Dear Carly: let’s talk

Dear Carly,

Carly Fiorina at the Sept. 16 GOP debate

Carly Fiorina at the Sept. 16 GOP debate

You’re probably feeling pretty good right now about your much-praised performance at the marathon Republican debate on Sept. 16. But before you settle in with a self-congratulatory attitude that you must have done everything right, let’s talk about what you said about dealing with Vladimir Putin.

“Having met Vladimir Putin, I wouldn’t talk to him at all. We’ve talked way too much to him,” you said defiantly, when the discussion turned to foreign policy. “Russia is a bad actor…”

Your campaign then doubled down, sending out a tweet, “Putin won’t listen to talk. We need leadership and resolve. Pitch in $3. Carlyforpresident.com/debate”

Wrong, Carly. Wrong.

That kind of blunt rhetoric may be red meat to the crowd, but it’s a simplistic, wrongheaded and potentially dangerous approach to foreign policy.

Despite their antipathy to communism and hostility toward the Soviet Union, Republican Presidents Nixon and Ford and Democrat Carter all talked with their Soviet adversaries and signed strategic-arms limitation agreements with the Soviet Union.

Though he denounced the Soviet Union as an “evil empire” Reagan kept open the lines of communication. Should Reagan, often praised for bringing the Cold War to an end, not have talked to the Soviets?

President Ronald Reagan visiting Berlin in 1987, where he said, "Mr. Gorbachev, tear down this wall."

President Ronald Reagan visiting Berlin in 1987, where he said, “Mr. Gorbachev, tear down this wall.”

As Strobe Talbott, who served as Deputy Secretary of State from 1994-2001, said, in his efforts to drive the Soviet Union to a more accommodating direction, Reagan emerged “as an archpragmatist and operational optimist who adjusted his own attitudes and conduct in order to encourage a new kind of Kremlin leader.”

Sure, there are times when talking or negotiating with adversaries is the wrong move. But refusing to talk with an adversary under any circumstances is not a viable option.

In the Cuban missile crisis, for example, had President Kennedy obstinately refused to negotiate with Soviet leader Nikita Khrushchev, a nuclear war might have been the outcome.

President Kennedy addressing the nation on the Cuban missile crisis

President Kennedy addressing the nation on the Cuban missile crisis

Would we really be better off today if President Nixon and Henry Kissinger had refused to talk with Chinese leaders and, instead, tried to isolate China and keep it from the world stage?

President Richard Nixon toasts with Chinese Premier Zhou Enlai in February 1972 in Beijing

President Richard Nixon toasts with Chinese Premier Zhou Enlai in February 1972 in Beijing

Foreign policy experts argue that America’s 21st century “War on terror” has overemphasized military responses and ignored the potential of diplomacy and that this had had “profound effects in misdirecting American power, alienating allies and discrediting worthy goals, including democratization and development.”

“Diplomacy include coercion and threats,” the experts note, “but it also requires discussion and room for bargaining between participants.”

So, before you get too far down this anti-talk road, take a breather and look at history. America will be best served by a president who acknowledges that we need to engage the world’s nations, both our allies and our adversaries. As John Donne put it so simply and eloquently:

No man is an island,

Entire of itself,

Every man is a piece of the continent,

A part of the main.

 

Thanks for your time,

Regards,

Bill MacKenzie

 

 

 

 

 

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SoulCycle: all that glitters is not gold

Pssst. Wanna make it big? Buy this hot stock.

This post diverges a bit from my usual subjects, but some of today’s breathless talk about can’t lose IPOs (initial public offerings) reminds me of the late 1990s when colleagues at work talked constantly about the run-up in tech stocks like Inktomi, Infospqce and pets.com, and how they were going to make a killing.

StockMarketBubble-Invest10MinutesAgo-BSmallerAug1998-450px

During the dot-com bubble of the late 1990s, too many investors abandoned common sense and ignored standard metrics, as upstart companies rose like a rocket and then flamed out.

