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Cincinnati Business Courier: Fourth – Race Project Back on Track – Flaherty – Collins

#cincinnati business courier

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Cincinnati Business Courier: Fourth Race Project Back on Track

by Chris Wetterich | Cincinnati Business Courier

A three-year-old plan to build a new apartment complex and garage in a key corner of downtown Cincinnati is back on track after years of delays, political saber-rattling, review and revision.

Later this summer, the Cincinnati Center City Development Corp. will demolish Pogue’s Garage at Fourth and Race streets and begin building a new garage, the podium for a $106 million, 225-apartment luxury tower to be built and owned by Indianapolis-based Flaherty Collins Properties. Demolition will take three to five months with construction of the 14-story building expected to begin by the end of the year.

The project will activate a sector of downtown that has some residential presence already with apartment and condo buildings on the west side of Fourth and Fifth streets, and, just as important, add much-needed supply to a Cincinnati housing market with pent-up demand.

“That’s a lot of bodies introduced to a part of town that straddles between Fountain Square and (west) Fourth Street where there is residential. There’s sort of a gap there, and this fills it in pretty well,” said Adam Gelter, 3CDC’s executive vice president for development. “Fourth Street in general, especially as you come east, is one of the better streets in town from an urban feel, but it isn’t tremendously active, particularly at night. The tenants on the first floor and the people above will bring a little bit more life to the street.”

Jim Crossin . Flaherty Collins Properties vice president for development, said the company is happy with how plans for Fourth and Race turned out.

“We think the project will be a great success,” Crossin said. “3CDC — they operate a lot of parking facilities. They’ll also take care of the loan and lease of the ground-floor retail, which is in their area of expertise. Our business is multifamily development. It works out great that they’re doing those two portions of the project.”

The company was not fazed by the long process of dealing with a change in city administration and shifting priorities.

“Almost everything we do is a public-private partnership. The public side of most of our deals usually involves the local municipality,’’ Crossin said. “We like them because in the end, it’s usually an opportunity to develop a special project downtown where projects aren’t easy to get done. It takes often working through the political process to get it done.”

Like other recent, brand-new downtown apartment projects, nearly half of the building will be a parking garage. 3CDC will build seven stories – first-floor commercial space, plus six floors containing 700 parking spaces – and Flaherty Collins Properties will build seven stories of apartments on top of that. Some parking will be reserved for residents while other spaces will replace those lost in the demolition of Pogue’s Garage.

The apartment tower will be C-shaped with an amenity deck on the eighth floor that includes a grilling area and resort-style outdoor pool.

Crossin said hiding the parking garage is an important architectural feature of the building. Atlanta-based Preston Partnerships, which designed the second phase of the Banks, will design the building, while Turner Construction will manage the construction.

“There’s screening on the garage to mask that it’s a parking garage,” Crossin said. “We wanted it to not look like a residential building sitting on top of a garage. We wanted a cohesive design that fits into the context of downtown.”

Flaherty Collins Properties aimed for a ratio of 1.1 to 1.2 parking spaces per unit. Asked whether he believes additional downtown apartment towers will need as much parking in the future, Crossin said that while the streetcar could reduce parking needs, “We’re still in the Midwest where you may need to use your car less, but everybody needs a car.”

If residents become less dependent on their cars, Crossin said, the parking spaces could be used by others.

“If you add more jobs downtown, which definitely seems to be going in a positive direction, those people will need places to park.”

The project is “addition by subtraction,” Gelter said. It gets rid of a hideous parking garage that empties via ramps on city streets. 3CDC expects to open the new garage before the overall project is complete, as it did with the 84.51 center at Sixth and Race streets.

“If nothing went back, it would be better than it is today,” Gelter said.

First-floor retail also was key.

“As we build around the country doing urban mixed-use, our residents – the No. 1 thing they want is a walkable, urban environment,” Crossin said. We wanted to have street-level retail space that serves as an amenity to residents.”

