Thursday, January 30, 2020

Warren Buffet Essay Example for Free

Warren Buffet Essay Executive Summary: Warren E. Buffett is one of the worlds richest men with a net worth estimated at $44 billion by Forbes magazine. Buffett is known for his patient approach to investing and making long-term investments in steady, predictable industries that generate positive cash flow. It was announced that MidAmerican would purchase the regulated electric utility PacifiCorp from Scottish Power, for $5.1 billion in cash and $4.3 billion in liabilities and preferred stock. This would be the second largest purchase of his career. After the announcement, stock prices for both PacifiCorp and Berkshire Hathaway increased, by 2.4% and 6.28% respectfully, which suggests market approval for the acquisition of PacifiCorp. Problem: From the increase in stock price, we can assume that investors believe that the deal was a fair price and that acquiring PacifiCorp was a good investment to benefit Berkshire Hathaway. In fact the market added more value enhancement to Scottish Power than Berkshire, which leads investors to consider why Scottish Power gained more benefit than Berkshire Hathaway and if Berkshire Hathaway paid a reasonable price. Analysis: From Exhibit A, on the following page, we can analyze the range of values for PacifiCorp. From this we can see that the only significant various between median and mean value arises in EBIT, which indicates outliers for revenues, operating expenses, or depreciation. Intrinsic value refers to the actual value of a company or stock without reference to its market value and is calculated through the discounted cash flow of a business during its remaining life. Intrinsic value can also encapsulate how well the company is run, cash flow, and management competency. According to Buffett, intrinsic value indicates the â€Å"present value of the future expected performance† and can be predicted through calculating the discounted cash flow of a business for its remaining life. This estimate allows Buffett to identify stocks or businesses that are undervalued. Other alternatives to intrinsic value as book value and accounting profit, which can fall short when determining what  the inve stment is really worth and accurate aggregate value. Stock price is the most accurate way to determine a company’s present value of expected cash flows. However, as a private company, the market value of PacifiCorp could not be determined by its share price. In order to calculate Berkshire’s discount rate we must use the capital asset pricing model (CAPM) to determine a required rate of return. This is calculated by adding the risk free rate (yield on a U.S. Treasury Bond) to beta multiplied by the difference of the expected market return and risk free rate. A U.S. Treasury Bill has a yield of 5.76%, Berkshire’s beta is .7, and expected market return is 10.5%, therefore the rate of return would be 9.07%. This can then be used to determine the present value of this investment over one year, $4.68 billion. Therefore, Berkshire’s offer to purchase PacifiCorp for $5.1 billion is slightly overvalued, but still a fair price for both companies. Berkshire Hathaway performed tremendously well between the periods of 1965 and 1995, where its stock prices grew 24%, in comparison to the SP 500, which averaged 10.5% a year. This is a remarkable occurrence to beat the market growth rate, and is even more rare to beating it for 30 consecutive years. Berkshires shares have been among the highest-priced shares on the New York Stock Exchange. Berkshire also holds majority shares in Coca-Cola Co., American Express Co., Gillette Co., and Wells Fargo, all of which have had consistent growth and stability over the companies’ lifetime. Buffet’s philosophy contradicts many of the common principles the average investor swears by. His philosophy relies on little diversification and avoiding risk. The biggest stand out in this regard is his dislike of broad diversification. Instead referring to diversification as protection against ignorance and an unstable market, Buffet believes it to be the lazy way out. Buffet believes that we must invest in our expertise areas and therefore will have greater knowledge in a handful of stocks and should not diversify our portfolio by purchasing shares of companies we know nothing about. While I understand where Buffet is coming from, this seems very risky. Recommendation This case shows a prime example of the link between a company’s valuation and the behavior of investors in the capital market. Through Berkshire Hathaway`s increase in share price the investors reflected that they agreed with the deal through an increase in share price. And even though it seems odd that both the selling and buying company should have an increased share price, we can see through calculating PacifiCorp’s intrinsic value, that the purchase was reasonable. This acquisition also added more diversification to Berkshire’s investment portfolio to provide more stable returns.

