Much was made this last week over United Parcel Service’s (UPS) failure to deliver packages before Christmas. The media seemed to border on delight in sharing the stories of customers who were upset that their packages didn’t arrive in time. As I heard these stories played over and over again I kept wondering how we got to this point. Last minute shoppers who were Amazon Prime members could order their gifts on December 22nd and still expect them to be delivered anywhere in the country before Christmas with free two-day shipping. But when some gifts didn’t arrive in time who’s to blame – the retailer, the shipper, or us, the consumer?
Remembering back to my years in the financial industry (Morgan Stanley 1997-2003) every business unit was always looking for the “multiplier” that can have a significant impact on their business. In the failed Mortgage Bond business it was the leverage multiplier – borrow huge sums of money to invest in mortgages with the goal of “super sizing” your returns. It the Private Equity business it was the pricing multiplier that you were seeking when you were able to roll smaller companies into one larger company by shedding redundancies (i.e. layoffs) and less pricing pressure from less competition. One of my other lessons on the importance of the multiplier came within my first few weeks of joining the Firm’s MBA New Hire Training Program. The teacher was one of the Firm’s legendary Global Markets Strategists, Barton Biggs.
I just added a brief book review for one of my favorite reads of the last few years – The Black Swan: The Impact of the Highly Improbable by Nassim Taleb. If you have already read the book let me know what you think by leaving a comment. Enjoy! http://www.matthunt.co/reviews/the-black-swan-by-nassim-taleb/200
