This house is so easy to move, it's like picking up a suitcase.
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If you can't afford an ordinary apartment, maybe you can try living in a parking lot. Even a Google employee is already doing it, leaving the rest of us mere mortals resigned to our fate.
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In Bangkok, where rents are quickly rising and young professionals often struggle to find places to live, architects created a simple tiny house that can easily pop up in a parking garage or inside one of the city's half-built abandoned buildings.
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Rachaporn Choochuey, cofounder of All(zone), a Bangkok-based design firm says.
"It is very difficult for young professionals to live with a bit of quality of life in the city. We noticed the issue and want to offer an alternative way of semitemporary living."
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Because the climate is mild in Bangkok, the pop-up apartments are open and airy—something that Choochuey says is somewhat similar to traditional Thai design.
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"Traditionally architecture was so light, so thin. With modernization, we began to build following international standards, which are somehow too solid for tropical conditions. People ended up living in air-conditioned environments all the time, which is very absurd."
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Instead of solid walls, the structure has a lattice-like design that lets breezes pass through. She says.
"With the wall, we need as much ventilation as possible. It is always too hot, not cold. . . . The perforated nature of the structure would be perfectly matched with the climate conditions."
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The lightweight building can easily be moved from place to place and set up in unused spaces, like the many half-built buildings in Bangkok that were abandoned after repeated economic crashes. Instead of signing a lease, someone would have a home they could bring along if they need to move. She points out the housing's portability.
"It's a bit larger than moving a suitcase."
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When the architects set up a prototype in an abandoned parking garage, a couple of young designers volunteered to try living in it for a few days. Their verdict: It had some advantages over typical apartment living, beyond the savings in rent.
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"There are also opportunities for community gathering, the exposure that living in a small apartment unit of a big building cannot offer."
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The Light House is on display at the Chicago Architecture Biennial.
COMMENTARY: The lighthouse portable housing cubes attract squatters and are especially usable in tropical areas. The micro-dwellings can be built on a budget of just $1,200 (£790) and disassembled in a matter of hours.
The floors are made from plastic-laminated plywood, while a polyethylene-coated metal grid envelops the space and doubles as shelving structure. Different degrees of perforation creates various configurations and spaces that can be unique. The studio built two prototypes within a vacant parking garage in Bangkok for two designers who inhabited the structures for several days. The firm said.
“The prototype house could lead to a new type of housing with less rigid materiality and energy.”
Courtesy of an article dated November 4, 2015 appearing in Fast Company Exist and an article dated October 8, 2015 appearing in Habitat
Came upon this infographic designed by Movehub for Business Insider. Its quite revealting. The USA is not No 1 in quality of life. We rank No 10. Switzerland, Denmark, Germany, Finland and Sweden are the Top 5. These are followed by Saudi Arabia, Oman, Australia, Norway and the USA. Hope you find the information useful.
Google's getting ready to face Amazon and eBay, according to The Wall Street Journal, and will be adding buy buttons directly to its search results. You'll see those buttons accompanying sponsored results under a "Shop on Google" heading -- they won't be used for non-sponsored links returned by the algorithm -- when you search for products on mobile devices. Upon clicking one, a separate product page will load where you can pick sizes, colors and ultimately complete your purchase. Any product you buy will still come straight from retailers, the WSJ says, so it doesn't sound like Google's stocking up warehouses with goods like Amazon does.
However, some major retailers are apparently worried that they'll get stuck with back-end order fulfillment with no real customer interaction. Since Google wants to remain in good terms with them (they are some of its largest advertisers, after all), it will give shoppers the choice subscribe to their marketing programs. That typically means mailing lists and the like, so the company's giving them access to customers' info, most likely names and addresses.
In addition, Google promised them that the product landing pages will be heavily branded with their names and will link to more of their products. The company also won't take a cut from their sales and will only get paid for every person that clicks their links. Mountain View will reportedly offer several payment options, "including digital payment methods from other providers," but it (thankfully) won't be giving retailers access to payment details. If you input credit card info to make a purchase, the website will save it for future transactions, but it will remain with the company.
As for why the feature will only be available on mobile, well, Google has a plethora of reasons. The biggest one is most likely the fact that more people now perform searches on their phones than on computers. According to the WSJ, you might spot a buy button or two as soon as the coming weeks. We don't have a list of official partners yet, since Google hasn't officially announced anything, but Macy's might be one of the first retailers available.
Even though more people are shopping on their phones, the majority aren’t making actual purchases on mobile. Google’s solution: sponsored, mobile-only “buy” buttons that keep people on Google rather than sending them back to the retailer’s check-out page. The idea: People will buy more with a seamless checkout than they would if forced to wait for a retailer’s page to load and then go through a less user-friendly checkout process.
With the addition of a buy button, Google Shopping would go from being a simple search engine to being more of a middle-man. However, unlike companies such as Amazon, Google would not get a share of the profit, but more a pay per click profit.
Mobile Commerce Increasing
According to an eMarketer retail sales report, retail mcommerce is rising rapidly, steadily gaining a larger share of overall ecommerce.
In 2013, retail mcommerce—which includes products and services ordered on mobile devices, including tablets—increased 70.0% to reach $42.13 billion.
In 2014 eMarketer estimates that figure will increase another 37.2% to total $57.79 billion, or about one-fifth of all retail ecommerce sales and 1.2% of total retail sales. In 2014, tablet sales will account for nearly two-thirds of mcommerce sales, eMarketer predicts, increasing to nearly 75% by the end of our forecast period.
By the end of 2015, eMarketer estimates that total US retail mcommerce sales will reach $76.41 billion or 22% of total US ecommerce sales.
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As more consumers use their mobile devices to conduct online searches for product reviews and price comparisons using search engines and recommendations from friends on social networks, it makes sense to incorporate call-to-action motivators like buy buttons.
What does this mean for smaller ecommerce stores?
Of course, with the release of these rumors, many smaller ecommerce store owners are worried that this means they will see a dip in sales, as Google will provide linkage with large retailers instead of smaller companies. Rumors state that Macy’s is already in talks to join the new program,
Furthermore, many retailers are afraid that they will lose out on a very important customer relationship if everything is handled by Google.
What will Google do to calm the storm?
According to The Wall Street Journal, ecommerce store owners will be able to continue with the same marketing programs that they have running on their own sites, in other words this will allow retailers to get access to customer’s contact information, for future marketing purposes. Furthermore, Google will brand the product pages with links to the ecommerce store, finally sources state that recommendations for future purchases will only be shown from the retailer providing the product.
What is the upside?
One of the most difficult areas for ecommerce owners to succeed in is mobile sales, many ecommerce owners see much of their traffic coming from desktops, with the mobile purchase process still in its infancy.