Inktomi, which provided software for internet service providers, soared to a market capitalization of $25 billion and a stock price of $241 a share in March 2000. Over the next 18 months the stock declined by 99.9% and in March 2003 Yahoo acquired the company for $250 million, or $1.63 a share.

Today all the talk’s about can’t lose companies like SoulCycle, a souped-up indoor cycling studio.

Remember Bally Total Fitness? Once owned by slot-machine maker Bally Manufacturing, it was the world’s largest owner and operator of fitness centers in 1987. In May 1998, it listed on the New York Stock Exchange under the ticker symbol BFT. After two bankruptcy filings, it now operates just 3 sites in New York.

Now we have SoulCycle.

A SoulCycle class

A SoulCycle class

In a July 30, 2015 Prospectus for its planned IPO, the company says it’s “a rapidly growing lifestyle brand that strives to empower our riders in an immersive fitness experience” and a company that believes “fitness should be joyful, inspiring and help people connect with their true and best selves.”

Wow! Who could resist investing their hard-earned money in that?

SoulCycle began as a small cycling studio in New York City in 2006. Since then SoulCycle has opened 47 locations nationwide, with plans to open 50-60 studios worldwide by 2016. It says it believes there’s enough opportunity to grow its domestic footprint to at least 250 studios.

The wealthy investors behind SoulCycle hope to reap a windfall when the company goes public, and there’s a lot of positive talk on the street.

But investors who are salivating over the IPO may be getting too exuberant.

As SoulCycle’s Prospectus notes, risk factors include the company’s ability to maintain the reputation and value of its brand, to attract and retain riders and to gain acceptance outside its Eastern geographic base.

There’s also competition. Current competitors already include similar cycling studios, like BurnCycle, Flywheel, and Portland’s Revocycle, as well as other fitness boutiques and thousands of athletic clubs that offer spinning classes. Revocycle, for example, is positioning itself as “the higher ground” of exercise, part of an “Organic, Artisanal Indoor Cycling Revolution.”

“Soul Cycle created a super high-intensity atmosphere ‘dance party on a bike’ class taught by ‘rockstar’ model/actor instructors,” says Revocycle. “…we try to treat our cycle classes like a yoga class, or barre….we practice excellent form and technique for safety, speak with a calming voice, use respectful and positive language, and we really tune into our bodies.”

SoulCycle is also going to have to deal in a timely way with inevitable changing trends. It could, frankly, be just another fitness fad.

In addition, there’s the issue of changing economic circumstances.

At $34 a session, if you go three mornings a week, you’ll spend $5304 a year. If you want to go whole hog, you can reserve your favorite instructors or classes by signing up for 50 SuperSoul classes at $3500, or $70 a session.

If you’re part of the 1 percent, that’s no big deal. But that may be too much for enough customers to fill 250 studios across the United States.

The experience of other recent IPOs should send a warning, too.

Of the 35 companies that went public with a valuation larger than $1 billion and started trading in the past year, 40 percent of them have fallen below their IPO price, BloombergBusiness reported earlier this month.

Bloomberg noted that investors had initially been excited about getting a piece of companies like Etsy Inc., which surged 87.5 percent on its first day of trading, and LendingClub Corp., which climbed 56.2 percent, but both stocks have slid more than 11 percent below their offering prices.

The Motley Fool just highlighted that even much-vaunted Twitter (NYSE:TWTR) stock has been hammered recently. After rising to $53 earlier this year, shares have since been halved. Now trading at around $24, Twitter stock’s year-to-date return is a disappointing -32%.

So as Sergeant Phil Esterhaus used to say on Hill Street Blues, “Hey, let’s be careful out there.”

Pssst. Wanna make it big? Buy this hot stock.

This post is a little different than my usual, but some of today’s breathless talk about can’t lose IPOs (initial public offerings) reminds me of the late 1990s when colleagues at work talked constantly about the run-up in tech stocks like Inktomi, Infospqce and pets.com, and how they were making a killing.

During the dot-com bubble of the late 1990s, too many investors abandoned common sense and ignored standard metrics, as upstart companies rose like a rocket and then flamed out.

