The Ultimate Business Irony

The Ultimate Business Irony Brings Us Opportunity.

This ad on YouTube by Sony is the ultimate business irony because YouTube may be responsible for putting Sony Pictures out of business.

In 1989, Sony Corporation purchased Columbia Pictures Entertainment, Inc.   Then later they created Columbia TriStar Pictures by merging Columbia Pictures and TriStar Pictures. Then they expanded growth by acquiring the Hollywood studio, Metro-Goldwyn-Mayer.  They have built a huge film production business but are in trouble.

24/7 Wall St. has created a new list of brands that will disappear in 2012, which includes Sony Pictures.  An article at the 24/7 website says:   Sony has a studio production arm which has nothing to do with its core businesses of consumer electronics and gaming. Sony bought what was Columbia Tri-Star Picture in 1989 for $3.4 billion. This entertainment operation has done poorly recently. Sony’s fiscal year ends in March, and for the period revenue for the group dropped 15% to $7.2 billion and operating income fell by 10% to $466 million. Sony is in  trouble. It lost $3.1 billion in its latest fiscal on revenue of $86.5 billion.

This is in part due to YouTube and other similar competitors creating increasing amounts of their own content.

An excerpt from a Bloomberg Business Week article entitled “Must-See YouTube” explains why:  Late last year, Google’s (GOOG) video-sharing site announced it would spend $100 million to support video programming. YouTube is funding filmmakers, artists, writers, and proven online hitmakers with grants that range from a few hundred thousand to a few million dollars. It will eventually have about 100 new channels.

By building a library of professionally produced programming that is closer to Charlie’s Angels than to “Charlie Bit My Finger,” Google hopes to attract more viewers, reduce the need to negotiate with Hollywood studios, and woo some of the big-name advertisers who have been reluctant to put their products next to cat videos.

YouTube’s competitors also are focusing on original, Web-exclusive content to lure viewers and advertisers—and to get around the major studios that produce most of the nation’s entertainment. Netflix is streaming its mob drama Lilyhammer and has new shows in the works from The Social Network director David Fincher and Weeds creator Jenji Kohan. It also bought the rights to new episodes of the cult TV hit Arrested Development. Hulu is producing a faux-documentary sitcom, Battleground, set in the world of Wisconsin politics. The creative development arm of (AMZN), Amazon Studios, recently said it would start soliciting ideas for children’s and comedy programming and back the best proposals.

YouTube, the dominant online video site with 181 million monthly visitors in the U.S., may have the most to gain. For years the site has tried to secure studios’ permission to stream Hollywood material on the Web—and has little to show for it other than a slow-moving copyright lawsuit brought by Viacom (VIA). “We could have bought their content and given them deals that were good for them and lost a large amount of money,” says Google Executive Chairman Eric Schmidt. “That is not how Google works.” James McQuivey, an analyst with Forrester Research (FORR), says the channels venture is “nothing less than the circumvention of the monopoly control” Hollywood has over premium content.

YouTube is betting there’s an entire class of material that might languish on cable but will find an audience on the Web.

This is also why big store book sellers are going down the drain and big publishing companies too.

Take for example  the Encyclopedia Britannica. It is regarded as one of the most scholarly of English language encyclopedias.  And the publishers have been progressive.  The Britannica is the oldest English-language encyclopedia still being produced. It was first published between 1768 and 1771 in Edinburgh, Scotland.  In 1933, the Britannica became the first encyclopedia to adopt “continuous revision”, in which the encyclopedia is continually reprinted and every article updated on a schedule.

Yet in 2012, the company stopped  publishing its printed editions and now is only online.

To succeed and remain successful businesses have to continually adapt.

A Harvard Business Review article (linked below) reminds us of this fact in an article entitled “Reinvent Your Business Before It’s Too Late”  by Paul Nunes and Tim Breene.

Here is an excerpt: Sooner or later, all businesses, even the most successful, run out of room to grow. Faced with this unpleasant reality, they are compelled to reinvent themselves periodically. The ability to pull off this difficult feat—to jump from the maturity stage of one business to the growth stage of the next—is what separates high performers from those whose time at the top is all too brief.

The potential consequences are dire for any organization that fails to reinvent itself in time. As Matthew S. Olson and Derek van Bever demonstrate in their book Stall Points, once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. Those odds are certainly daunting, and they do much to explain why two-thirds of stalled companies are later acquired, taken private, or forced into bankruptcy.

