Obvious prospects for physical growth in a business do not translate into obvious profits for investors.–Ben Graham
Games Companies Play: A Structured Approach to Competitive Strategy, Part II Entry/Preemption Games.
This chapter may help you with your case study in Fox Broadcasting (Previous post found here:http://wp.me/p1PgpH-AK).
Question 1: What are the four characteristics of entry/preemption or “quantity” competitive situations that differ from pricing issues?
Question 2: What can a potential entrant do to discourage incumbents from resisting its entrance?
Question 3: You are faced with analyzing a competitive industry, and you want to understand what the players might do. Describe what techniques you might use to accomplish this analysis.
Ben Bernanke gives his point of view: http://www.theatlantic.com/magazine/archive/2012/04/the-villain/8901/
Prize awarded to anyone who can explain the following. If central planning of an economy has been shown repeatedly to fail–witness USSR, Communist China, Cuba, North Korea, Welfare Europe–how can the Federal Reserve succeed in manipulating interest rates for a multi-trillion dollar economy?
How is Ben doing? Purchasing Power Calculator: http://www.bls.gov/data/inflation_calculator.htm
Corporate compensation or Failure is the New Success:http://prudent-speculation.blogspot.com/2012/03/gimme-failure-baby.html Why is this not surprising? Why do corporate CEOs receive such distorted compensation. Hint: follow the money!
The government builds a listening center. Comforting. http://www.wired.com/threatlevel/2012/03/ff_nsadatacenter/all/1
Next week while you do your case studies, we will discuss how to read a Value-Line Tear Sheet. Do you know that almost any major library will have Value-Line available on-line for your use from home? It doesn’t get better than that!
Have a good weekend.