“Managing your career is like investing – the degree of difficulty does not count. So you can save yourself money and pain by getting on the right train.”

In my year-end post, Ten Lessons Learned In 2007, my number eight lesson learned was “Work for great people at great companies”. Mary Buffett details the lesson with the following account from her former father-in-law:

One not only needs to learn what kind of business to invest in but what kind to work in. If one goes to work for a company with poor long-term economics, then he can never expect to do really well because the company doesn’t do well. Salaries will be below average and raises will be few and long between, and there is greater risk of losing your job because management will always be under pressure to cut costs.

But if you go to work for a company that has great long-term economics working in its favor, then the company will be awash in cash. This means higher salaries and tons of raises and promotions for a job well done. Plus there will be plenty of room for advancement as management looks for ways to spend all that free cash.

You want to work for a company that has high margins and makes lots of money. And you want to stay away from businesses that have low margins and lose money. One is a first-class train ride to Easy Street; the other is a long, slow hard freight-train ride to a Siberian nowhere.

To drive Warren and Mary Buffett’s point home, examine the company that I work for - Avionics Systems, Inc. (not the actual real name) and its stock performance. The company provides a 401K program and presently matches my contributions with 8% in company stock. The historical return on the company stock is 22.41% (since 2001). Assume I am 29 years old and have $10,000 in company stock, and the company’s stock continues to perform at the historical level of 22.4% until I retire in 33 years at the age of 62. My $10,000 of company stock would be worth $7,906,015. And that’s not adding any more shares to the account.

Now what if I had not chosen to work for this great performing company, but rather worked for an average company that performs at the historical stock market average return of 11%? My $10,000 in company stock would be worth $313,082 at retirement.

You see Warren Buffett’s point? Work for great companies. It pays off in the long run.

Are you working for a great company? If not, go get a great job this year.

Want some suggestions? Try Garmin Ltd. (GRMN), The Procter and Gamble Company (PG), Research In Motion, Limited (RIMM), Apple Inc. (AAPL), Google Inc. (GOOG), Intel Corporation (INTC), Microsoft (MSFT), Dick’s Sporting Goods Inc. (DKS), or T Rowe Price Group Inc. (TROW), all which outperformed the market the past year and have great long-term economics working for them.

Pierre Cutler
The Sacramento Executive

(Note: I own shares in The Procter and Gamble Company.)

Posted by Pierre Cutler at 1:30 PM | Permalink

My frustration level is high as we enter a new year.

We (as in this country, we) wasted another year with no or inadequate action on many important issues:

The environment, healthcare for all, improving our prison systems, lifting the poor out of poverty, reigning back the corporations who are now in charge of our country, stopping the loss of lives and limbs and brains of our young men and women in Iraq and Afghanistan, protecting and defending the Constitution (and using fear, fear, fear to justify the loss of our rights), improving education, and on and on.

In California, we allowed another year of drunken spending by our government and our citizens until the bubble burst, this time not tech but real estate. And we allowed a ballot initiative, which passed by 61%, that would have provided drug treatment instead of prison and cut back spending drastically, to be completely underfunded. Meanwhile, we allowed the prison union to continue their unfettered, unabated growth, all aided and abetted by that fear, fear, fear message.

In Sacramento, we allowed another year to go by without resolving most of the major development problems - a new arena, a safe and prosperous K Street (and Downtown Mall) and that ugly hole in the ground on what should be our grand entrance (Capitol Mall). And, of course, that Greyhound bus station stands stubbornly in the path of progress. And then there would be the situation surrounding the loss by death or life sentences of our young people in South Sacramento that grows more out of control every day. And that same old gang, fear, fear, fear message. How about a message of hope - jobs, training programs, mentors, education? Could we try that for a change?

Depressing, yes. So depressing that we just give up. Absolutely NOT. Go register to vote, read everything you can about every candidate and every issue and be the decider from now on. It's too important not to be.

Happy New Year. Let's hope the message of hope overshadows the constant messages of fear.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 12:59 PM | Permalink | Comments (1)

My fiftieth year passed me by in 2007. And what did I learn?

1. Escape 9 to 5 and live anywhere – thank you Tim Ferriss;
2. Practice peace – thank you Varick F. Cutler;
3. Define my primary aim – thank you Michael Gerber;
4. Envision my perfect job and then go for it – thank you Richard Nelson Bolles;
5. Don’t lose money, Rule #1 for investors – thank you Phil Town;
6. Focus on the positive – thank you Mom;
7. Downsize my life and that less is truly more – thank you Michael Gellert;
8. Work for great people at great companies (if you must work for someone else) – thank you Warren Buffett;
9. Aspire to educate all because the lack of education is the root of most evil;
10. Say I love you – Gillian, I love you very much!

