Company that makes business jet engines decides that business jets serve no business purpose

While on that cruise with mom I missed a big story about two of my favorite topics: aviation and corporate looting.

GE is one of the world’s leading manufacturers of business jet engines (product line). Recently the company decided that it shouldn’t operate business jets: “GE to shut down corporate jet fleet in cost-cutting move”



Philip Greenspun’s Weblog

Boston Globe on the Chinese acquisition of Terrafugia, a flying car company

Terrafugia, an MIT spin-off roadable-aircraft company (“flying car” sounds better) is being acquired by the Chinese owners of Volvo. I’m quoted in the Boston Globe story on the subject.

[Readers: Yes, I’m aware that this posting will be primarily of interest to my mom and dad! No need to point that out.]

The journalist did not quote what I thought were the most interesting things that I said. I pointed out that Terrafugia was founded before Uber. The existence of Uber makes an airport-bound airplane more useful and therefore a $ 50,000 used Cessna or Piper or $ 150,000 used Cirrus is almost certainly more practical as transportation (though of course plenty of people will buy a flying car just as a fun toy). I also pointed out that the main value of Terrafugia might be the team that understands something about certifying airplanes under the LSA standard. Geely might not want to make flying cars, but perhaps they want to make electric trainer airplanes?




Philip Greenspun’s Weblog

How can a computer company lose data that it gathered only a minute earlier?

Dell has refused to accept a return of the XPS 13 2-in-1 that they sold me for $ 2,400 (sampling of issues: it gets stuck in “tablet mode” even when opened as a laptop, it can’t stay connected to a Bluetooth mouse, it stops listening to its touchscreen hardware, and it stops listening to the trackpad (so eventually there is no pointer at all and you’d have to remember all of the Windows keyboard shortcuts to accomplish the basics)).

On the theory that “Maybe 25 hours on the phone with these guys isn’t enough and the 26th hour will be the charm,” I called 877-907-3355 to try to get tech support. This starts with a 2-minute automated process of entering, via voice, the “service tag” (letters and numbers). The automated attendant confirms the service tag. Then it tries to transfer you to “the right department.” Once this resulted in immediate disconnection. When the call was successfully transferred to a human, the first thing that she asked was “What’s your service tag number?” (Before I could give it to her, the call was disconnected, but that’s incidental to the subject of this post.)

As a computer nerd I am always fascinated when companies have a customer service system that asks for some information and then has no way to make the typed-in stuff available to the human who ultimately answers the phone. Also, that it seems to be rare for customer service agents to have access to Caller ID. So a lot of time is wasted in asking the customer a callback number (not to mention the potential for errors).

In the case of Dell, perhaps they have an incentive to waste customer time so that people stop calling for tech support (though how many will buy a second machine from this company?). But that’s not true for a lot of other companies that answer phone calls. If they are inefficient and drop information on the floor it ends up costing them extra customer service hours as well as potentially reducing customer loyalty.

So… why can’t the computers that answer the phone talk to the computers on the agents’ desks? And why can’t they see Caller ID? How hard can that be?

[Okay, and before the Mac fans start dishing out ridicule in the comments section, let me admit in advance that I made a huge mistake by buying this machine! Obviously a MacBook (or even a $ 500 Acer) would have outperformed this $ 2,400 Dell. And if the MacBook had failed for some reason, I would be able to zip over to the Apple Store and get it fixed rather than spending hours on the phone with Dell or returning it to them for service (projected turn-around time: 2+ weeks).]

Philip Greenspun’s Weblog

Why does it make sense for one company to own all of the ski resorts?

Vail Resorts bought Whistler last year for about $ 1 billion. This year they bought Stowe (Denver Post) for $ 50 million. Why does this make economic sense? Where is the economy of scale in running a ski resort? Especially when they are not geographically proximate. Vail doesn’t manufacture lifts, skis, or boots. They have a pass program that is good for multiple mountains across North America, but that could be arranged by agreement among resorts owned by separate companies.

I don’t think this is how it works in other parts of the hospitality industry. There is an economy of scale in establishing a hotel brand, but individual hotels are usually owned by separate groups of investors (i.e., two “Four Seasons” or “Marriott” hotels are unlikely to share ownership).

What’s different about skiing? Could it be that it is actually not that different? One reason why hotel owners contract ot Marriott or Four Seasons is that those companies are good at training people. So maybe it is the same for ski resorts? The big operator can send people from an already-efficient mountain like Vail or Beaver Creek to Stowe and achieve operating efficiencies via better-trained employees? But if so, why does the company that trains and markets also have to physically own the mountain, the lifts, etc.?