There’s no shortage of explanations for this stalling—from failure to stick with the core (or sticking with it for too long) to problems with execution, misreading of consumer tastes, or an unhealthy focus on scale for scale’s sake. What those theories have in common is the notion that stalling results from a failure to fix what is clearly broken in a company.

Having spent the better part of a decade researching the nature of high performance in business, we realized that those explanations missed something crucial. Companies fail to reinvent themselves not necessarily because they are bad at fixing what’s broken, but because they wait much too long before repairing the deteriorating bulwarks of the company. That is, they invest most of their energy managing to the contours of their existing operations—the financial S curve in which sales of a successful new offering build slowly, then ascend rapidly, and finally taper off—and not nearly enough energy creating the foundations of successful new businesses. Because of that, they are left scrambling when their core markets begin to stagnate.

About the Research

In our research, we’ve found that the companies that successfully reinvent themselves have one trait in common. They tend to broaden their focus beyond the financial S curve and manage to three much shorter but vitally important hidden S curves—tracking the basis of competition in their industry, renewing their capabilities, and nurturing a ready supply of talent. In essence, they turn conventional wisdom on its head and learn to focus on fixing what doesn’t yet appear to be broken.

Thrown a Curve

Making a commitment to reinvention before the need is glaringly obvious doesn’t come naturally. Things often look rosiest just before a company heads into decline: Revenues from the current business model are surging, profits are robust, and the company stock commands a hefty premium. But that’s exactly when managers need to take action.

The Harvard article links to a Yale Press article entitled “Stall Points – Most Companies Stop Growing–Yours Doesn’t Have To” that says:   Very few large companies manage to avoid stalls in revenue growth. These stalls are not attributable to the natural business cycle. Rather, careful analysis reveals that the vast majority of such stalls are the direct result of strategic choices made by corporate leaders. In short, stoppages in growth are almost always avoidable. This extensively researched book analyzes the growth experiences of more than six hundred Fortune 100 companies over the past fifty years to identify why growth stalls and to discover how to rectify a stall in progress or, even better, avoid one.

This article points out:   Top Four Reasons a Firm May Stall:

• Premium position captivity

• Innovation management breakdown

• Premature core abandonment

• Talent shortfall

This article also leads to the Stall Point Initiative  that drives a global network of more than 14,000 executives from 80% of the Fortune 500 and more than 4,700 leading corporations and not-for-profit organizations. Our membership programs encompass all major functional areas of the large corporate and middle-market sectors.  This site offers a “Red Flag Diagnostic” aimed at helping CEOs spot danger signals in the evolution of their business.   I took the test and let me hasten to add not because it is meant for our tiny business.

The questionnaire leading to the diagnostic starts by asking the size of the company  and the numbers are large.   The smallest companies are sales of $500 million or more… way… way above my pay grade.

However… guess what.  Big businesses are ruled by the same laws of nature as we little folk so we can transform… ie. step down…  so the questions do apply to all of us.

Here is an example of three of the 50 questions in the diagnostic and what they mean to us.

Big Corp Question #1: Our earnings growth rate has outstripped our revenue growth rate for five or more years.

Stepped Down Question #1 for We Little Folks: We are penny pinching so we have more and more money in the bank… but we are not reinvesting in ourselves.

Big Corp Question #2: Our core business reinvestment rate (R&D + CAPX + advertising divided by revenue) falls below its historic range.

Stepped Down Question #2 For We Little Folks:  We are not even trying to improve the existing things we already are doing.

Big Corp Question #3:  Our dividend payout ratio exceeds 30 percent.

Stepped Down Question #3 For We Little Folks:  We are spending too much and investing too little.

We all need to evolve and adapt. How is the question.  Take a look at the Stall Point Initiative’s Big Business Red Flag Diagnostic and step the questions down to fit your own business and life.  That transformation could transform your life!


Technology is changing business at a rapidly increasing pace.

This is why our courses on how to earn globally never end and include regular updates that look at what we are doing in business ourselves.

Never Run Out of Money

Join Merri and me for our October 17-18 Quantum Wealth Seminar.

Share my 49 years of global investing experience.   learn how to fight inflation and gain profits using easy value investment portfolios and currency distortions.

For example at the 2012 October seminar  it became obvious that the Japanese yen was overvalued.