According to research, many shoppers search for products on their smartphones, but then switch to their desktop computers to make the final purchase. One of the reasons for this is, that it is still relatively difficult to fill out a whole purchase form from a smartphone. However, if Google was to make the whole process more seamless, then perhaps retailers participating in Google’s buy now program would gain a major advantage as they would see mobile sales grow exponentially.
What is the downside?
Jason Goldberg, V.P. of Strategy at Razorfish says.
“While it’s a good feature, it definitely isn’t a no-brainer that all retailers should invest in because a whole set of issues can come with transactions on a third-party platform."
Other issues include Google’s sponsored ads might not be able to keep up with stock quantities or backorders and shoppers will be subjected to Google’s less specialized customer service.
Keeping Up With The Competition
In December 11, 2014, Facebook announced the addition of new "Call-To-Action" features to Facebook pages. This includes a "Shop Now" feature that will allow brands to convert fans into buyers from ads running in the newsfeed. On September 8, 2014, Twitter announced that it was testing "buy buttons" in tweets.
Twitter says artists, brands and non-profits taking part in the test include Burberry, DonorsChoose, Pharrel among other, and their followers will get offers and merchandise not available elsewhere. They can complete the transaction in a couple taps.
Courtesy of an article dated May 16, 2015 appearing in Engadget, an article dated May 24, 2015 appearing in EcommercePlatforms, an article dated April 10, 2014 appearing in eMarketer, and an article dated May 19, 2015 appearing in Digiday
The Nobel Prize in Physics 2013 was awarded jointly to François Englert (left) and Peter W. Higgs(right) "for the theoretical discovery of a mechanism that contributes to our understanding of the origin of mass of subatomic particles, and which recently was confirmed through the discovery of the predicted fundamental particle, by the ATLAS and CMS experiments at CERN's Large Hadron Collider"
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François Englert and Peter W. Higgs are jointly awarded the Nobel Prize in Physics 2013 for the theory of how particles acquire mass. In 1964, they proposed the theory independently of each other (Englert together with his now deceased colleague Robert Brout). In 2012, their ideas were confirmed by the discovery of a so called Higgs particle at the CERN laboratory outside Geneva in Switzerland..
The awarded theory is a central part of the Standard Model of particle physics that describes how the world is constructed. According to the Standard Model, everything, from flowers and people to stars and planets, consists of just a few building blocks: matter particles. These particles are governed by forces mediated by force particles that make sure everything works as it should.
The entire Standard Model also rests on the existence of a special kind of particle: the Higgs particle. This particle originates from an invisible field that fills up all space. Even when the universe seems empty this field is there. Without it, we would not exist, because it is from contact with the field that particles acquire mass. The theory proposed by Englert and Higgs describes this process.
On 4 July 2012, at the CERN laboratory for particle physics, the theory was confirmed by the discovery of a Higgs particle. CERN’s particle collider, LHC (Large Hadron Collider), is probably the largest and the most complex machine ever constructed by humans. Two research groups of some 3,000 scientists each, ATLAS and CMS, managed to extract the Higgs particle from billions of particle collisions in the LHC.
Even though it is a great achievement to have found the Higgs particle — the missing piece in the Standard Model puzzle — the Standard Model is not the final piece in the cosmic puzzle. One of the reasons for this is that the Standard Model treats certain particles, neutrinos, as being virtually massless, whereas recent studies show that they actually do have mass. Another reason is that the model only describes visible matter, which only accounts for one fifth of all matter in the cosmos. To find the mysterious dark matter is one of the objectives as scientists continue the chase of unknown particles at CERN.
François Baron Englert was born in 1932 and is a Belgian theoretical physicist and 2013 Novel prize laureate (shared with Peter Higgs). He is Professor emeritus at the Universite libre de Bruxelles (ULB) where he is member of the Service de Physique Théorique. He is also a Sackler Professor by Special Appointment in the School of Physics and Astronomy at Tel Aviv University and a member of the Institute for Quantum Studies at Chapman University in California. He was awarded the 2010 J.J. Sakurai Prize for Theoretical Particle Physics (with Gerry Guralnik, C.R. Hagen, Tom Kibble, Peter Higgs and Robert Brout), the Wolf Prize in Physics in 2004 (with Brout and Higgs) and the High Energy and Particle Prize of the European Physical Society (with Brout and Higgs) in 1997 for the mechanism which unifies short and long range interactions by generating massive gauge vector bosons. He has made contributions in statistical physics, quantum field theory, cosmology, string theory and supergravity. He is the recipient of the 2013 Prince of Asturias Award in technical and scientific research, together with Peter Higgs and the CERN.
Peter W. Higgs CH, FRS, FRSE was born in 1929 and is a British theoretical physicist, Nobel laureate and emeritus professor at the University of Edinburgh. He is best known for his 1960s proposal of broken symmetry in electroweak theory, explaining the origin of mass of elementary particles in general and of the W and Z bosons in particular. This so-called Higgs mechanism, which was proposed by several physicists besides Higgs at about the same time, predicts the existence of a new particle, the Higgs boson (which was often described as "the most sought-after particle in modern physics". CERN announced on 4 July 2012 that they had experimentally established the existence of a Higgs-like boson, but further work is needed to analyse its properties and see if it has the properties expected from the Standard Model Higgs boson. On 14 March 2013, the newly discovered particle was tentatively confirmed to be + parity and zero spin, two fundamental criteria of a Higgs boson, making it the first known fundamental scalar particle to be discovered in nature (although previously, composite scalars such as the K had been observed over half a century prior). The Higgs mechanism is generally accepted as an important ingredient in the Standard Model of particle physics, without which certain particles would have no mass.
Nobel Prize in Chemistry for 2013
The Nobel Prize in Chemistry 2013 was awarded jointly to Martin Karplus (left), Michael Levitt (middle) and Arieh Warshel (right) "for the development of multiscale models for complex chemical systems".
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Chemists used to create models of molecules using plastic balls and sticks. Today, the modelling is carried out in computers. In the 1970s, Martin Karplus, Michael Levitt and Arieh Warshel laid the foundation for the powerful programs that are used to understand and predict chemical processes. Computer models mirroring real life have become crucial for most advances made in chemistry today.
Chemical reactions occur at lightning speed. In a fraction of a millisecond, electrons jump from one atomic to the other. Classical chemistry has a hard time keeping up; it is virtually impossible to experimentally map every little step in a chemical process. Aided by the methods now awarded with the Nobel Prize in Chemistry, scientists let computers unveil chemical processes, such as a catalyst’s purification of exhaust fumes or the photosynthesis in green leaves.