Flaherty Collins Properties has developed 50 properties and 8,000 units, with many of their projects in Indiana.

The project will inject several hundred new residents in an area of downtown with a lot of longtime retailers, such as Koch Sporting Goods and Bromwell’s. Both developers and government leaders view downtown as having more demand than supply, with Downtown Cincinnati Inc. reporting an occupancy rate of 97 percent for residential units in 2015.

Even as Flaherty Collins Properties worked through the Fourth and Race deal, it considered other Cincinnati projects. It has talked to some downtown parking lot owners who other developers have reported have been reluctant to sell or join developments as equity partners.

“We’re getting a subsidy from the city. The land is being contributed also,” Crossin said. “If it were Joe Smith with a parking lot that’s very valuable land worth several million bucks, it doesn’t work. If rents can continue to rise, we’ll reach a point where those deals do work without any help. I think the city’s hope is that they’re priming the pump.”

Flaherty Collins Properties plans to keep looking for other projects.

“We think Cincinnati’s a fantastic market downtown,” Crossin said. “We think there’s more demand (downtown) than there are new high-end projects currently.”

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4 Tips on Building a Catering Business Plan #new #business #names

#catering business

#

Tasty tapas, enticing entrées, and delectable desserts – if the sounds of these dishes whet your career appetite, then employment in catering might be right for you. If, in addition to being a virtuoso in the kitchen, you’re an expert event organizer, then perhaps you can do more than just work for a catering company. That skillset is just what a catering business entrepreneur needs to be successful.

Launching your very own catering business can be incredibly rewarding but also requires a lot of hard work and careful planning. Before you start working on your catering business plan, make sure you take into consideration these four factors as advised by professional business plan writers .

Investing in Logistics is Key

Glossing over the logistics in your catering business plan won’t suffice. Being successful in the catering industry requires a keen understanding of the logistics involved in the delivery of your catered dishes. A simple miscommunication between you and a supplier, for instance, can result in a botched wedding and a very unhappy clientele. Therefore, invest in logistics technology that suits your needs and learn all there is to discover about lead times, transportation, handling, etc. These skills will go a long way in keeping your business afloat.

Reach out to Dependable Suppliers

Even if you have all your internal ducks in a row logistics-wise, having an unreliable supplier can just as easily doom your business as if you yourself were a shoddy caterer. This is especially true when the goods being supplied are food. Since you’ll be working with perishable items, stocking up your inventory for the long-term is not an option for the most part. You’ll need to partner with suppliers who can deliver fresh meat, fish, dairy, produce, and more in a timely fashion. Moreover, you’ll need suppliers that you can trust are handling and storing food safely and properly. A bout of food poisoning – though not caused by your kitchen – can ruin your business nevertheless. So, do your research and ask for references when you’re on the hunt for a dependable supplier.

Save on Space

Depending on the needs and requirements of your business, you might be able to save on rental or leasing costs. Instead of leasing a commercial space on your own, you can share it with another caterer to reduce overhead. Other options include working out of your home or renting a restaurant’s kitchen after closing. A little creativity in your catering business plan can go a long way to saving money!

Competing in the Catering World

According to IBISWorld. the catering industry in the U.S. is a $9 billion industry with over 11,000 businesses. Revenue growth is mediocre, however, with annual growth between 2009 and 2014 measuring only 2.0 percent. With the industry as a whole experiencing little growth, new entrants in the catering space have a difficult time getting their share of the catering pie. If you want to compete, finding a speciality might be your best option. For example, you may choose to cater solely for corporate parties and events. Likewise, you might become the first gluten-free or organic caterer in your city. By gaining insight into the industry on a national and local level, you’ll be more prepared to come up with a unique strategy for your catering business.

Creating a successful catering business plan does not have to be difficult, The Plan Writers can help your business flourish. Fill out our online form for more information on building your business.





