Force Of Law And The Law Of Force

I believe in international investing. My colleagues and I dive deep into the funds we consider for our clients, carefully sifting and balancing to create what we consider to be just the right the mix of regions, countries, industries and company sizes.

We have done this for many years. The world has changed considerably in that period, but one constant in our approach has been to avoid any direct investments in Russia and mainland China.

Investment practices our size, especially those with a global focus, generally do not do this. Since our business began in the 1990s, China has grown from a minor economic power to the world’s second-ranked economy. Russia, meanwhile, recovered from its late-1990s economic crisis to become the world’s number one oil producer, as well as a major market for Western (primarily European) and Chinese goods, as well as high-end American real estate.

So why do we avoid investing in Chinese and Russian companies?

In a nutshell, we avoid them because I believe there is a key distinction between investing and gambling, and that committing capital to these countries is more like the latter than the former. As my firm’s founder and president, I passed these views on to my co-workers. They may agree with me or they may not, but on an issue this fundamental, it doesn’t matter. I have the ultimate responsibility, and I make the call.

I define investing as the commitment of resources in the rational expectation of receiving a return. Gambling, or speculation, is based on hope rather than rationality. We can rationally expect, from historical results, that the S&P 500 will be higher 20 years in the future than it is today. It is not at all rational to assume that it will be higher tomorrow than it is today. Buying an S&P 500 index and planning to hold it for 20 years is an investment. Buying that same index and planning to sell it tomorrow at a profit is just a gamble.

Business operates on rational expectations. If we make a decent product for which there is demand, and if we price it right, we rationally expect people to buy from us. If we meet the requirements for government permits, we expect to get the permits; we should not need to plan on paying bribes in order to get them. And if we sign a contract, we expect the other party to honor the contract or the courts to enforce it, if necessary.

In dealing with other nations, we similarly expect them to make and honor commitments, to use established mechanisms to resolve disputes – which are inevitable – and not to resort to violence for political, commercial or strategic advantage. We also expect governments to be accountable to their own people, which is what enables them to make valid long-term commitments on behalf of their nations.

In other words, we should expect to do business under the force of law, rather than the law of force.

We cannot realistically expect that to be the case in Russia or China today. Those conditions have never existed there in my lifetime, and long before. For a decade or so beginning with the fall of the Iron Curtain, we hoped Russia would establish a durable democracy, along with the rule of law, with an independent judiciary to enforce it. Instead, Russia experienced a chaotic period of privatization-driven kleptocracy under Boris Yeltsin, followed by a steadily more autocratic, nationalistic and repressive regime under Vladimir Putin and his bench player, Dmitry Medvedev.

In China the power of the Communist Party remains the paramount consideration, even as communist ideology has withered to irrelevance. The result is a self-perpetuating elite that seeks to maintain its privilege through censorship, repression and nationalistic campaigns against neighboring nations, as well as through the more appropriate means of raising living standards for its people.

In Russia and China, contract and property rights mean whatever the local authorities want them to mean at any given moment. A nation that forcibly seizes territory from another sovereign will have no qualms about seizing foreigners’ local investments.

Investing in Russia means gambling that Putin will not do something unpredictable to seize or impair your investment. Investing in China means gambling that some future crisis over domestic politics, foreign territory or Taiwan will not create an economic or human disaster.

There is no way to invest sensibly today without investing in those countries at all. Too many multinationals have substantial business interests in Russia and China to avoid them as a practical matter. Most of those companies have global portfolios, however; a single adverse development in Moscow or Beijing might be costly, but usually it would not jeopardize the entire enterprise.

Companies organized and managed in Russia and China, however, are entirely subject to the whims and vagaries of local authorities. We can assume that those authorities act responsibly and rationally, but as events playing out in Ukraine illustrate, those assumptions are based more on hope than on fact. In other words, acting on such assumptions is a gamble. Keep this in mind later this year when big Chinese companies like Alibaba and Weibo make their initial public offerings in the United States.

When I direct a client’s investments to a certain place, I am basically entrusting that investment not just to the fund managers who pick the company shares we hold, or to the company managers themselves. I am entrusting someone else’s money to the political, legal and social systems in which those companies operate. I have to at least expect fair and predictable treatment.

I never had that sort of trust in Boris Yeltsin, Vladimir Putin or any Chinese Communist leader. I often wonder how Western CEOs could persuade themselves that these are safe enough places to make big investments. I do understand the jackpots these places offer. I just don’t like to gamble.