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 10:44 AM | Permalink

Don't get me wrong. I never used to actually agree with Tom Sullivan on much of anything. But he did have a certain gentlemanly aura about him that made me capable of listening to him without resorting to high pitched shrieks (the kind I use for Rush). But did his joining Fox turn him into a jerk?

I hadn't listened to him for several months. Earlier this week I had a 2 hour drive in an area of poor radio coverage and had forgotten to bring my XM Radio. Turn to stalwart KFBK. Tom Sullivan is going off about incandescent bulbs being banned. He says that he has the right to use whatever bulb he wants and if he wants to pay the extra cost for the energy consumed, that's his business. Well actually Tom, it's not just your business because all of that extra energy that you are requiring is heating up my earth and I an pretty resentful about that. One might think that as a parent, you might be a little concerned about that too. Concerned enough that you might be willing to take a light that is a little 'cooler' than the warm glow you require. How selfish can you be?

Next day, I tune in again, just at the minute that the family who had been lost in the Sierra's for 2 days when they went to cut down a Christmas tree. You are going off about how they had no right to go in there so unprepared, etc. etc. Could you just slow down for a second and let everyone be grateful that they are alive and well? I can sort of see when those climbers got lost on Mount Hood a year ago could make people question the reasonableness of their decision to go out in terrible conditions - they were professionals. But a local family, with a Dad that had just moved from Southern California? Did you ever hear of a mistake, Tom? Thank goodness, it didn't turn into a fatal and tragic mistake.

Is that what happens when local radio guys go national on TV? They turn into jerks. Is that a requirement? Makes me be much more sure to remember my XM every time I travel.

Gillian Parrillo
SacWomen

Posted by Gillian Parrillo at 12:47 PM | Permalink | Comments (2)

I see the photo online today.
An 'army' of heavily armed policemen patrol through South Sacramento. And a small girl dressed in a bright pink outfit walking on the sidewalk. The photo haunts me. Can this be my City? Surely, it's a picture of Iraq or Afghanistan? My heart breaks - for the law enforcement officer killed yesterday, for the lost youth of Sacramento who believe, rightly or wrongly, that gangs offer more hope to them than their community, for all those who hate and punish even though it is obvious this is not the solution. And by the minute, the situation deteriorates.

I thought about it all day. I can't put it out of my mind. And then Rhonda Erwin, a fearless and tireless champion for the youth of Sacramento, forwarded this note written by a local attorney and former law enforcement officer. If only he were in the majority.

When a community lives by the sword, it will die by the sword. Yet, I mourn grievously the needless death of the law enforcement officer performing his duties, as I once "wore the uniform" of another law enforcement agency.

His loss is deep and mournful, as I weep for his loss as he did his Duty to the Fullest Measure. For his family, I shed my reluctant tears and offer only inadequate solace, for he obviously was a great man, and dedicated public servant. Hopefully his loss will at last call us all to awake from our comfort of letting "law enforcement" take care of this problem.

Just as it has been said, "War is too Important to be left to the Generals", so too at home, the so-called "street crime" is too important to leave only to law enforcement.

I once walked that neighborhood and called that place home, so I take to heart the great tragedy that folks there now must feel. This brings real anguish in this place. On the one hand, these neighbors must feel their days are risky and dangerous because of restless youth; but on the other-hand they must feel isolated and invaded by official powers with a "survivor- conquers-all" mentality. But that mentality isn't trust-worthy; and that mentality didn't work here, and won't be any more reliable for our Community's neighborhoods in the future, where and when our Children will be living our legacy.

Now, at last, at long last, we, starting here and now in our Community need to reach out in peace; peace begets peace. Let it begin. Let our legacy be a challenge of peace, not a challenge of war-fare on our own streets, in our own neighborhoods.

Children should be offered love, and respite from the violence of gangs, not rebuff and fear.

Children should be offered a welcoming place, in the class-room, in the neighborhood, in Recreational Centers, in Parks, in the Youth Programs, and yes, in their Churches.

Children here are "our" children, not the Enemies that our trigger-ready mentality of SWAT teams and Law Enforcement budgets caters to at local Board meetings. "Where our Treasure is, so are our Hearts."

Children "Know" when they are marginalized, and Children "Know" when they are pushed outside of the Value Parameters of our Community.

