Opportunities abound in Region 1 - its no longer at Region 1V

Looking forward to the future of business

We recently took a trip to a province in Region 1.  Vote rich.

The TIPLEX ends at the this province.

Some opportunties noted were (in this particular province:

1.  An economic zone in a City with

2.  A diviersion road being built

     (At diversion road in Urdaneta, many new busiensses have been built.

3.  Lots available for solar farm near the grid, at an unbelievable price;

4.  Solar lamps, pumps, at prices that are 10 to 15% lower than exhibits, and previous offer.

     P21K ang 80 watts with 6 meters pole (Sa kanila 6 meters pole +  180 watts less than P20K)

5.  Memorial park projects, partially built that are for management and or jv.

     Another one in resort town.  With permits all ready.

I concluded that the opportunities are no longer in NCR or MM.  These are growth areas  Couple this with publicity for this province due to Pogo hearings,   Closeness to China too.

We should not just stay in our offices houses waiting for opportunities to come

Higher losses for a local multinational food company

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The head of this company  Joselito Campos.was a former college classmate. He is the son of  Unilab, the biggest local drug company which is multinational.   It is unfortunate that the losses of his company doubled for 2024.  In PHP th8s runs into billions.  While our modest company are not that much, being local and not $ denominated, we are happy that we do not have that much losses.

The losses were attributed to poor performance in US market

It is imply no guts no glory.   Growing big entails losses.

I had advised a local food processing company vs  putting up a plant in USA because of tight competition, (and lack of knowledge and experience in US market) and high labor cost.    With a socialist governor -  Gavin Newsome, the advice could not have been much better.

Is it still OK to do business in USA?

Del Monte losses doubles

Opportunity everywhere

Looking forward to the future of business

This post lost 3 deals because we cant get TD titled.   We spent 6 months on these deals and they were wasted.   No time to despair.

Today as I went on biking route somebody, a kapadyak on MC chased me and we had brief conversation.   He asked if we can take on 4 hectares untitled property.   Its in a different town.  So no problem.

Shift of business models from selling hardware, to making platforms for services

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Why is apple making more PHP than Samsung?   Why is Samsung floundering despite making being the leader in CP manufacture.

Well Apple has monetized its Apple iphone to the platform for its services.   For its renewal of ios, the Apple TV, the sale of music etc.

Whereas, Apple is just focused on Samsung phone sales

We see ourselves in the future selling more services where margins are higher and repeat sales are possible rather than sale of hard assets

If people so delegated, are not moving, or not producing results, even if you are semi retired, you have to take action

Looking forward to the future of business

Yesterday, this post went one of its biggest business units.  It has a large inventory with just one personnel. I went to the provincial unit and invited the former top notcher in marketing for  possible business deal, ie. marketing its huge inventory with special reward offering.  We had lunch and discussed possible business deal.   

We will be selling three product groups/category.   This post was thinking of  3,200 units in one year.   

I was fortunate that her business now, marketing is not making that much now

THATS FROM ZERO TO SOMETHING.     Determination alone is omnipotent.     God bless

Why are 99cents stores closing? Walgreen, Walmart, and 711?

Looking forward to the future of business

Whats causing this?

1.  Post pandemic blues;

2.  Decreased purchasing power of consumers due to inflation?

3.  High shoplifting losses vs very thin margins;

4.  What Amazon has wrought?

5.  Higher minimum wages legislation

We used to own a retail establishment.  We could not stand competition with a Sy owned retail store.

 There are many players now:   operating in high rent environment, tight competition, and reduced purchasing power too of consumers.

Are there other things that owners, business managers can do to avert closure....

Are the politicians who increased the cost responsible?  What is better -  higher wages or no wages?

Is this limited to California only or Dems run state

Who are the players now?

1.  Family mart,

2.  Uncle John

3.  Dali

4.  Save more

5.  .Alfa Mart

6.  7 -11

  

More enlightenment (or confusion) on Yen carry trade.

Looking forward to the future of business

This was made several days ago and correctly predicted the raising of interest rates and Yen upsurge in value.  May be triggering the  sell off.

Tutorial on Yen Carry Trade. Were you enticed to invest in this - easy money

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Easy money;  easy loss

Did the carry trade trigger the market sell off? Is Japan taking down the world finances

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Is this worse than WWII waged by Japan?