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7-Eleven, Volkswagen cases show why we should push back on – corporate ethics #business

#business ethics articles

#

7-Eleven. Volkswagen cases show why we should push back on ‘corporate ethics’

Professor of Management and Organization Studies, Macquarie University

Disclosure statement

Carl Rhodes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The Conversation’s partners

The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.

Republish this article

We believe in the free flow of information. We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print.

Chairman and major shareholder of 7-Eleven Russ Withers sits in a Senate Committee hearing in Melbourne. Julian Smith/AAP

There is perhaps no phrase more hackneyed in the corporate world than: “good ethics is good business”. Against the image of the ruthless business baron who will stop at nothing in the pursuit of wealth and power, the slogan tells us there is no friction between being good and being successful.

As luck should have it (for corporations that is) it is argued organisations can stand up and be righteous about their do-gooding, and this will actually lead to the achievement of self-interested business results. The cake can be had and eaten.

But does this ethical catch phrase really hold sway in the corporate world? Events this September suggest not.

The month of the corporate scandal

September 2015 was mired in corporate scandal. German car manufacturer Volkswagen was raked over the coals for installing software in its cars that ensured it falsely passed emission tests. Eleven million cars were involved over a period of seven years. VW’s CEO Martin Winterkorn resigned over the affair and now faces possible criminal charges .

American corporation Turing Pharmaceuticals was publicly vilified for its predatory pricing when it raised the price of the drug Daraprim by 4000%. This is a drug used to treat infections associated with HIV and AIDS. Turing’s CEO Martin Shkreli was described by the Washington Post as “the most hated man in America”.

In Australia trouble arrived at convenience store chain 7-Eleven when the ABC’s documentary series Four Corners revealed its use of exploitative and illegal work practices to reduce its labour costs. Employees were being paid less than half the legal minimum wage. Young and foreign workers were especially targeted. The scandal saw the resignations of 7-Eleven’s chairman Russ Withers, and its CEO Warren Wilmot.

Bad ethics is good business

Each of these scandals has been scrutinised in terms of business ethics. We are not talking here about contentious and nuanced debates about the nature of morality. In these cases the ethical issues relate to cheating, lying, deception, law breaking, exploitation, and merciless profiteering. As far as any common understanding of ethics is concerned these things are on the far side of the thick and grey line that separates right from wrong.

What do these cases have in common? Each one suggests there was an ethos in place in these corporations that held that “bad ethics is good business”. Seven years of highly orchestrated cheating at VW meant increased sales. In 2009 VW became the world’s biggest car manufacturer .

Institutionalised wage fraud and labour exploitation at 7-Eleven kept store costs down, increasing profits both for franchisees and (especially) for the parent company. 7-Eleven has twice been names Australia’s “franchisor of the year”. Price gouging at Turing meant a drug listed on The World Health Organization’s essential medicines list could bolster the company’s profits by exploiting the sick and vulnerable.

Just don’t get caught

The “bad ethics is good business” approach was going well for these businesses until they got caught. These three cases have triggered debates still raging in all sectors of society. Heads have rolled and bottom lines are jeopardised.

Does this really confirm that “bad ethics is bad business”? Of course not. There is no doubt many other corporations are profiting handsomely from deceit, lies, fraud and exploitation. The scandals of September 2015 show that “bad ethics is good business … unless you get caught”.

It’s not just about not getting caught. It is also about the political, legal, social and economic implications of being found out. In the cases of VW, 7-Eleven and Turing there has been a massive public and media outcry about their reprehensible and selfish behaviour.

Bringing these corporations to justice was not the work of one heroic individual, nor the result of government action. It was a collective effort that involved NGOs, scientists, academics, politicians, the media and the general public. This was a victory of civil society and democratic dissent.

So, we can reformulate our proposal: “Bad ethics is good business … unless you get caught … and as long as you aren’t the subject of a public outcry”.