That led me to post a note at this site “Multi Currency Sandwich” suggesting shorting the Japanese yen and investing the loan in dollars and euro.

What a ride!  The dollar appreciated over 12% versus the yen in one quarter. This rise was far higher than the skyrocketing Dow Jones Industrial average (red line in chart below).

Those who learned how to borrow yen and invest in the Dow Jones industrial average… earned both the 9.5% and 12% profit or 21.5%… in three months.

yen dollar chart

US dollar versus yen and comparison to Dow Jones Industrial average chart from  Click on chart to to enlarge.

That yen loan is not safe at this time.  At the seminar we will look at the risk reward scenarios for numerous currencies to see which is likely to bring the greatest profit next.  More importantly you learn how to continually monitor currency values after the seminar.

Learn why it now makes more sense to borrow (or short) pounds.

We conduct the seminar in October because September and October are important months for investing and also pose the greatest risk to our wealth.

A study by Michael Keppler shows that most profits in most major equity markets, is achieved from the beginning of November through the end of May.

Michael wrote: “Gary, We have done extensive research on seasonality and I am proud to announce that a shortened version of a major study which I have coauthored with our Director of Research, Dr. Xing Hong Xue, will be published in the Winter Issue of the Journal of Investing.  Our research shows that basically in all major equity markets, nearly all returns are achieved from the beginning of November through the end of May.  All the best to you and Merri.  Michael

Michael showed that over 30 Years, the Dow grew 8.16% overall.

There was 8.36% growth in the months November through April.  There was 0.37 growth in the months May  to October.  $100 invested in the Dow grew to $848 overall over the 3o years.
$100 invested in the Dow grew to $1,067 if it were invested only in the months of November through April.  $100 invested in the Dow dropped to $79 if it were invested only in the months of May to October.

Historically the worst months for stock markets are September and October.   This week, the best chances for equity losses this year, have just begun.  Think risk aversion now and think ahead for profit making in November.

We’ll be joined by Michael Keppler, one of the world’s foremost equity mathematical and statistical analyst.   Between Michale and myself, we have almost 100 years of equity research experience.  He will speak about time, asset allocation and how to determine good value markets.

Learn how to protect and increase your savings and wealth with easy to start, very slow trading, safe and secure, worry and stress free portfolios that provide proven long term profit potential.  Avoid the ups and downs that stock markets will see in the months ahead.

As a run up to my 50th year of speaking and writing about savings and investments around the world I asked my mathematical and tax genius friends to share a weekend with us to cut through the fog of rapid change and show us ways to invest better than hedge fund managers.

Hedge Funds were the fashionable place to invest in the 1990s, but since then their performance has been falling.

However some hedge fund managers succeeded for one simple reason… experience.  A Telegraph article “How can we avoid the next financial crisis?  Urgently listen to those who foresaw this one” explains why  a few managers succeeded, when it was said:  It’s no coincidence that the biggest winners of the downturn – John Paulson, Paolo Pellegrini and Jeffrey Greene – were approaching 50 years of age. They retained vivid memories of past real-estate problems.  Youth was a detriment to pulling off the greatest trade ever and preparing for the downturn.  

The successful hedge fund investors succeeded where most failed because of their experience.

I’ll provide the 50 years of experience at the seminar.  I have been through the rise of gold to over 800 an ounce (in the 1970s) and silver to $48.  I experienced the stock market’s bear that began in 1968, the Black Monday crash in 1987 when the Dow had its biggest one day drop ever and the dotcom bubble as well as the collapse in 2008.  I worked my way through the first dollar devaluation in 1971, the Plaza Accord arranged dollar collapse and two major downturns in the Japanese yen, plus invested through the 1970s, 1980s and late 2000 recessions.

We’ll share how these experiences prepare us for our investments now.

Michael Keppler provides the Math.

The idea of using math to find good value equity investments led me to ask mathematical analyst, Michael Keppler, to join us in the Blue Ridge for the seminar.

Fwd: keppler

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.

Red Lining Your Investments

According to Keppler’s analyses, an equally-weighted combination of good value markets offers the highest expectation of long-term risk-adjusted performance.  His mathematical predictions have been eerily accurate as the red line below shows.

Each quarter Michael shares with me (and other professional investors) his “Total Return Predictions”.

Screen Shot 2015-07-16 at 7.23.02 PM

Click on chart to enlarge.