There is huge carry trade happening about as some traders estimate to be between $10 to $15 trillion.   Carry trade is just an arbitrage game.   You get low interest rate from Japan say at 0.80% and invest this in US Treasuries at 3.5% and profit from the interest differential.  Or if the yen sinks further, you can earn on the currency too.  However, things can go south as it is now:   Bank of Japan  has raised interest rates, and the Yen price is on the upsurge.   

Thus funds hedge managers are unloading their carry trades because they will be losing with rising Yen exchange rate, and higher interest rates in Japan. 

And probably this is the cause of the sell off -   investors and fund managers getting rid of carry trade portfolio which are now in losing/negative terriroty

That is why:    this post does not advocate paper shuffling business, making money out of other people miseries.   Do business that really generate values for customers for the world like construction, manufacturing, agriculture, construction.  Arbitrage is a zero sum game:  there are losers and winners, gain gained at the expense/hurt of others.

Is the world on the road to recession (perdition?)

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Global sell off intensifies

The US, Germany, Korean, Japan stock markets are on decline.   Losing by as much as double digit %

Everybody is spooked by the following events:    Possible escalation of Iran Isreal conflict, high unemployment rate in US, delayed rate reduction by US Fed.     And may be just may be to the presence of carry trade in Japan.

Nikkei fell 12% reminding us of the 2018 crash.  Tech stocks:   like Nvidia and Apple are mostly affected

Amazon lost double digit causing wealth of Jeff Bezos, one of top 5 richest men in the world to plummet big time

Pundits are wondering if Fed is interested in:   fighting inflation or preventing recession.  Well they raised rates to fight inflation

This is what doomsayers have been saying:  Schiff, Kiyosaki, Buffet are saying long long time ago.  And many did not pay heed.  At times the stock market went into the bull territory.   

This post being in the MSME territory would like to focus on micro market.  But we can not deny that Macro market, like the stock market health can affect micro market.   (Well the stock market reacts to economic fundamentals) and a plummeting stock market warns us to be prepared.

87% tax to businesses in California? That is why many businesses are on exodus to other states!

Looking forward to the future of business

87% tax for businesses?  This could destroy businesses in the fabulous state of California.  No kind of business will survive under that environment.  Couple that with high crime rate, high minimum wage, homelessness.  It is certainly not a good place do business anymore.   Top names like Google, Tesla, McDo is also exiting California

All of a sudden our business environment looked so friendly and enticing.   This is even more attractive to export processing zones and free port (as in Subic)   Its time to send trade missions to California to invite them to do business here.

One time I was invited to do a business plan for a meat plant in California which the local family bought for a hefty sum  I advised them vs the idea.  Instead to just export to Asian and ME countries which could achieve the same volume

What will happen to our kababayan in California?   Will California still be the state that has GDP second only to the USA? 

Why has California transformed to be a dismal place for business?  Can this still be reversed?

Buffett happens to be awash in cash when market is about to crash; he goes bargain hunting when stocks fall in value

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We can only guess that the market is about to crash, or stock prices will be discounted.   He did this before and is now selling off stocks that had increased in value.  That is how Berkshire makes  profits from market crash.    (A bear player?  and sells off in Bull market)

Brilliant eh....

Buffett indicator:       Stock Market Cap   Indicated by Wilshire 5000/GDP

The Buffet strategy does not seem to be rocket science.   Just stay liquid when you see the market overhyped and the bubble is ready to burst.   Then go bargain hunting (just like in 2008 for the BofA stocks which they are unloading now)

 Compare this with historical average.  Higher or lower?   (Lower -  buy)  Higher, expect the difference to be the amount of crash.    So when that happens dont buy!!!

It should give the % of overvalue of stock market cap over GDP and would indicate the % of crash

Why is Warren Buffet (Berkshire Hathaway) offloading stocks? Are there corrections in the stock market we do not know? Should you offload stocks too?

Looking forward to the future of business

Warrent Buffet has offloaded billions worth of stocks:   BofA and Apple.  Huge chunks of his holding.  He prefers Treasuries which are sure bet and liquid?

Is Buffet developments that we dont see.?  Are there new things he wants to be positioned in?  Are we on the verge of a crash, or recession.  We do not know.   Only the sage of Omaha knows.   I could only speculate .

But whatever it is lets do our own critical analysis and pay attention to many experts who are predicting a crash.    P. S.   Today August 7, 2024, the crash is unfolding.  Markets world wide are on great sell off.  

