Strama defects - most writers can not connect FS and analysis, and strategy

Every generation needs a revolution - an entrepreneurial revolution

I was in 2 strama sessions this week:  one in the medical school last Tuesday, and yesterday at AGSB

I have seen this time and time again, students committing the same mistake, out of inexperience or lack of skills in financial. (as most do) It is only after 20 years of MBA that I learned the value of FS.

Thus the student will propose a plant or improvement, it no changes in FFE, in Balance sheet and cash flow, and no interest expense in P and L.  They all come together.  I

If they understand that strategy is about choice of resources and processes to reach an objectives, or a story of where am I now, where am I going, how do I get there, then they should see the totality of their work and connect, even the FS to their story

I met my former marketing professor at AGSB, former Administrator of SBMA, and now of Holy Land

Every generation needs a revolution - an entrepreneurial revolution



Rizal Philippines
March 14,, 2017

                                       Prof Jorge, Administrator Robert Garcia, and our business partner


Today, my business partner in Laguna, his son, and my daughter who is part of the management team went to Holy Land  at SBMA (near the entrance of Subic Freeport along Tipo Highway in Front of Seal oil station) this morning.

There I met my former professor in marketing at AGSB some 30 years ago (at H de la Costa) who just resigned from his post as SBMA administrator.  He used to be exec at RamCar group (the Petines family business)   He turned around SBMA from a net loss, to  a profitable one, restructuring its debt together with Joven Reyes, the CFO and COO (former AGSB classmate;  he was our class valedictorian)

His wife Maribi's passion is running and getting finances for the Holy Land, a religious shrine that features way of the cross, Jesus Christ life, and many more.  She is Jesuit bred and understands a lot about Jesuit reflection  We were drawing inspiration for inspiration for a religious shrine at our Holy Gardens Memorial Park

You should visit it this Holy Week.   You will enjoy its attractiona and the entrance fee is low.  A great way to observe Lent

                              I looked older than the Chairman who plays golf always

                          The Administrator's wife Maribi Garcia and the master planner Arch Florentino

Brilliant deal making from seasoned and veteran businessman

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
March 8, 2017

One of the companies which we oversee a memorial park in the north, is being wooed by a leading memorial park.   The first offer was rejected by my joint venture partners because it was  single digit million arrived at using present value.

The next offer which we discussed yesterday, made the offer 5x  the original offer, to be paid  levedl payment, over a period of 72 months.   If we do a PV of that payment, there would be about P12 million discount.  Our JV partners were salivating and wanted to grab the offer, except that they wanted to have at least 20% dp and the term reduced to 48 months

We have over 5,200 items worth over P40,000 each.   When they take over, they would sell our lots to pay us off.

Looking back analyzing the deal:

1.  We would lose about P96 million GP over the next say 20 years.   (that is after the op ex)

2.  We could do the same;  Discount our products down to 30T and they would sell fast, and generate over y amount of cash, flow, which would be 50% more than the payments to be made to us of x amount.  In other words the deal  is guisado with our own fat.  That is why they are balking on cash payment.  

Brilliant.  Whoever can think of such a deal?  One of the veterans of the trade, the former head of a chem company was thinking along that line all the time:   OPM and using 0 of their own money to get a business deal

However our marketing staff there is not that capable to sell the inventories fast