Democratic business ethics

When corporations speak of business ethics their idea is that they can keep it all in house. The ethics of business is largely seen as a matter of corporate self-regulation so that pesky outsiders won’t stick their noses into corporate affairs. The September scandals suggest an entirely different ethics.

If we want ethics in business, what we need is more corporations being caught and more public outcry. For business ethics to be effective they must be pushed onto corporations against their will. Business ethics is democratic, not corporate.

What we can learn from the business events of September is that ethics cannot be left to corporations themselves. Business ethics requires a vigilant democracy where the public and its institutions will hold corporations to account for their actions.

Business ethics, to borrow a phrase, is about keeping the bastards honest.





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Monkey Business » On a Mission to Make the World More Fun and Yellow

#monkey business

#

We help people
to implement
new ideas!

Meille apinoille ihminen on tärkein.
Organisaatio on ihmisten päiden, käsien ja sydänten summa. Tavoitteenamme on saada sydämet ja päät toimimaan yhdessä entistä paremmin. Tällöin kädet vapautuvat ja uudenlainen tekeminen luo tekemisen kulttuurin.
Lähestymistapamme on muotoilullinen, eikä meillä ole valmiita vastauksia. Jokainen ongelma ratkaistaan yhdessä ihmisten kanssa, ihmisten tarpeisiin. Avullamme tekijät itse keksivät ratkaisut ja ideat omiin ongelmiinsa.

Tämä referenssi on ollut osa Kokeiluraportti 2/2015 -uutiskirjettämme. Käy vilkaisemassa koko kirje tästä. Emme voi kertoa organisaation nimeä tai hankkeen tarkkoja

Tämä referenssi on ollut osa Yellow Press – Kokeilut 1/2015 -uutiskirjettämme. Käy vilkaisemassa koko kirje tästä. Emme voi kertoa organisaation nimeä

Organisaatiot hakevat jatkuvasti uusia toiminnan muotoja. Toimintaympäristössä tapahtuvat muutokset edellyttävät valmiutta reagoida nopeasti, ketterästi ja tehokkaasti. On löydettävä se, missä

Vuodesta 2006 asti olemme Monkey Busineksessä tutkineet tulevaisuuden organisaatioita. Tutkimusmatkoillamme olemme toteuttaneet yli kaksisataa erilaista kehitysprojektia yli kahdessakymmenessä maassa, viidellä

Katri Viippola kertoo yllä olevalla videolla miksi on valinnut Monkey Busineksen avukseen jo kahdessa eri organisaatiossa.

Monkey Busineksen ensimmäinen virallinen iso keikka elokuussa 2007 oli Strategian lanseeraustilaisuus eräälle yritykselle Pieksämäellä. Se tarjoiltiin Tatulle ja Villelle verkoston

Monkey Business on teille oikea kumppani, jos: Haluatte muutosta toimintatapoihinne, yksinkertaisin keinoin. Haluatte, että muutos on vuorovaikutteinen ja osallistava – ihmiset saavat

Kolmas ydinteoriamme on kirjasta The Leadership Challenge.

Nonakan & Takeuchin kiteyttämä tiedon luomisen teoria on hyvä malli uuden tiedon synnyttämiselle. Tässä yksinkertaistettu malli. 1. Dialogi – käymme dialogia

Toimintamme ytimessä on dialogi. Dialogi on yhdessä puhumista ja ajattelua. Dialogin perusidea on yksinkertainen: kun yksi puhuu, niin muut kuuntelee.