The work of Karplus, Levitt and Warshel is ground-breaking in that they managed to make Newton’s classical physics work side-by-side with the fundamentally different quantum physics. Previously, chemists had to choose to use either or. The strength of classical physics was that calculations were simple and could be used to model really large molecules. Its weakness, it offered no way to simulate chemical reactions. For that purpose, chemists instead had to use quantum physics. But such calculations required enormous computing power and could therefore only be carried out for small molecules.
This year’s Nobel Laureates in chemistry took the best from both worlds and devised methods that use both classical and quantum physics. For instance, in simulations of how a drug couples to its target protein in the body, the computer performs quantum theoretical calculations on those atoms in the target protein that interact with the drug. The rest of the large protein is simulated using less demanding classical physics.
Today the computer is just as important a tool for chemists as the test tube. Simulations are so realistic that they predict the outcome of traditional experiments.
Martin Karplus was born in 1930 and is an Austrian-born American theoretical chemist. He is the Theodore William Richards Professor of Chemistry, emeritus at Harvard University. He is also Director of the Biophysical Chemistry Laboratory, a joint laboratory between the French National Center for Scientific Research and the University of Strasbourg, France. Karplus received the 2013 Nobel Prize in Chemistry, together with Michael Levitt and Arieh Warshel, for "the development of multiscale models for complex chemical systems".
Michael Levitt, FRS was born in 1947 and is an American-British-Israeli biophysicist and a professor of structural biology at Stanford University, a position he has held since 1987. His research is in computational biology and he is a member of the National Academy of Sciences. Levitt received the 2013 Nobel Prize in Chemistry, together with Martin Karplus and Arieh Warshel, for "the development of multiscale models for complex chemical systems".
Arieh Warshel (Hebrew: אריה ורשל, was born in 1940 and is an Israeli-American Distinguished Professor of Chemistry and Biochemistry at the University of Southern California. He received the 2013 Nobel Prize in Chemistry, together with Michael Levitt and Martin Karplus for "the development of multiscale models for complex chemical systems".
Nobel Prize in Medicine for 2013
The Nobel Prize in Physiology or Medicine 2013 was awarded jointly to James E. Rothman (left), Randy W. Schekman (middle) and Thomas C. Südhof (right) "for their discoveries of machinery regulating vesicle traffic, a major transport system in our cells".
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The 2013 Nobel Prize was awarded jointly to three scientists who have solved the mystery of how the cell organizes its transport system. Each cell is a factory that produces and exports molecules. For instance, insulin is manufactured and released into the blood and signaling molecules called neurotransmitters are sent from one nerve cell to another. These molecules are transported around the cell in small packages called vesicles. The three Nobel Laureates have discovered the molecular principles that govern how this cargo is delivered to the right place at the right time in the cell.
Randy Schekman discovered a set of genes that were required for vesicle traffic. James Rothman unravelled protein machinery that allows vesicles to fuse with their targets to permit transfer of cargo. Thomas Südhof revealed how signals instruct vesicles to release their cargo with precision.
Through their discoveries, Rothman, Schekman and Südhof have revealed the exquisitely precise control system for the transport and delivery of cellular cargo. Disturbances in this system have deleterious effects and contribute to conditions such as neurological diseases, diabetes, and immunological disorders.
How cargo is transported in the cell
In a large and busy port, systems are required to ensure that the correct cargo is shipped to the correct destination at the right time. The cell, with its different compartments called organelles, faces a similar problem: cells produce molecules such as hormones, neurotransmitters, cytokines and enzymes that have to be delivered to other places inside the cell, or exported out of the cell, at exactly the right moment. Timing and location are everything. Miniature bubble-like vesicles, surrounded by membranes, shuttle the cargo between organelles or fuse with the outer membrane of the cell and release their cargo to the outside. This is of major importance, as it triggers nerve activation in the case of transmitter substances, or controls metabolism in the case of hormones. How do these vesicles know where and when to deliver their cargo?
Traffic congestion reveals genetic controllers
Randy Schekman was fascinated by how the cell organizes its transport system and in the 1970s decided to study its genetic basis by using yeast as a model system. In a genetic screen, he identified yeast cells with defective transport machinery, giving rise to a situation resembling a poorly planned public transport system. Vesicles piled up in certain parts of the cell. He found that the cause of this congestion was genetic and went on to identify the mutated genes. Schekman identified three classes of genes that control different facets of the cell´s transport system, thereby providing new insights into the tightly regulated machinery that mediates vesicle transport in the cell.
Docking with precision
James Rothman was also intrigued by the nature of the cell´s transport system. When studying vesicle transport in mammalian cells in the 1980s and 1990s, Rothman discovered that a protein complex enables vesicles to dock and fuse with their target membranes. In the fusion process, proteins on the vesicles and target membranes bind to each other like the two sides of a zipper. The fact that there are many such proteins and that they bind only in specific combinations ensures that cargo is delivered to a precise location. The same principle operates inside the cell and when a vesicle binds to the cell´s outer membrane to release its contents.
It turned out that some of the genes Schekman had discovered in yeast coded for proteins corresponding to those Rothman identified in mammals, revealing an ancient evolutionary origin of the transport system. Collectively, they mapped critical components of the cell´s transport machinery.
Timing is everything
Thomas Südhof was interested in how nerve cells communicate with one another in the brain. The signalling molecules, neurotransmitters, are released from vesicles that fuse with the outer membrane of nerve cells by using the machinery discovered by Rothman and Schekman. But these vesicles are only allowed to release their contents when the nerve cell signals to its neighbours. How is this release controlled in such a precise manner? Calcium ions were known to be involved in this process and in the 1990s, Südhof searched for calcium sensitive proteins in nerve cells. He identified molecular machinery that responds to an influx of calcium ions and directs neighbour proteins rapidly to bind vesicles to the outer membrane of the nerve cell. The zipper opens up and signal substances are released. Südhof´s discovery explained how temporal precision is achieved and how vesicles´ contents can be released on command.
Vesicle transport gives insight into disease processes
The three Nobel Laureates have discovered a fundamental process in cell physiology. These discoveries have had a major impact on our understanding of how cargo is delivered with timing and precision within and outside the cell. Vesicle transport and fusion operate, with the same general principles, in organisms as different as yeast and man. The system is critical for a variety of physiological processes in which vesicle fusion must be controlled, ranging from signalling in the brain to release of hormones and immune cytokines. Defective vesicle transport occurs in a variety of diseases including a number of neurological and immunological disorders, as well as in diabetes. Without this wonderfully precise organization, the cell would lapse into chaos.
