Never Laugh at Chinese!

A Chinese man walks into a bank in New York City and asks for the loan officer. He tells the loan officer that he is going to China on business for two weeks and needs to borrow $5,000.

The bank officer tells him that the bank will need some form of security for the loan, so the Chinese man hands over the keys to a new Ferrari parked on the street in front of the bank. He produces the title and everything checks out.

The Loan officer agrees to accept the car as collateral for the loan. The bank's president and its officers all enjoy a good laugh at the Chinese for using a $250,000 Ferrari as collateral against a $5,000 loan.

An employee of the bank then drives the Ferrari into the bank's underground garage and parks it there.

Two weeks later, the Chinese returns, repays the $5,000 and the interest, which comes to $15.41.

The loan officer says, 'Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi-millionaire. What puzzles us is why you would bother to borrow $5,000? The Chinese replies: 'Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there safely when I return.

起得比鸡早，睡得比狗晚，干得比驴多，吃得比猪差。

如果能做到前三点就好了。

高高在上，盛气凌人

高盛

The Culture of Success: an extreme outdoorsman

Bob Greenhill, Morgan Stanley's first Head of Mergers and Acquisitions, was a Yale graduate and Baker Scholar at Harvard Business School, and an extreme outdoorsman with a slight, muscular build, a big head of curly hair, and a wicked grin. He was famous for his endurance and his adventures. In the 1970s, he and his wife, Gayle, and their three children went to the Arctic with Jack Wadsworth, a handsome Kentuckian who worked at First Boston, and Wadsworth's family. They were flown in by seaplane and dropped off above the Arctic Circle to begin a month long canoe trip on the Back River --- as in "watch your back," one of Greenhill's friends says --- to the pickup point. They left their maps behind and guided themselves using the journals of earlier explorers. Among the outcomes of the trip was that Greenhill persuaded Wadsworth to come to work at Morgan Stanley.

CNN: First-time Triathlete - No Training

Brian Kuritzky, a 24-year-old securities analyst, has long been a competitive person.

It's what he does now in the aggressive world of securities and financial risk-reward, and it's what he's done throughout his life. After watching his mother battle and succumb to breast cancer when he was a teen, he sustained himself demonstrating a hard work ethic as a college athlete, followed by a brief stint as a professional player in the cutthroat world of European soccer.

Last Saturday, he even out-competed himself. Kuritzky completed his first ultra-distance triathlon -- a 2.4 mile swim, a 112-mile bike race, and a 26.2 mile marathon run, back-to-back-to-back -- 30 minutes under the 16-hour time limit he had set for himself.

What makes that even more noteworthy is that he did it without any real training. In fact, it was only three weeks before the event that he decided to have a go at it, after co-workers bet he couldn't complete the race with no training and on short notice.

Taking the competitive aspect up a notch, Kuritzky in advance designated his office-wager winnings would go to charity. Those office bets have mushroomed into what is now $75,000 and growing in payoffs and other matching contributions, with that money heading to the Susan G. Komen for the Cure organization, formerly known as the Susan G. Komen Breast Cancer Foundation.

As news of Kuritzky's feat -- and his reason for doing it -- spread, the donations total grew. What started as some $1-per-minute office wagers jumped from $20,000 combined private and matching company donations by Monday to $75,000 once word spread of his race time and success.

It all began when two co-workers laid down a challenge to the former Cornell soccer player: finish an "Ironman" triathlon in 16 hours. For every minute over 16 hours, Kuritzky would pay his colleagues $1 each, out of his own pocket. For every minute under, the payoff was reversed and $1 per colleague would go to his charity.

Around 100 of his co-workers entered into the pool, holding Kuritzky personally responsible to pay if he were to go over his estimated time or drop out of the race entirely. All his winnings were designated in advance to go to the breast-cancer charity that Kuritzky supported to honor the memory of his mother, Janice, who died when he was 15.

"I knew every minute I finished ahead of 16 hours I had 100 people or so who were going to be donating. Every minute wasted felt like a (lost) potential $1,000. If I took my time or took a break it would've been missing opportunities for money for the charity," Kuritzky told CNN.

Aside from some research on nutrition and a few laps in a local swimming pool, Kuritzky had done zero training for the event. With his demanding job as a securities analyst at Goldman Sachs, he had only a few hours a week to dedicate to soccer practices, with extended games on the weekends.

"There are people that spent nine months training that couldn't finish in his time," Fred Summer, president of Summer Sports, the company that sponsored the Great Floridian triathlon in Clermont, Florida, told CNN in a post-race wrap-up.

