Watching the outside world go by?

There was an interesting article in the weekend papers asking how many private investors had heard from their financial advisors during the stock market turmoil of the past week or so. Not many I would wager. Indeed it would be interesting to know how many advisors of any kind had been systematically reviewing the impact on their clients’ businesses of the recent economic and social developments.

One of the benefits of working with an external advisor, such as a part time FD, should be that they are able to bring information and perspectives that those who are working on or in their business full time don’t get. I frequently get asked by clients about what is happening in the world outside their business, and what changes they may need to make as a result.

Having said all of that, how do you manage a situation where the FTSE can go from 2% down on the day to 3% in a couple of hours? The big temptation is to sit tight, hope that it will all blow over, and that everything will turn out well in the end. Nonetheless it is difficult to balance wondering about the impact of current events with maintaining focus on the medium to long term goals of the business.

Based on recent events I have advised clients trading overseas that managing their currency exposure has become even more important, that the riots are a timely reminder to check insurance policies and cover levels, and that a thorough review of all clients and suppliers, including credit checking, would help to minimise any negative impact.

With the constant talk of deficits, cuts, debts and global imbalances, it is easy to become despondent and tread water waiting for better news to begin to come through. It is worth noting that many large corporates remain in a strong financial position.

However should financial Armageddon ultimately occur I suspect there is little anybody will be able to do about it. For advisors and managers alike it all comes down to managing what you can, being as good as you can, and keeping focussed on the bigger picture of what you are trying to do, whilst always of course looking for opportunities or dealing with the risks that present themselves in the short term.

Summer shorts…….

There was news last week of the latest organisation to embrace the paperless office. Step forward our very own Her Majesty’s Revenue and Customs. They have apparently decided not to send out paper reminders to a large number of taxpayers who have payments due at the end of July. However this is not being done as a display of environmentally conscious zeal or as part of the ongoing government cuts programme. They have simply run out of paper.

Actually before we shake our heads at the supposed incompetence of it all, we should take a moment think about how we do use paper. I am sure most of us pay lip service to those entreaties at the bottom of e-mails imploring us not to print out this e-mail unless you really really need to. Indeed certain e-mails will often get printed out a number of times. Sometimes it takes an event such as running out of paper, or not being able to print, to make people realise that they don’t actually need a hard copy. Memo to purchasing – cut down on paper purchases next time. An electronic memo of course…….

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I have just come across a new variation of the holiday stress chart courtesy of PHD Comics and The Poke website  which shows in comic fashion how stress levels rise and fall before, during and after a summer vacation from work. Not really the complete break the doctor orders is it?

Oh what the hell, come on people get real! It is a 24/7 world out there. Nothing stops for anything anymore. The annual two week break has become as anachronistic as ..er.. HMRC sending out paper reminders for half yearly tax payments. Holidays now vary from trips of a lifetime to a smattering of short breaks during a year, during which nearly everybody keeps in touch with what is happening back home.

They say a change is as good as a rest. If you are checking your e-mails and managing your business from a remote corner of the globe rather than in and around your normal place of work then I guess it is a holiday of sorts.

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Americanisms. Don’t you just love them? Apparently not according to the BBC News website, which has just listed 50 that generated varying degrees of irritability among the UK population.

Looking down the list I think the blame for many of them lies with MBA courses. Leverage is a prime example. Once used by US financiers to describe the ratio of debt to equity, its use has now been widened to cover any activity which involves producing a lot with a little.

Going forward (another phrase on the list) should we take the French approach and resist their use or should we accept it as the price of globalisation? Have a look and decide for yourself. Mind you if the USA is your holiday destination of choice this year then at least you will be able to speak the language…..