James E. Rothman was born 1950 in Haverhill, Massachusetts, USA. He received his PhD from Harvard Medical School in 1976, was a postdoctoral fellow at Massachusetts Institute of Technology, and moved in 1978 to Stanford University in California, where he started his research on the vesicles of the cell. Rothman has also worked at Princeton University, Memorial Sloan-Kettering Cancer Institute and Columbia University. In 2008, he joined the faculty of Yale University in New Haven, Connecticut, USA, where he is currently Professor and Chairman in the Department of Cell Biology.
Randy W. Schekman was born 1948 in St Paul, Minnesota, USA, studied at the University of California in Los Angeles and at Stanford University, where he obtained his PhD in 1974 under the supervision of Arthur Kornberg (Nobel Prize 1959) and in the same department that Rothman joined a few years later. In 1976, Schekman joined the faculty of the University of California at Berkeley, where he is currently Professor in the Department of Molecular and Cell biology. Schekman is also an investigator of Howard Hughes Medical Institute.
Thomas C. Südhof was born in 1955 in Göttingen, Germany. He studied at the Georg-August-Universität in Göttingen, where he received an MD in 1982 and a Doctorate in neurochemistry the same year. In 1983, he moved to the University of Texas Southwestern Medical Center in Dallas, Texas, USA, as a postdoctoral fellow with Michael Brown and Joseph Goldstein (who shared the 1985 Nobel Prize in Physiology or Medicine). Südhof became an investigator of Howard Hughes Medical Institute in 1991 and was appointed Professor of Molecular and Cellular Physiology at Stanford University in 2008.
Nobel Prize in Literature for 2013
The Nobel Prize in Literature 2013 was awarded to Alice Munro"master of the contemporary short story".
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Alice Ann Munro (néeLaidlaw); was born in 1931 and is a Canadian author writing in English. Munro's work has been described as having revolutionized the architecture of short stories, especially in its tendency to move forward and backward in time. Munro's fiction is most often set in her native Huron County in southwstern Ontario. Her stories explore human complexities in an uncomplicated prose style. Munro's writing has established her as "one of our greatest contemporary writers of fiction," or, as Cynthia Ozick put it, "our Chekhov." Alice Munro was awarded the 2013 Nobel Prize in Literature for her work as "master of the modern short story", and the 2009 Man Booker International Price for her lifetime body of work, she is also a three-time winner of Canada's Governor General's Award for fiction.
Nobel Prize in Economics for 2013
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2013 was awarded jointly to Eugene F. Fama (left), Lars Peter Hansen (middle) and Robert J. Shiller(right) "for their empirical analysis of asset prices".
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There is no way to predict the price of stocks and bonds over the next few days or weeks. But it is quite possible to foresee the broad course of these prices over longer periods, such as the next three to five years. These findings, which might seem both surprising and contradictory, were made and analyzed by this year’s Laureates, Eugene Fama, Lars Peter Hansen and Robert Shiller.
Beginning in the 1960s, Eugene Fama and several collaborators demonstrated that stock prices are extremely difficult to predict in the short run, and that new information is very quickly incorporated into prices. These findings not only had a profound impact on subsequent research but also changed market practice. The emergence of so-called index funds in stock markets all over the world is a prominent example.
If prices are nearly impossible to predict over days or weeks, then shouldn’t they be even harder to predict over several years? The answer is no, as Robert Shiller discovered in the early 1980s. He found that stock prices fluctuate much more than corporate dividends, and that the ratio of prices to dividends tends to fall when it is high, and to increase when it is low. This pattern holds not only for stocks, but also for bonds and other assets.
One approach interprets these findings in terms of the response by rational investors to uncertainty in prices. High future returns are then viewed as compensation for holding risky assets during unusually risky times. Lars Peter Hansen developed a statistical method that is particularly well suited to testing rational theories of asset pricing. Using this method, Hansen and other researchers have found that modifications of these theories go a long way toward explaining asset prices.
Another approach focuses on departures from rational investor behavior. So-called behavioral finance takes into account institutional restrictions, such as borrowing limits, which prevent smart investors from trading against any mispricing in the market.
The Laureates have laid the foundation for the current understanding of asset prices. It relies in part on fluctuations in risk and risk attitudes, and in part on behavioral biases and market frictions.
Eugene Francis "Gene" Fama (/ˈfɑːmə/) was born in 1939 and is an American economist and Nobel laureate in Economics, known for his work on portfolio theory and asset pricing, both theoretical and empirical.
He is currently Robert R. McCormick Distinguished Service Professor of Finance at the University of Chicago Booth School of Business. In 2013 it was announced that he would be awarded the Nobel Prize in Economic Sciences jointly with Robert Shiller and Lars Peter Hansen.
Lars Peter Hansen was born in `1952 and is the David Rockefeller Distinguished Service Professor of economics at the University of Chicago. Best known for his work on the Generalize Method of Moments, he is also a distinguished macroeconomist, focusing on the linkages between the financial and real sectors of the economy. In 2013, it was announced that he would be awarded the Nobel Memorial Prize in Economics, jointly with Robert J. Shiller and Eugene Fama.
Robert James "Bob" Shiller was born in 1946 and is an American economist, academic, and best-selling author. He currently serves as a Sterling Professor of Economics at Yale University and is a fellow at the Yale School of Management's International Center for Finance. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since 1980, was Vice President of the American Economic Association in 2005, and President of the Eastern Economic Association for 2006-2007. He is also the co‑founder and chief economist of the investment management firm MacroMarkets LLC. Shiller is ranked among the 100 most influential economists of the world. On 14 October 2013, it was announced that Shiller, together with Eugene Fama and Lars Peter Hansen, would receive the 2013 Nobel Prize in Economics, “for their empirical analysis of asset prices”.
Nobel Prize For Peace 2013
The Nobel Peace Prize 2013 was awarded to Organisation for the Prohibition of Chemical Weapons "for its extensive efforts to eliminate chemical weapons".
The Norwegian Nobel Committee has decided that the Nobel Peace Prize for 2013 is to be awarded to the Organisation for the Prohibition of Chemical Weapons (OPCW) for its extensive efforts to eliminate chemical weapons.
During World War One, chemical weapons were used to a considerable degree. The Geneva Convention of 1925 prohibited the use, but not the production or storage, of chemical weapons. During World War Two, chemical means were employed in Hitler’s mass exterminations. Chemical weapons have subsequently been put to use on numerous occasions by both states and terrorists. In 1992-93 a convention was drawn up prohibiting also the production and storage of such weapons. It came into force in 1997. Since then the OPCW has, through inspections, destruction and by other means, sought the implementation of the convention. 189 states have acceded to the convention to date.