Philip Greenspun’s Weblog

Why do you guys run an education company?

At SMB, our primary business is our proprietary trading desk.  85 percent of my energy and attention goes into the trading desk, our traders, and growing that business.  But everyday, I do spend time on our education arm- SMBU.

Recently, I had drinks with two partners of a proprietary trading desk in NYC and one asked, “Why do you guys run an education company?” And I have to admit this gentleman was not the first to ask.

There are numerous reasons why we run SMBU, but the one most important to Steve and I relates to the picture above.  We meet people/traders, who we would not have met otherwise.  Simply, if we were Read more […]
SMB Capital – Trading Education

Department of unfortunate company names… ZIKA Industrials

Here’s a good case study for a business school rebranding class…. driving around northern Israel recently we passed a big warehouse prominently marked “ZIKA”. This turned out to be part of a company founded in 1950: ZIKA Industrials. Fortunately the products are for welding and are not targeted at consumers.… says that the origin of the name for the virus comes from the “Zika Forest” in Uganda.]

Philip Greenspun’s Weblog

More looting from public company shareholders in our future?

“Where More Women Are on Boards, Executive Pay Is Higher” (nytimes) says that public company CEOs can boost their pay (i.e., their stealing from shareholders) by putting women on their boards.

Certainly it seems likely that through a combination of pressure and demographic shifts there will be an increasing percentage of public company board members who identify as women. Should we expect this pay boost for in-house looters to be persistent?

[Separately, like other reports that count up men versus women, I’m not sure how this article makes sense in an age where cisgender-normative prejudice is frowned upon. How can anyone know what the gender composition of a corporate board is given that people might change their gender ID tomorrow morning and/or might have changed it some months ago but without changing names?]


Philip Greenspun’s Weblog

New Tool – Search Historical Company News – Testers Needed

If you’re like me, it’s a time consuming pain in the rear to try and figure out what news took place on xx date for xx stock. Especially when you go more than a year out, it becomes a tedious task.

To address this problem, we’ve created a very simple tool that can go approximately two years back and pull headlines for nearly any day the market was open, for any stock.

Read the full article at

Stock Trading To Go

Minecraft Company History and Swedish Gaming Industry

I listened to Minecraft: The Unlikely Tale of Markus “Notch” Persson and the Game that Changed Everything as an audiobook (could be cut in half). I hadn’t realized that the Swedish computer game industry was so huge. The authors say that about 22 percent of computer game revenue in Europe goes to Swedish companies, mostly located in one neighborhood in Stockholm, despite the country having less than 2 percent of Europe’s population.

What do folks think accounts for this? The long winters? It doesn’t seem to be favorable tax treatment. A Swedish gaming success would be taxed at the capital gains rate of 30 percent, higher than some other European countries and the U.S. (an American would pay 20 percent federal tax, another 4 percent Obamacare tax, and then another 13 percent in California, but the average combined rate across all states is 28.6 percent).

Philip Greenspun’s Weblog

U.S. taxpayers now can subsidize a French/German company

If you were comforting yourself on April 15 that your forced commitment to corporate welfare was limiting to U.S.-based companies, “Airbus Gains New Financing Ally in U.S.” (WSJ) will rain on your parade. By setting up a final assembly plant in Alabama, Airbus planes will now be eligible for taxpayer-subsidized financing.

Philip Greenspun’s Weblog

Business idea: nightclub and startup company incubator/co-work space

A friend is an investment banker helping restructure the ownership and financing of a group of nightclubs. She said that nightclubs own or rent valuable real estate that may be used as few as three nights per week. There is a certain amount of revenue from rental for private events, but that is also mostly in the evenings.

Some of the highest profit margins in the real estate world are at co-working spaces, which may also be characterized as “startup company incubators.” Given the tendency of people to work during the daytime and party at night, why not use the otherwise vacant nightclub real estate during the daytime as a co-working space? Put in some crazy fast WiFi, have a side room where the Aeron chairs can be stashed, and then offer people co-work space at a discount if they’ll agree to vacate by 7 pm.

Where’s the flaw in this idea?

Philip Greenspun’s Weblog

You can pay McKinsey to run a quota system at your company

“Gender equality: Taking stock of where we are” is an article from McKinsey, management consultant to Enron (Guardian). This cluster of Harvard and Stanford MBAs has figured out that setting explicit quotas results in more employment for the targeted group:

Our experience has been that top-down targets make a difference. We didn’t set explicit gender goals for McKinsey until 2014, and in just one year after doing so, our intake of female consultants has increased by five percentage points.