"I saw him at the awards ceremony the next morning, and he was standing up and smiling when I went over to congratulate him. I was surprised he even finished considering our dropout rates can sometimes be as high as 20 percent when conditions were as tough as they were for this race."

Kuritzky's finishing time was 15 hours and 30 minutes, a full half-hour under his prediction. He was a top-five finisher in his age group at an event that is notorious for its difficulty due to the climate and conditions of the hilly course.

Kuritzky is no stranger to negligible training when completing major events. When a friend dropped out of the ING New York City marathon in 2008, he took her place with less than nine days leading up to the race.

What kept him going then and to this day was keeping alive the memory of his mother, and the Komen charity. As a young professional member, he joined the organization's board after the ING New York City marathon and has worked as a fundraiser ever since.

On his triathlon race blog he wrote, "If I were to stop when my body was telling me to, I wouldn't have finished the first bike lap."

Kuritzky took Monday off from work, stopping by his office only briefly to check his fundraising balance sheet. Once again, he found he had broken another goal. Good news of his race time had traveled fast around the office and people multiplied their original dollar donations to reflect their admiration and support for what he had done. Along with his co-workers' donations, there were companies matching private donations dollar-for-dollar, all of it going to the Susan G. Komen organization.

Kuritzky, aiming to get back on the soccer field soon, looks at his triathlon achievement not for what he did, but for what it has done for his chosen charity.

"For me it was a question of not only about whether it was possible or not," he said, "but a personal challenge that I set for myself and a cause I wanted to do everything that I could possibly do."

WSJ: Do the Rich Work Harder?

We often hear that the key to wealth is hard work.

But is it really?

British billionaire Richard Branson is quoted today as saying that the wealthy don’t work harder than everyone else–they are just fortunate.

“Yes, entrepreneurs may work hard, but I don’t think they actually work any harder than, say, doctors, nurses or other people in society, and yet tremendous wealth comes with it and therefore enormous responsibility comes with that wealth, responsibility to do good things, maybe create new businesses and maybe tackle some of the more seemingly intractable problems in the world…”

He may be right. But studies on the comparative work habits of the wealthy tell a different story.

Research by professors Mark Aguiar and Erik Hurst combined the results of several large surveys (including studies where randomly chosen subjects kept detailed time diaries), and found that the working time for upper-income professionals has increased compared with 1965, while total annual working time for low-skill, low-income workers has decreased.

As David Brooks put it in a 2006 column: “For the first time in human history, the rich work longer hours than the proletariat.”

Research by Daniel Kahneman, the Nobel Prize-winning psychologist, shows that “being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.”

His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.

My own experience tells me that the wealthy work insanely hard. I spent Monday and Tuesday with a billionaire who got up at 4:30 a.m., held meetings and business briefings until 9 p.m., ate dinner, then worked on emails until 2 a.m. He woke up at 5 a.m. the next morning, and started all over again. Seven days a week. This entrepreneur hadn’t taken a day off in 10 years (and I checked).

Of course, the inherited wealthy might be a different story (though plenty of them work hard, too). Still, at a time of lower pay and increasing demands on workers, it might seem like most Americans are working longer hours. But according to the OECD, total average annual work hours for those who are employed fell to 1,768 in 2009, from 1836 in 2000.

Of course, some may be working less not out of choice but by necessity. And maybe the upper-class are the only ones fortunate to be able to work long hours for hefty compensation. What is more, even the proud wealthy would admit that hard work accounts for only part of their success.

Still, based on the limited data we have, wealthy and upper-income folks really do seem to worker harder than everyone else.

Do you think the wealthy work harder than everyone else?

NYT: The Deal Makers Who Deserve Failing Grades 2010

Year-end is a time for professors to grade. In a similar spirit, I end this year by highlighting the lowlights of the year’s deal making. These are, by category, the Deal Professor dropouts, the deal makers who deserve an F.

SHAREHOLDER RIGHTS

Cedar Fair failed hands down. After missing earnings estimates and suspending its dividend, Cedar Fair, an amusement park operator, announced a $2.4 billion sale in December 2009 to the private equity firm Apollo Global Management. Cedar Fair is based in Sandusky, Ohio, and has a large local shareholder base.

These shareholders formed a core group protesting the low price and management’s participation in the buyout. Cedar Fair responded by stonewalling its shareholders and postponing a vote on the deal at the last minute. Shareholders then held their own tea party revolt, convening an alternative shareholder meeting.