Children "Know" when there's no music program because that's too expensive.

Children "Know" when the Community doesn't value them, or much less their Future.

Children "Know" when we show them that their Future is not our concern, seeing the schools left afloat with demeaning lack of concern, both for the physical plant and resources and challenging opportunities.

Yes, Children "get-it" that those new shinny Law Enforcement tools are targeted at them.

They get-it that they are expected to "stay-in-line", but not the line that leads to Educational Excellence and development of their God-Given Potential, but instead the one that leads to darkness and despair because we are "ready, willing and able" to FILL MORE PRISONS at whatever COST.

Yes, Children "get-it" that we are not prepared to fill their classrooms with any "shinny" new educational tools, because we constantly remind them that such educational assistance for them would COST TOO MUCH.

Yes, Children clearly "get-it" where we're coming from. They see, hear and "feel" it when we adopt "Gang-Ordinances" to watch, monitor and control their movements, speech and free association. They "get-it"!

A new dialog is needed. And if we need new Leadership to "get-it" right, then the time is NOW to start.

Our law enforcement officers need to be welcome as "Neighborhood Beat-Cops" who know the kids by name. That may be back-to-the-future", but the Path we have wandered-down is fruitless of positive results. Staying on that old Path is only certain to lead to the same "Survivor-Wins" results.

Let's now dedicate to take a new Path, expecting Positive Results BECAUSE WE PLANT THE SEEDS OF HOPEFULNESS, not despair. Let us bear any burden to support our neighborhood kids, NO WHAT OR WHERE THAT NEIGHBORHOOD IS. LET'S EXPECT OUR KIDS TO BE OUR FUTURE COMMUNITY LEADERS AND GOOD CITIZENS.

Gillian Parrillo
SacWomen

Posted by Gillian Parrillo at 7:49 PM | Permalink

Here's a great last minute stocking stuffer:

California Lectures presents legendary political powerhouse, Willie Brown, February 19, 2008 at 7:30 p.m. at the Crest Theatre in downtown Sacramento. In conversation with Phil Isenberg, Willie Brown will be discussing and reading from his new book Basic Brown: My Life and Our Times (February 2008).

Willie Brown has been at the center of California politics, government and civic life for an astonishing four decades. He rose from the rural, segregated Texas of the Depression to become the two-term mayor of San Francisco, the longest-serving Speaker of the California Assembly (1980-1995), and one of the most influential black politicians in American history.

In his new biography -- an anecdote-filled compendium of advice and candid rules about surviving today’s power politics -- Brown discusses contemporary political figures including Hillary Clinton, Barack Obama, Condoleezza Rice, Arnold Schwarzenegger, Mark Warner, Colin Powell and George W. Bush, and the secret weapon that can win the presidency for the Democratic Party in 2008.

With a career that has spanned the American Presidency from Lyndon Johnson to George W. Bush, Willie Brown has worked with every California governor from Pat Brown to Arnold Schwarzenegger. The Washington Post has referred to Brown as “the last Political Showman of the 20th Century.” Currently he heads the Willie L. Brown, Jr. Institute on Politics and Public Service.

Tickets are $25 and available at Tickets.com or (800) 225-2277, or can be purchased in person at the Crest Theatre box office. California Lectures season line up also includes bestselling author, Sue Miller, Pulitzer Prize winner Geraldine Brooks, and internationally acclaimed authors Richard Powers and Tobias Wolff. For program information call (916) 737-1300 or visit the website.

Lecture Date | Time
February 19, 2008 at 7:30 p.m.
Lecture Preview at 6:30 p.m., a biographical discussion presented by CSUS Professor Tim Hodson. Doors open at 6:15 p.m. Books available for purchase and book signing after the event. For program information call (916) 737-1300.

Lecture Location
Crest Theatre, 1013 K Street, Sacramento

Tickets on sale December 12: $25
Tickets.com or (800) 225-2277. Or at the Crest Theatre Box Office, 1013 K Street:
Monday – Thursday, 4:30-8:00 p.m. | Friday – Sun

Gillian Parrillo
SacWomen

Posted by Gillian Parrillo at 11:47 PM | Permalink | Comments (1)

OK folks, you've all heard the saying "Think Outside The Box".

Well here's new meaning to thinking outside the box. But before you peek, remember these golden rules:

1. Don't Assume.

2. Question Habits.

3. Be Creative.

4. Look For A Better Way.

5. Impossibilities Often Aren't.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 12:46 PM | Permalink | Comments (2)

Two weeks ago I posted Twenty Contrarian Thoughts. I 'd like to add one and make it 21:

Warren Buffett on investing in the stock market:

"Be fearful when others are greedy and greedy when others are fearful."

