BroadPeak Executive Forum

SEC Removes Terrorism Tool amid Backlash

Chairman Christopher Cox takes down the list but doesn't rule out releasing another version.

Alan Rappeport, CFO.com

July 24, 2007

The Securities and Exchange Commission removed the controversial terrorism tool from its website on Friday evening, nearly a month after it launched.

The tool drew ire from companies, business lobby groups, and the House Committee on Financial Services, which argued that it had unfairly "blacklisted" companies for having exposure to five countries deemed to be state sponsors of terrorism. Critics said that some of the relationships were negligible or outdated.

The tool's detractors also said the tool was subject to misinterpretations because it relied solely on simple search terms and companies' annual reports. For instance, if a company said in its report that it had previously "divested" from one of the countries, it would still have appeared on the SEC's list.

In a statement released on Friday, SEC Chairman Christopher Cox said the SEC has temporarily suspending the tool while it undergoes reconstruction. However, any reincarnation of the tool could be vastly different, if it happens at all. "Our staff is considering whether the use of interactive data tags applied by companies themselves could permit investors, analysts, and others to easily discover this disclosure without need of an SEC-provided Web tool at all," Cox said, indicating that eXtensible business reporting language, or XBRL, may have a hand in the solution.

Read the entire article at CFO.com

Housing Troubles

Problems in America's housing market begin to undermine confidence in the global credit bubble.

  Economist Staff, The Economist

July 17, 2007

When the man approaching you is wearing boxing gloves, it makes sense to duck. The crisis in the American subprime-mortgage market was clearly visible months ago. Too many homebuyers with a poor or non-existent payment record were lent too much money. But when the rating agencies on July 10th finally got round to acknowledging the problem, investors were clobbered. Shares briefly wobbled and the dollar sank. Swap spreads, a measure of risk aversion, reached their highest point since 2003. Credit derivatives, where much of the financial innovation in recent years has taken place, recoiled. Investors flocked to the haven of Treasury bonds.

Why were investors so slow to react? It seems they have been consistently blindsided by how widespread the subprime problems have become—as well as complacent about the potential spillover into other areas of the debt markets.

At first, investors thought the subprime issue was confined to a few lenders, but the forthright website www.lenderimplode.com suggests that 97 of them have now been hit. Then they thought that defaults would be confined to a few states in the Midwest but the crisis has spread to heavily populated California and Florida.

The second delay was caused by the way that mortgages had been repackaged and sold. Initially they were bundled into residential mortgage-backed securities or RMBSs; Moody's, a rating agency, downgraded 399 of these bonds, while Standard & Poor's, a rival, indicated it was preparing to downgrade some 612 bonds, worth $12 billion. These bonds are only a small portion of the mortgage-related market. But according to Josh Rosner of the investment firm Graham Fisher, the agencies suggested further downgrades were to come.

CFO.com

Tips For Writing A Great Cover Letter

Many candidates ask about writing cover letters. Should they send one to a potential employer along with a resume? Should they have a generic cover letter to send to any employer at any time? What information should be included in a cover letter?

First of all, as a job seeker you have to think of every contact with a potential employer as an opportunity to sell yourself. So, if you send a generic cover letter that says something like, "I want this job because it is a great opportunity..." you aren't selling yourself and you aren't telling the potential employer something they don't already know. In other words, a generic cover letter is basically a useless document and I never recommend that my clients write one.

So, when is a cover letter necessary? If you are applying for a job through a corporate website and the site has a space for you to include a cover letter you should take advantage of the opportunity and write one. On the other hand, if you are working with a recruiter you generally don't need to write a cover letter unless the employer they are representing requests one. If a friend recommends you for a job with his/her employer it's a good idea to write a cover letter that clearly articulates your reasons for applying - you don't want the potential employer to think you are only interested in the job because your friend works there too.

When writing a cover letter you have the opportunity to do several things with one document. A good cover letter will tell a potential employer the following things about you:

1. Why do you want to work for this particular company?
2. What special skills, qualifications, passion do you have to offer the company?
3. You can showcase your ability to research a company and to clearly articulate your value proposition.
4. You get to showcase your writing skills

I give my clients the following advice about writing a cover letter:

1. Research the company, its management team, and its products extensively. Use internet sites like LinkedIn, Google, The Vault, and Zoominfo to find out all about the company and what makes it uniquely interesting to you.

2. Clearly articulate ways that you, the candidate, could add value to their unique organization. Steer clear of generic statements and focus on specific skills and interests you have that dovetail with their business needs.