The sale was canceled, Cedar Fair’s chief executive announced his retirement, and Cedar Fair is still grappling with a hedge fund activist shareholder. Deal makers should remember that shareholders do not react kindly when management tries to manipulate the sale process, especially when they can see management in the local coffee shop.

BIDDING TACTICS

It was the year where Bruce Wasserstein’s “Dare to Be Great” speech, egging on bidders to pay a full price, was turned on its head. Bidders, including Alimentation Couche-Tard for Casey’s General Stores and Hertz Global for Dollar Thrifty, repeatedly refused to raise offers and walked instead.

In this vein and for the second year in a row an F goes to Agrium for its unsuccessful hostile offer for CF Industries. After missing the deadline to nominate directors to CF’s board in 2009, Agrium failed to bid forcefully for CF in 2010 after waiting a year and arranging an ingenuous solution to obtain antitrust clearance. Instead, the company dropped its bid just like everyone thought it would.

COMMUNICATIONS

In this perennially competitive category for bad grades, the F this year goes to Dynegy. The energy company threatened its shareholders with possible bankruptcy if a sale to the Blackstone Group was not completed at $4.50 a share. The threat made the company appear heavy-handed with its shareholders and was ill conceived, because only a month after the Blackstone sale was canceled, the company agreed to sell itself to Carl C. Icahn for $5.50 a share. This latest sale is also being challenged by one of Dynegy’s largest shareholders.

MANAGEMENT BUYOUTS

Robert X. Sillerman, former chief executive of CKX, owner of the “American Idol” brand, receives an F. This year Mr. Sillerman made his second effort to acquire CKX, a company in which he owns 21 percent. As with his last proposal, this one was half-baked, lacking financing and was less than half the value of his initial offer in 2007. Mr. Sillerman withdrew his latest proposal in October, leaving CKX adrift without a plan.

Others deserving an F are Tilman Fertitta, chief executive of Landry’s, for his second buyout effort of the restaurant company.

J. Crew’s chief executive, Millard S. Drexler, and the private equity firms TPG and Leonard Green also receive an F for appearing to manipulate the J. Crew sale process unduly in their favor. Among other maneuvers, these buyers dropped their offer at the last minute, leaving the impression they cowed the J. Crew special committee of independent directors into a sale.

CORPORATE LAW

The most esteemed corporate law court in the land, that of Delaware, unfortunately gets an F for its opinion in the Airgas case. The Delaware Supreme Court’s decision overruled shareholders who had voted for Airgas to hold its next meeting of directors in January 2011. The opinion ignored prior law on the issue, and instead appeared to be a political statement by the judges, who endorsed the board’s central role over shareholders in resisting hostile takeovers.

ACQUISITION EFFORTS

Charles River Laboratories International’s effort to buy WuXi PharmaTech was particularly disastrous. Charles River again highlighted the oft-made point that poorly performing companies shouldn’t try to climb their way to profit through risky, game-changing acquisitions. Charles River succeeded only in bringing the activist hedge funds out to deep-six the deal. Another acquirer meriting an F is General Motors for buying the subprime auto-finance company AmeriCredit at a high valuation. G.M. appears to be repeating the mistakes of its past by focusing on financing to bolster sales instead of simply making cars.

FINANCING

The first F of 2010 went to the South Korean company Arigene in connection with its failed takeover of Trimeris. Upon announcement of the deal, Arigene’s stock price fell almost 75 percent on the Korean stock exchange. Arigene was unable to complete an equity offering necessary to finance this acquisition.

Unfortunately, Arigene did not negotiate an ability to terminate its agreement for a failure to secure this financing. Early in 2010 Trimeris recognized that suing a Korean company with no assets in the United States might be a fruitless endeavor and terminated the deal.

CROSS-BORDER TRANSACTIONS

There were two significant F’s this year. Prudential of Britain receives a failing grade for its failure to correctly read its shareholders before agreeing to acquire American International Group’s Asian business, AIA, in a $35.5 billion deal. Prudential’s new chief executive violated a cardinal rule of deal making: Don’t make big deals in your first years.

BHP-Billiton and the Canadian government also receive an F. BHP Billiton receives this low grade for spending more than $800 million on failed takeover efforts for Rio Tinto and the Potash Corporation of Saskatchewan. Canada receives the F for rejecting BHP Billiton’s Potash bid for blatantly political reasons.

INVESTMENT BANKERS

Frank Quattrone’s new investment bank, Qatalyst, receives an F for the fairness opinion and valuation it provided to 3Par in connection with Dell’s offer to acquire the company at $18 dollar a share. Hewlett-Packard subsequently paid $33 a share for the company, almost double Dell’s initial offer.