₦airaland Forum

Definition of 'Black Swan Event'

An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader. Black swan events are typically random and unexpected. For example, the previously successful hedge fund Long Term Capital Management (LTCM) was driven into the ground as a result of the ripple effect caused by the Russian government's debt default. The Russian government's default represents a black swan event because none of LTCM's computer models could have predicted this event and its subsequent effects.

The black swan theory or theory of black swan events is a metaphor that encapsulates the concept that an event is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight.

The theory was developed by Nassim Nicholas Taleb to explain:

"The disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology"

Unlike the earlier philosophical "black swan problem", the "black swan theory" refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.

(Culled Wiki and Investpedia)

@nitrogen, apologies for the delayed response. "I am currently doing "360 in a 120 lane". There are many exit strategies for a PE investment. The strategy used will be largely determined by the duration of the investment, amount involved, type of deal originated,marco economic condition and investment climate just to mention a few. This said, I have included some theory for your attention whilst making an attempt to answer your question.

"PE exit strategy"
A private equity firm receives the lion’s share of its returns upon exit of an investment. (The remainder is realised along the way as dividends, distributions, management fees and capital returns.) The Exit Strategies and Methods for Private Equity Funds include the following:

Trade sale: this is the most common exit for private equity. The reason being that trade buyers in the same industry are often more likely to have synergies with the business. Therefore, they are the most natural buyers of the business and, ipso facto, trade buyers can pay the highest price.

Public listing: in the right market conditions, an IPO can lead to very fruitful outcomes for business owners. The major benefit of an IPO is that the business owners don’t need to subscribe to a raft of warranties and earnout conditions, which are usually present in a trade sale. The downside is that the process is relatively costly and the results are acutely sensitive to market movements.

Recapitalisation: in some cases, the management team and other shareholders may decide they want to continue running the business after the private equity firm exits. Recapitalising the business (usually with debt) and using the new capital to buyout the private equity owner can achieve this.

Secondary sale: this involves selling the business to another financial investor (usually another private equity fund). Although this seems perverse, (you’d imagine if one private equity firm didn’t want the investment, others wouldn’t either), a deviation from a firm’s investment mandate can drive it (e.g. the business is getting too large for the fund to support).

There are other less common Exit Strategies and Methods for Private Equity Funds, but these are by far the most common way for PE to sell investments and move on

(Adapted from Private Equiteers)

This said, the most common exit strategy is usually through a public flotation. However, the apathy in the capital market has made this strategy highly unpopular, thus other plausible alternatives are considered. The Ikeja shopping mall investments presents good business case study for this. I suspect that the exit strategy will be based on a B.O.T contract (build, operate and transfer) with the occupants of the mall. A B.O.T contract is a type of arrangement in which the private sector builds an infrastructure project, operates it and eventually transfers ownership of the project to the government or new owners. This kind of contract is typical for most long term infrastructure development.

Definition of 'Quantitative Easing'

A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.

Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to keep market interest rates at a specified target value.


(Culled Wiki and Investpedia)

Who wants to get married nowadays when after ten or "ish" years of marriage, you suddenly discover that you have been living with a total stranger, when after ten or "ish" years of marriage you 'suddenly' discover that the sweet adorable kid who calls you "Daddy" and who makes you feel like 'Superman' anytime, you lift them up is not the product of your loins!

When your future 'better half' is still calling her "Ex" moments before she says "I do" to make arrangements for a "rendezvous" where she will pleasure her "Ex" with the greatest "farewell/bye bye sex" ever. When your better half wants to put you on a leash and turn you into "Bingo".

Who wants to get married when, there will be a "pre-nup" indicative that both partners might not be committed in the long haul. Who wants to get married when you will have nosy in laws that will drive one crazy and by default expect to cater for the needs of your spouse's extended family(pay school fees/ house rent for your spouse's cousin, aunty, sister's uncle's niece! etc).