Visiomme: Monkeyn visio on olla Suomelle paras lifestyle-osuuskunta. Teemme töitä sydämestä puhumisen ja välittämisen vallankumouksen puolesta. Meidän unelmamme Suomesta on intohimon





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Reflections on the co-creation of innovative business ideas #business #contract

#innovative business ideas

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Reflections on the co-creation of innovative business ideas

From Participation to Collaboration: Reflections on the co-creation of innovative business ideas

Cara Broadley, Katherine Champion, Michael Pierre Johnson, Lynn-Sayers McHattie

The Glasgow School of Art (2), University of Abertay, The Glasgow School of Art

Keywords: co-design methods; knowledge exchange; collaboration; design-led innovation

Design-led innovation interventions are predicated on the importance of establishing complex disciplinary collaborations. This paper reflects on the effects of different co-design methods to support knowledge exchange and the co-creation of new business ideas with multidisciplinary participants. It draws on data collected from sandpit style events entitled Chiasma, undertaken as part of the knowledge exchange hub, Design in Action (DiA) in which co-design methods were used to bring designers, entrepreneurs, and academics together to develop innovative business ideas in Scotland. Employing a thematic analysis of idea generation, team formation, and idea development, we suggest that a more nuanced range of methods, tools, and techniques can strengthen multidisciplinary engagement and participation. We argue that such approaches can be enhanced by designers and researchers’ shifting focus from co-design methods to supporting collaborative mindsets in knowledge exchange towards innovation.

download the paper (PDF)

Cite this paper: Broadleya, C. Championa, K. Johnsonb, M.P. McHattiea, L.S. (2016). From Participation to Collaboration: Reflections on the co-creation of innovative business ideas. Proceedings of DRS 2016, Design Research Society 50th Anniversary Conference. Brighton, UK, 27–30 June 2016.

This paper will be presented at DRS2016, find it in the conference programme





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Fewer stocks listed on the stock market are vanishing #stockmarket #today

#stocks market

#

The stock market is vanishing

The stock market isn’t what it used to be.

As noted by Steven DeSanctis, equity strategist at Jefferies, the sheer number of companies listed on stock exchanges has been dropping off precipitously.

The number of firms with shares publicly listed in the University of Chicago’s Center for Research in Security Prices aggregate index has fallen to 3,267 from a peak of 6,364 in 1997.

This, in fact, is the lowest number of listed stocks since 1984.

There are a number of possible reasons for this. Here’s DeSanctis’ breakdown:

“Between the lack of IPO activity. the pick-up of M A, and buybacks, the US equity world is becoming smaller and smaller, and this could be one of many reasons why active managers are lagging behind their indexes. Companies may not want to come public due to the additional cost of Sarbanes-Oxley or the fact that the private market has become a bigger source of financing than it has been in the past.”

While the answer is probably some combination of these factors, DeSanctis also thinks that the declining number of stocks may be affecting the performance of many professional stock pickers.

The argument is that with fewer companies to choose from, active managers are forced to crowd into certain stocks. Crowding makes it impossible to differentiate returns and causes these managers, in DeSanctis’ mind, to fall short of their benchmarks.

SEE ALSO: ALBERT EDWARDS: The crutch holding up the US economy is about to be ‘kicked away’





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7-Eleven, Volkswagen cases show why we should push back on – corporate ethics #free

#business ethics articles

#

7-Eleven. Volkswagen cases show why we should push back on ‘corporate ethics’

Professor of Management and Organization Studies, Macquarie University

Disclosure statement

Carl Rhodes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The Conversation’s partners

The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.

Republish this article

We believe in the free flow of information. We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print.

Chairman and major shareholder of 7-Eleven Russ Withers sits in a Senate Committee hearing in Melbourne. Julian Smith/AAP

There is perhaps no phrase more hackneyed in the corporate world than: “good ethics is good business”. Against the image of the ruthless business baron who will stop at nothing in the pursuit of wealth and power, the slogan tells us there is no friction between being good and being successful.

As luck should have it (for corporations that is) it is argued organisations can stand up and be righteous about their do-gooding, and this will actually lead to the achievement of self-interested business results. The cake can be had and eaten.

But does this ethical catch phrase really hold sway in the corporate world? Events this September suggest not.