3. To demonstrate how your skills can enhance a potential employer's business, use specific examples drawn from your resume. Don't reiterate what is on your resume verbatim but, instead, expand upon some of your notable accomplishments that are relevant to this particular employer.

4. If you have a top tier education (Ivy League or top regional school) add a sentence near the beginning of the resume that mentions it.

5. Keep the cover letter between 1-2 pages in length (600 - 1000 words).

6. PROOFREAD. The worst thing you can do is send in a cover letter with a spelling or grammatical error because then you have given the employer a perfect excuse to reject you. A cover letter can be your best friend in a job search or, if you leave typos in the document, it can be your worst enemy.

Moody's Downgrades Private Equity

The ratings agency is skeptical of the hype.

Alan Rappeport, CFO.com

July 10, 2007

Private equity has faced all kinds of pressure as the bubbling industry's profile has grown with bigger buyouts and, lately, public offerings. The latest to weigh in is Moody's, the ratings agency, which Monday released a "special comment" questioning whether private-equity-owned companies are really any more far-sighted than the managements of public companies when it comes to investing in their businesses.

The report claims that despite their freedom from quarterly earnings reports, private equity firms do not invest over a "longer term horizon" than their public counterparts. Further, Moody's said it was concerned by the "willingness of private equity firms to issue special dividends despite commitments to reduce leverage," sometimes within the first year after a buyout. Private equity's freedom from the short-term pressures of public-equity markets is often credited as one of its prime advantages.

Read the entire article at CFO.com

Identity Crisis

As the line blurs between hedge funds and banks, a bit of mystique goes missing.

  Economist Staff, The Economist

July 05, 2007

People have trouble defining the term hedge fund. For some it simply conveys an aura of big money tinged with a dashing hint of menace. But within a few years the term may be even more meaningless than it is now, because hedge funds are rapidly becoming indistinguishable from the rest of the financial-services industry.

D.E. Shaw, an American group, is a case in point. It started as a "quantitative" manager, using sophisticated computer models to pick stocks and, with $26 billion under management at the end of 2006, was ranked as one of the four largest fund groups in the world.

But hedge funds were only the beginning; there is barely a financial activity in which D.E. Shaw is not now involved. In early June it announced a bid for James River, an insurance firm. The group already has an arm, Laminar Direct Capital, that makes direct loans to firms. It has considered moving into private equity and owns FAO Schwarz, a big toy store. As well as running hedge funds, it operates a “long-only” business, which buys assets in the hope they rise in price.

As hedge funds like D.E. Shaw move in one direction, investment banks and conventional fund managers are shifting in the other. Many have bought hedge-fund groups outright (such as JPMorgan Chase's purchase of Highbridge Capital Management) or have taken minority stakes in them (Lehman Brothers bought 20% of D.E. Shaw in March). Others either operate funds-of-hedge-funds (Goldman Sachs) or have set up separate hedge-fund arms (Gartmore and—less successfully of late—Bear Stearns).

Read the entire article at CFO.com

Don't Forget to Have Fun

Sometimes we all work too hard or get too caught up in what is going on at the office. It's natural because I think that for most professionals, our jobs are important to us and we want to excel at in our career of choice. There is nothing wrong with working hard but it's important to keep your job in perspective. This is especially true for entrepreneurs who usually have to work long hours to make their businesses successful.

I find that it's easy for me to spend hours and hours in my office working on resumes for clients, writing articles, working on marketing programs for BroadPeak, or networking. The work never ends and I can always think of something that I should be doing to expand or improve my business. I have been working really hard at completely breaking away from work for chunks of time to spend time with my husband. It's so important to remember that our loved ones are more important than our business and to make sure that we take the time to enjoy our relationships rather than letting ourselves get sucked into the never ending cycle of work, ideas, and more work.

Last week, my husband took a few vacation days and I rearranged my workload so that I could take a day off to spend with him. We drove to San Antonio to go to Sea World (we had always wanted to see the Shamu Show which was pretty impressive) and had a great time. We didn't talk about work at all...instead we just laughed and had fun together. By the time I turned on my computer the next day I was totally recharged and reconnected with my husband. The time I spent having fun helped me to rest, relax, and to be more productive when I returned to work.

It is so easy to think that if we aren't at our desks we aren't being productive. And believe me, when you are an entrepreneur there is always a feeling of panic when you aren't working because if you don't work you don't make money. I find that when I take a little time off work to focus on what is really important in my life (family) that I return to work with a renewed focus and energy that makes me a little more efficient and effective at what I do.

So, don't forget to have fun with your loved ones...that is really what life is all about and you may find that your work improves when you take time off to enjoy life a bit.

Happy 4th of July!