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Divestment

In looking for a husband for your daughter, says an old proverb, don’t ask: “Who’ll make the best husband for her?” Ask instead: “For which kind of a man would she make a good wife?”

Divestment is a “marketing” rather than a “selling” problem. The question is not: “What do we want to sell and for how much?” It is: “For whom is this venture ‘value’ and under what conditions?” The salient point if finding the potential buyer for whom what is misfit to the seller is a perfect, the buyer to whom the venture to be sold offers the best opportunity or solves the worst problem. This is then also the buyer who will pay the most.

A major printing company decided that a mass-circulation magazine it owned was at best a partial fit and should be sold. The magazine had been bought originally to hold its printing contract. They asked, “What is value to a magazine publishing company?” If it is a growing magazine company,” they answered, “its greatest need is cash. For a growing magazine requires heavy cash investments in building circulation for several years. “How can we supply this need of the potential buyer to our own advantage?” was the next question. And the answer was, “By giving him ninety days rather than the customary thirty days to pay his print and paper bill to our printing plants.” The printing company then rapidly found a publishing group that filled their requirements.

ACTION POINT: Identify a “partial fit” business of yours. For whom is this misfit a perfect fit?

The work of the manager

Managers can improve their performance by improving their performance of these constituent activities.

There are five basic operations in the work of the manager.

  • Managers, in the first place, set objectives. They determine what the objectives should be. They determine what the goals in each area of objectives should be. They decide what to be done to reach these objectives. They make the objectives effective by communicating them to the people whose performance is needed to attain them.
  • Second, managers organize. They analyze the activities, decisions and relations needed. They classify the work. They divide it into manageable activities and further divide the activities into manageable jobs. They group these units and jobs into an organization structure. They select people for the management of these units and for the jobs to be done.
  • Next, managers motivate and communicate. They make a team out of the people who are responsible for various jobs.
  • The fourth basic element in the work of the manager is measurement. The manager establishes yardsticks – and few factors are as important to the performance of the organization and of every person in it.
  • Finally, managers develop people, including themselves.

ACTION POINT: Manage by setting objectives and organizing, motivating, communicating with, measuring, and developing people, including yourself.

“Commodities tend to zig when the equity markets zag.”

Jim Rogers

“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”

George Soros

“Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

Warren Buffett

“There is enough oil out there for world demand. It is true that a lot of what’s driving oil prices up right now is not the lack of supply. There’s enough supply.”

President Barack Obama

“Historically, there has been a bull market in commodities every 20 or 30 years.”

Jim Rogers

 

“The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you…it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

Warren Buffett

” Gold is not overvalued at $500, and gold will not be overvalued at $1,500 or $2,000. The real money is buying gold and putting it away.”

Peter Schiff

“What motivates most gold purchasers is their belief that the ranks of the fearful will grow…As ‘bandwagon’ investors join any party, they create their own truth — for a while.”

Warren Buffett

“When you look at a commodities market you need hedgers and speculators. If you don’t have one, you don’t have a market. That’s how it works.”

T. Boone Pickens

“Fifty-dollar oil is just another stop on the road to much higher crude prices.”

Peter Schiff

“All those commodities are going to have to rise in value as we are in short supply and we are printing too much money.”

Peter Schiff

“The price of a commodity will never go to zero. When you invest in commodities futures, you’re not buying a piece of paper that says you own an intangible piece of company that can go bankrupt.”

Jim Rogers

“Soaring prices for crude oil, falling production surpluses, wild speculation in commodities, a rush into the precious metals, turmoil in the Middle East, assertive oil producers: it is 1973-74 all over again, and at dictation speed.”

James Buchan

“The exchangeable value of all commodities rises as the difficulties of their production increase.”

David Ricardo

“The strength in gold is revealing the general weakness in the dollar.”

Peter Schiff

“Shale gas has provided the United States the opportunity to have 100 years of supply that is domestically produced. If we are going to develop natural gas from shale, it has to be done in a safe and responsible manner.”

Ken Salazar

“Natural gas is a better transportation fuel than gasoline, so if that’s the case, it’s cheaper, it’s cleaner and it’s a domestic resource.”

T. Boone Pickens

“Like other commodities, gold and silver have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labor bestowed in procuring them, and the value of the capital employed in the mines which produce them.”

David Ricardo

“The crude oil market, unlike every other commodity in America, is virtually unregulated.”

Peter DeFazio

“Our culture runs on coffee and gasoline, the first often tasting like the second.”

Edward Abbey

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