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 6:44 AM | Permalink

A year ago today, we introduced the Magic Formula Index, inspired by The Little Book That Beats the Market. According to the author Joel Greenblatt, the book may be the only investment book that you will ever have to read.

Greenblatt claims an enviable record of 40% annual returns since 1985 in his private investment firm Gotham Capital. In the Little Book (it really is little!), Greenblatt lays out a simple strategy that just seems to work. He contends you should buy 20 to 30 stocks each year with the highest pre-tax earnings yield (the inverse of price to earnings ratio) and the highest return on capital. That's all there is to it. Sit back and beat the market. If you applied this magic formula since 1988, you would have realized a 30.8% annual return. Not bad, particularly when the S&P 500 produced a 12.4% annual return over the same period.

This is year two of testing Greenblatt's magic formula. Here's how it works:

For the next year I will keep track of his results. We'll call it the MagicFormula Index. From his website www.MagicFormulaInvesting.com, I applied his formula and ran the following search: top 25 companies with a minimum market capitalization of $100 million. Here are the results and closing prices as of December 12. Let's invest a fictional $100,000 and see where we end up on December 12, 2008.

• Accenture Ltd. (ACN), $34.65
• Aspreva Pharmaceuticals Corp. (ASPV), $25.77 (second year on the list)
• Avici Systems Inc. (AVCI), $7.35
• Barrett Business Services Inc. (BBSI), $18.14
• Biovail Corp. (BVF), $14.73 (second year on the list)
• China 3C Group (CHCG), $3.81
• Cutera Inc. (CUTR), $15.72
• Freight Car America Inc. (RAIL), $35.17 (second year on the list)
• Heelys Inc. (HLYS), $6.05
• Heidrick & Struggles International Inc. (HSII), $34.45
• ICF International Inc. (ICFI), $25.79
• Idearc Inc. (IAR), $17.51
• Intevac Inc. (IVAC), $16.34
• King Pharamceuticals Inc. (KG), $10.25 (second year on list)
• Korn/Ferry International (KFY), $19.71 (second year on the list)
• Pacer International (PACR), $14.36 (second year on the list)
• Palm Inc. (PALM), $5.49 (second year on the list)
• Palomar Medical Technologies Inc. (PMTI), $20.14
• Replidyne Inc. (RDYN), $4.01
• Silicon Image Inc. (SIMG), $4.88
• Travelzoo (TZOO), $15.14
• Trident Microsystems Inc. (TRID), $6.95
• USA Mobility (USMO), $13.50
• United Online Inc. (UNTD), $11.25 (second year on the list)
• ViroPharma Inc. (VPHM), $8.55 (second year on the list)

Posted by Pierre Cutler at 5:25 AM | Permalink | Comments (1)

Twelve months ago we begain tracking the Magic Formula Index. Since December 13, 2006, the Index is up 2.8% versus 5.3% for the Standard and Poor's 500 Index. Hence, the Magic Formula did not produce magic. It underperformed the S&P 500 Index by 2.5%.

A year ago we introduced Joel Greenblatt's book "The Little Book That Beats The Market". In his book, Greenblatt shared his success with the Magic Formula.

Recall that we started with a notional $100,000 investment in a basket of 25 stocks. The investment is now worth $102,844. The Standard and Poor's 500 Index closed today at 1486.59 (the S&P 500 Index closed on December 12, 2006 at 1411.56).

In our basket of stocks, 14 were up and 11 were down. The best performing stock was Fording Canadian Coal Trust (FDG), up 81.5%. The worst peformer was Mannatech Inc. (MTEX) down 52.1%. Details of the Index, assuming today's closing prices:

