business

Alternative: AI & Blockchain for professional services 2018

Alternative AI & Blockchain for Professional Services will help you cut through the hype about both technologies and focus on their business benefits.

This one-day event is specifically for law firms, accountancy practices, consultancy practices and corporate legal departments with an interest in artificial intelligence (AI) and block chain and their potential to transform the professional services market.

AI 201 – taking your understanding to the next level:

More mature and better understood than blockchain, AI still presents challenges. We’ll provide a non-technical overview of the technology and its latest developments and uses, allowing you to hit the ground running for the rest of the day.

An introduction to the capabilities of blockchain for those who want a broad view of the opportunities available from this disruptive technology. How it works, what it does, why it’s different and who is using it now, and how.

Alternative AI & Blockchain for Professional Services will focus on the immediate outcomes for professional services, by providing “everything you need to know” about AI and blockchain, in one place in one day.

The objective content will come from law firms, accountancy practices, management/property/strategy consultancies, in-house legal teams, academics, advisors and vendors – the entire AI & blockchain universe.  The programme will be a mix of strategic plenaries, panel debates, case studies and round table discussions with AI & blockchain covered independently in streams and breakouts.   The entire programme will focus on the here and now, not what could happen in 10 years’ time.

The pace of technological change poses a significant challenge for incumbent market leaders. A strategy of investing in tech incubators, or directly in start-ups, is a path that many firms have chosen, and one that many have rejected – a path that requires big decisions and big changes to organisational models and cultures.

What are the reasons that firms have invested, or chosen not to invest? How, if at all, should your firm interact with incubators and/or start-ups?

How must you adapt your processes to succeed in this strategy? What additional advantages do you get from investing in tech products over simply purchasing them?

Delegates will leave able to make informed decisions about both AI & blockchain – the opportunities, the threats and the impact on professional services now.


Bernard Marr with Suhail Ahmad – CEO (Adviser Direct)

 

 

Let the Show Begin

Waiting for my youngest son (above) to participate in his first nativity play yesterday afternoon, I tried not to look at my Bloomberg app. Or think of the roller-coaster the financial markets could embark on if we were to get a surprise from the U.S. Federal Reserve later in the day.

When my son arrived in the gym hall, I could see his excitement with dad in the front row. I arrived early just to make sure I’d get a good seat (and parking). As the older kids and teachers started their introductions, etc. I could see my son’s excitement start to wane as he sat with his classmates waiting for the show to begin.

Bump up not lift-off

Just like the millions of professional investors who literally were sitting on their hands for most the day waiting for Janet Yellen and the Federal Open Market committee at the same time. Providing us their interest rate decision so we can move on with our day. Which makes me wonder, why they don’t hold the conference first thing in the morning and help reduce the anxiety on trading floors worldwide!? One of many humble suggestions I can give to central bankers if I were to get in a room with them.

So now we finally have the much-anticipated interest rate hike in the U.S. It’s not a major move. However it’s the potential of it becoming the beginning of the end of low-interest rate environment that has some economists and “fed watchers” all excited.

But what does it mean for most investors and business managers? Based on my crystal ball and the Economist in me (yes, I do have a degree in Economics), I don’t think we’re going to be out of the low-interest rate environment anytime soon.  The U.S. economy is not healthy enough to be able to sustain series of interest rate rises based on the data I’ve seen. Sure the U.S. jobless rate is the lowest it’s bee in seven years. We’ve seen relatively good performance out of the U.S. economy over the past few years. But the U.S. is not immune to the global economic slowdown and will have to tread very carefully to avoid falling into a recession.

But it doesn’t matter what I or you think about interest rates. It is what it is. It will be what it will be. Many investors and business managers spend too much time trying to figure out what will happen. And often times what ends up happening is what we least expected. We simply need to understand the possible scenarios, what impact these scenarios will have on our assets or earnings, and take steps to mitigate the impact of these potential scenarios. Or preferably how to benefit and improve the financial position under these various scenarios. Difficult but not impossible.

What it means to you?

As an equity investor I don’t see any significant impact from the interest rate hike on my portfolio. Since most of my companies have low debt and I’m defensively positioned. However if interest rates do start to increase steadily over the next year, the already fully valued equity markets in the U.S. could see major price declines.

For the struggling pensioners and savers relying on interest income, it’s too early to start rejoicing. The quarter basis point increase or 0.25% is nothing to cheer about just yet. Over the past almost decade savers have been punished with huge transfer of wealth from savers to debtors by means of a low-interest rate. They will not see improvement in their miserable investment income anytime soon.

Business managers need to become more prudent with their accounts receivable to ensure they get paid timely and proactively monitor their clients financial positions. Bad debt is often a silent killer on balance sheets.