Inktomi, which provided software for Internet service providers, soared to a market capitalization of $25 billion in March 2000 and a stock price of $241 a share. Over the next 18 months the stock declined by 99.9% and in March 2003 Yahoo acquired the company for $250 million, or $1.63 a share.

Today all the talk’s about can’t lose companies like SoulCycle, a souped-up indoor cycling studio.

Remember Bally Total Fitness? Once owned by slot-machine maker Bally Manufacturing, it was the world’s largest owner and operator of fitness centers in 1987. In May 1998, it was listed on the New York Stock Exchange under the ticker symbol of BFT. After two bankruptcy filings, it now operates just 3 sites in New York.

Now we have SoulCycle.

In a July 30, 2015 Prospectus for its planned IPO, the company says it’s “a rapidly growing lifestyle brand that strives to empower our riders in an immersive fitness experience” and a company that believes “fitness should be joyful, inspiring and help people connect with their true and best selves.”

Wow! Who could resist investing their hard-earned money in that?

SoulCycle began as a small cycling studio in New York City in 2006. Since then SoulCycle has opened 47 locations nationwide, with plans to open 50-60 studios worldwide by 2016. It says it believes there’s enough opportunity to grow its domestic footprint to at least 250 studios.

The wealthy investors behind SoulCycle hope to reap a windfall when the company goes public, and there’s a lot of positive talk on the street.

But investors who are salivating over the IPO may be getting too exuberant.

As SoulCycle’s Prospectus notes, risk factors include the company’s ability to maintain the reputation and value of its brand, to attract and retain riders and to gain acceptance outside its Eastern geographic base.

There’s also competition. Current competitors already include similar cycling studios, like BurnCycle, Flywheel, and Portland’s Revocycle as well as other fitness boutiques and thousands of athletic clubs that offer spinning classes. Revocycle, for example, is positioning itself as “the higher ground” of exercise, “the Portland Organic, Artisanal Indoor Cycling Revolution.”

“Soul Cycle created a super high-intensity atmosphere ‘dance party on a bike’ class taught by ‘rockstar’ model/actor instructors,” says Revocycle. “…we try to treat our cycle classes like a yoga class, or barre….we practice excellent form and technique for safety, speak with a calming voice, use respectful and positive language, and we really tune into our bodies.”

SoulCycle is also going to have to deal in a timely way with inevitable changing trends. It could, frankly, be just another fitness fad.

SoulCycle will also have to deal with people’s changing economic circumstances.

At $34 a session, if you go three mornings a week, you’ll spend $5304 a year. If you want to go hole hog, you can reserve your favorite instructors or classes by signing up for 50 SuperSoul classes at $3500, or $70 a session.

If you’re part of the 1 percent, that’s no big deal. But that may be too much for enough customers to fill 250 studios across the United States.

The experience of other IPOs also should send a warning, too.

Of the 35 companies that went public with a valuation larger than $1 billion and started trading in the past year, 40 percent of them have fallen below their IPO price, BloombergBusiness reported earlier this month.

Bloomberg noted that investors had initially been excited about getting a piece of companies like Etsy Inc., which surged 87.5 percent on its first day of trading, and LendingClub Corp., which climbed 56.2 percent, but both stocks have slid more than 11 percent below their offering prices.

The Motley Fool just highlighted that even much-vaunted Twitter (NYSE:TWTR) stock has been hammered this year. After rising to $53 earlier this year, shares have since been halved. Now trading at around $24, Twitter stock’s year-to-date return is a disappointing -32%.

So as Sergeant Phil Esterhaus used to say on Hill Street Blues, “Hey, let’s be careful out there.”

SoulCycle: all that glitters is not gold

Pssst. Wanna make it big? Buy this hot stock.

Some of today’s breathless talk about can’t lose IPOs (initial public offerings) reminds me of the late 1990s when colleagues at work talked constantly about the run-up in tech stocks like Inktomi, Infospqce and pets.com, and how they were making a killing.

During the dot-com bubble of the late 1990s, too many investors abandoned common sense and ignored standard metrics, as upstart companies rose like a rocket and then flamed out.