• Aspreva Pharmaceuticals Corp. (ASPV), $19.70 vs. $25.77, (up 30.8%)
• Biovail Corp. (BVF), $21.00 vs. $14.73, (down 22.7%)
• Cavco Industries Inc. (CVCO), $34.41 vs. $35.78, (up 4.0%)
• EPIQ Systems Inc. (EPIQ), $10.50 vs. $16.78, (up 59.7%)
• Earthlink Inc. (ELNK), $6.42 vs. $6.76, (up 5.3%)
• Fording Canadian Coal Trust (FDG), $22.58 vs. $38.40 (up 81.5%)
• Freight Car America Inc. (RAIL), $53.39 vs.$35.17 (down 33.8%)
• Frontier Oil Corp. (FTO), $31.34 vs. $41.82 ( up 34.4%)
• Harvest Natural Resources Inc. (HNR), $10.21 vs. $12.54 (up 22.8%)
• King Pharmaceuticals Inc. (KG), $16.56 vs. 10.25 (down 38.1%)
• Korn/Ferry International (KFY), $22.30 vs. $19.71 (down 11.6%)
• Mannatech Inc. (MTEX), $13.46 vs. $6.18 (down 52.1)
• New Frontier Media Inc.(NOOF), $9.31 vs. $5.20 (down 35.1)
• OmniVision Technologies Inc. (OVTI), $14.59 vs. 17.40 (up 19.3%)
• PW Eagle (PWEI), $34.96 vs. 33.91 (down2.4%)
• Palm Inc. (PALM), $14.01 vs. $5.48 (up 3.4%, includes special dividend of $2,569.59)
• Pinnacle Airlines Corp. (PNCL), $10.34 vs. $15.71 (up 51.9%)
• PortalPlayer Inc. (PLAY), $13.40 vs. $13.48 (up .6%)
• True Religion Apparel Inc. (TRLG), $15.41 vs. $18.97 (up 23.1%)
• United Online Inc. (UNTD), $13.38 vs. $11.25 (down 10.0%)
• Vaalco Energy Inc. (EGY), $7.97 vs. $4.69 (down 41.2%)
• Valassis Communications Inc. (VCI), $16.44 vs. $12.40 (down 24.6%)
• Verigy Ltd. (VRGY), $18.06 vs. $26.69 (up 47.8%)
• ViroPharma Inc. (VPHM), $14.99 vs. $8.55 (down 43.0%)
• Western Refining Inc. (WNR), $27.17 vs. $27.29 (up 1.7%)

I still believe in the Magic Formula Index and will track it again over the next year. Look for a new set of stocks for the Index in the next post.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 10:12 PM | Permalink

The Great Start Mentorship Program. A great, free resource for entrepreneurs in Sacramento. If you are starting a company, you would be foolish not to take advantage of this new program from the Sacramento Area Regional Technology Alliance. From the SARTA website:

GreatStart provides assistance to high tech companies in early stages of development. Clients apply to be accepted into the program and then get to work with mentors and advisors over a time specified by panelists and mentors. Upon completion of this process, the GreatStart client is requested to make a presentation to our panel of experts. Our panels are made up of investors, lawyers, strategists and industry savvy professionals. During and after the panel presentation feedback is provided and then a next meeting occurs with comments, suggestions, contacts and more about the plan and presentation. At that time a mentor is chosen and will work with the team for the months ahead through the process of preparation to go in front of investors. The main goal for clients and mentors is to prepare a business plan and strategy to move forward to get funding.

Check it out

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 6:37 AM | Permalink

Last year I baked each of our neighbors a loaf of banana bread. Actually I baked them two each. The dog jumped up and ate the first ones while they were cooling, so I had to start over.

This year, I wanted to do something a little more meaningful. And something that the dog couldn't eat! I thought about making a charitable donation in my neighbors' names. I had done that for one of them on his birthday last year. But then I read a story in the Dallas Morning News today about Mark Bent who created the BoGo.

BoGo stands for Buy One Give One. And a BoGo is a solar powered flashlight that uses highly efficient LEDs to convert sunshine into bright clean light. But the best thing about BoGos are that when you buy one, the company gives one to Africa.

More than a billion and a half people around the world have no electricity. Instead they use lanterns that burn expensive kerosene. The cost of kerosene is often 30% of a family's income. The kerosene provides very poor light, even in a small hut, but it emits lots of noxious pollutants.

So I ordered 3 BoGos and 3 BoGos are winging their way to Africa and changing the lives of 3 families. And my neighbors get a cool looking solar powered flashlight as part of the deal.

I think I met my requirement of a meaningful gift for our neighbors. Now for 2008.....

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 4:48 PM | Permalink

FMC Technologies (NYSE symbol FTI) is undervalued, selling at 55% discount of fair market value. Using Warren Buffett's approach, on Friday I paid 45 cents on the dollar for FTI. My purchase price was $58.45 and the estimated fair market value is $130.84. Now that's a real bargain!

Here's what attracted me to FTI (all five-year annual growth rates): bookvalue 25.8%, earnings per share 40.8%, revenue 16.0%, return on invested capital 13.0%, and free cashflow 23.2%. The analysts' consensus earnings annual growth estimate for the next five years is 31%.

