Biggest Mistakes of Executives

22 Executives Reveal 

The Biggest Mistakes They Ever Made

Jamie Dimon, chairman, president and CEO, 

JPMorgan Chase

“My biggest mistake, probably of my whole career, was not closing down our mortgage broker business sooner."

Learning is a skill

10 Strategies Quick Learners Use 

To Pick Up Anything

Learning is a skill in itself.

To understand a problem, ask "why" five times. 
"Five Whys" technique for getting to the root of an issue.

Keep a positive attitude. 

"Anxiety precludes you from exploring real solutions and real thought patterns that will come up with solutions,

Don't just learn about it; practice it. 

Find an expert, and then ask them about their expertise.
Whenever he's trying to learn a sport, he'll seek out the nearest silver medalist, arrange for an interview, and then grill them on technique. 

Get an accountability buddy. 

experience the learning process with the same skill as you

When you don't understand, say so.

learning is very much a matter of being aware of when you're perplexed, and then following up on that perplexity. 

Repeat, repeat, repeat.

It's not so much that practice makes perfect; it just makes actions go faster.
Don't just write it out; draw it out.
"Often the best approach to solving problems and generating ideas involves a combination of words and pictures,
Learn the difficult stuff at the start of the day.

Use the 80/20 rule. 

you get 80% of your value out of 20% of work.

Secrets of Advertising

5 Tricks Advertisers Use 

To Make You Buy Their Products

These tricks work because they speak directly to our psychology.

1. PEOPLE ARE DRAWN TO THE RIGHT HAND
2. ADVERTISER OFTEN PUT PRODUCT IN ACTORS' RIGHT HANDS
3. RESEARCHER SHOW PEOPLE ARE DRAWN TO THIS BECAUSE THEY ARE RIGHT HANDED THEMSELVES
4. COLORS IN ADD ARE VERY IMPORTANT
5. THEY ARE USE TO CONVEY PARTICULAR EMOTIONS
1. BLUE - TRUST
2. RED - EXCITEMENT
3. GREEN - FRESH
6. PLACEMENT OF WORDS AND IMAGES MATTERS
7. THE EYE IS DRAWN TO AD WHEN IMAGES ARE ON THE LEFT AND THE TEXT IS ON THE RIGHT
8. THE EYE IS DRAWN TO THE IMAGES WITH ROUNDED CORNERS
9. THIS IS ESPECIALLY TRUE WITH PRODUCT DESIGN FOUND IN ADS
10. THIS INCLUDE FONTS WITH ROUNDED CORNERS
11. SHARP CORNERS LEAD PEOPLE TO THINK ABOUT SHARP THINGS IN REAL LIFE THAT CAUSE PAIN
12. FACES IN ADS OFTEN FEATURE LARGE PUPILS, DESIGNER ENLARGE THEM IN PRINT ADS

The Greatest Graduation Speech Ever Given Is This Bullet-Point List Of 12 Economic Concepts

The Greatest Graduation Speech Ever Given

 Is This Bullet-Point List Of 12 Economic Concepts

                                 Thomas J. Sargent

I thought the graduation speeches were long. I will economize on words.

Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.

1. Many things that are desirable are not feasible.

2. Individuals and communities face trade-offs.

3. Other people have more information about their abilities, their efforts, and their preferences than you do.

4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.

5. There are tradeoffs between equality and efficiency.

6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.

7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.

8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.

9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).

10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.

11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).

12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

Negative Working Capital

Definition - What does Negative Working Capital mean?

Negative working capital is the situation where a company's current liabilities exceed its current assets. This means that the liabilities of the company that need to paid within one year exceed the current assets 

Negative Working Capital

A buyer actually prefers to see a working capital ratio of 1.0 - 1.5x, which means there is at least one dollar of current assets for every dollar of current liabilities. This assures the buyer that the company can generate sufficient cash over the short run to cover  and supplier and payroll obligations. However, smart buyers will look for an even higher net working capital ratio . This carry means that there may be a much longer period to convert receivables to cash than it takes to pay accounts payable.

That being said, there are some businesses in which negative working capital is a positive. The famous case study is Dell Computer, which for years had negative working capital as a result of its business model that allowed it to collect cash up-front but pay suppliers later.

Such situations result from a competitive advantage are more the exception than the rule.

The bottom line: A negative working capital is a sign of managerial efficiency in a business with low inventory and accounts receivable (which means they operate on an almost strictly cash basis). In any other situation, it is a sign a company may be facing bankruptcy or serious financial trouble.

When Wal-Mart ordered the 500,000 copies of a DVD, they were supposed to pay Warner Brothers within 30 days. What if by the sixth or seventh day, Wal-Mart had already put the DVDs on the shelves of its stores across the country? By the twentieth day, they may have sold all of the DVDs. In the end, Wal-Mart received the DVDs, shipped them to its stores, and sold them to the customer (making a profit in the process), all before they had paid Warner Brothers! If Wal-Mart can continue to do this with all of its suppliers, it doesn't really need to have enough cash on hand to pay all of its accounts payable. As long as the transactions are timed right, they can pay each bill as it comes due, maximizing their efficiency.

Things to Remember

If the ratio is less than one then they have negative working capital. A high working capital ratio isn't always a good thing, it could indicate that they have too much inventory or they are not investing their excess cash.

Examples

1. McDonald's had a negative working capital of $698.5 million between 1999 and 2000). 
2. Amazon.com is another example.
3. Dell