The month of the corporate scandal

September 2015 was mired in corporate scandal. German car manufacturer Volkswagen was raked over the coals for installing software in its cars that ensured it falsely passed emission tests. Eleven million cars were involved over a period of seven years. VW’s CEO Martin Winterkorn resigned over the affair and now faces possible criminal charges .

American corporation Turing Pharmaceuticals was publicly vilified for its predatory pricing when it raised the price of the drug Daraprim by 4000%. This is a drug used to treat infections associated with HIV and AIDS. Turing’s CEO Martin Shkreli was described by the Washington Post as “the most hated man in America”.

In Australia trouble arrived at convenience store chain 7-Eleven when the ABC’s documentary series Four Corners revealed its use of exploitative and illegal work practices to reduce its labour costs. Employees were being paid less than half the legal minimum wage. Young and foreign workers were especially targeted. The scandal saw the resignations of 7-Eleven’s chairman Russ Withers, and its CEO Warren Wilmot.

Bad ethics is good business

Each of these scandals has been scrutinised in terms of business ethics. We are not talking here about contentious and nuanced debates about the nature of morality. In these cases the ethical issues relate to cheating, lying, deception, law breaking, exploitation, and merciless profiteering. As far as any common understanding of ethics is concerned these things are on the far side of the thick and grey line that separates right from wrong.

What do these cases have in common? Each one suggests there was an ethos in place in these corporations that held that “bad ethics is good business”. Seven years of highly orchestrated cheating at VW meant increased sales. In 2009 VW became the world’s biggest car manufacturer .

Institutionalised wage fraud and labour exploitation at 7-Eleven kept store costs down, increasing profits both for franchisees and (especially) for the parent company. 7-Eleven has twice been names Australia’s “franchisor of the year”. Price gouging at Turing meant a drug listed on The World Health Organization’s essential medicines list could bolster the company’s profits by exploiting the sick and vulnerable.

Just don’t get caught

The “bad ethics is good business” approach was going well for these businesses until they got caught. These three cases have triggered debates still raging in all sectors of society. Heads have rolled and bottom lines are jeopardised.

Does this really confirm that “bad ethics is bad business”? Of course not. There is no doubt many other corporations are profiting handsomely from deceit, lies, fraud and exploitation. The scandals of September 2015 show that “bad ethics is good business … unless you get caught”.

It’s not just about not getting caught. It is also about the political, legal, social and economic implications of being found out. In the cases of VW, 7-Eleven and Turing there has been a massive public and media outcry about their reprehensible and selfish behaviour.

Bringing these corporations to justice was not the work of one heroic individual, nor the result of government action. It was a collective effort that involved NGOs, scientists, academics, politicians, the media and the general public. This was a victory of civil society and democratic dissent.

So, we can reformulate our proposal: “Bad ethics is good business … unless you get caught … and as long as you aren’t the subject of a public outcry”.

Democratic business ethics

When corporations speak of business ethics their idea is that they can keep it all in house. The ethics of business is largely seen as a matter of corporate self-regulation so that pesky outsiders won’t stick their noses into corporate affairs. The September scandals suggest an entirely different ethics.

If we want ethics in business, what we need is more corporations being caught and more public outcry. For business ethics to be effective they must be pushed onto corporations against their will. Business ethics is democratic, not corporate.

What we can learn from the business events of September is that ethics cannot be left to corporations themselves. Business ethics requires a vigilant democracy where the public and its institutions will hold corporations to account for their actions.

Business ethics, to borrow a phrase, is about keeping the bastards honest.





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People on the Move – Memphis Business Journal Online, 12 #business #franchise #opportunities

#memphis business journal

#

  • Connect With us:
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  • Click this link to send us an email.

People on the Move Memphis Business Journal Online, 12/07/11

Date added: December 7, 2011

Submission Type: New Hire

Current employer: Pathway Lending

Current title/position: Regional Program and Client Manager

Position level: Manager

Duties/responsibilities:
Chris will serve Nashville-based Pathway Lending as the Regional Program and Client Manager (for West Tenn.) out of the Jackson office.