The conventions and the work of the OPCW have defined the use of chemical weapons as a taboo under international law. Recent events in Syria, where chemical weapons have again been put to use, have underlined the need to enhance the efforts to do away with such weapons. Some states are still not members of the OPCW. Certain states have not observed the deadline, which was April 2012, for destroying their chemical weapons. This applies especially to the USA and Russia.
Disarmament figures prominently in Alfred Nobel’s will. The Norwegian Nobel Committee has through numerous prizes underlined the need to do away with nuclear weapons. By means of the present award to the OPCW, the Committee is seeking to contribute to the elimination of chemical weapons.
COMMENTARY: Congratulations to all recipients. The 2013 Nobel laureates include six Americans. Here's a YouTube video of the Nobel Prize Ceremony:
More than three quarters (80%) of US college students describe themselves as more cost-conscious this year than a year ago,according to a recent survey by Fluent.
The majority (53%) also report having to meet higher expenses this year with less money. A quarter (26%) say they have less money this year to work with but their expenses stayed the same. Only 19% feel they have the money to meet expenses, and just 2% say they have significantly more money to spend this year than last.
Below, additional key findings from the report, which was based on a survey of more than 1,000 US college students preparing to return to school.
Income and Expenses
Just 45% of students said they met or exceeded their summer job earnings goal.
34% said they fell short of their summer job earnings goals, and the remaining 21% said they had no set financial goals for the summer.
Most college millennials (54%) plan to rely on off-campus work during the school year to meet expenses.
What They Spend On
The five top "must haves" that college millennials plan on purchasing are...
When They Spend
Not surprisingly, many college students (37%) said they begin and end their back-to-school shopping in August.
However, nearly an equal number (36%) said they have no fixed start or end date to their shopping and are "always stocking up."
For more findings from the survey, check out the infographic below.
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About the research: The report was based on data from a survey of 1,010 US college students conducted between July 29 and August 6, 2013.
COMMENTARY:Generation Y, also known as the Millennial Generation, are the demographic cohort following Generation X. There are no precise dates for when Generation Y starts and ends. Commentators use beginning birth dates ranging from the early 1980s to the early 2000s (decade).
Millennials are sometimes called Echo Boomers, due to the significant increase in birth rates during the 1980s and into the 1990s. Millennials are mostly the children of baby boomers or Gen Xers. The 20th century trend toward smaller families in developed countries continued, however, so the relative impact of the "baby boom echo" was generally less pronounced than the original boom.
Millennial characteristics vary by region, depending on social and economic conditions. It is generally marked by an increased use and familiarity with communication, media, and digital technologies. In most parts of the world its upbringing was marked by an increase in a neoliberal approach to politics and economics; the effects of this...
Millennials are sometimes referred to as the "hard luck" generation. Many are saddled with huge amounts of college debt. Unemployment among Millennials is the highest of all generations, and many are having to take minimum wage jobs or work at two or more part-time jobs just to make ends meet. As a result, 40% of Millennials have had to move in with their parents due to lack of jobs. Up to 80% of Millennials prefer to ride a bike rather than drive a car. In fact, unlike past generations in their age group (18 to 29 year olds), many of them do not own a car, and don't plan on buying one. This has Detroit very worried. On the other hand, they are very technically savvy, and are the most mobile of all generations, dominate social networks in terms of time spent online, and believe in global warming. The majority, about 60%, lean towards liberal politics, and are a big reason why President Barack Obama was elected, then re-elected. This could all change in 2016, because many have lost faith in the President.
I really like this generation. They are my favorite generation. What Millennials are experiencing in America is also happening to Millennials in other countries. It's not their fault that the Great Recession came along. On a positive note, many of them are leading the current wave of entrepreneurism and technological innovation. I just hope that if they make it big, they give back to society, and don't forget where they came from.
Courtesy of an article dated August 23, 2013 appearing in MarketintProfs
The student debt fight is back -- with a vengeance.
Once again, current students are facing the possibility of interest rates on Stafford Federal student loans doubling.
Once again, we are asking what our leaders are doing about a crisis that gets worse every year.
Once again, the answer is: Not much.
That is a huge problem -- and not just for millennials, or young people born between 1980 and 2000. The approximately $1.1 trillion in student debt out there already constitutes a crisis for every one of us.
College student loans now total $1.1 trillion (Click Image To Enlarge)
The number of student loan borrowers increased from 23.3 millin in 2005 to 38.8 million in 2012 and the average student loan balance increased from $16,651 in 2005 to $24,803 in 2012 (Click Image To Enlarge)
Student loan debt now exceeds consumer auto and credit card debt as of 2012 (Click Image To Enlarge)
It is the only form of household debt that has continued to rise during the Great Recession. It is also the only form of debt that cannot be discharged under bankruptcy or even death, as parents who have lost children have discovered to their horror. It is preventing young people from buying homes and starting businesses.
The cost of a college eduation grew by nearly 600% between 1980 and 2010, while the U.S. Consumer Price Index grew to 150% during the same period (Click Image To Enlarge)
In short, student debt is a $1.1 trillion anvil dragging down the entire U.S. economy.
Unfortunately, the conversation in Washington is not about big fixes, but simply how to avoid making matters worse by letting interest rates rise.
Last year, the interest rate on federal Stafford student loans was set to double from 3.4% to 6.8%. There was a massive outcry from students and organizations like my own, Rebuild the Dream. Perhaps fearing young people's electoral clout, Congress kicked the can down the road a year.
The average cost of a 4-year college education grew from $8,756 in 1980 to $21,657 in 2010 and the average cost of a 2-year college education grew from $5,580 in 1980 to $8,734 in 2010 (Click Image To Enlarge)
So here we go again: Last week, President Obama waded back into fight, urging Congress to prevent the rate hike scheduled for July 1.
But this year, something is different: Sen. Elizabeth Warren. A few weeks ago, Warren, D-Massachusetts, proposed groundbreaking legislation that would give students the same deal that big Wall Street banks get. This bill is good policy, and even better politics.
The top 10% of households (net worth > $983K) had students owing the least student debt (3% of total student loans) than the bottom 25% of households (networth < $58.5K) owed the most in student loans (58% of total student loans). (Click Image To Enlarge)
After all, why are we loaning money to mega-profitable international financial institutions at 0.75%, but demanding up to nine times more from our own young people?
By comparison, the otherwise ideal Harkin-Reid proposal for a two-year extension of the current 3.4% rate is simply not as ambitious.
Unfortunately, the proposals with the most energy behind them are worse than both these options. House Republicans, the Obama administration, and a number of senators are all pushing to permanently tie the rate for student loans to the government's borrowing costs.