This chart shows the entire real-time forecasting history of Keppler for the KAM Equally-Weighted World Index, he started in 1993.  Keppler continually shows what his mathematical formulas predict for markets four years ahead.  These numbers are based on mathematical relationships between price and value over the previous 15 years moving forward in monthly increments.  In this way Keppler uses numbers to continually adjust to the ever-changing market norm.

Keppler’s chart includes two remarkable episodes.  The first in the period when global equity markets peaked and crashed over a five-year period from 1997  to 2001.  Keppler’s Equally-Weighted World Index predictions stayed above the upper forecast band and accurately predicted the recovery and how much global markets would rise.

The second remarkable period started in October 2008, when again Keppler’s forecasts accurately showed where markets would reach as they fell below the lower forecast band.

Imagine the extra profit professional investors have today when they invested in these depressed good value markets before they again rose.

Keppler’s projections now indicate that global markets are expected to rise from between 2.1%  and 13.0 % in the next three to five years.

Learn about Keppler’s projections and about Asset Allocation from Michael Keppler in person at our Value Investing Seminar October 17 & 18 in Jefferson, North Carolina.  

jefferson Landing

Our October seminar will be at the Jefferson Landing Country Club.

Enjoy the autumn leaf change and learn how to survive and prosper with value investments.

garyascott- leaf - change

Jefferson leaf change view.

Learn amazing tax benefits as well.  I have invited my tax expert, Conrad Oertwig, to join us.  

Seven of tax secrets that Conrad will share include:

* How Dutch-treat entertainment allows you to deduct your own meals.

* How to entertain for business and help the charity of your choice because a charity sporting event produces double the deduction of a business meal.

* How one magic word can allow you to deduct your daily transportation costs between your home and another work location.

* How to earn an extra $11,425  by using antiques as office equipment.

* How to gain $12,976 by using two vehicles for business.

* How to reduce tax by having a second office in the home.

* How to travel by cruise ship and deduct up to $680 a day.

Plucking common sense from the tax law is time consuming and difficult work.  For more than 25 years, Conrad has gained great satisfaction by helping his clients extract tax dollars from the tax law.  He has over 400 tax savings tips and will share some of  the most important lessons at the seminar.

To help you get an early start on tax savings, I will send you Conrad’s report “7 Secrets to Paying Less Tax… for the One-Owner Business” when you enroll in the seminar.  I’ll also send you “The Silver Dip 2015” as soon as it is released.

Join Michael Keppler, Conrad Oertwig, Merri, and me, plus video presentations by Leslie Share, Eric Roseman, Thomas Fischer and Richard Smith.   The “Value Investing Seminar” looks at how to protect purchasing power and pensions with value investing.  The course teaches how to add safety and create profits by spotting multi currency and global equity cycles through good value mathematics.

Get “7 Secrets to Paying Less Tax & The Silver Dip 2015”.  Join us Saturday, Sunday, October 17-18, 2015, Jefferson, North Carolina.  Enroll here $499. Couple $799.

Hear from other speakers via video.  The seminar will include online presentations including:

One way to protect our wealth and freedom is to have a good attorney who understands how to use appropriate planning so you can also be protected rather than hurt by the tax laws.

Leslie Share:  How to use and benefit from US tax law living overseas and for wealth preservation.


Leslie has been our friend and adviser of more than 30 years, and I have asked him to speak to the seminar online at the October Value Investing seminar.  Leslie is an attorney in Coral Gables, Florida who specializes in general, corporate and international taxation, estate and gift tax planning, internal revenue service matters at the agent and appeals level plus most important, he specializes in wealth preservation.

He has the highest possible Peer Review Rating by Martindale-Hubbell, Florida Super Lawyers and The Best Lawyers in America.

Leslie is the type of attorney who can help gain asset and wealth protection if you live in the US or abroad.

The best way for boomers to protect their wealth is with good value income producing shares.  Not everyone can wait for their assets to grow.  Many need investments that create income now.

Eric Roseman: How to select good value income producing shares.

erci roseman

Eric Roseman

I have worked with Eric for decades and use his ability to select good value income producing shares.  Understanding the intrinsic value of any equity is an elusive concept, but one of the best ways to assess value is by looking at the income it generates.  Eric is a master at sniffing out the shares that provide a good income now as well as potential appreciation later.  Learn from his strategic ideas for current market conditions.

Richard Smith: How to overcome the behavior gap with Trailing Stops.