Company headquarters: Nashville

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Pathway Lending is an Equal Opportunity Lender. We do not discriminate on the basis of race, color, religion, sex, marital status, disability, age, or national origin. This project is funded under an agreement with the Tennessee Department of Economic and Community Development.

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The Lowdown On Penny Stocks #business #sale

#penny stocks

#

The Lowdown On Penny Stocks

Successful companies aren’t born, they’re made. They have to work through the ranks like everyone else. Unfortunately, some investors believe that finding the next “big thing” means scouring through penny stocks in hopes of finding the next Microsoft or Wal-Mart. As we’ll explain in this article, this is probably not the best strategy.

More from Investopedia:

What Exactly Is a Penny/Micro-Cap Stock?
In this article we’ll use the terms “penny stocks” and “micro-cap stocks” interchangeably. Technically, micro-cap stocks are classified as such based on their market capitalization while penny stocks are looked at in terms of their price. Definitions vary, but in general a stock with a market capitalization between $50 and $300 million is a micro-cap. (Less than $50 million is a nano-cap.) According to the Securities & Exchange Commission (SEC) any stock under $5 is a penny stock. Again, definitions can vary, some set the cut-off point at $3, while others consider only those stocks trading at less than $1 to be a penny stock. Finally, we consider any stock that is trading on the Pink Sheets or OTCBB to be a penny stock.

The main thing you have to know about penny/micro stocks is that they are much riskier than regular stocks. For instance, junk bonds (bonds with a rating lower than BBB) are considered a much higher risk than those of investment grade (bonds with a rating higher than BBB). In the world of stocks the equivalent comparison is penny stocks vs. blue-chip.

What’s the Problem with These Stocks?
What makes penny stocks risky? Four major issues arise when you decide to buy these securities:

Lack of Information Available to the Public
One thing we always preach is that the key to any successful investment strategy is acquiring enough tangible information to make informed decisions. For micro-cap stocks, information is much more difficult to find. Companies listed on the pink sheets are not required to file with the SEC and are thus not as publicly scrutinized or regulated as the stocks represented on the NYSE and the Nasdaq exchanges; furthermore, much of the information available about micro-cap stocks is typically not from a credible source.

No Minimum Standards
Stocks on the OTCBB and Pink Sheets do not have to fulfill minimum standard requirements to remain on the exchange. Sometimes, this is why the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves one of these smaller exchanges. While the OTCBB does require companies to file timely documents with the SEC, the Pink Sheets has no such requirement. Minimum standards act as a safety cushion for some investors and as a benchmark for some companies.

Lack of History
Many of the companies considered to be micro-cap stocks are either newly formed or approaching bankruptcy. These companies will generally have a poor track record or none at all. As you can imagine, the lack of histories of companies only magnifies the difficulty in picking the right stock.

Liquidity
When stocks don’t have much liquidity, two problems arise: first, there is the possibility that the stock you purchased cannot be sold. If there is a low level of liquidity, it may be hard to find a buyer for a particular stock, and you may be required to lower your price until it is considered attractive by another buyer. Second, low liquidity levels provide opportunities for some traders to manipulate stock prices, which is done in many different ways – the easiest is to buy large amounts of stock, hype it up and then sell it after other investors find it attractive (also known as pump and dump).

The Problem for Investors
Penny stocks have been a thorn in the side of the SEC for some time because micro-cap stocks’ lack of available information and poor liquidity make these groups of stocks an easy target for fraudsters. There are many different ways these people will try to part you from your money, but here are two of the most common:

Biased Recommendations � Some micro-cap companies pay individuals to recommend the company stock in different media, i.e. newsletters, financial television and radio shows. You may receive spam e-mail trying to persuade you to purchase particular stock. All e-mails, postings and recommendations of that kind should be taken with a grain of salt. Look to see if the issuers of the recommendations are being paid for their services as this is a giveaway of a bad investment and make sure that any press releases aren’t given falsely by people looking to influence the price of a stock.