Nearly 12% of all student loan borrowers are now 90 days past due on their loans. Credit card, home equity and auto loan borrowers constitute 10%, 6% and 4.5% of total loans now 90 days past due. (Click Image To Enlarge)
It may seem commonsense, but the devil is in the details.
For instance, the Republican plan passed recently is just plain bad for students. Interest rates on July 1 would actually be higher than 6.8% for some borrowers, and vary wildly and unpredictably over the lifetime of the loan. The government would mark up the costs 2.5% to 4.5%, based on the type of loan. The profit would pay down a deficit young people did not create, instead of funding education.
If Congress does nothing the annual interest on student loans could eventually skyrocket to $9,083 per year. Under President Barack Obama's alternate student loan plan, annual interest on student loans will increase gradually from $3,959 in 2013 to $8,133 in 2020. (Click Image To Enlarge)
The Obama plan, by contrast, has better terms for borrowers and would offer fixed-rate loans that will not suddenly spike in cost. But it lacks any cap on how high interest rates can go, and continues the worrying practice of the government profiting off student loans.
As for borrowers who already have loans? Sen. Kirsten Gillibrand, D-New York, has proposed allowing students to simply refinance their old loans at today's historically low rates. It is almost shocking that you cannot do this already. California Democratic Rep. Karen Bass' Student Loan Fairness Act would make repayment fairer and easier.
The high rates of unemployment (12.5%) among new college graduates is alarming and forcing many to take part-time jobs and jobs paying minimum wages. This means many college graduates will be forced to take on several low-paying jobs just to make ends meet and payoff their student loans (Click Image To Enlarge)
Young people should be rallying behind the Warren, Bass, and Gillibrand bills. But they can and should demand a whole lot more.
The problem is not just that the cost of borrowing could go up. The real problem is the skyrocketing cost of tuition that is forcing students to take on unmanageable levels of debt in the first place. It is in our leaders' own best interests to do something about that.
After all, millennials will make up one-third of eligible voters in 2020. It is no accident that the two best Senate bills were introduced by senators -- Warren and Gillibrand -- who have been rumored as future presidential candidates.
But at the end of the day, this is not a student issue. It is not a youth issue. This is a corrosive crisis that touches your life whether you know it or not. If you live in the United States of America, this is your issue.
The student debt fight is back -- and it is not going away any time soon.
COMMENTARY: The silver lining to this story is that more Americans are pursuing higher education, even if they are taking out loans to do so. Some economists are troubled by the fact that fewer people under 30 are buying homes and other goods as more are paying for college, but higher education is, on the whole, a solid place to put your money. In 2010, the median earnings for young adults with bachelors degrees were 50 percent higher than those of their counterparts with high school diplomas. But for many members of Generation Debt, the benefits of having a diploma may seem a long way off.
I am definitely concerned about the Millennial generation and the future of America. There is no student loan relief in sight, and the rising costs of earning a college education, the shrinking middle class, the large number of households at the lower end of the economic scale with student borrowers, the high unemployment rate among college grads, and rising deliquency rate among college borrowers, presents long-term problems for the U.S. economy.
Credit ratings will be lowered.
Lenders will be less inclined to lend to Millennials with large student loan balances.
Overall consumer spending will be negatively impacted because Millennials wil buy less.
The housing industry cannot rely on younger Americans to become homeowners and housing prices will become stagnant.
If Congress does not act to provide student loan relief, Generation Debt will become a fixture in our economic landscape.
Courtesy of an article dated June 6, 2013 appearing in CNN Opinion, an article dated June 5, 2013 appearing in Mother Jones and an article dated May 1, 2013 appearing in Quartz
"Today's unemployment data rather takes the shine off recent claims that the eurozone crisis is over. The immediate threat to the single currency has receded, but politicians and policymakers still face an ailing economy. Initiatives such as a banking union or the ECB's bond-buying programme may hold the eurozone together, but they don't deliver the hope of immediate growth."
Once again the highest rate was seen in Spain at 26.6% followed by Greece at 26% (recorded for September 2012). According to Eurostat, the unemployment rate increased in 18 of the EU member states, fell in seven and remained stable in both Denmark and Hungary.
Unemployment rates vary slightly between the EA 17 (European nations adopting the EURO as their currency) and the EU 27 or European Union.
EA 17 and EU 27 Unemployment Rates - 2000 through Q1 2012 - EuroStat (Click Image To Enlarge)
The latest figures from Eurostat, the statistical office of the European Union, also show the EU27 unemployment rate stood at 10.7% in November, stable compared with the previous month.
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Eurostat figures also show youth unemployment and the latest figures suggest the situation has got worse. The youth unemployment rate for November 2012 was 23.7% in the EU, up from 22.2% in November 2011.
The eurozone recorded a youth unemployment rate of 24.4%, up from 24.2% the previous month. Greece and Spain reported the highest rates at 57.6% (September 2012) and 56.5% respectively.
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Germany, Austria and the Netherlands had the lowest youth unemployment rates at 8.1%, 9% and 9.7% respectively.
The latest release shows that 26.06m people in the whole European Union were unemployed in November 2012 - an increase of 154,000 people on the previous month. Compared with November 2011, unemployment has risen by 2.012m.
Despite the latest release displaying the November 2012 seasonally adjusted rates for most EU countries, there are still some gaps. The latest recorded figures for Greece are from September 2012.
Austria and Luxembourg had the lowest unemployment rates at 4.5% and 5.1% respectively. Germany (5.4%) and the Netherlands (5.6%) also recorded low rates of unemployment.
The table below shows the seasonally adjusted unemployment rates by country and month. There is also a table showing youth unemployment by country. Breakdowns by gender can be found in our downloadable spreadsheet. What can you do with this data?
Eurozone Unemployment Rate Hits Record High in February 2013
Unemployment rose to a record high of 12 percent in February 2013 in the Eurozone, according to the latest data released by the EU's official statistics agency.
The Belgium-based Eurostat said on Tuesday that some 19.07 million people in the 17-member currency bloc are looking for jobs, up by 1.01 percent from the same month last year.
Laszlo Andor, a spokeswoman for EU Employment Commissioner, said.
"Such unacceptably high levels of unemployment are a tragedy for Europe. The EU has to mobilise all available resources to create jobs...young people in particular need help."
The figures and a weak manufacturing sector report added to the gloom after data earlier this year had encouraged some hope the European economy might finally have touched bottom.
Analysts suggested Tuesday's reports pointed instead to worse to come, with the jobless queues likely to grow as the debt crisis continues to sap the economy.
The highest unemployment rates in February 2013 were found in Spain with 26.3 percent and neighbour Portugal, on 17.5 percent.
Greece was put at it 26.4 percent but this figure is for December, the latest available.