Inktomi, which provided software for Internet service providers, soared to a market capitalization of $25 billion in March 2000 and a stock price of $241 a share. Over the next 18 months the stock declined by 99.9% and in March 2003 Yahoo acquired the company for $250 million, or $1.63 a share.

Today all the talk’s about can’t lose companies like SoulCycle, a souped-up indoor cycling studio.

Remember Bally Total Fitness? Once owned by slot-machine maker Bally Manufacturing, it was the world’s largest owner and operator of fitness centers in 1987. In May 1998, it was listed on the New York Stock Exchange under the ticker symbol of BFT. After two bankruptcy filings, it now operates just 3 sites in New York.

Now we have SoulCycle.

In a July 30, 2015 Prospectus for its planned IPO, the company says it’s “a rapidly growing lifestyle brand that strives to empower our riders in an immersive fitness experience” and a company that believes “fitness should be joyful, inspiring and help people connect with their true and best selves.”

Wow! Who could resist investing their hard-earned money in that?

SoulCycle began as a small cycling studio in New York City in 2006. Since then SoulCycle has opened 47 locations nationwide, with plans to open 50-60 studios worldwide by 2016. It says it believes there’s enough opportunity to grow its domestic footprint to at least 250 studios.

The wealthy investors behind SoulCycle hope to reap a windfall when the company goes public, and there’s a lot of positive talk on the street.

But investors who are salivating over the IPO may be getting too exuberant.

As SoulCycle’s Prospectus notes, risk factors include the company’s ability to maintain the reputation and value of its brand, to attract and retain riders and to gain acceptance outside its Eastern geographic base.

There’s also competition. Current competitors already include similar cycling studios, like BurnCycle, Flywheel, and Portland’s Revocycle as well as other fitness boutiques and thousands of athletic clubs that offer spinning classes. Revocycle, for example, is positioning itself as “the higher ground” of exercise, “the Portland Organic, Artisanal Indoor Cycling Revolution.”

“Soul Cycle created a super high-intensity atmosphere ‘dance party on a bike’ class taught by ‘rockstar’ model/actor instructors,” says Revocycle. “…we try to treat our cycle classes like a yoga class, or barre….we practice excellent form and technique for safety, speak with a calming voice, use respectful and positive language, and we really tune into our bodies.”

SoulCycle is also going to have to deal in a timely way with inevitable changing trends. It could, frankly, be just another fitness fad.

SoulCycle will also have to deal with people’s changing economic circumstances.

At $34 a session, if you go three mornings a week, you’ll spend $5304 a year. If you want to go hole hog, you can reserve your favorite instructors or classes by signing up for 50 SuperSoul classes at $3500, or $70 a session.

If you’re part of the 1 percent, that’s no big deal. But that may be too much for enough customers to fill 250 studios across the United States.

The experience of other IPOs also should send a warning, too.

Of the 35 companies that went public with a valuation larger than $1 billion and started trading in the past year, 40 percent of them have fallen below their IPO price, BloombergBusiness reported earlier this month.

Bloomberg noted that investors had initially been excited about getting a piece of companies like Etsy Inc., which surged 87.5 percent on its first day of trading, and LendingClub Corp., which climbed 56.2 percent, but both stocks have slid more than 11 percent below their offering prices.

The Motley Fool just highlighted that even much-vaunted Twitter (NYSE:TWTR) stock has been hammered this year. After rising to $53 earlier this year, shares have since been halved. Now trading at around $24, Twitter stock’s year-to-date return is a disappointing -32%.

So as Sergeant Phil Esterhaus used to say on Hill Street Blues, “Hey, let’s be careful out there.”

The faux fight against ISIS

dronesISIS

ISIS is on the run. Just read the headlines.