What's not to like about this? Great financial results over the past five years and solild future predictions. And so I jumped at it.

Now let's see if I am right.

About FMC Technologies: FMC Technologies is a global provider of technology solutions for the energy industry and other industrial markets. The Company designs, manufactures and services systems and products, such as subsea production and processing systems, surface wellhead production systems, high-pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. It also produces food processing equipment for the food industry and specialized equipment to service the aviation industry.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 1:42 PM | Permalink

For the kid away at college in a major city or university town without a car consider a membership to Zipcar. For a $50 a year membership fee and an hourly usage fee starting at $5, he or she can pick up a car, including a Toyota Prius, in a nearby garage to run quick errands. The driver must be at least 21 years old and have a good driving record.

No more, "But I have to have a car at school!"

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 9:47 PM | Permalink | Comments (1)

Bill O'Reilly is a moron! Mark Cuban refrained from saying it after Bill O'Reilly's ugly comments in November about Cuban and the movie "Redacted". But I feel free to say today what Cuban didn't, after seeing Mark Cuban's actions last night for the fourth year in a row.

Allow me to set the stage:

O'Reilly alleged that Cuban was anti-American and ran a campaign to have fans take "Support Our Troops" signs to the Dallas Mavericks - San Antonio Spurs game on November 15. Well, instead Cuban outclassed O'Reilly and arranged for the Army National Gaurd to hand out Defending Freedom t-shirts to every fan .

And then last night at the Mavericks - Jazz game, every front row seat was occupied by military personnel, as guests of Mark Cuban and the Mavericks.

In a press release from the Mavericks:

Tonight for the fourth consecutive year, Mavs front row season ticket holders have banded together to provide a special tribute to injured U.S. military personnel title "Seats for Soldiers".

Approximately 130 members of the U.S. military will enjoy the special experience of sitting in front row seats valued at over $200,000. American Airlines is providing jet transportation to Dallas from Brooke Army Medical Center in San Antonio. In addition, American Airlines flight crew and flight attendants are donating their time for this special occasion.

As my wife Gillian Parrillo and I settled into our seats for the game, I happened to spot one of the soldiers sitting on the Mavericks' bench that looked like someone I knew. And sure enough it was TSgt. Israel Del Toro, whom I met at the Ft. Hood TACP Expo in June.

TSgt. Del Toro is an unbelievably remarkable human being, having suffered burns over 80% of his body from an IED explosion in Afghanistan. And there he was, guest of Mark Cuban for the second time in two years, sitting on the Mavs bench. (click here for a must see video of Del Toro, as he tells his story)

And now back to the class of Mark Cuban.

Rather than ranting about Bill O'Reilly, Mark quietly goes about his business, touching the lives of many like those 130 wounded solidiers. Time and time again, I've seen Mark do it not only for the soldiers, but also for young entrepreneurs such as the Sacramento Entrepreneurship Academy where I saw him speak pro-bono. I expect he will continue to do more.

And what is the moron doing? Being outclassed by Mark Cuban, no doubt.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 12:36 PM | Permalink

Many employees at my company look forward to the first Friday each December because it's bonus payday. Today was no exception.

Like most, for weeks, I waited in anticipation of the announcement as to how we did, planning what I was going to do with the bonus. By mid-November we received the news - my bonus was a bit over 20% of my base annual salary. Very nice! And so I continued to plot and plan, waiting for today, when the company would pay the bonus via direct deposit.

Six of us dined together for lunch today. Much of the conversation centered around what we were doing with our bonuses. Most noted it was perfect timing for the holidays. I listened to everyone's plans. One person was planning to buy a 72" HDTV. Another was talking about a boat. Without exception, each person spoke of what they were going to buy.

As we talked, I shared a story from a colleague who lived in a mid-west town, which is the headquarters of our 20,000-person firm. About 10,000 of the 110,000 people in the community work for my company. A couple of years ago on bonus payday, the community had a run on big-screen TVs at the local Best Buy store. By the end of the weekend the store had run out of TVs.

I was amazed at this account and assume it will happen again this weekend, based on the talk at lunch.

Now here’s what I did with my bonus – after the stock market opened this morning, I used a third of the bonus to buy FMC Technologies, Inc. (NYSE symbol FTI). I had patiently waited for the right time to buy FTI, based on Phil Town’s Rule #1 approach, and surprisingly, today was the time to make the value play (buying the stock at a margin of safety of 50% off the fair market value).

