Book value and market value

August 12, 2019

By   via investopedia.com   Article

How Are Book Value and Market Value Different?

Book Value The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities. As a result, the book value equals the difference between a company’s total assets and total liabilities. Book value is also recorded as shareholders’ equity. In other words, the book value is literally the value of the company according to its books (balance sheet) once all liabilities are subtracted from assets. …

Market Value The market value is the value of a company according to the financial markets. The market value of a company is calculated by multiplying the current stock price by the number of outstanding shares that are trading in the market. Market value is also known as market capitalization. …

How Book Value and Market Value Are Interpreted

When the market value of a company is less than its book value, it may mean that investors have lost confidence in the company. In other words, the market may not believe the company is worth the value on its books or that there are enough future earnings. Value investors might look for a company where the market value is less than its book value hoping that the market is wrong in its valuation. For example, during the Great Recession, Bank of America’s market value was below its book value. Now that the bank and the economy have recovered, the company’s market value is no longer trading at a discount to its book value.

When the market value is greater than the book value, the stock market is assigning a higher value to the company due to the earnings power of the company’s assets. Consistently profitable companies typically have market values greater than their book values because investors have confidence in the companies’ ability to generate revenue growth and ultimately earnings growth. …

The Bottom Line Book value and market value are two fundamentally different calculations that tell a story about a company’s overall financial strength. Comparing the book value to the market value of a company can also help investors determine whether a stock is overvalued or undervalued given its assets, liabilities and its ability to generate income. However, with any financial metric, it’s important to recognize the limitations of book value and market value and use a combination of financial metrics when analyzing a company.”


Sexual misconduct, fraud, bribery, insider trading

August 12, 2019

“39 percent of the 89 CEOs who departed in 2018 left for reasons related to unethical behavior stemming from allegations of sexual misconduct or ethical lapses connected to things like fraud, bribery and insider trading.”

Source

 


Drastically different results

August 12, 2019

By Steve Keating via stevekeating.me  Article

The Art of Leadership

“There is well documented science behind the management of things. You input a set of ‘ingredients,’ follow a known and specific plan and presto, you almost always get the output you were looking for.

It’s not that way with leadership. Managing is about things. Leadership is about people. When you manage a budget you input the numbers with a high degree of certainty that 2 plus 2 will equal 4. … When you lead people you can put 2 people in the same room, give them identical directions on performing the identical task and get 2 drastically different results.

A stoplight at an intersection demonstrates the difference between managing and leading. The red and green lights mean the same thing to everyone. You stop on red and go on green.

The yellow lights however can mean very different, even opposite things. To some people yellow lights mean slow down. To other people the yellow light means go real fast. But that depends too. If you’re not in a hurry it may mean slow down but if you are in a hurry it might mean go real fast.

The red and green lights are pretty straightforward, kind of like managing. The yellow lights have lots of variables and even those variables can change depending on the circumstances. That’s a lot like leading.

Authentic Leaders know that while people can have similarities no two people are identical. They develop their people by using those diverse skills, varied knowledge and different experiences to mold a productive team. They rally those individuals to mutually agreed upon goals and objectives.

Authentic Leaders encourage robust discussions to reach high-quality and correct decisions. While working as a team they establish both group and individual accountability. They learn from their successes and learn even more from their failures. Instead of assigning blame they look for solutions.

Developing people is the true art in leadership. Authentic Leaders invest a significant part of each day practicing that art. They know that their success is completely dependent on the success of their people. They understand that while quarterly profits and short-term metrics are important the development of their people is the only way to truly sustainable success.”


The deadly traps of managing

August 12, 2019

By Dan Rockwell via leadershipfreak.blog  Article

“76% of employees did not want their boss’s job. (HBR) Most American workers are not aiming for the corner office. Approximately one third (34 percent) of workers aspire to leadership positions, with only 7 percent aiming for senior or C-level management. (CareerBuilder)

Why are workers avoiding leadership? 52 percent are simply satisfied in their current roles. 34 percent don’t want to sacrifice work life balance. A Berrett Koehler study found only 43 percent are comfortable being managers. Only 32 percent saying they like being managers. (Managing for People who Hate Managing)

Why managing sucks:

… You’re caught in the middle between upper management’s goals and employee empowerment. You don’t have authority to make decisions and aren’t included in company goal setting. You were promoted and not trained. 61 percent of new managers DON’T receive management training. Only 34 percent report receiving any mentoring.  And only 31 percent report receiving any coaching. (Blanchard)

Finding enjoyment in managing:

#1. Stop working so hard. Let talented people do their jobs. Stop telling people how to do the work you assign. People resent your interference and enjoy your support. You might be able to do the job better than others. Keep your mouth shut. Let people do their work.