Official: local ISIS leader killed in western Mosul, Sept. 2015; US Airstrikes In Iraq Kill Three Senior ISIS Leaders, Including Baghdadi’s Key Aide, Sept. 2015; White House confirms key ISIS leader killed in US air strike, Aug. 21, 2015; Afghan agency: ISIS leader killed in drone strike, July 2015; U.S.: ISIS No. 2 killed in U.S. drone strike in Iraq, Aug. 2015; Pentagon officials: Prominent ISIS recruiter killed in airstrike, Aug. 2015; Top ISIS leader killed in coalition airstrike, July 2015; ISIS Leader Killed in Airstrike in Syria, June 2015; ISIS hacking leader killed by drone strike, Aug. 2015; Senior ISIS leader killed in extremist-held Hawija, July 2015; ISIS leader confirmed killed by U.S. forces, May 2015; Special Ops Kill ISIS Commander, Free His Family Slave, May 2015; Senior ISIS leader killed during raid, May 2015; Senior ISIS leader killed in U.S. raid in Syria, May 2015; U.S. special forces storm Syria’s Deir ez-Zor, kill senior ISIS commander, May 2015; Isis leader Abu Bakr al-Baghdadi ‘seriously wounded in air strike’, April 2015; CNN: US Has Secret ‘Kill List’ of Top ISIS Leaders, Feb. 2015; Iraqi police: new ISIS commander in Anbar killed, Jan. 2015; U.S. Secretary of State John Kerry announces that Iraq and the U.S.-led coalition have killed 50 percent of the Islamic State of Iraq and Syria’s (ISIS) top commanders, Jan. 2015.

HAVE WE WON YET?

Danger ahead: the dismal performance of some minorities on the SAT

The College Board recently reported the results for SAT test-takers in the class of 2015…and the news isn’t good.

african-american-teenagers-taking-the-sat

On average, high school graduates in the class of 2015 had lower scores in all three subject areas (critical reading, math and writing) than in 2014 and overall the lowest performance since the 2,400-point scale was developed about a decade ago.

The mainstream media covered this pretty well, but most ignored or said little about a more disturbing aspect of the report: the results for Native American, African American and Hispanic students were appalling.

Just 41.9% of SAT takers in the class of 2015 (712,000 students) met the SAT College and Career Readiness Benchmark. That means they have a 65% probability of obtaining a first-year GPA of B- or higher at a four-year college. It indicates a student’s readiness to enter college or career-training programs and to succeed in credit-bearing, entry-level college courses.

But look at the percent of U.S. test-takers who met the benchmark broken down by race/ethnicity:

  • Asian: 61.3%
  • White: 52.8%
  • Native American: 32.7%
  • Hispanic: 22.7%
  • African American: 16.1%

The numbers for native Americans, Hispanics and African-Americans in Oregon who met the College and Career Readiness Benchmark were pretty dismal, too: 

  • Native American: 31%
  • Hispanic: 22.6%
  • African American: 24.9%

Some argue that the averages for minority students are low because the number of them taking the test is expanding: 32.5% were underrepresented minority students in the class of 2015, compared to 31.3% in the class of 2014 and 29.0% in the class of 2011.

Others argue that this is avoiding the real issue, that too many minority students are not getting a good education. “Without access to challenging courses and assessments that measure their progress, students will not be able to get the most out of their opportunities to prepare for college and careers.” The College Board said in its report.

The College Board noted that there continue to be striking differences in academic preparation between white and Asian students and African Americans, Native Americans and Hispanics that affect college readiness. White and Asian students taking the SAT, for example, are more likely to have taken AP and Honors courses. They are also more likely to have completed a full “core curriculum,” which includes four or more years of English, three or more years of mathematics, three or more years of natural science, and three or more years of social science and history.

“Nowhere is there more of a need to expand access to more rigorous coursework than among low-income and minority students,” said Cyndie Schmeiser, Chief of Assessment at the College Board.

The U.S. Census projects that racial and ethnic minorities will represent more than half of all children in the United States by 2023, and that the U.S. population will be 54 percent minority by 2050. As noted by the Association of American Colleges & Universities, “Youth from these communities need full preparation for and access to higher education. It would be both immoral and impractical to ignore the disparities facing these young people, as a brighter future for them means a brighter future for all.”