Banked and Unbanked

• 7.7% of US households were "unbanked" in 2013. Unbanked refers to not having an account in an insured institution supervised by the FDIC. "Underbanked" households, who may have an account but have used "alternative financial services" (AFS) in the past year including money orders, check cashing, remittances, payday loans, refund anticipation loans, rent-to-own services, pawn shop loans, and auto title loans, accounted for 20% of US households, comprising 16 million adults and 8 million children.
• 34% of unbanked say that a job loss resulted in them dropping banking services: 20% said that a new job allowed or required them to open up a new bank account.
• 95% of recent Chinese immigrants to New York City surveyed in Sunset Park, Brooklyn in 2013 said they were "banked." 15% described themselves as undocumented. 60% immigrated from an urban region in China. These immigrants had an average of 1 child, 10.5 years of education, and self-rated their English ability as a 2.1 on a scale of 5.

Deferred gross margin

• On bigger projects where income is accrued in installments, instead of being closed to the income summary, it's closed to a contra-A/R account called "deferred gross margin." It's shifted to "realized gross margin" when cash is received.
• Revenue recognition practices for a company are required to be listed by the SEC, usually they are written after the financial statements in Special accounting notes.
• Foreign exchange markets have been one of the most affected by financial regulation due to accusations that big banks were rigging markets.

Hughes Reef

1) Hughes Reef is the land formation in the South China Sea, only above water in low tide, where China has created a 14-football-field-sized island to aid its claims to ownership of the important shipping channel and airspace.
2) "Subprime" credits in the personal loan market are defined by Equifax as having credit scores lower than 680 on a scale from 300 to 850
3) Labor force participation rate is the share of the population either working or looking for work. In the US, its shrank to 62.9% from 66% between 2007 and 2014. 4) This past December, 3.6% of jobs were unfilled, the highest vacancy rate since 2001--this rate is much higher than in 2007 (recession), suggesting current workers may not be suited for available jobs.

Manspreading

1) "Manspreading" is the male act of taking up too much space on public transportation, needlessly using seat space that could be occupied by others
2) Cost of goods sold (COGS) is accounted for by taking the initial inventory, adding purchases of inventory, and subtracting the ending inventory.
3) Inventoriable costs are all "expenditures directly or indirectly incurred to bring inventory to its existing condition and location." Some freight costs that do not result in "bringing inventory to salable condition" do not constitute inventoriable costs.

Pink sheets

• "Pink sheets" refer to a daily publication compiled by the National Quotation Bureau (NQB) of bid-ask spreads for OTC stocks. Companies "on the pink sheets" (they switched to an electronic medium in 1999) do not need to meet minimum SEC requirements; they are therefore seen as more risky investments because of lower barriers to entry in the marketplace.
• Standard deviation of prices in a marketplace works as a stand-in for measurement of risk in a market. That is, over increasingly shorter terms, the risk of movement and the risk of large swings are both bigger on average in markets where returns do not cluster as well around moving averages.
• It is interesting to note, however, that appearances of risk are a function of time. Over time, using a buy and hold strategy, it can be very advantageous to own high-risk investments in a growth environment. It's this continued world growth that makes stocks, over time, create higher returns.

Artificial intelligence

1. Data is not information, information is not knowledge, knowledge is not intelligence, intelligence is not wisdom. The best computers now are able to process information in between the information and knowledge areas, albeit at very high speeds.
2. Bits correlate with speed, bytes correlate with size of files. 4G mobile processing speed is 5-12 megabits/sec for downloads, 2-5 Mbps for uploads.
3. Pfizer has fallen behind rivals in the race to develop immuno-oncology drugs in-house, explaining their interest in acquiring AstraZeneca for $118B earlier in 2014 (failed) and current partnership with Merck to develop perhaps 20 different immunotherapies.