Off-Shore Brokers� Under regulation S, the SEC permits companies selling stock outside the U.S. to foreign investors to be exempt from registering stock. These companies will typically sell the stock at a discount to offshore brokers who, in turn, sell them back to U.S. investors for a substantial profit. By cold calling a list of potential investors (investors with enough money to buy a particular stock) and providing attractive information, these dishonest brokers will use high-pressure “boiler room” sales tactics to persuade investors to purchase stock.

Buying These Stocks
Two common fallacies pertaining to penny stocks are that many of today’s stocks were once penny stocks and that there is a positive correlation between the number of stocks a person owns and his or her returns.

Investors who have fallen into the trap of the first fallacy believe Wal-Mart, Microsoft and many other large companies were once penny stocks that have appreciated to high dollar values. Many investors make this mistake because they are looking at the “adjusted stock price”, which takes into account all stock splits. By taking a look at both Microsoft and Wal-Mart, you can see that the respective prices on their first days of trading were $28 and $25 even though the prices adjusted for splits is $0.09722 and $0.02444 (at time of writing). Rather than starting at a low market price, these companies actually started pretty high, continually rising until they needed to be split.

The second reason that many investors may be attracted to penny stocks is the conception that there is more room for appreciation and more opportunity to own more stock. If a stock is at $0.10 and rises by $0.05, you will have made a 50% return. This together with the with the fact that a $1,000 investment can buy 10,000 shares convinces investors that micro cap stock are a rapid surefire way to increase profits. For some reason, people think of the upside but forget about the downside. A $0.10 stock can just as easily go down $0.05 and lose half its value. Most often, these stocks do not succeed, and there is a high probability that you will lose your entire investment.

Conclusion
Sure, some companies on the OTCBB and Pink Sheets might be good quality, and many OTCBB companies are working extremely hard to make their way up to the more reputable Nasdaq and NYSE. However, the flip-side is that there many good opportunities in stocks that aren’t trading for pennies. You need to understand that this is a high risk area that isn’t suitable for all investors. If you can’t resist the lure of micro-caps, make sure you do extensive research and understand what you are getting into.

by Investopedia Staff

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Monkey Business » On a Mission to Make the World More Fun and Yellow

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Meille apinoille ihminen on tärkein.
Organisaatio on ihmisten päiden, käsien ja sydänten summa. Tavoitteenamme on saada sydämet ja päät toimimaan yhdessä entistä paremmin. Tällöin kädet vapautuvat ja uudenlainen tekeminen luo tekemisen kulttuurin.
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Tämä referenssi on ollut osa Kokeiluraportti 2/2015 -uutiskirjettämme. Käy vilkaisemassa koko kirje tästä. Emme voi kertoa organisaation nimeä tai hankkeen tarkkoja

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Organisaatiot hakevat jatkuvasti uusia toiminnan muotoja. Toimintaympäristössä tapahtuvat muutokset edellyttävät valmiutta reagoida nopeasti, ketterästi ja tehokkaasti. On löydettävä se, missä

Vuodesta 2006 asti olemme Monkey Busineksessä tutkineet tulevaisuuden organisaatioita. Tutkimusmatkoillamme olemme toteuttaneet yli kaksisataa erilaista kehitysprojektia yli kahdessakymmenessä maassa, viidellä

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Monkey Busineksen ensimmäinen virallinen iso keikka elokuussa 2007 oli Strategian lanseeraustilaisuus eräälle yritykselle Pieksämäellä. Se tarjoiltiin Tatulle ja Villelle verkoston

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Toimintamme ytimessä on dialogi. Dialogi on yhdessä puhumista ja ajattelua. Dialogin perusidea on yksinkertainen: kun yksi puhuu, niin muut kuuntelee.

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