Daily Archives: 05/26/2014

(Community Matters) a Modi success in reforming and igniting India’s economy would reform history and reshape how our world works – the potential for 3 economic superpowers, finally.  In the Economist: 

THE most important change in the world over the past 30 years has been the rise of China. The increase in its average annual GDP per head from around $300 to $6,750 over the period has not just brought previously unimagined prosperity to hundreds of millions of people, but has also remade the world economy and geopolitics.

India’s GDP per head was the same as China’s three decades ago. It is now less than a quarter of the size.

Mr Modi, by contrast [to previous president, Mr Singh, a Gandhi family retainer], has huge authority, both within his party and in the country. The BJP’s victory owes something to good organisation but most to its leader’s appeal. Not since Indira Gandhi was assassinated in 1984 has India had such a powerful personality in charge.

Mr Modi has an outright majority—282 of the 543 elected seats in Parliament’s lower house. . . . [and] a mandate for economic reform. 

(Community Matters) Interesting to reread this 2009 Vanity Fairs article on Arthur Ochs Sulzberger Jr., & the New York Times in light of today’s results. The VF was more about Sulzberger but foresaw the Times in bankruptcy – because mostly of devastatingly bad billions invested in stock repurchase and secondary business priorities over journalistic.

And, since, the stock price has increased from $6.49 to $14.93 (a 26% annual return as opposed to 20% for the Dow). hmm, yet net income continues to shrink despite mostly flat revenues. 1Q14 ad revenues up and dividends reinstituted. Though, pessimism about stickiness of ad revenue increases and growth in digital platform.

Debt to equity has improved considerably from 3.9x to 2x – thanks in great part to divestitures (About.com group ($300mm) and equity stake in Fenway Sports Group ($30mm)) – though still high & risky for a declining industry. Cash from operations continues to decline – from 153mm in 2010 to $35mm in 2013.  The company did repay Carlos Slim’s $250mm 2009 loan a couple of years ago. Reports that Mr. Slim will exercise his warrants ($6.36 exercise price) to increase equity from 8% to 17%. Will be enlightening and foretelling to see if he takes his gain or holds.

(Community Matters) Andrew Roman and I flew down to meet my & Steven’s godson Will Roman. Will’s been touring Mexico in his jeep for the last six weeks – crisscrossing the entire country.

refreshments at San Angel Inn after touring Trosky’s and Krida Kahlo’s houses. Found & reengaged my old guide/driver Jesus Maldonado who drove me & Steven (& my parents, and Margaret & James Michael) regularly back in the late 90s and early 2000s.

(Community Matters) ” . . . its ability to turn firms around deftly, execute strategies economically and overcome obstacles nimbly suggests that a better description of its strength would be ‘frugal innovation.'” Lenovo in Economist