your competition. This is where you can always find the competitive advantage.

Sam Walton
Read More

0 comentários:

The best for TSIPRAS is for Greece to go downhill from here

Tuesday, June 23, 2015 Francisco Carneiro 0 Comments

TAGS:

Control your expenses better than your competition. This is where you can always find the competitive advantage.
Sam Walton


Apparently Tsipras is going to consolidate through more taxes instead of cutting expenses. He is going to kill their economy 

More taxes is different than less expenses. It kills the economy in a very direct way. Tspiras is deliberately shooting his own foot in order to blame the TROIKA 1 year from now. He will try everything for his country to do bad.


The Greek proposals included higher taxes and welfare charges and steps to curtail early retirement. This is simply more deflationary pressure that will crack Greece apart. However, Prime Minister Alexis Tsipras is not prepared to cut nominal pension or wage cuts first sought by lenders, which would more likely than not spark revolution. Tsipras was elected in January on a promise to end austerity measures, also appeared to have avoided raising value added tax on electricity or loosening job protection laws. He is not fulfilling the will of the people making his election highly questionable. He refuses to look at the Greek economy or the Euro. All he is doing is trying to now support Brussels over his own country – a VERY BAD MOVE.
Greece must repay the IMF €1.6 billion euros by June 30 or be declared in default, potentially triggering a bank run and capital controls. However, the IMF can also agree to some nominal payment and any payment would technically not be a default. Nevertheless, looking forward, there is no solution to the Greek crisis by attempting to raise more taxes and suppress its economy for the benefit of Brussels and the IMF. Grexit is inevitable for turning the economy down from here will only make everything far worse.

Martin Amstrong
Read More

0 comentários:

Competition is for Losers

Tuesday, June 23, 2015 Francisco Carneiro 0 Comments

TAGS:

Best business is to buy your competitor, it's cheaper than to destroy it. In this complicated world more and more competitors figured out that they have to combine. And with Chep money the best use is to borrow and pay whatever for your competitor!

From Reuters-
Patrick Drahi, the owner of France's number two telecoms player Numericable-SFR (NUME.PA), has offered to buy smaller rival Bouygues Telecom (BOUY.PA) for about 10 billion euros ($11.4 billion) in cash, two people familiar with the matter said.

The move, which was first reported by the Journal de Dimanche, would take the French mobile market from four to three players at a time when the merits of such consolidation are being hotly debated in Europe.
 From Reuters-

 Mexico's Bimbo, among the world's largest bread makers, said on Monday it had reached a preliminary deal to buy Spain and Portugal-based Panrico, excluding certain brands.
Bimbo said in a statement that the deal was subject to the approval of antitrust regulators and it did not provide any details on the amount of the purchase. (Reporting by Michael O'Boyle)
Number one, cash is king... number two, communicate... number three, buy or bury the competition.
Jack Welch




From Peter Thiel,

Competition Is for Losers

If you want to create and capture lasting value, look to build a monopoly, writes Peter Thiel


This means that even very big businesses can be bad businesses. For example, U.S. airline companies serve millions of passengers and create hundreds of billions of dollars of value each year. But in 2012, when the average airfare each way was $178, the airlines made only 37 cents per passenger trip. Compare them to Google, GOOG 0.28 % which creates less value but captures far more. Google brought in $50 billion in 2012 (versus $160 billion for the airlines), but it kept 21% of those revenues as profits—more than 100 times the airline industry's profit margin that year. Google makes so much money that it is now worth three times more than every U.S. airline combined.
The airlines compete with each other, but Google stands alone. Economists use two simplified models to explain the difference: perfect competition and monopoly.

 http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536
Read More

0 comentários:

when you have everything

Monday, June 22, 2015 Francisco Carneiro 0 Comments

TAGS:







Read More

0 comentários:

6 AM Today in Lisbon

Friday, June 19, 2015 Francisco Carneiro 0 Comments

TAGS:




I am not used to train before 6 am but with people from São Paulo everything is possible!

Now i feel great but after lunch i guess i will be tired.
Read More

0 comentários:

I guess all is well in the Tech world

Wednesday, June 17, 2015 Francisco Carneiro 0 Comments

TAGS:

Read More

0 comentários:

I miss the competition !

Tuesday, June 16, 2015 Francisco Carneiro 0 Comments

TAGS:

Read More

0 comentários:

Just a beautiful software

Monday, June 15, 2015 Francisco Carneiro 0 Comments

TAGS:

Yesterday i used UBER

 it was cheap & flawless

 3,19 euros for a ride that usually costs 5 or 6 on a normal cab. I followed the car until it reached my street and i went down just in time.

 on top of that the car was clean
21:39
Calçada Necessidades 44, 1350-180 Lisboa, Portugal
21:46
Rua das Amoreiras 78B, 1250-096 Lisboa, Portugal
CARRO
uberX
quilómetros
2.34
DURAÇÃO DA VIAGEM
00:06:42


I asked the driver how can he afford to receive only 80% of the fee (20% is for UBER) and he told me he has been busy non stop since he started working. That is the trick, efficiency.The normal cab's are idle most of the time.

When a company can improve the life of their prospects they have a business. That is the most important thing.

Be of service

The best customer service is if the customer doesn't need to call you, doesn't need to talk to you. It just works.
Jeff Bezos 
UBER has a business and naturally they will extinguish a lot of jobs because they are better and scalable and almost no human intervention. Just a beautiful software !


That makes me think about the future and the future is going to be this:

From the ECONOMIST

The Swiss will soon vote on a proposal for a basic income of 2,500 francs ($2,700) per month, following the success of a national petition........

The left has usually viewed such policies as a way of beefing up the social safety net and fighting inequality. That is particularly appealing in a world where technology creates unimaginable riches for some, but threatens the jobs of others. As early as 1964 James Meade, an economist, argued that technological progress could reduce the demand for labour so much that wages would fall to intolerable lows. In a world where a computer can suddenly make a profession redundant, those who have worked hard cannot be certain of a decent standard of living. That may justify more generous state support.

Read More

0 comentários:

Just me & Van Gogh

Monday, June 08, 2015 Francisco Carneiro 0 Comments

TAGS:

I spent last week between Washington & London

I fly there with Lufthansa and together with TAP i think it's the best airline that i have flown. I never tried the Asian (Singapore) /Middle east ones.

I stayed in the first JW Marriott near the White House. Decoration with bad taste. No plug in for european power and they don't lend adapters. It cost 20 USD at the shop with no refund. Brakfast was not included. They have a pool but it was full of kids and i mean full, it was some kind of school. 

Every morning i walked to a GYM called Flywheel some 40 min away from the hotel near Dupond Circle to do a 6 am Spinning class. Same concept of Studio Velocity in São Paulo. It's good but in SP they know better how to work with the software. They take everything from you. They make everybody compete with each other and against himself. It's a good product but a bad business. (They lend you shoes , towels and they have people helping you set the bike right, it's a lot of expenses)

I had 3 free hours before my flight back to London. Decided to visit National Gallery of Art. It's free, very few people, you can take pictures and many times you have a room just for you. Just me and Van Gogh! what a difference with London where you pay everything and the rooms are packed.



A lot of older people still at work . Not like in Europe where older people have no place in the workforce. I took a pic of this 2 ladies in the entrance of the Museum. That is not possible in Europe where we send our older people home before they are unable to work.


Worst Lounge ever: United Dulles airport terminal C.

Best rooftop bar ever. Hotel W in Washington.

 Cabs are very decent in Washington.






Read More

0 comentários:

Subscribe to: Posts (Atom)