Understand a Cultures Customs Before Gift Giving

Gift giving has been around probably as long as the human race itself; although the ritual has been traced back to the Romans who would give each other a token meant to wish the recipient good luck in the New Year. This token was known as a strenae. According to tradition the strenae was originally merely branches plucked from the grove of the goddess Strenia who was the Roman goddess of strength and endurance. From these meager beginnings the art of gift giving has evolved and changed depending on cultures traditions, customs and religious beliefs in countries throughout the world.Giving gifts is now surprisingly complex yet an important part of the human interaction and helps to define relationships and strengthen bonds on a small scale with family and friends as well strengthen or repair relationship and bonds on a major scale as those between countries. Gift giving is an art and as with any art it is meant to evoke delectation in its recipient as well as the person giving it.When giving business gifts, the gift should reflect your thoughtfulness, good taste, attention to detail and most importantly show an understanding of the recipient’s customs, beliefs and traditions. Rules and customs regarding the giving and receiving gifts vary from country to country and cultures within those countries. Whether you are doing business in another country, doing business with a company in another country or doing business with a person with different beliefs than yours, it is important that you have an understanding of the recipient’s customs, tradition, beliefs and company rules before you present a gift to them. To give an idea on how simple gifts given with the most thoughtful intentions will be perceived by other cultures.
If you wish to give a gift to a Chinese client, it would be considered poor taste to give them a clock as a gift. It would also be considered to be in poor taste to give an individual gift, instead a group gift should be given.
A gift of Lobster which is a very popular gift in the States during the holidays is viewed as a distasteful gift for people of the Jewish faith.
Giving a gift such a football (made of pigskin) or alcohol to people of the Muslim faith is also considered also to be a distasteful gift and against their religious beliefs.
To give a gift to the wife of an Arab colleague or client is considered to be in very poor taste.
When doing business in Singapore bear in mind that businessmen there are not allowed to accept gifts.
Countries such as Malaysian consider gifts given before a firm relationship is established to be a bribe.
In India you would not give a gift made of leather or any beef product because the cow is a sacred being to them.
Countries such as Japan, Indonesia and Philippines the exchanging of gifts is expected and has been part of their culture’s traditions for centuries and is a sign of respect. The way a gift is presented to the recipient is as important is as important if not more so than the gift itself. When presenting a gift, to a Japanese associate or clients, whether shipping the gift or giving it in person, it is important to never allow it to arrive unannounced, make sure that the recipient is aware of its impending arrival. If giving the gift in person, it should be given at the end of your visit so that it can be opened later once you have gone.
When presenting a gift in person in Japan or Hong Kong, it is important that that you do so using both hands.
In the Middle East you would present the gift using the right hand.
In Singapore when presenting a gift to a client it is tradition for the recipient of the gift must turn down the gift three times before accepting it. It is important to make sure you offer the gift three more times to ensure that the gift is accepted.
It is usually in poor taste to give a gift that displays a company’s logo on it. Clients in Spain, Portugal and Greece would not view this as a gift but a blatant form of advertising and find it offensive.
Gift giving has always had a central place in business practices, helping to build and strengthen the bonds between businesses. When considering the giving of a gift to a client or person it is important that you do some research to find out what would be appropriate gift for the recipient. This research is useful to prevent offending the intended recipient customs or religious beliefs, but also may help you to find out more about the person such as special dietary restrictions, for an example sending a person who is diabetic a gift basket filled with chocolates and candies looses the impact that was intended. One should never underestimate the impact that a gift can have on a relationship whether business or personal. Knowledge of the recipient will assist you in the selection of a gift that has a more personal touch creating a greater impact. Here are a few general gift giving etiquette tips that may help prevent awkward or embarrassing gift giving situations.
When giving gifts to people of a different culture, do some research to find out about the recipients culture, traditions and beliefs and use this information to create a more personalized gift.
When giving business gifts give gifts that reflect you as well as your company’s image.
Never give gifts that display your company’s logo (Items with a logo tend to be viewed as an advertisement not a gift).
Prior to giving a business gift check with the recipient’s company to find if they have a policy on their employee’s accepting gift and if there is an expense cap.
Have an understanding of the recipient’s culture, customs and beliefs about receiving gifts and the proper way to give them that respects their traditions and culture.
When choosing gourmet products for business gift-giving, such as gift baskets, know the contents of the gift to make sure none of the items will offend the recipient’s religious beliefs or customs.
For maximizing the impact that a gift has, personalize it by factoring in the recipients outside interest, customs and personal likes. Use your imagination and make the gift stand out (in a good way).
With any gift you give the gift should reflect the value you place on the relationship whether business or personal. The more important the person is to you the more attention that should be put into the gift you give them.
Remember that the note attached to the gift has as much if not more importance than the gift itself. Whenever possible handwrite the note and always make it personal and heartfelt
One thing to take away from this is that a person should never under estimate the impact that even the smallest of gift can have on a relationship whether business or personal and one should have an understanding of the person or company’s customs, culture, traditions and religious beliefs before giving a gift. Gift giving is a wonderful thing and if done properly will allow a business relationship to blossom grow and flourish, yet if done improperly can cause a relationship grind to a screeching halt or destroy it completely.