Wednesday, January 22, 2020

The Story Of English :: essays research papers

The Story of English Many people may ask, " What is the Bayeux Tapestry?" In the following paragraphs, the significance of the Bayeux Tapestry will be recognized. First of all it should be understood that it is not a Tapestry in the full sense of the word. It is an embroidery. It was constucted from eight separate pieces of linen which were joined to make up it's length. It is approximately 70 meters long and a half a meter wide. It is evident that at one stage it ws longer, probably by as much as seven or eight meters are missing. This is a tragedy as it may have answered many of the questions that gives cause for debate today. It is generally agreed that Bishop Odo was the architect who commisioned the Bayeux Tapestry. It was designed and constructed reasonably soon after the battle in 1066. It was made without any shadow of a doubt to celebrate and record for posterity the events leading up to battle and its aftermath. If it is reasonably confident that Bishop Odo commissioned the Tapestry, debate still reigns as where to it was constructed, and by whom. It basically comes down to the allegiances. If one is French, they would like to believe that it was made in France. There are so many clues in its construction that indicate otherwise. Whereas it is known as the Bayeux Tapestry in England, it is sometimes referred to in France as the Tapisserie de la reine Mathilde or Queen Matilda's Tapestry. Matilda, one will remember, was William's wife. To infer that she and she alone constructed this work of art defies all credibility. As Queen of England and Duchess of Normandy, she would never have had the time. Another factor which excludes her from the equation is that she does not appear in it herself (although she may have been in the missing section). So if you discount the construction being undertaken in France, where was it made? Over the years, the Tapestry has been studied by experts in this field and the consensus of opinion is that it was of English construction. Certain historical facts of the time and features of the Tapestry indicate where it was made. Following the battle in 1066, Bishop Odo was made Earl of Kent. This was partly because he was William's half brother and secondly because William was duty bound to repay the loyalty of his nobles.

Tuesday, January 14, 2020

Leadership and multiple ways of looking at the world

Human nature is not an easy term to define, but every day’s activities of an individual revolve around the human nature of that person. The nature of a person may dictate such things as, how to handle various situations, how does one relate with others etc. Therefore human nature is both a product of physical environment of an individual and the biological aspects that a person might have inherited from the ancestors. A good person There are varied viewpoints on how one should be a good person. This is affected by the moral obligation of a person on how they perceive a good person to be and how they can achieve that. The society has got some moral standards that have been set which happens to be static and rigid (Schein, 1992). But with the gestalt that guides a good person, they happen to be flexible and dynamic. A good person will first envision a certain behavior, perform it and compare its outcome with what is the standard of the good. The outcome of the comparison will make the person consider whether taking the behavior or not. The choice is then made according to what fits the goodness described. Therefore, the judgment of a good person depends on how the individual takes that judgment. Moral behavior is an important concept of identity of a good person. Apart from moral uprightness, good character also is part of a good person. Within good characters, will obviously lay good moral behavior. To increase some good personalities in the organization, it is good to give rewards to those considered to be of good quality character. Many of the things that might come in mind when a person is asked about qualities of a good person are those who are kind, helpful, caring, understanding and patient. In most cases a just person will really try as much as possible to do to others what he/she might also want it done to them. This implies that rewards and punishment should be given where it is due supposed to be. Therefore people in a group who will show kindness and understanding to others deserve reward. These are people who in most cases will also be helpful to others and show patience whenever they feel that something is not going as much as they like. With rewarding this, it will increase the development of good characters as the physical environment rather than only depending on the inherited traits can also influence human nature. According to Schein (1992), rewards acts as an incentives of making people to learn. Therefore, people who show kindness to others and obey law also deserve reward. In many organization people have been subjected to reprisal actions because of being whistleblowers.   In any organization, if the management does not follow the laid down procedures and ethical behaviors there are high chances of employees with good characters to disclose such wrong doings. Many managers have developed the art of bureaucracy and autocracy in the organization that they don’t give room for the employees to give their views. But many people do not want to talk about their organizational problems in public due to the fact that they feel that it is dirty politicizing their organization (Morgan, 2004). There can be cases such as embezzlement of funds, mistreating of employees and favoritism in the organization. Such behaviors, especially fund embezzlement requires employees with a strong character who believes in upright morality to disclose the information or else, it may remain a silent matter and thus at the end hurt the organization. High & Low context Culture in the organization. High context culture refers to a situation where by a group of people in the society have had a close relationship spanning for a long period of time. In this culture, there is high emphasis on interpersonal relationships. With this kind of culture in place people develop a high sense of trust among themselves, putting personal interest aside and concentrating on the general interest of the group or society. The events in this culture can only can ony be understood in context, (Schein, 1992). On the other hand low context culture represents a society of people with so many connections but only spanning for a short period of time. In this culture, logic, factors and directness are highly valued. Therefore problems in the organization have to be lined up and then solve one after the other. Decisions concerning problems have to be based on the factors rather than intuition. There are various differences between the high and low context culture. In the high context culture, the group members have a long-term relationship with strong boundaries. They consider the relationship to be more important than the tasks performed. Contrary in the low context culture, it is characterized by shorter relationships with no strong boundaries, putting the tasks ahead of the relationship. According to Schein, group leaders sets the boundaries while the group members are the one to test the effectiveness of the boundaries. Another different between the two is the barrier to enter. High context’s strong boundaries create a big problem for any outsider to enter the relationship as compared to the low relationship, which allows for outsiders to enter easily. This is because the low context culture has a unidirectional culture as compared to the mutual casualty of high context. My workplace is an example of a low context culture. This is because of the following, it is not difficult to enter the organization as long as one has the required qualification and there is a vacancy, then equal chances of employment are given to all; the individuals output is highly considered than his/her relationship with the organization; there are objectives that the organization has to achieve, one after the other starting from the immediate objectives to long term; any decision made or arrived at has to be based on facts of the business environment. Social construction Reality. When people come together and interact for a certain period, they form a culture that arises because of the mode they decide to behave or influences certain behavior. In such cases, the behavior might lead to certain conventional rules of behavior differentiating this group from the other groups in the society. According to Morgan (2004), â€Å"when we talk of culture, we are usually referring to the pattern of development reflected in a society’s system of knowledge, ideology, values, laws, and day-to-day ritual†, (pp 116). In constructing the social realities, there are factors about certain behaviors that have been put in place, these have consists of objective factors. The constructing of social realities depends on both the physical and social realities. In physical reality, it represents a certain organization, for instance a workplace, school, or churches, while the social reality will consist of the inhabitants of the physical reality. The rules that are formed and followed by human being in the physical reality ends up affecting the whole original physical reality. For instance, when an organization puts down certain values embedded in the organization’s motto, it is not that it is the physical organization that brought about the motto, but rather that the humans just came up with the belief and have made it a universal belief. All those who will be coming after the original thinkers and proponents of the motto will also have to follow same suit and behave in the same manner. This kind of values of the organization governs its members. In continued development of the values, it forms the basis of the organizational culture. There is no any correct culture, as many organizations happen to compete each other.   Therefore, the correct culture is only that which helps the organization to achieve its goals and objectives (Schein, 1992). When an organization finds certain means of doing its duties to achieve the objectives it becomes now a habit for all of that community to follow same suit. This implies that it will be a habitualization of the organization to be performing those activities in that manner in future. The problem with habitualization in the organization is that it narrows down the other means of doing the same job in a different way that may be beneficial to the organization. Reference: Morgan. G (2004): Images of the Organization, Sage Publication Inc, ISBN 1412939798 Schein E. H (1992): Organizational Culture and, Leadership, Jossey-Bass, ISBN 1555424872.