Finally, who wants to get married and be stuck with eating "egusi" everyday, 24/7 when you can remain single and have the pleasure of vegetable, banga, bitter leaf, ewedu,okra,abula and even mix some of the above cited(e.g bitter leaf and egusi, vegetable and egusi etc ) when we like.........Food for thought!

In financial accounting, a cash flow statement, also known as statement of cash flows or funds flow statement, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and cash out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet.


Culled from "Wikipedia"

"Balance Sheet"

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation or other business organization, such as an LLC or an LLP. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.

A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.

Culled from "Wikipedia"

"Balance Sheet"

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation or other business organization, such as an LLC or an LLP. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.

A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.

(Culled from "Wikipedia"

Definition of 'Fire Sale'

Selling goods or assets at heavily discounted prices. Fire sale originally referred to the discount sale of goods that were damaged by fire; it may now refer to any sale where the seller is in financial distress. In the context of the financial markets, fire sale refers to securities that are trading well below their intrinsic value, such as during prolonged bear markets.

(Culled from Investopedia)

LBO vs. MBO

A leveraged buyout (or LBO, or highly leveraged transaction (HLT), or "bootstrap" transaction) occurs when an investor, typically a financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage (borrowing). The assets of the acquired company are used as collateral for the borrowed capital, sometimes with assets of the acquiring company.

A management buyout (MBO) is a form of acquisition where a company's existing managers acquire a large part or all of the company. In most cases, the management will buy out all the outstanding shareholders and then take the company private because it feels it has the expertise to grow the business better if it controls the ownership. Quite often, management will team up with a venture capitalist to acquire the business because it's a complicated process that requires significant capital.

(Adapted from "Wiki" and Investopedia)

@ maclatunji,
I think what you will need is a venture capitalist or angel investor. I might be wrong but I suspect that your intended transaction or business might not fall within the minimum threshold that will command the attention of a PE firm in Nigeria. Either way, you still need to have a business plan to back up your request.

@ feelamong, you have raised a vital question. Well, no matter the amount of due diligence conducted for a potential PE deal, there is bound to be one of two that go south or "bust" as cited by you. In this regard, there are several measures put in place to mitigate for this unintended outcome. The first is that comprehensive insurance cover is always provided hence the insurance company will bear the risk in this case.

Secondly and depending on the type of deal, additional debt funding can be included in the transaction to strengthen the balance sheet size of the company invested in. Here it could be that the company is facing short term liquidity problems.

If the transaction is on. B.O.T basis and consummated on behalf of a third party i.e. infrastructure or project finance, the is always an "exit clause" included in the transaction document that will compel the third party to reimburse any funds expended (at prevailing market rates) on the project till the point of exit.

Additionally, the assets of the company/ invested in could be auctioned through a process known as asset stripping and investors' funds returned. Assets here could range from patent rights to plant and machinery and even real estate.

The exit strategy used which is usually plotted on a "baseline,pessimistic and optimistic" scenario is largely determined by the nature of the PE deal. Quite frankly, no two PE deals are the same.

You are quite correct PFAs (pension fund administrators) are allowed to allocate a certain proportion of their entire pension portfolio to private equity investments. However this is done with "cautious optimism". Most PFAs prefer to invest now in risk free government T bills and bonds that would only guarantee a small ROI but ensure the safety of the initial investment principal taking into account bitter lessons learnt from the last global financial crises and current volatility in the global markets. Bear in mind also, that PE transactions cut across all cadre of investments. One downside though is the risk of an asset/liability mismatch wherein there could be a call on the PE investments before the obligations are due.

I am also aware that HF managers also include some PE investments in their portfolio for diversification purposes but mainly those that can be disposed off easily to a counter party. Eg investments in social media like facebook,linkedIn,nano technology and bio tech investments. Most HF managers nowadays place counter party bets on contingent liabilities and engage in derivative trading. The downside to this is that whilst most HF transactions are consummated with a short term perspective in mind,good PE investment take an average 3-7 to mature.