Deflated footballs

1. Game-ready NFL footballs should be inflated to between 12.5 and 13.5 psi and weigh between 14 and 15 ounces. Twelve regular game balls and 6 kicking balls are prepared 2 hours and 15 minutes before the game and are inspected by referees before kickoff.
2. Apple had an annual profit last year of $40B and Google netted $19B. All in, Disney made $7B.
3. How can you recognize if your firms differences (strategic positioning, which is always more important than operational effectiveness for creating a sustained competitive advantage) are special enough to create SCA? 
1. Resource-based view of competitive advantage states that, for SCA, a firm must control exploitable resources that fit 4 characteristics: 1) valuable, 2) rare, 3) tough to imitate, 4) nonsubstitutable

"trash can"

• AOCI, accumulated other comprehensive income, is sometimes termed the "trash can" because of its propensity to house unrealized gains and losses that could be very material on a firm's net income. Companies have lobbied to keep AOCI on their books in order to prevent these gains and losses from lending an appearance of choppy or inconsistent revenues.
• Accessible from Manhattan's Upper West Side in 20 minutes or less, the Ice House in Hackensack, NJ is accessible in under 20 minutes from the island.
• Swings in the market yesterday, with price moving in excess of 430 points, represents some of the greatest volatility the market has ever seen.

Bushwick

• NYU students have moved out across the L line subway in New York City in search of cheap rent over the years: first to LES, then to Williamsburg, and now further out to Bushwick. Real estate prices are adjusting accordingly. The Bronx, according to some, is the new place frequented by artists--the next-up for gentrification.
• ERP=enterprise resource planning, integrating different operational areas in a company (usually through leveraging some kind of IT solution) in order to share information and realize maximum cost savings.
• Companies that are more "digitally mature" outperform others that are not by using IT to transform customer experience (customer understanding, top-line growth, customer touch points), operational processes (process digitization, worker enablement, performance management), and business models (digitally modified businesses, new digital businesses, digital globalization).

Homeless

• 60,000 homeless in NYC, 25,000 are children
• To start one: stand-alone facility, 300 flashlights, 400 bunk beds, 160 wash cloths, 20 receiving blankets, and 1 mailbox
• 24 shelters opened in 2014, 11 opened in 2013 (WSJ)

Coupons for your bonds

• The "coupon" payment received by a bondholder from the bond issuer comes from the day when little slips of paper--coupons--we attached to paper bonds and had to be physically redeemed to redeem interest payments.
• Bonds sold in the US by non-US issuer but denominated in dollars are called Yankee bonds; bonds sold in Japan by a non-Japanese issuer but denominated in yen are called Samurai bonds
• Debt securities are being formed by everything, including student loans, credit card loans, home equity loans, and car loans.

Mayonnaise

1. The US mayonnaise market is a $2 billion a year affair--and it's double the size of the ketchup market (Yahoo Finance).
2. It is possible for a group of people to purchase $9.3 billion worth of stuff in a single day (BBC News)--on Single's Day, November 11 (11-11), which Alibaba has single-handedly turned into the biggest shopping day on the planet.
3. This week's call from Warren Buffett, the Sage of Omaha, on how to invest: 1) Don't worry about volatility "A lumpy 15% return over time is better than a smooth 12%" 2) Keep good company "Companies obtain the shareholder constituency that they seek and deserve" 3) Keep your focus "Value can stagnate in the presence of hubris or of boredom that causes the attention of the manager to wander" 4) Keep costs low

Deflating news

- China's current inflation rate of 2% is a full two percentage points below the govt's target of 4%

- falling oil prices is a big part of falling prices overall, but it's not all bad; the IMF rule of thumb is the a $20 drop in oil prices generates a 0.4% increase in global growth

- Russia's current inflation stands at 8% with a target of between 6 and 4%

- the ECB is being blocked from buying Eurozone govt bonds as other more solvent govts argue its favoritism of Spain, Italy, and Greece

Midterms

• Republicans need to gain 6 seats to gain majority in the Senate. There is a good chance they'll achieve this given polls about voter dissatisfaction with the current direction that the country is heading.
• Between 55% and 65% of eligible voters take part in presidential elections (about 130 million US voters in 2012). A far fewer percentage--between 39% and 42%--take part in midterm elections (about 90 million in 2010).
• A GOP-run US legislature would give voters a chance to "try out" the party before presidential elections in 2016. My call for Republican nomination: Chris Christie shakes off Bridgegate scandal and makes a strong run, while Mike Bloomberg comes in as the dark horse. I'm predicting a strong likelihood of GOP election in 2016, as they take credit for a relatively-strong US economy.

Ken Langone's 3 Tips

1. Some kind words, every day.
2. A thoughtful gesture, every day.
3. Work with energy and passion--it's infectious.

Also, in a customer-facing business--treat your employees well first. Treat employees well, they treat customers well, and from there everything else follows.