I am really excited about FTI. I guess I could have bought a TV or maybe even a car. But why should I? These items are depreciating assets. I want appreciating assets - things that can grow and make me rich. I plan to spend my entire bonus buying value stocks, using Phil Town’s approach. I will be patient and wait for the right moment to “spend” the rest of my bonus on stocks, like I did last year, when I put it all on the Procter and Gamble Company (NYSE symbol PG) in March (and have enjoyed a 22.7% return on investment in nine months).

Oh by the way, you might ask, “What is Rule #1?”

Rule #1 is – don’t lose money. Warren Buffett teaches this rule. If it’s good enough for Warren, then it’s good enough for me.

I wonder how many people used their bonus to invest in an appreciating asset today? I bet not many. And that’s what’s sad about Americans – they are not setting themselves up to financially succeed. Can you imagine what Warren Buffett would think about the behaviors of my co-workers on bonus payday?

Pierre Cutler
The Sacramento Executive

About FMC Technologies: FMC Technologies, Inc. (FMC Technologies) is a global provider of technology solutions for the energy industry and other industrial markets. The Company designs, manufactures and services systems and products, such as subsea production and processing systems, surface wellhead production systems, high-pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. It also produces food processing equipment for the food industry and specialized equipment to service the aviation industry.

Posted by Pierre Cutler at 3:32 PM | Permalink

The West Sacramento City Council voted 4-0 Wednesday in favor of accepting the results of a feasibility study and to develop a business plan to move forward the establishment of a technology incubator in West Sacramento.

The effort is being spearheaded by Diane Richards, the economic development coordinator for West Sacramento. The feasibility survey was undertaken by Innovative Partners and included 55 investors, entrepreneurs, government and academic officials, local business executives, and land owners and developers between Aug. 13 and Nov. 21. Innovative Partners is made up of Jeffrey Milanette, President of Innovative Partners, and Ingrid Rosten, who oversees GreatStart and CleanStart. The results revelead that:

There is general support for establishing a tech incubator in West Sacramento;
The city has the ability to collaborate with the private sector and create an organization that will build many small companies into larger ones, and stimulate West Sacramento's economy and employment;
There are sufficient numbers of tech startups in the region to indicate that "a reasonable level of occupancy" could be achieved and maintained;
There are potential public and private partners, many of which have indicated their willingness to work with the city;
Entrepreneurs support the idea and many said they'd consider applying for admission.
The report recommends the city take a "conservative" step-by-step approach toward establishing an incubator. The city would begin that work in the first quarter of next year and conclude the process in three to five years.

The City will prepare a business plan due by the end of April.
City staff will begin establishing a nonprofit incubation corporation, seek funding for the program and execute contracts for incubation services in June.
Beginning in July, the City will roll out a virtual incubator - one that offers services without the physcal space. If that program is successful, the City will find incubator space.

Good news for Sacramento area tech startups.

Story courtesty of the Sacramento Business Journal

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 6:01 AM | Permalink

Thanks to Mason and Tricia for a wonderful event to benefit the Sacramento Children's Receiving Home. Buy your tickets ASAP.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 2:28 PM | Permalink

Au contraire! Here are twenty contrarian thoughts worth pondering:

1. "Whenever you find yourself on the side of the majority, it is time to pause and reflect" (Mark Twain).
2. "Reality is negotiable" (Tim Ferriss).
3. "Everything popular is wrong" (Oscar Wilde).
4. "Victory is sweetest when you’ve known defeat" (Malcom S. Forbes).
5. Who would Jesus bomb?
6. Less is more.
7. Why [do] Smart People Do Stupid Things With Money (Bert Whitehead)?
8. Why buy the biggest house you can afford?
9. In a democracy, how is it possible to win without getting the most votes?
10. If women make up 51% of the popluation, how come there are only 26 women CEOs in the 1,000 largest publicly traded companies in America?
11. Why does the stock market go down when investors are most bullish?
12. And why does the market go up when investors are most bearish?
13. Why does the myth “one has to assume higher risks to achieve higher returns” exist (Mohnish Pabrai)?
14. Simple Abundance (Sarah Ban Breathnach).
15. How come 85% of all mutual funds under perform the market?
16. Why do most people buy high and sell low?
17. Wouldn’t it be better to "put all your eggs in one basket and mind that basket very well" (Ben Franklin)?
18. ”Failure is success if we learn from it” (Malcom S. Forbes).
19. In baseball, if you fail to get on base (a hit is more accurate here) two out of every three at bats, you are a major league all-star.