#2. Show up to coach, inspire, and encourage. Delegate authority and get out of the way. Show up to offer support, but don’t tweak everyone’s work.

  1. Show respect.
  2. Offer encouragement.
  3. Stay available.

#3. Schedule follow-up meetings. Ambiguity is stressful. Alleviate ambiguity by scheduling follow up meetings. “Let’s touch base next Tuesday at 3:00 to finalize things.” (Then stay out of people’s hair.)

#4. Get a mentor/coach. Don’t wait for permission, just do it.”


The biggest financial mistake millennials make

August 5, 2019

Via lifemoneystuff.com  Article

“In a world of uncertainty, one of the most important financial decisions you can make is to set aside extra cash for a rainy day. But a huge percentage of millennials don’t (or can’t) follow this advice.

The Motley Fool explains:

About 46% of millennials don’t have any money set aside in an emergency fund, according to a 2017 survey by GOBankingRates. This can pose a problem when an unexpected event like a home repair, a costly medical bill, or a sudden job loss puts an extra strain on your budget. Without any savings to cover these financial emergencies, you may have no choice but to take on debt or fall behind on your rent or mortgage payment and other bills, which can have a serious impact on your creditworthiness.

Most experts recommend keeping at least three to six months’ worth of expenses in a savings account to help cover unexpected expenses. Look at your monthly bills and calculate how much you would need to cover them. Then multiply that number by three (or six if you want to be extra safe) and create a weekly savings goal to help you reach it.

Living without rainy day reserves is precarious, and it can add anxiety to your life. We recommend saving at least a month’s worth of your salary–even if you have to spend less to get there.”


Who you work with

August 5, 2019

By Dan Rockwell via leadershipfreak.blog  Article

Two Key Factors For Happiness At Work

“If you don’t like the people around you, you hate showing up at work.

Jamie Naughton, Chief of Staff for Zappos, told me she used to think, ‘Happiness at work was more in your job duties.’ Jamie said, ‘We wrongly believe a new job, promotion, or getting a new boss will make us happy.’

Who:

Who you work with has greater impact on job happiness than what you do.

Beware unhappy people. Unhappy people hate the happiness of others. Unhappy people aren’t happy until everyone around them shares their unhappiness. Chronically unhappy people are shouting, ‘I’M NOT GETTING WHAT I WANT.’

Tip: Happiness is found in meaningful service. Selfish people end up unhappy.

Connection and support:

‘[Happiness at work is about a number of things] and one of them is connectedness.’ Jamie Naughton

‘Having best friends at work is really important. And having an environment where you feel like people support you and they’re more like family will make you happier.’

Jamie’s use of the term ‘support’ reminded me of a conversation I had with Amy Lyman, Cofounder of Great Place to Work®.  I asked Amy if great companies put employees first or customers first? She said that it doesn’t matter as long as employees feel supported.

Connecting:

Jamie explained that connection is about knowing people beyond their jobs.

  1. Know your team outside of the work they do.
  2. Treat co-workers like family.
  3. What’s important to them has to be important to you.”

Do you know the people you lead?

August 5, 2019

By Steve Keating via stevekeating.me  Article

“One of the more critical responsibilities of leadership is making sure you have the right people in the right positions. Leaders who don’t understand this fail, and they take their people right into the pit of failure with them.

You can have one of the most talented people in the world on your team but if you don’t put them in a position to succeed then their chance at success goes way way down.

Albert Einstein said that ‘Everybody is a genius. But if you judge a fish by it’s ability to climb a tree, it will spend it’s whole life believing that it is stupid.’ So it is with people too!

You may not see all of your people as geniuses but each of them indeed has their own set of strengths and as a leader it is incumbent upon you to make certain that those strengths are put to good use. Doing so is good for both your organization AND your people.

One of the challenges many leaders face is that they simply do not truly know their people. They don’t know their motivations, they don’t know their goals (or if they even have any) and they don’t know what challenges their people are facing in their own lives. Too many leaders are almost completely unaware of the totality of their people’s strengths and that results in people locked into jobs that are often far below their abilities.

No one wins when that happens. Underutilized people become unmotivated people in the blink of an eye. If you don’t know what you have in your people you’ll likely never get it out of them.

If you’re a leader and you’re not conducting regular ‘strength inventories’ with your people then you run the risk of demotivating the very people you need to be as engaged as possible. Conducting these types of inventories requires you to interact with your people. It makes you get out from behind that Great Wall known as a desk and meet your people on their terms. Indeed, the huge side benefit of conducting ‘strength inventories’ is you’re also taking the pulse of your organization. …

Not providing your people the opportunity to fully utilize their skills is one of the fastest ways to lose them. If you’re lucky once you lose them they will move on to greener pastures, if you’re not lucky then you’ll lose them and they will stay in your organization.”