Key is to seriously consider what are the implications of a series of interest rate hikes next year. That would significantly increase the cost of borrowing despite interest rates still being near historical lows.

As a business manager you need to be conscious of potential change in interest rate environment and the economic instability or recession it could trigger. Be extremely careful taking on debt and on the other hand if requiring financing to do it sooner rather than later.

An interesting fact is that credit markets have been tightening well before yesterday’s interest rate increase. Goldman Sachs tracks a financial conditions index which measures and incorporate factors such as stock prices, credit spreads, interest rates, and the exchange rates to determine the impact of the interest rate movements.

According to Goldman Sachs estimate, it says that every 1% rise in the federal funds rate shows up as 1.5%  increase in the index.  The index sits at the highest level it’s been in five years since September of this year. Borrowing costs for business could increase dramatically over the next few years if interest rates continue to rise.

Get ready for a quite a show

But at least the December interest rate hike is done and dusted. Investors are in for quite a show as market participants (primarily economists) will continue their obsessive discussions of how much and when interest rates will rise next year.

Smart equity investors will ignore them and carefully look at valuations and rotate out of momentum and high-beta shares in favour of value and distressed equity. Speaking of distressed equity, energy shares which have taken brunt of the tax-loss selling may finally stabilize. Successful investing over the long-term is always about quality assets and cash flow.

I don’t know if the Santa Claus rally will transpire over next few weeks. But either way Mr. Market can now get the show on the road.

Happy holidays everyone!

Giving It Away

I applaud Mark Zuckerberg and his wife Priscilla’s announcement this week to give away 99% of their Facebook shares to a new charitable foundation. The news brought to the forefront the Giving Pledge initiative started by Bill Gates and my mentor Warren Buffett. The duo challenged the world’s richest families to join them in not hoarding their money but using it for the greater good.

Bill and Melinda Gates said in a statement after the Zuckerberg-Chan news said: “As for your decision to give back so generously, and to deepen your commitment now, the first word that comes to mind is: Wow. The example you’re setting today is an inspiration to us and the world. We can be confident of this: Max and every child born today will grow up in a world that is better than the one we know now. As you say, ‘seeds planted now will grow.’ Your work will bear fruit for many decades to come.”

Added Buffett in a statement: “A combination of brains, passion and resources on this scale will change the lives of millions. On behalf of future generations, I thank them.”

Now you don’t have to be a billionaire to pledge and make a difference. Each and every one of us can make a commitment to be more responsible with our money and making sure we give it away while we can.

To inspire us we have the likes of Zuckerberg and according the Generosity Index (calculated as the ratio of lifetime donations to current net worth in U.S. dollar figures), there are many unsung heroes who have truly made a sacrifice and given away the vast majority of their fortune during their lifetime.

Ranking in absolute dollar terms, they most generous as posted on Business Insider are:

1. Bill Gates

Co-founder of Microsoft

Lifetime donations: $27-billion

Net worth: $84.2-billion

Generosity Index*: 32%

2. Warren Buffett

Chairman and CEO of Berkshire Hathaway

Lifetime donations: $21.5-billion

Net worth: $61-billion

Generosity Index: 35%

3. George Soros

Retired founder of Soros Fund Management

Lifetime donations: $8-billion

Net worth: $24.4 billion

Generosity Index: 33%

4. Azim Premji

Chairman of Indian consulting and IT company Wipro

Lifetime donations: $8-billion

Net worth: $15.9-billion

Generosity Index: 50%

5. Charles Francis Feeney

Retail magnate

Lifetime donations: $6.3-billion

Net worth: $1.5-million

Generosity Index: 420,000%

6. Sulaiman bin Abdul

Aziz Al Rajhi

Co-founder of Al Rajhi Bank

Lifetime donations: $5.7-billion

Net worth: $590-million

Generosity Index: 966%

7. Gordon Moore

Co-founder of Intel

Lifetime donations: $5-billion

Net worth: $6.5-billion

Generosity Index: 77%

8. Carlos Slim Helú

Chairman of Grupo Carso

Lifetime donations: $4-billion

Net worth: $27.3 billion

Generosity Index: 15%

9. Eli Broad

Former CEO of SunAmerica

Lifetime donations: $3.3-billion

Net worth: $7.3-billion

Generosity Index: 45%

10. George Kaiser

Chairman of BOK Financial Corp.

Lifetime donations: $3.3-billion

Net worth: $9.3-billion

Generosity Index: 35%

13. Mark Zuckerberg*

Founder and CEO of Facebook

Lifetime donations: $1.6-billion

Net worth: $40.7-billion

Generosity Index: 4%