The lowest rates were 4.8 percent in Austria and 5.4 percent in Germany, Europe's biggest economy.
With youth unemployment a huge cause of concern, Eurostat said that the jobless rate for under-25s ran at 23.9 percent in the Eurozone and 23.5 percent in the EU.
Among the countries with the highest youth jobless levels, Spain was on 55.7 percent, followed by Portugal on 38.2 percent and Italy with 37.8 percent.
Greece was the highest with 58.4 percent but this was also for December.
In the United States, the youth unemployment rates for teens (16-19 yrs) and young adults (20-24 yrs) are at historical highs, peaking at 26.75% for teens and 17.5% for young adults in early 2009 as a result of the Great Recession.
U.S. Unemployment Rates - Teens (16-19 yrs), Young Adults (20-24 yrs) and Adults (25+ yrs) - 1948 through 2012 - Bureau of Labor Statistics (Click Image To Enlarge)
According to the Bureau of Labor Statistis, the youth (ages 16-24 yrs) unemployment rate stood at 16.2% at the end of March 2013. This is more than double the U.S. unemployment rate. By contrast, the Eurozone youth unemployment rate was 23.9% -- +47.5% higher than the U.S.
When you breakdown the U.S. unemployment rate by age and race, it is obvious that Hispanic and Black youth are having a difficult time finding employment.
U.S. Unemployment Rates - Teens, Young Adults and Adults Over 25 yrs - By Age and Race - March 2013 - Bureau of Labor Statistics (Click Image To Enlarge)
Howard Archer of IHS Global Insight said the figures marked a "dismal landmark" at 12 percent -- already very close to the official EU 2013 forecast of 12.2 percent.
COMMENTARY: As you can readily see, although the U.S. unemployment rate as of March 2013 was 7.6%. At the height of the Great Recession, the official U.S. unemployment rate exceeded 10%. If you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps) the U.S. unemployment rate was 22%.
Three Measurements of U.S. Unemployment Rates - Official, Official+Workers No Looking For Work, and Official+Workers Not Looking For Work+Underemployed Workers - 1994 through April 2009 - BLS (Click Image To Enlarge)
In a blog post dated November 6, 2011, I prepared a detailed analysis of the U.S. unemployment rate, and I explained the three key factors as to why the unemployment rate will continue to remain high, and why no President, not even Barack Obama, is likely to do much about it. I believe that the Eurozone is in a similar fix.
To put things into perspective, the present Eurozone unemployment rate of 12% is probably closer to 25% when you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps). As a resu;t of these horrific unemployment statistics, the Eurozone is suffering through a recession similar to what the U.S. experienced just recently.
This motion graphic is on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.
COMMENTARY: If you think capitalism is working, then you have to look at the above video infographic of America's distribution of wealth. We are basically a nation of paupers with a middle class that is being squeezed as never before. If the idea was to lower wages to the point where it is difficult to make an honest living or buy luxuries or even own a home, then capitalism is definitely not working. When you have this type of wealth distribution inequality, you are really asking for problems. We used to be a nation of consumers, but if the above trend continues, you have to ask yourself, who is going to buy what we produce? No wonder employment is high, employers got used to not hiring people following the slow recovery after the Great Recession. Now they are about to find out that there are simply not enough buyers for what we produce. With the potential for even smaller consumption of goods and services, we could be at a tipping point leading to another recession.
At the “When Growth Stalls” website, the Web home of the book by Steve McKee, there is a confidential self-diagnosis survey available to business professionals who want to get a sense of how their company is doing. McKee Wallwork Cleveland collected over 1,000 responses from these executives and recently took a closer look at the results. The results are staggering.
It’s not about the economy.The research shows that many struggling companies are suffering for reasons of their own making so McKee Wallwork Cleveland prepared this fun infographic to summarize the not-so-enjoyable internal dynamics that struggling companies must find a way to overcome.
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COMMENTARY: It is important that management not only understand what corporate growth is, but what drives growth and how to manage that growth effectively for longterm sustainability and predictability. Let's look at the 6W's of corporate growth: why, what, where, when, and HoW.
6W's of Sustainable Corporate Growth (Click Image To Enlarge)
What is the real purpose of your business? Your company needs profits to live, but profits are not what the business is for. The objectives are to provide value to the population and to make the community better.
When this vision is lost then we lose sense of purpose, the feeling of belonging, the sight of why we work, and why our business exists. Start a business when you have a passion for something and want to create something that you can be proud of. Inspire yourself and your people with a clear vision. Define shared values and let values rule. Achieve your sustainable competitive advantage by continuously developing existing and creating new resources and capabilities in
response to rapidly changing market conditions. Focus on strengthening your distinctive capabilities – leadership, teamwork, processes, tacit knowledge, etc. – which cannot be replicated by competitors.
Finding the right balance in your business will help you refine your goals and hasten you towards them. Organizations prosper by achieving strategy through balancing the four major factors or perspectives: Financial; Customer; Process; and Growth.
Build Your Sustainable Competitive Advantage
Sustainable competitive advantage is the prolonged benefit of implementing some unique value-creating strategy based on unique combination of internal organizational resources and capabilities that cannot be replicated by competitors. Sustainable competitive advantage allows the maintenance and improvement of your enterprise's competitive position in the market. It is an advantage that enables your business to survive against its competition over a long period of time.
Remember the old joke about the car mechanic who’s called in after every other mechanic failed? He listens to the engine for a few minutes, then hauls off and gives it a big swift kick in a certain strategic spot. Lo and behold, the engine starts humming like a kitten. The mechanic turns around, gives the car owner his bill for $400. The owner is flabbergasted and demands an itemized breakdown and explanation.
The bill says... '$1 for my time, and $399 for knowing where to kick.'
Timing is everything. You have to know not only how to make a move, but when. “The value of actions lies in their timing,” said Lao Tzu. Customer value derives from timely delivery. Change is unavoidable, but if you can anticipate it and understand business cycles, you can ride with change instead of being run over.
According to Lee Iacocca, "In the end, all management can be reduced to three words: people, product, and profits. People come first." Your corporate vision is worthless, strategies powerless and shared values are corrupt without the right people to execute.
Manage processes, not people. Focus not on what they do, but on how they do it. Establish a synergistic enterprise-wide and an end-to-end (cross-departmental, and often, cross-company) coordination of work activities that create and deliver
ultimate value to customers.
Sustainable Growth Rate
According to Profit Impact of Marketing Strategy or PIMS an important lever of business success is growth. Among 37 variables, growth is mentioned as one of the most important variables for success: market share, market growth, marketing expense to sales ratio or a strong market position.