How Outdated Phone Systems Are Killing Businesses

Thriving in today’s economic climate requires unified communicationsYep, those old traditional landlines are on their way out. In 2017, almost 90% of phone numbers were connected to mobile devices or internet-enabled phones. And some experts have predicted 2020 is the year that landlines finally become obsolete. (To be honest, they probably won’t disappear that fast. After all, there are still people out there using analog modems, believe it or not.)Yet still, even with landlines falling out of favor, many businesses rely on traditional private branch exchange (PBX) phone systems for day-to-day operations.Their trust in these systems makes sense: landlines aren’t susceptible to remote hacking (though analog lines can still be hacked locally through good old wiretapping), they usually still work when you’ve lost power, and they’re based on-premise, which gives the owner total control. Owners love total control over anything that impacts their business, especially things that affect the bottom line.But the world of work is changing rapidly, and for any business to succeed in this moment, they need a better alternative – unified communications.How old phone systems hurt businessesOlder PBX phone systems in today’s business environment have some pretty serious limitations. Some of those are business-impacting and result in:

Poor customer service: Leaving a voicemail and waiting for a response is so ’90s! In fact, most consumers expect to communicate with businesses online, be it online ordering, email, text, or live chat. If the only way to reach your business is by phone, you’re likely missing out on a major opportunity to handle service problems quickly, retain customers, and boost your reputation.

Internal miscommunication: Old phone systems can be frustrating for office employees to use. Imagine leaving a voicemail about an urgent issue for your boss and not receiving a response for hours or days. Relying on outdated technology makes employees feel less productive, which can spiral into other issues.

According to a 2018 Unisys Corporation study, these frustrated employees are 450% more likely to quit than employees at companies with better tech solutions. Though this study sounds pretty far-fetched, and it is quite possible that the presence of outdated technology is an indication of a bigger problem with the business. Nevertheless, this questionable study supports the narrative that old technology can cause serious problems within a company. Thus, it is worth mentioning. Clearly, updating your system and improving communication for everyone beats recruiting and training new employees.

Less versatility: As many companies have made the switch to remote work, they’ve found landline phone systems to be far less versatile than VoIP-based PBX systems. Landline systems are tied to a specific geographic location and connect to the company’s separate phone network through phone hardware (e.g., phone cables, phone wall ports, etc.). Thus, they can’t be easily integrated with computer software applications, SMS and MMS messaging, video calling, chat apps, and other cool features required to make remote work easy. In contrast, a unified communications system supports all of these tools, making it super easy to onboard remote employees.

Difficulty diagnosing problems remotely: Diagnosing and fixing problems with traditional PBX systems requires troubleshooting from the IT department (if you have one, that is) or a technician from the phone system provider. The process involves testing connections, assessing internal and external parts, and likely fumbling with equipment on your building’s exterior. This means scheduling a day and time for the repair, and in the meantime, your system remains down, causing you lost revenue.
On the other hand, to address problems with cloud-based systems, you have access to round-the-clock tech support that can tap into your system and get things back up and running quickly. No appointment required.

Hard to grow: When your business grows, it’s quite difficult to scale your old phone system up. Usually, with every batch of new users, you will have to add a bunch of new hardware. This hardware is usually proprietary, costly, and likely has to be installed by a skilled technician. Web-based phone systems are much easier to expand.

Why your business needs unified communicationsAs an alternative to your old phone system, it’s time to embrace unified communications. Generally speaking, this is a comprehensive service that enables all employees in your company to communicate in a way that delivers the best business results. Most unified communications components are based on Voice over Internet Protocol (VoIP), which gives you the ability to communicate from any location using the same phone number, extensions, and features.And looking more specifically at a VoIP PBX system’s benefits over an old phone system, there are several advantages. You have the option of using both physical phones and “soft phones”, which are computers or mobile devices that use specialized communications software. VoIP PBX systems also connect to all of your business locations, enable you to respond to messages and requests in a timely manner, and can easily be scaled up or down at any time. In short, a VoIP PBX system moves and grows with the ever-changing needs of your business. Your old phone system limits your options to serve employees and customers, and it ultimately cuts into your profits.Set up your Virtual PBX system todayWork with us to introduce cloud-based phone systems into your day-to-day business operations. Our VoIP PBX system helps you cut costs, connect all your business locations into one communications domain, send free SMS messages from business phones and desktops, and access free 24/7/365 tech support. Contact us today to discuss your needs and explore the best options for your company.