5 November 2018 FT — Articles to Read

5 November 2018


Question: According to MSN: Money, how do you plan financially for the holidays .. and after?


General Electric finance division calls time on commercial paper borrowing – Pg. 1

–        GE’s financial services division is giving up on using commercial paper, in a landmark moment for a business that was once the largest borrowing in the market

–        GE Capital’s move away from commercial paper – debt with a  maturity of up to 270 days – is likely to increase its cost of financing, which is also under pressure from credit rating downgrades

–        Before the 2008 crisis, GE Capital boasted of being the largest borrowing in global commercial paper markets, using them to support operations such as consumer credit, mortgages and industrial lending.  At the end of 2008 it accounted for about 4% of all commercial paper outstanding in the US

–        The company is instead becoming more reliant on bank lending

–        GE’s financing costs have also been hit by its worsening credit rating


Buffett’s $1bn buyback points to dearth of attractive deals – Pg. 13

–        The buyback, it’s the first in six years, represents a tiny fraction of the conglomerate’s $104bn cash pile and comes as Berkshire’s takeover drought stretches to nearly a third full year

–        Some $3.5tn of acquisitions have been agreed this year, up more than 30% from a year earlier,…

–        If nothing less, the value at which Berkshire repurchased its shares indicates what Mr Buffett and vice-chairman Charlie Munger believe the company’s stock is worth.  In the third quarter, the average price it paid for its class A shares was $312,807, …


Answer: (1) Slow down – Remember that doing less is an option (Prof Note: Is there anything really better than being toasty in front of a roaring fire, with the house decorated for the holidays?!); (2) Budget – Start early (Prof Note: Think Origami!  Who does not love origami?!); (3) Adjust spending – Don’t go overboard on gifts (Prof Note: It is truly the thought that counts.  I love my $20 Stanley Thermos from my Aunt.  I look like a real construction person!); (4) Kids’ gifts – Remember that little ones aren’t brand snobs; (5) Suggest a family gift exchange; (6) Plan meals well in advance; (7) Artisnanal gift – Make things at home (Prof Note: See #2 Prof Note); (8) Use points – Credit card rewards can be used for gifts; (9) Travel cheap – Book flights early; (10) Beware of temptations – Shop for gift, not yourself; (11) Potluck – Cook as a team; (12) Organize group volunteering instead of holiday parties (Prof Note: I remember working at one company and they literally made us repaint a homeless shelter for a day.  My fellow analyst and I did the math.  We begged to donate our salary to painters (which were 18% of our cost, i.e. they could have two real painters for a week rather than us two chuckleheads for a day) rather than go ourselves.  We actually liked our jobs and quantified the benefit of monetary philanthropy!  We lost, ended up painting for the day, complained the entire time, and our collective boss said, “Never AGAIN!”); (13) e-cards – Save on postage by using MailChimp (Prof Note: Ohhh…puuullleeezzzzz…this is cheap even for me.  Splurge on the car and postage.  Tell me how much you love me, as I love all of you!); (14) AliExpress – Buy from China; (15) Plan for next year – Open a holiday savings account