Perhaps the greatest contrarian of our time is Warren Buffett whose value stock investing approch made him the third richest person in the world.

Going with the crowd produces mediocre results. Think. Think big. And number twenty - "The fishing is best where the fewest go" (Tim Ferriss)!

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 1:27 PM | Permalink | Comments (2)

I ran across these sobering and thought provoking words of Kurt Vonnegut on the blog of Tim Ferriss today.

"My country is in ruins. So I’m a fish in a poisoned fishbowl. I’m mostly just heartsick about this. There should have been hope. This should have been a great country. But we are despised all over the world now. I was hoping to build a country and add to its literature. That’s why I served in World War II, and that’s why I wrote books."

Posted by Pierre Cutler at 11:07 AM | Permalink

Want to be a successful entrepreneur? I suggest you read Skelliewag and her post on the Audacity of Failure. Skellie writes about blogging. But her principles equally apply to entrepreneurs.

Briefly, Skellie writes:

Part of being audacious is being ignored, or rejected, or brushed off, or criticized. You will sometimes fail. You’ll certainly make mistakes. I’ve experienced all of those things, and if you’re audacious, you will too.

Thankfully, both Albert Einstein and Michael Jordan (strange bedfellows, no?) have a few words of wisdom on that point:

“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
– Michael Jordan

“Anyone who has never made a mistake has never tried anything new.”
– Albert Einstein

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 10:27 AM | Permalink

The failure rate of angel-backed start-up companies is high. I once heard that 1 out of 17 companies succeeds. That is, investors get their money back on less than six percent of their investments.

Entrepreneurs, my message to you is if you fail, keep trying. Here are some amazing "failures" that will motivate you not to quit:

1. Michael Jordan, the greatest basketball player of all time, 14-time NBA all-star, 5-time NBA MVP, 10-time NBA scoring champ, 2-time Olympic gold medal winner, winner of six NBA titles and six NBA finals MVP, and 3-time all-star MVP, was cut from his high school basketball team.
2. Boston Celtics' Hall-of-Famer Bob Cousy, one of the NBA's 50 greatest players, 13-time NBA all-star, and winner of six NBA championships, was cut from his high school basketball team.
3. Tom Landry, third winningest NFL coach of all time with a record of 270 wins, 178 losses, and 6 ties, winner of two Super Bowls, and NFL record holder of twenty consecutive winning seasons, never won a game in his first season as head coach of the Dallas Cowboys with a record of 0-11-1.
4. Chuck Noll former head coach of the Pittsburg Steelers, winner of four Super Bowls, and head coach record of 209-156-1, won just one game his first year, posting a losing season of 1-14.
5. Bill Walsh, former head coach of the San Francisco 49ers, winner of three Super Bowls, and head coach record of 102-63-1, posted a record of 2-14 in his inaugural season.
6. Jimmy Johnson, former head coach of the Miami Dolphins and Dallas Cowboys, winner of one Super Bowls, and head coach record of 89-68, won one game his first year, with a losing record of 1-15.

Click here for a list of heros who would not give up and ultimately achieved renown success.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 5:30 PM | Permalink | Comments (1)

Congratulations to Karen Armstrong, Dave Eggers and Neil Turok, winners of the 2008 TED Prize.

Each winner will receive $100,000 and be granted a WISH to change the world.

Click here to see the video announcement.

My daughter Rebekah introduced me to Dave Eggers in 2000, with his first book "A Heartbreaking Work of Staggering Genius". I look forward to hearing Dave's wish in February. I bet it will have something to do with education or Africia. Perhaps both.

About the TED Prize:

The TED Prize was introduced in 2005, and it is unlike any other award. Although the winners receive a prize of $100,000 each, the real prize is that they are granted a WISH. "A wish to change the world." There are no formal restrictions on the wish. We ask our winners to think big and to be creative. The goal is that it creates an incredible sense of excitement and common purpose. It inspires the TED community, and all those who hear about the wish, to offer their help in making the wish come true.

Three winners are chosen each year. They could be anyone with world-changing potential: inventors or entrepreneurs, designers or artists, visionaries or mavericks, story-tellers or persuaders. But they must be people who the judges believe have the ability to inspire others to do something great for the world.

Our new winners will announce their wishes at TED2008 in Monterey, on February 28, 2008, and their presentations will be released online to the world shortly afterward.

Posted by Pierre Cutler at 9:32 AM | Permalink