Monday, January 6, 2020

Protecting Ip And The Ethical Issues Related - 2204 Words

In a world where innovation, technology, and the digital age is moving at such a rapid rate, Intellectual Property (IP) becomes a hot button across business, law and ethics. In like manner, the complications with protecting and managing IP increases. The demand on IP policy has grown from the need to protect a simple invention, such as a light bulb, to the need to protect an idea, a slogan, or even a gene (i.e. biotech). To further complicate things, IP protections are no longer just in the interest of preserving a trade secret; it is now focused on monetary gains, economic strength and a means for businesses to compete. One can only imagine how complex the issues can become when focused on so many issues. This paper will discuss why†¦show more content†¦By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish. Therefore, IP is a critical piece of our country’s economic development, social and cultural welfare. Enforcement of these protections are relied upon in many industries, scientists and not to mention, many artists. It helps to foster competition, betterment, creativity and innovation. In addition, the American consumer benefits as IP ensures they are purchasing products that are safe and effective. Given these points, there is no doubt that IP rights must be protected in order for the U.S. to continue to be productive. One key reason protecting IP is important is its impact on the U.S. job market. IP industries put forty million Americans to work and it is expected that as technology continues to advance, those industries will continue to grow and do so rapidly. This is expected to happen not just in the U.S., but globally. In addition, IP intensive positions tend to pay higher salaries averaging about $50,576 per employee in comparison to the national average of $38,768. (U .S. Chamber of Commerce, 2016) IP is also a key aspect of the overall U.S. Economy. With IP intensive industries accounting for more than one third of the U.S. GDP, it has become key to the country’s economic growth. Currently, U.S. IP is worth $5.8 trillion, more than the nominal