Dr. Richard Smith, founder and CEO of TradeStops.  Richard earned a PhD in Math and Systems Science, and even he had to learn the hard way that it takes more than intelligence to win in the game of investing.  He has spent the last 10 years researching and developing algorithms and services that give individual investors the tools they need to remain in their personal investing comfort zone, and to succeed!  With his background in mathematical theories of uncertainty combined with his own investing and trading experience, Dr. Smith understands risk management and how to use it as a self-directed investor to master the market.

Finally at the seminar I’ll review the 50 Golden Rules of Investing.  Learn how to protect against shady investment advice, unreasonable and hidden fees.  Learn how to protect yourself from your own emotions.  Learn when it is best to buy shares and determine which type of share is best for you.  Find out how to avoid the loss fear syndrome and stop getting caught by great sounding stories that can rob your wealth.

In 1986 I wrote  a report called the Silver Dip that showed how to borrow 12,000 British pounds (US$18,600) and use the loan to buy 3835 ounces of silver at around US$4.85 an ounce.

Silver had crashed in 1986, I mean really crashed, from $48 per ounce.   As prices decreased from early 1983 into 1986, total supply had fallen to  449.7 million ounces in 1986.  Mine production was restricted by the low prices at this time, with silver reaching a low for this period of $4.85 in May 1986. Secondary recovery also was constricted by these low prices.

Then silver’s price skyrocketed to over $11 an ounce within a year. The 12,000 pound loan purchased silver that rose to be worth $42,185.

The loan was in pounds and in May 1986 the dollar pound rate was 1.55 dollars per pound.  So the 12,000 pound loan had purchased $18,600 of silver.  The pound then crashed to  1.40 dollars per silver.  The loan could be paid off  for  $13,285 immediately creating a $5,314 profit.  So the profit grew to $47,499 in just a year.

This is why the “Silver Dip 2015” will be one of the seven portfolios, the most speculative, we will study at our October 17-18 Investment Seminar in Jefferson, North Carolina..

This is also why I am releasing a new “Silver Dip 2015” report.  The same conditions are in place for gold and the Silver Dip looks at both speculations in silver and gold.

There is also another, much safer, once every 30 year opportunity that I have described in a short, but powerful report “Three Currency Patterns for 50% Profits or More.”  This report shows how to earn an extra 50% from currency shifts with even small good value investments.  The mathematics behind the idea of this investment strategy are currently extraordinary.  Currency diversification has always been important for safety, but right now a multi- currency opportunity is brewing and has more profit potential than we have seen in over three decades.

Our Investing Seminars started 32 years ago when one of the best set of three currency and equity conditions ever existed.  Over these decades, our semi annual seminars have updated what’s going on in global investment markets and what to do.  Yet in all those years, few times have conditions offered as much long term opportunity as in 1982.   The Dow alone rose from 1,000 to 14,000 in that period.

Then the cycle ended.  Warren Buffet explained the importance of this ending in a 1999 Fortune magazine interview.  He said: Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

Now three of the great economic conditions have returned.

Conditions have come together just as we saw at our first seminars in the 1980s.  The US dollar, the US stock market and the price of oil are acting almost exactly as they did in the early 1980s.  Knowing these conditions and why they have merged and what to do about them can help you create a fortune.

Learn how to gain this potential (we’ll review three ways to accomplish this at the seminar) in the Keppler Good Value Country Strategy with ETFs  (Country Index Exchange Traded Funds).  For example there are currently ten good value developed markets, Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom.  You can easily create a diversified portfolio in each or all of these ten countries with Country Index ETFs.

We review Country Index ETFs at the seminar and look at specific portfolios you can create to tap into these three economic conditions.

Share my 50 years of experience. Gain advice that is sterling as we head toward my golden anniversary of writing about saving, finance and investing.  Our value investing seminars are filled with valuable information but we have fun and take time to relax and socialize as well.

We look forward to joining us this October.


Saturday, Sunday, October 17-18, 2015, Jefferson, North Carolina.

Join Michael Keppler, Conrad Oertwig, Merri and me.  Enroll here $499. Couple $799.



See 24/7 Wall Street’s list of businesses that will disappear in 2012.

Bloomberg’s Must-See YouTube

Harvard Business Review Reinvent Your Business Before It is Too Late

Yale Press  Stall Points  – Most Companies Stop Growing–Yours Doesn’t Have To

Stall Point Initiative 

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