Monthly Archives: April 2017

New Alibaba Program to Facilitate US Small Business Sales in China

Reach back in memory to January and the well-publicized meeting between newly inaugurated US President Donald Trump and Executive Chairman Jack Ma of Chinese mega-company Alibaba. At that meeting Ma made a pledge to launch an online sales platform which would give at least 1 million small US businesses a chance to market their wares to the seemingly endless Chinese marketplace.

This week Ma will make another announcement promising to make good on that promise with a first giant step: teaching US businesses how to sell to Alibaba’s 443 million Chinese customers. The education will take place at a conference in Detroit scheduled for June 20-21, 2017.

The world’s two largest markets for small businesses are in China and the USA, so ““connecting them seems like a good idea – good for the United States and good for China,” said Michael Evans, Alibaba president.

Today there are only 7,000, mostly large, US businesses on Alibaba, the world’s largest on-line retailer, which is orders of magnitude larger than Amazon. Alibaba hopes to get that number up to 1 million within the coming five years, most of them small businesses. Trump stated back in January that this would create about 1 million new jobs in the USA.

Ma stated in an open letter to US farmers, entrepreneurs and businesses, that Alibaba’s goal is to make it simple for American small business owners to “take advantage of the China opportunity.”

Using Frequent Flyer Miles is Not Always the Best Option

According to a study conducted by personal finance site NerdWallet, it sometimes makes more sense to hold onto your frequent flyer points and use cash to pay for your plane ticket. The new summer travel study showed that in a few specific circumstances, using reward points is a financial mistake.

NerdWallet examined 20 of the country’s most popular flights, including domestic and international, on four US airlines: Southwest, Delta, American and United. On those routes they then looked at the fares for 320 different individual trips, in order to get a broad overview of domestic, international, peak season, off-season, economy, business and first class ticket costs.

What they found is that on short flights in business class, point values were not high enough to justify their use. They concluded that travelers should just pay in cash for their tickets.

Here’s the reason why. Obviously, the value of each point varies, depending on the cost of the flight and the number of points you need to purchase a ticket. For instance, if a flight from New York to Los Angeles requires 50,000 points, the value of each point changes with the cost of the flight. A $1000 flight is a much better deal than if the flight only cost $300.

The Points Guy is a site that gives advice on using points for plane tickets, hotels and other types of loyalty programs. The site is extremely helpful to consumers since it posts up-to-date valuations each month for how much airline points are worth at that time.

NerdWallet found that for business and first-class flights less than 1,000 miles, the value of each point was only 0.72 cents. Compare that with an average of 1.13 cents per mile on flights longer than 1,000 miles. Paying for the shorter flights makes sense since you can save your miles for those longer flights next time.

Three Funds Flying with Its Investors

There are two basic models for fund managers managing other people’s money. Managers can take their client’s money, and work hard to give them the best results based on what the manager knows are the client’s goals. Some investors might want quick returns on liquid assets. Others might prefer long term returns on less accessible assets. But whichever it might be, the manager is doing his best for the client without any personal stake in the outcome other than serving his client to the best of his ability.

There is another model, however, in which the manager has staked his own personal assets on his bets, right alongside those of his clients. It is understandable why investors feel more confident in their managers when they know that his decisions will affect not only his clients’ finances, but his own personal stake.

One case resembles a pilot flying the plane you are on. He is along for the ride, and his life is at much at stake as yours. Would you feel as confident if the pilot were on the ground, flying the plane  remotely, while you were 30,000 feet above him in the sky, and nothing between you and disaster but the pilot’s good will and expertise?

There are several pilots who have been flying with their passengers on the journey to greater wealth, who have been quite successful in recent days. Here is a look at who they are, and what they’ve been up to.

Tetragon Financial Group– With managers Reade Griffith, Paddy Dear and an experienced management team, the Tetragon Financial Group has £173.62 million ($217.79 million) under management, some of it their own money. Tetragon was launched in April 2007, which means it is approaching its tenth anniversary with some excellent results. Its overall three-year return is 12.52% and the five-year return is 18.14%.  That is good news for pilots and passengers.

Riverstone Energy– Run by a professional group of managers, Riverstone manages £72.19 million ($91.45 million), including a substantial fraction from management’s own pockets. The fund was established by Riverstone Holdings in 2013, and its investment manager is Riverstone International Limited. It was the subject of a £760 million ($953.34 million) IPO in October 2013 and is listed on the London Stock Exchange, and is part of the FTSE 250 Index. Its three-year return is 11.44%.

Scottish Mortgage– Another publicly traded fund, this is an investment trust which invests globally in strong businesses with better-than-average returns. It is managed by Edinburgh-based investment management partnership Baillie Gifford & Co. It has an AUM of £54.05 million ($67.8 million) and is part of the FTSE 100. Its performance over the past three years is 75.34% and over five years 160.57%. The Scottish Mortgage and Trust Company Limited was launched over 100 years ago, in 1913.