McKinsey charges customers a lot of money for forward thinking, but they seem to be taking a backward attitude toward gender. What does it mean for a consultant to be “female”? How does McKinsey know that 100 percent of their employees won’t come in tomorrow morning identifying as “female” (or “male” for that matter)? If the modern way of looking at gender is that it is primarily a state of mind, wouldn’t the smartest employers achieve instant gender balance by offering a bonus to any worker of the over-represented gender to identify as a member of the under-represented gender? (See this report on papers from the American Economic Association on what people are willing to do in exchange for small financial incentives.)

Let’s assume for the moment that McKinsey is correct in its assumption that employee gender is persistent and/or biological. Why is their focus on the gender composition of their workforce? Does McKinsey have the same percentage of African-American partners in the U.S. as there are African-Americans in the U.S. population as a whole? If not, does switching the focus to gender mean that McKinsey has given up on achieving racial goals/quotas? (Or that McKinsey agrees with Rachel Dolezal regarding race being a social construction?) One thing that nearly everyone agrees on, except perhaps Tinder users, is that age is an immutable biological fact for humans. Why isn’t McKinsey interested in addressing age discrimination, establishing hiring quotas for older workers, or examining the potential for age disparity in new hires that results from recruiting almost exclusively from among fresh MBA graduates?

Let’s assume that the gender composition of a workforce is in fact something that should take higher priority than racial or age composition. According to the authors, McKinsey is interested in sorting employees by gender so that women can have “economic equality”:

Economic equality for women, to no small degree, depends on achieving a sweeping set of social-equality reforms. Is it the business of executives to help solve broader social issues? We would say yes, provided they don’t distract from the very real issues executives face in their own organizations.

The article does not mention, however, that women in many parts of the U.S. can obtain the after-tax spending power of a McKinsey partner by having sex with three McKinsey partners and harvesting the resulting child support (see Real World Divorce; works best in California, Massachusetts, New York, and Wisconsin; if she doesn’t want children she could have sex with six McKinsey partners and sell the abortions). If a woman and a man have the same spending power, isn’t that “economic equality”? If the goal is economic equality, shouldn’t McKinsey therefore make greater efforts to achieve gender balance in jurisdictions, e.g., Germany and Scandinavia, where unlimited child support profits are not available?

McKinsey is a member of the “30% club,” seeking a quota of 30% for corporate board representation, but the authors don’t explain why the goal should be 30 percent. Why not 50 percent, for example? Or 100 percent for a period of time in order to make up for past underrepresentation? (And if McKinsey has denied employment opportunities to women in the past, doesn’t fairness require that the quota for new hires be 100% female, at least for a period of time?)

The authors claim that it will be tough for McKinsey to hire and retain more women but they don’t explain why. Is it the case that among the 7 billion people on Planet Earth there are not enough qualified people who identify as “women” to occupy 50, or even 100 percent of the chairs at McKinsey? If there are sufficient qualified people who, at least for the present identify as “women,” what is preventing McKinsey from offering them a combination of salary and benefits that would induce them to join and stay at McKinsey?

If McKinsey is not competent to hire the mix of employees that it desires, why announce that failure to the world? Doesn’t that cast some doubt on McKinsey’s competence to serve as management consultants? Or is McKinsey’s point that they ran a quota system at their company, which bumped up the percentage of employees who identify as part of the female gender, and you can pay them to advise on running a similar quota system at your company?

What do readers think? Does this article make you more or less impressed with the quality of thinking at McKinsey?

Philip Greenspun’s Weblog

Shake and Bake an Elixir in Medicines Company

Written By: DragonFly Capital


Medicines Company ($ MDCO) had been a bit of a sleepy stock over the last 18 months, quite the opposite of the rest of the healthcare space. That was until August 26th. Maybe some phase I trial data from the following Sunday leaked? Well whatever the cause the stock started higher off of the 200 day SMA.


From there is found resistance at 42.50, just above the January 2014 high before the rounded bottom started. This type of quick move is one that traders often look to fade, meaning they take profits or even sell short. A pullback would establish a Handle to go along with the Cup. The momentum indicators had moved to overbought levels. The stock was outside of the Bollinger Bands®. A triple whammy.

But stock prices can still go up when they are overbought. And overbought can get more overbought. A Cup can just get bigger without a handle. And that is what is happening in Medicines Company. A bit of a Shake and Bake scenario. After a small bull flag the price of the stock is moving higher again Wednesday. How high can it go? The bull flag would measure higher to 51.70. And with short interest at almost 18%, a short covering squeeze cold get it there quickly.

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