Apple does not have much of an innovation;

The financial environment is not friendly to banks.   Or that BH is harvesting BofA stocks for the gains when they bought it cheap 

Let us be prepared.      

PBBM's marching order to the new Acting DTI Secretary Roque - uplift MSMEs

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This post is glad that the DTI will concentrate on building the business community from the grassroots.  Taking care of the useful many.

In the past this department has focused on the big industries -  getting FDI.   

DTI has shifted gears to the small business that matter.  

More power Sec. Roque

Marching orders to Acting DTI secretary - uplift MSMEs

New DTI secretary, an entrepreneur, businesswoman, fmr USEC for MSME replaces Alfredo Pascual who resigned

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Former Usec Maria Cristin  Aldeguer Roque was sworn in today as replacement for  DTI secretary Pascual who resigned.   She was the founder of Kamiseta which she founded after college.

We are thankful that a person with entrepreneurial and business experience will be in charge of business and trade in the country  -  not career technocrats, politician.  This is welcome addition to our country's drive towards growth and progress

Ending an adventure on untitled property project, accepting risks and reality

Looking forward to the future of business

This post dreamed of things that were not and asked why.  So since there were plenty of untitled properties begging for development, this post answered that call.

1.  This post tried to negotiate for a 3.5 hectare property near a convention center.  The property is owned by the son of the late friend developer,  To show our interest we lent PHP to the owner.  However, it turned out it was a no go since his brother preferred to sell.  We had the mayor and MPDC pre approve this but now we are left hanging.   The agents assured that we can have this titled.   No title no LTS from DHSUD.  Its going to be an illegal project without LTS

2.  Substitute projects also untitled were forwarded by the agents   One was 2.9 hectares and located at a trail road, which was steep, and the other was 2.1 located along the newly built highway.   The sites could serve roughly 80,000 population and had great overlooking views

      1.  The 2.1 hectare had two cases one in USA, the other here in RTC Antipolo.  The owner is a US

           citizen (a  red flag)  He signified his intention to go on Joint Project.  However the papers were                not delivered early to to me as promised

     2.  The 2.9 project.  It was represented that the decision was to be made by former suppliers.  However it turned out 6000 sm was owned by them.  The 2.2 hectare was owned by step brother who lives in neighboring province He had a stage way of doing business ie for us to make an offer though  did not have the documents

3  The titling and the Guido case:

     We were supposed to meet the persons who could answer the questions on Guido case titling via

free patent:   RA 10023 (Public Lands Act)   RA 11322,  RA 11571.   

      For Guido case the lady Guido was cutting me off, despite the fact that we were there to ask questions.   She was emphatic that they owned the large estate, and under the SC ruling she could ask the LRA and DENR to withdraw titles that have been previously issued.  

     The DENR that we were supposed to meet was not there.  There is no more meeting

     I just asked for a sample Free Patent that was issued brokered by the facilitator that showed:

Guido had issued the applicant with the a waiver, the OCT issued by DENR. This would settle the doubts about the additional expense (which is substantial) to erase all the doubts about the titling  He hesitated and said later and neutralized the request, by saying what use will it be anyway if we dont believe.   He also decried that assigning another party to be convinced to make the final say which is an illogical way of parrying the points being raised.

4.  The actions character of the facilitator

     Red flags and alarm bells were ringing:   The facilitator could not be trusted:

    1.  He was late for appointment

    2.  He misrepresented often:

         1   In the 2.9 property, he mentioned that we were meeting on ministerial way as the elders have

         decided

         2.  That in the case of DENR, we would meet them yesterday, there was none

         3.  That we could ask questions but this post was cut off by the Dona

         4.  He would send docs by gmail but did not

    3.  He often would say we should decide soon, or how should we answer the other party knowing 

          fully well what the problems well

    4.  He had the habit of putting this post on edge which borders on attack on my personality:

        1.  Why did I pass on the decision making to someone else?

        2.   Why am I wasting his time (he made the business proposal)

        3.   Why dont you consult the lawyer if you do not believe.   

Well I was hopeful that we can give him a chance.  I was willing to help him in other business deal.  Disregarding that he spent some time behind bars for violating RPC 315!