Southpaw

• Southpaws are so-called because ballparks, in being designed to have the sun out of the batter's eye in the afternoon, are arranged with left-handed pitchers' throwing arms always facing south. It has nothing to do with lefties propensity for being submarine pitchers, or lefty pitchers coming from the southern states.
• Chinese ESL speakers sometimes confuse "he" and "she," referring to women as "he" and vice versa. The difficulty stems from the Chinese word for he and she being exactly the same (ta). In discussion today, someone repeatedly kept calling the lady sitting beside her "he" this, "he" that. No one said anything as we understood what the speaker meant; the sense of lack of regard for gender was actually kind of cool.
• Canada can have terrorist problems, too. It will be interesting to see how shootings at the state house in Ottawa changes Canada's participation in the war on terror inside their country and abroad.

Tekmira

• Tekmira (NASDAQ:TKMR), Mapp Biopharmaceutical (private), and Chimerix (NASDAQ:CMRX) are all racing to develop better drugs to fight Ebola, and are presented with a rare opportunity to use experimental cures on human patients afflicted with the disease
• To meet its 2014 budget, Venezuela would need the per-barrel price of oil to rise to $162 (Business Insider)
• The lower half of US households ranked by wealth held just 1% of total assets last year, down from 3% in 1989 (WSJ)

Snapsaved

1. Firms choose FIFO to accentuate profits, as COGS is usually lower for older inventory, therefore increasing apparent margins. They choose LIFO to create favorable tax situations, as newer, more expensive inventory creates lower margins but a lesser tax burden. If given a choice, many firms will choose FIFO for accentuated profits and save explanations for the notes on SEC reports.
2. Nothing can ever be erased in the digital age. Snapchat just got burned by website Snapsaved.com, which apparently hacked SC servers and grabbed thousands of photos. Considering half of SC's users are between 13 and 17 years old and are known to use the service to send racy photos to one another, this puts the company--who was just valued by Kleiner, Perkins, Caufield & Byers at $10 billion, in a very sticky situation.
3. The patience of the PRC trumps youthful idealism. Despite violence in Hong Kong last night, it looks like protesters are blinking first. HK government is pulling a Bloomberg and sending in fire hoses and hack saws to dismantle tent-towns and barricades. Flare-ups of violence are looking limited and not significant enough to grow protest crowds back up to last week's levels.

Bumbershoots

1. The term, "bumbershoot," when used in insurance, refers to a kind of umbrella coverage used to insure marine risks--which can extend well beyond blue and brown waterways into transportation and, basically, anything that moves. According to Investopedia, "shipyards use this policy for protection and indemnity coverage as well as liability protection under the Longshoremen and Harbor Workers Act." The word "bumbershoot" may be a portmanteau of the words "umbrella" and "parachute."
2. "Elbowing" for some people on Metro North includes brushing them with your fleece sleeve while trying to type on your laptop, three-aside during rush hour. The lady sitting next to me this morning would not have lasted long in Beijing.
3. 17M cars are slated to be sold in the US in 2014, approaching an all-time annual record. If the number of total cars to be sold globally continues to increase at a 5% YOY rate, we can expect about 87 million (new?) cars to be sold worldwide in 2014. Growth is being pushed by China, where people are now buying more than 20M new cars every year. That's about 3 cars per second, all year round.

Kaizen

1. "Fair day's work for a fair day's pay" comes from Frederick Wilhelm Taylor's Principles of Scientific Management (1909). You work a full day, you get paid for a full day. Not too flexible in terms of give and take. Reminds me of the way managers in Beijing will prorate monthly salaries by the day and even down to the hour and minute for late workers.
2. "Esprit de corps" would appear to come from Henri Fayol, an early 20th century Turkish immigrant in France and coal mine manager. It's one of his 14 principles of management. From military to modern management consulting, this phrase is all over the place now.
3. Beginning in the 1990s, Toyota has really been tearing it up in terms of management theory. Some vocabulary: "Kanban" refers to visual indicators of depleted resources on a supply chain that can quickly and easily signal a line manager that he needs to order up a new batch of a certain material, enabling just-in-time manufacturing processes. Kaizen might be translated as "good changes," the key to continuous improvement methodology; instead of momentary, sweeping change--which throws things into chaos--things should be improved modestly, subtly, and continuously to maximize retention, employee support, employee satisfaction, and ultimately, customer satisfaction.