"Private Placement"

Private placement (or non-public offering) is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors.

Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market. Since the placements are private rather than public, the average investor is only made aware of the placement after it has occurred.

(Adapted from "Wiki" and Investopedia)

I am inclined not to have any sympathy for the poster for some reasons which I will state below. We have only listened to your own side of the story and there is one particular piece of information herein about your "verbally abusive" boyfriend. You have added that he is currently unemployed. This present state can be quite frustrating and demeaning for a man's ego. Now, I am aware that my view could be biased and I am also not holding sway for his "act of cowardice", (yes I will call it this because any man that abuses a woman either verbally or physically is one) but how have you helped him in this regard? Do you encourage him with motivating words or embark of a journey of self comparison(your mates are doing this and that and you are still looking for a job etc). The worst thing that can happen to a man is to have his ego bruised and besides relationships is not just about sex and food alone.

On second thought, if all you have said is true, then there no point staying another second in the relationship. The holy books spells out the consequences of casting our "pearls amongst swine", but hey this is Nigeria where most ladies get "confused" when you try to be polite and treat them with decorum so I am not surprised! They would prefer to be in a relationship where they are treated like "trash" and kept in the background rather than one where they will be pampered and treated like the "Nubian" queens that they ought to be.

I was in Nigeria late last year for my parent's wedding anniversary and decided to visit this chinese restaurant on the island. I ran into three ladies at the entrance and tried to be a gentleman by opening the door for them to enter. To my wider shock, I overheard one of the ladies calling me a "mugu". Upon further inquiry, from my cousin at home, I was told what the derogatory term stands for. Similarly, another lady immediately assumed I was after her BB pin and tel number and instantly declined even before I asked for it just because I offered to assist her with her extra baggage at Shoprite.

@ the poster, sorry about your predicament but "I am not holding my breath"

Bagholder

The term bagholder is an informal slang term used in financial markets to refer to the shareholders left holding shares of worthless stocks.

The shareholders could be caught up in a corporate bankruptcy and accounting scandal, or the victims of a pump and dump scheme (similar to the "IPO/PO/Hybrid offer bubble" witnessed in the Nigerian banking sector around 2006-2008, in which naive and unsophisticated investors fall victim to spurious equity valuations, rigged stock tip/recommendations, or other tricks used by to drive up the shares of companies.

The term has also been applied as a term of derision to real estate investors.

The word is derived by combining shareholder with the expression "left holding the bag."

(Adapted from "Wiki" and Investopedia)



@ Ajo M, apologies for the delayed response. Somehow, your question just fell through the "cracks". Yes, I am certain that you will be able to get the data you have stated herein. There is however a "caveat", if you intend to make use of the Bloomberg terminals at the universities around you. The kind of information you will have access to will be largely determined by the subscription package paid for. There are some that would pay for country specific, sector specific, transaction specific information so you might want to consider this. But over all, the aforementioned firms should be able to provide the data you need. The can also offer you bespoke services tailored to meet the data requirements you want. The MPR articles relate to the bond aspect of the project as it is through this that the CBN sets interest rates which have a bearing on the movement of bond prices and other related factors. All the best!

@ Nitrogen, Herd mentality describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items. Examples of the herd mentality include stock market trends, fashions in apparel, cars, taste in music, home décor, etc. It is a concept in behavioral finance that explains why investors are hardwired to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice.

For example, if a herd investor hears that internet stocks are the best investments right now, he will free up his investment capital and then dump it on internet stocks. If biotech stocks are all the rage six months later, he'll probably move his money again, perhaps before he has even experienced significant appreciation in his internet investments.

(Adapted from "Wiki" and Investopedia)

Hello Nairalanders,

I am inspired to start a new thread with the title referenced above. The idea is to create an interactive and educative platform where people can learn from one another, every day terminologies often used in our different fields of specialism. Definition of terms and concepts from budding "career specialists" in telecomms, oil and gas, all cadre of engineering, entertainment,education,health etc is welcome!