The question how much growth is sustainable is answered by two concepts with different perspectives:
The Sustainable Growth Rate (SGR) concept by Robert C. Higgins, describes optimal growth from a financial perspective assuming a given strategy with clear defined financial frame conditions/ limitations. Sustainable growth is defined as the annual percentage of increase in sales that is consistent with a defined financial policy (target debt to equity ratio, target dividend payout ratio, target profit margin, target ratio of total assets to net sales). This concept provides a comprehensive financial framework and formula for case/ company specific SGR calculations.
The Optimal Growth concept by Martin Handschuh, Hannes Lösch, Björn Heyden et al. assesses sustainable growth from a total shareholder return creation and profitability perspective - independent of a given strategy, business model and/ or financial frame condition. This concept is based on statistical long-term assessments and is enriched by case examples. It provides an orientation frame for case/ company specific mid- to long-term growth target setting.
Sustainable Growth Rate (SGR) Formula
The sustainable growth rate according to Robert C. Higgins is the maximum growth rate a company can achieve consistent with the firm`s established financial policy. Basically, it is calculated as:
In order to grow faster, the company would have to invest more equity capital, increase its financial leverage or increase the target profit margin.
The sustainable growth rate model assumes several simplifications such as depreciation is sufficient to maintain the value of existing assets, the profit margin remains stable (also for new businesses), the proportion of assets and sales remains stable (also for new businesses) and the company maintains its current capital structure and dividend payout policy. The sustainable growth rate model has implications for valuation models, as for instance the Gordon model and other discounted cash flow models require a growth estimate that can be sustained for many years. The sustainable growth rate can be a check if business plans are reasonable.
Optimal Growth Rates
Optimal Growth from a shareholder value reation and profitability perspective according to Martin Handschuh, Hannes Lösch and Björn Heyden is the growth rate which assures sustainable company development – considering the long-term relationship between revenue growth, total shareholder value creation and profitability. Assessment basis: The work is based on assessments on the performance of more than 3500 stock-listed companies with an initial revenue of greater 250 million Euro globally and across industries over a period of 12 years from 1997 till 2009. Due to this long time period, the authors consider their findings as to a large extent independent of specific economic cycles.
Relationship Between Revenue Growth, Total Shareholder Value Creation and Profitability
In the long-term and across industries, total shareholder value creation (stock price development plus dividend payments) rises steadily with increasing revenue growth rates. The more long-term revenue growth companies realize, the more investors appreciate this and the more they get rewarded.
Also the combined ROX-index (average of ROA, ROS and ROE) shows rises with increasing growth rates to a broad maximum in the range of 10 to 25% revenue growth per year and falls towards higher growth rates.
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The authors attribute the continuous profitability increase towards the maximum of two effects:
Profitability drives growth: Companies with substantial profitability have the opportunity to invest more in additional growth.
Growth drives profitability: Substantial growth may be a driver for additional profitability, e.g. by higher attractiveness for high performing young professionals, higher employee motivation, higher attractiveness for business partners as well as higher self-confidence.
Beyond the profitability maximum extra efforts to handle additional growth – e.g. based on integrating new staff in large dimensions and handling culture and quality - do rise sharply and reduce overall profitability.
The combination of the patterns of revenue growth, total shareholder value creation and profitability indicates three growth zones:
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Low Return: Low profitability and low value generation below 10% per year
Long-term Sweet-Spot: Solid value generation and highest on average profitability in the revenue growth interval from 10% to 25% per year
High Speed: Even higher total shareholder value generation however in combination with lower profitability beyond 25% per year
Growth rates of the assessed companies are widely independent of initial company size/ market share which is in alignment with Gibrath`s law. Gibrat's law, sometimes called Gibrat's rule of proportionate growth is a rule defined by Robert Gibrat (1904–1980) stating that the size of a firm and its growth rate are independent. Independent of industry consolidation and industry growth rate, companies in many industries with growth rates in the range of 10 to 25% revenue growth p.a. have both, higher total shareholder value generation as well as profitability than their slower growing peers.
Base Strategies and Growth Moves
These findings do suggest two base strategies for companies:
For companies (e.g. in established markets like central Europe and USA) with low single digit growth rates: Consider acceleration of growth given the fact that TSR and profitability are higher in the sweet-spot
For companies (e.g. in fast growing regional markets like China with India and/ or rapidly growing industry segments) with growth rates beyond 25%: Consider best ways to “digest”/ and to stabilize rapid growth and ensure a “soft landing” should market growth come to a sudden stop
How To Achieve Long-Term Growth in the Sweet-Spot and Beyond
The authors have identified a set of preconditions and levers to achieve long-term growth in their defined sweet-spot and beyond:
Generating a common understanding regarding growth and profit ambitions among the management team as a prerequisite for aligned and coordinated strategy development and implementation
Understanding relevant markets (current or future promising markets). Generating market foresight when identifying and assessing growth initiatives, e.g. megatrends and scenario analyses, segment specific benchmarking and in depth assessments, market demand projections
Levers and strategy
Applying formulas for rapid growth, e.g. maxing out the number of relevant customers, maxing out the share of wallet and lifecycle potentials, continuous innovation, killer offerings, network based growth, M&A/buy-and-build driven growth, franchising proven business concepts, pyramid-like network expansion and managing value networks
Defining the growth strategy as a portfolio of best suited growth initiatives considering a multidimensional set of criteria, e.g. ease of implementation, growth and profit impact, expected risk vs. return, cash flow stability
Making growth happen: Strategy and corresponding culture must be addressed in a consistent way, e.g. creating the case for growth, clearly defining and communicating vision and strategy as well as actively developing and energizing the organization.
As described the sustainable growth rate (SGR) concept by Robert C. Higgins is based on several assumptions such as constant profit margin, constant debt to equity ratio or constant asset to sales ratio. Therefore, general applicability of SGR concept in cases where these parameters are not stable is limited.
The Optimal Growth concept by Martin Handschuh, Hannes Lösch, Björn Heyden et al. has no restrictions to certain strategies or business model and is therefore more flexible in its applicability. However, as a broad framework, it only provides an orientation for case/company specific mid- to long-term growth target setting. Additional company and market specific considerations, e.g. market growth, growth culture, appetite for change, are required to come up with the optimal growth rate of a specific company.
Additionally, considering the increasing criticism of excessive growth and shareholder value orientation by philosophers, economists and also managers, e.g. Stéphane Hessel, Kenneth Boulding, Jack Welch (nowadays), one might expect that investors` investment criteria might also change in the future. This may lead to changes in the relationship of revenue growth rates and total shareholder value creation. Regular reviews of the optimal growth assessments may be used as an indicator for the development of stock markets` appetite for rapid growth.