    5.  He asks advances and money up front.  Even for a meeting -  A VERY VERY RED FLAG

    6.  He often plays this post against other business acquaintances, and to disregard on going transactions:

        1.  He was approached by Brilliance (a possible ML ) who would eat him up

        2.  A very wealthy realtor who is in to very large real estate development who would finance

             his project

        3.  He has a P500 million deal for the payment of the road way for the Manila East road for the

             Guidos.  ENOUGH playing this post against others.  Not in a mood for contest of egos and

              wealth

I am glad its over.  This business episode has caused a lot of thinking and worries on my part.   

    

Downside of franchise - owning a franchise can go south!

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Buying a franchise does not guarantee success.  The franchisor  exercise a great deal of control over the franchise.   You are obliged to follow their process, their menu.  

There is no substitute for doing the business plan yourself.

Business is hard work, hard work,  Hard work.   

Success from having a franchise is an illusion.  

All tasks all deals must have closure if possible, face to face

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A deal we had last May for a possible joint project lay in still waters because of displeasure from our side on the other side nasty remarks at the GC.   And informally some assumed the deal was off.

However I elected to travel to the location of the other side the principal, for formal closure.  We started this face to face, we will end this face to face.  So this post took a 7 hour journey to speak with courage to the other party that the project with us is over. 

Becoming more risk averse

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The site looks very nice.  It is accessible via a wide avenue and only 2.5 km to the main highway.   The site is fantastic - it is overlooking.  It is untitled though.

And when I asked the persons who control the purse string, they were leaning heavily on the risk:  What if  the supposed Estate owners run after the project and sue us?   Thats the big risk.  On Wednesday, we evaluate the risks some more.  If the fear is justified, what will happen?

Excellent management by the pilot of an aircraft to ensure comfort and safety of passenger

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This post loves to read stories about aviation and air tragedies - air crash investigation.   Most of the tragedies would have been avoided if the pilot practiced good communications with the first officer, ATC, observed company and good flying practices, followed the ATC, had good situational awareness:  fuel, condition of flaps, landing gear, of propellers pitch.

In one story, the plane crashed, a propeller driven airplane because the pilot mistakenly pulled the feather lever, when it was about to land, and had no power upon landing and crashed.  

One crashed because the captain disobeyed  the order for it to reduce altitude by observing the holding pattern.  Instead he disregarded the holding and went straight and was thus landing too steep an angle and too steep.   The pilot and the first officer were not communicating (which was the norm - always verifying)  The pilot had this habit of disregarding procedure and should not have been allowed to fly.  Thus insubordination is a dismissible offense

Be aware of supervisors and staff who do not observe procedures, and/or who fail to communicate

Be at the gemba, do it now!

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Despite being in dire situation now because of prolonged recession, Japan during its heyday, had some of excellent management ideas.  One of them is being at the GEMBA - at the workplace - at the shopfloor or selling area.  It is another term for MBWA -  Management by Walking Around   Some FMCG manufacturing companies hold their board meetings at the end of a manufacturing line where they examine the product do the taste test.  Probably, they do too at  supermarket shelves at point of sales.

This was a striking contrast to the lady head of  security service of govt office in US who was grilled by party mates of injured candidate in an assassination attempt.  She was  ridiculed  and bullied for:

1.  refusing to answer, 2.  that somehow she doesnt know yet,    3.  that the situation was still being investigated (after nine days)   4.  inconsistent with her statement before hand that buck stops at her office.

A pastor in same state where the assassination attempt took place went to the Gemba - at Butler to see for himself the rooftop where the gunman went up.  He saw:   the roof slope was not that steep -  it rose only probably a foot from the edge.  The distance of the roof was that close in actuality.  Probably much closer than 140 yards and potshots can be taken.  LACK OF SITUATIONAL AWARENESS for security personnel and officer the head who has the ultimate responsibility.  

Thus its accountability and responsibility for managerial and supervisory position that actually count, at the end  of the day.  

Be at the GEMBA.  Be aware.  

The one page memo

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The famous one page memo at P  & G

I used to have classmates and friends who worked before with P & G who were trained hard on these one page memo.   The classmate happened to be brand assistants, the core of brilliant hard working marketers who plan the launch, revival, or turn around of brands.  They are also called category assistants/officers/managers now.  The discipline is still the same  the channels have changed into variouus platforms.

In that one page, the assistant will summarize the situation - market, competition,  the brand SW, 

and recommend action to the President regarding the brand with summary of PNL, new sales, new %, and budget to carry out the task.   How could these fit into one page.  

That is the way it should be.  Business deals are closed on napkin or paper placemats of resto or fast food, and they are closed on a handshake.