These terminologies should be defined in clear terms so that a "lay man" can understand and grasp them quickly. I work in finance (Private Equity) and would like to, with the express permission of the " forum moderators" set the balling rolling!

"Greater fool theory"

The greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a greater fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else at an even higher price. It is similar in concept to the "Keynesian beauty contest principle of stock investing".

(Adapted from "Wiki" and Investopedia)

P.S. It will also do some 'good' if we reference properly any definition that is not original or quoted "inter alia" to avoid plagiarism. Thank you.

Definition of 'Private Equity'

Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a de-listing of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.  

The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.

(Adapted from Investopedia)

The concept of private equity is relatively new in Nigeria and was popularized during the privatization of federal agencies, deregulation of the telecomms industry and consolidation of the banking industry. PE investments in Nigeria cut across various sectors-infrastructure,agriculture, transportation and haulage,retail and hospitality,financial institutions, real estate, healthcare,tech, media and telecomms etc. Major players include Actis,ECP,ARM Capital partners,ACA,CBO Capital Partners, Alithelia Capital, ACM etc.

Some of the seminal deals include but not limited to the following: Palms Shopping Mall in Lagos and host of other malls scattered round the country. Major investments in telecomms, hotels especially around the Lagos metropolitan area (VI and environs),infrastructure e.g concessioning of the Lekki expressway on a B.O.T arrangement, capital injection into UBN and host of others that can't be cited because they are still in their "incubation" stage!

This is just a teaser for those enthusiasts (both home and abroad) that might be interested in a career in PE. Please feel free to ask your questions and contributions are also welcome.

@ T22, I am still in private equity and I have decided to stay put there. The PE industry is very active now (both home and abroad) because, investors' apathy towards the capital markets and public flotations is still high hence they have channelled most of their funds to PE. More so, I occasionally participate in some deal origination and execution with some HFs that manage some endowment and institutional funds. for my clients.

Typical for us to play the "blame game" and transfer responsibility for our misdemeanor to others. No doubt, the feedback mechanism at our Universities is not at par but I am of the opinion that we eventually decide the grade that we want to graduate it. One vital point that we are all missing is that the decision to finish with a particular grade is not one made overnight but rather it is a process consisting of several "elements" including effective feedback included herein. The truth is even with feedback,some people will still finish with a third because they are some that quite frankly don't care or realize the true position of their grades a little too late.

@ Ajo Mmuo try bloomberg, datastream, thomson reuters and datamonitor. These firms compile data periodically and I am certain that you will be able to get the information you require from them at an affordable cost. You can also get some relevant information from the MPR articles up loaded on the CBN website. You may also speak to a registered stock broker and dealing member of the NSE if you still require any info from them. One down side though with NSE data is that they don't update it regularly. All the best.

Yes, you can work in an oil company along the lines of which you have specialized in-medicine. Any outside this is will be akin to you trying to pass a camel through the eye of a needle. All the best

I want to derail from the thread a little bit. The sentence structure is wrong. It should read: He drives a Benz and yet I turned him down or He owns a Benz and I still turned him down/ rejected his offer/declined his request.

!

@ poster, I will not give you a "politically correct" answer that will lead you on some grandiose illusion. I will advise you to forget about the idea. This doesn't imply that I am trying to discourage you from pursuing your dreams. If you insist on this 'route' despite the prevailing circumstances you have included in your post then by all means, please continue along this path. "Impossible is nothing" and I have personally removed the word "impossible" from my dictionary. If you decide to stay on course, what I would suggest is an accelerated 3 year plan for you as outlined below.

Continue with the CIS, register for ACCA i.e the dual programm with Oxford Brookes Uni in the UK where you also get a BSc Accounting in addition to your ACCA qualification. Try to pass at least level one of the CFA exam within this three year time line and this might possibly increase your chances slightly. I have suggested this for you because your grade at the HND level is a "setback" bearing in mind the fact that the industry is highly competitive and recruitment has slowed down. Besides, age is not in your favour. This route will be a capital intensive option and take a lot of your time but hey remember that "Impossible is nothing"!

