Archive for September, 2006

Are you boycotting Bank of America?

Current events, Personal finance

It seems there’s a grassroots movement going on this week to boycott Bank of America. So far, according to Clark Howard’s website, some $18M worth of accounts there have been withdrawn. , for those who don’t know, is a consumer advocate, and has taken up the call asking BofA customers to back a fellow customer named Matthew Shinnick of San Francisco who earlier this week had a nightmare of an experience at Bank of America with no recourse of action.

Shinnick was arrested, put in jail, and paid $14K out-of-pocket due to the incident because BofA called the police when he tried to verify and cash a check he’d received for $2,000 for a pair of bikes he’d listed on Craigslist. It turned out that the account at BofA was real, but the check was fake. Before signing the check, Shinnick had asked BofA to verify that the funds were available, which they did, but as soon as he signed the back of the check, he unwittingly become not a victim but the second party to the crime. Shinnick has been trying to get BofA to cover the $14K in expenses he paid, but a 2004 Supreme Court case shields institutions from liability when reporting a suspected crime, and legally, BofA has done no wrong.

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Best companies for working moms


Working Mother magazine has just come out with the . They evaluated companies based on “workforce profile, compensation, child care, flexibility, time off and leaves, family-friendly programs and company culture.” Here are the top 10:

    1. Abbott Laboratories
    2. Bon Secours Richmond Health System in Virginia
    3. Ernst & Young LLP
    4. HSBC-North America
    5. IBM Corp.
    6. J. P. Morgan Chase
    7. Patagonia Inc.
    8. PricewaterhouseCoopers LLP
    9. Principal Financial Group
    10. S.C. Johnson & Son Inc.

Some highlights from the companies who made the list: plenty of flex-time offered and used; maternity leaves of 6 months or more; on-site childcare centers; compressed schedules allowed, including some companies that allow 20 hours per week of work to qualify for benefits; and many others. If anyone who works at these companies (or others listed) cares to comment on real examples of how these policies work, please do!

Would you encourage your kids to follow your career footsteps?


According to a recent WSJ article, .

This rings true for me: my father, a pathologist, made it abundantly clear to both my brother and me that he didn’t think being a doctor was the wisest career to choose, thanks to escalating insurance costs and a demanding lifestyle. Instead, he always thought the business world was the one to be in. Of course, the grass always looks greener, perhaps….

For my part, I’d encourage my kids to be more entrepreneurial, though that doesn’t mean that’s the path I want them to take. I simply wished I had been exposed to and developed a savvy, street-smart sense of business a little earlier in life. I’ve also not been afraid to try different roles, or take positions in smaller companies and startups (some worked, some didn’t), and I’d probably encourage my children to do the same.

What about you? Would you encourage or discourage your child to go into your profession?

Actively-managed vs. passive international stock funds

Mutual funds

Each week’s issue of Barron’s usually includes an interview with a fund manager or expert toward the end of the issue. Last week’s issue (dated September 18, 2006) featured an interview with Rudolph-Riad Younes (subscription required), co-manager of the Julius Baer International Equity Fund (symbol: BJBIX for Class A shares).

I’ve been interested in a while now in putting more money in investments outside the US market, so I read the article with a great deal of interest. Mr. Younes doesn’t seem to suffer from the rah-rah-there’s-money-to-be-made-here-there-everywhere kind of attitude that you sometimes find in interviews with fund managers.

His point of view appears grounded and he states some commonly held beliefs about the state of the current US economy, including that China and Asia are allowing the rest of the world “very low credit and very low interest rates”, that inflation should include housing and energy, that wage inflation isn’t here because people are “[using] their houses as ATMs”. All pretty standard stuff, but surprisingly not comments you hear nearly as often on typical talk US talk shows like CNN and CNBC.

His fund has performed well, and so I wanted to find out which stocks he recommended. They are the following:

Company Ticker Recent Price
Richemont CFR.Zurich Chf59.9
State Bank of India SBIN.Mumbai Inr976.5
HK Ruokatalo HKRAV.Helsinki Euro 10.44
Commerzbank CBK.Frankfurt Euro 27.23
Impact IMP.Bucharest Rol0.47

Hmm. Can you guess what my reaction was?

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A rough financial analysis of Zecco

Blogging, Business & entrepreneurship, Corporate finance

Zecco has gotten a lot of press lately, both good and bad. If you haven’t yet heard of it, it’s a site that was launched in July and currently in beta whose business model aims to “revolutionize” the financial services arena by offering free trades and offering previously unavailable investing information and opinion all in one place, a la social networking.

Much has been written about Zecco already. Most of the positive news has been related to its PR and marketing department, while the online community has mostly voiced its doubts (see Techcrunch’s thoughts here or another blogger’s experience with them). But no harm, no foul. Every new business idea is fraught with naysayers and critics, and who knows? Maybe Zecco will succeed.

“Free” business models with expenses paid for by advertising revenue is no new concept, even in bricks-and-mortar businesses. Ryan Air is considering offering free flights to over half its passengers using this model by the end of the decade. There’s even a “restaurant” in Atlanta offering free food and drink (well, bread, butter, and sweet tea) called the Butter Trough.

What I haven’t seen discussed is how their business model will work. Assuming that they’ll be paying for the free trades purely through advertising revenue, I wanted to do some rough calculations and see what sorts of numbers came up. Obviously, I’m working with limited information, but here goes:

Zecco claims it will split revenues 50/50 with bloggers. Let’s assume they’ll be approved by and use Google Adsense, a staple advertising partner among bloggers. How much revenue will that bring in?

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