If it is too long and complicated, it cant be done.    You should be able to explain what to do to your kid. If they cant get it, it cant be done.   Simplify, simplify.  That is the task of a manager, knowledge worker.

This post believe in one page memos

This post remembers an ex P n G, the last time I heard he is the head of  a household cleaning products, who riled vs the one page memo and he was on the nth draft (he graduated with Latin honors and cant be poor in his grammar) and was ready to resign.   It was lucky that his nth draft got accepted.   Perhaps the rewrites gave him a diP n G one page memoscipline to think clearly.   

I remember doing financial analysis on several pages of worksheet (and this was before excel) just to get a one page finance recommendation., deep into the night.   This enabled me to cut through financial mumbo jumbo.  

Did Taiwan take away US chip business? TSMC to invest $40 billion in Arizona USA plant

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Fmr President Donald Trump mistakenly accused Taiwan of taking away chip business from US.  While partially correct -  TSMC founder was a former executive of Texas Instrument who went to Taiwan to put up chip business at Taiwan's behest, its incorrect.  TSMC also plans to put up a plant in Arizona USA.  Trumps comment, including the threat that Taiwan should share in its defense cost with US send tremors to the stock market. TSMC continues to make record profits.

Do you agree with Donald Trump's comments.?

Philippines - a great place to do business

Looking forward to the future of business

Let us do business in the Philippines.  A great place to do business:

1.  Strategically located in South East Asia along sea routes.

2.  Excellent port facilities

3   Large growing population (Japan, Korea have aging population)  - easy sourcing of HR

4.  Meaning it has large domestic place

5.  Nice beaches and resorts

6.  Nice resorts and casino hotels

7.  Robust economic growth among Asean countries. (and even vs China)

8.  Plenty of arable land (80% still unutilized vs say Singapore only 1% available agrii land)

No longer sick man of Asia.  Just a growing economy.  Not a tiger or leopard

Steel Asia to invest P80 billion in 5 steel mills in the Philippines

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Steel Asia which is celebrating its 50 years announced that it will invest P80 billion in five steel mills:

     two in Davao

     one in Lemery Batangas

     one in Concepcion Tarlac

     one in Candelaria  Quezon (saw their vehicles in Candelaria when I went there)   

This has huge impact on Philippine economy about jobs, steel supply chain.  It will save PHP and dollars in importation of steel for construction, manufacturing, machinery.  This is long in coming and finally after IISMI debacle we will finally be self sufficient in Steel

Thank you, Steel Asia,  Kudos for taking this bold move/investment   

Are casinos good/moral businesses? All Philippine tycoons have one.

Looking forward to the future of business

Early on, when a fellow professor consulted us on a board game, I objected to a lotto being a part of entrepreneur journey.   Being entrepreneur must not be at probability level, or a business should create value to customer or society

Gambling or lottery is a dignified Ponzi scam,  You get rich at the expense of others + some profit to the operator.  And just to think of social costs.   Suicides, gambling addiction.   Poverty to the family of the gambler.   Loss of productive time   Plus the attendant other vices:   alcoholism, prostitution, mugging, robbery and the like

Gambling cities in US become static after sometime and not enough progress is achieved.  Take Vegas or Atlantic city.  They do not have the dynamism and grown of say Silicon Valley, Texas, Boston, San Francisco .  

In the Philippines, casino resorts rake in billions for Pagcor, the government, and the owners.  Almost every tycoons:   Razon, SM, Robinson has one.    Most are either at MoA or at Clark.   Casinos haven

If you have billions, would you invest in casinos.  ?

Can the Phil govt pay back its P15 trillion debt?

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The video said there is nothing to worry about.  Its a lot of mumbo jumbo.  

The total debt is divided into:   P10 trillion local debt and P5 trillion foreign debt.  This is riskier.

because of limited FX and very low interest rate at 0.01 %.    And is therefore affordable

And also look at FX reserve of Philippines.  which stands at  $100 billion or P5.8 trillion.   

But its worrisome too.   At say  3% for foreign, and 6.5% domestic debt, debt service would be 

         P5 trillion   x 3%     =  P150 billion

         P10 trillion x 6.5%  =  P650 billion

         Total                              800 billion

How much of the BIR collection      How much did BIR  collect in 2023 - P2.5 trillion

Debt service would roughly be 30% of local revenues.    That is a lot.   

And our govt managers are borrowing like crazy to finance welfare and other non productive enterprises.   We should be aware