Secondly, why not consider an alternative route because I want to believe that the ultimate goal in mind is to be wealthy and successful, however, we might define it. It is not compulsory that you must go down the 'IB route' if you wan to achieve "wealth or success" I will stop at this point and allow you to do some soul searching!

P. S try and do some reading on the concept of "Herd Mentality"

@ D.O.G, you answers are still generic and not on point. I will still refer you to the original questions herein below.

Additionally, what do you intend to do say post MSc, for example if environmental toxicology and pollution management is on offer at UI? Secondly, you why public health as an alternative. Both courses though similar in some aspects share vast dissimilarities as far as core specialization is concerned. I want to assume that this venture if I may call it that will involve some huge capital outlay and investment. More so, it will involve your time and other non quantifiable resources so it will not make sense to take this bold step without some form of advanced preparation whilst quantifying other plausible alternatives.

Finally I will suggest that you create a mind map with a 5 to 10 year time line(for starters) for what you want to do career wise because you intention to "have something that can fetch me a good job or even still be independent" is vague and ambiguous.

@ sammy, No harm intended, I am just contributing my bit. Just a quick teaser, before we completely derail this thread. Let me create a trajectory for you using the cost vs prize analogy.

Cost- possibility that the entire savings meant for a kid's college fund will be wiped out.

Prize-the commission to be made from a transaction involving the above cited even in the face of information asymmetry and moral hazard


Cost- sale of complex securitised derivative instruments to unsuspecting and unassuming investors.

Prize- taking huge bets on the above cited just to satisfy the hubris of a finance professional.

I could go cite more examples on this analogy.

I still take risks and in fact it is what I do for a living but sometimes it is quite refreshing to challenge the status quo. Who knows, maybe it could bring about a 'disruptive innovation' that will totally change our perception about finance.

@OP, apologies for derailing your thread.

I don't mean to sound harsh but the information you have provided here is generic and sketchy hence any advice you get will not be well balanced. I am not an expert in any of the fields you have mentioned in your original post but I guess there are holistic views to your question. In this regard can you please answer the following questions?

What was your grade as an undergrad?

What course did you want to study that is not on offer at the University of Ibadan?

Why pick public health as an alternative?

What are your post MSc career plans? Do you want to remain along the lines of academia or become a professional?

What has OAU and the course you have made inquiries about got to do with everything?

The above questions are essential because it will be a risk to jump on this "band wagon of herd mentality" where you opt for a course just because you like its "fanciful name" or because your friend is offering the same course, or perhaps, you have seen someone who towed the same path and became successful and hence, you want to copy such verbatim,or because the course is in "vogue" and you want to belong.

Again,my stance might be brash but it is with the best intentions!
BTW still waiting for answers to the above questions!

@ sammy 107_d This is not an attempt to give Finance a bad name. I am a finance professional myself and I am in it for the long haul. This is just my own take on the matter and I have concluded herein that Finance just like Economics is overrated. This said, I have not in any way discouraged the poster from following his desired path.

I will, if you permit me, address some salient points that you have raised whilst making occasional reference to the story.

You have mentioned the word 'greed' which I quite agree with you but at what cost? It is this greed that will make an investment advisor collect all the entire 401k retirement plan of a family under the guise of investing for the long haul whilst also adding a caveat that the safety or return of the retirement money is not guaranteed. The same greed that will make the fisherman to abandon his family and friend to embark on a journey that will eventually lead to a position that he hitherto occupied in the first instance. Back home in Nigeria, it is this greed that propelled banks to embark on an aggressive expansion plan without any long term strategic intent in mind. Where as they built branches with reckless abandon, manipulated share prices and sold to the investing public, gave bogus valuations etc. I am sure you know the final outcome of the whole fiasco. Yet again greed at what cost?

You have also mentioned that the fisherman was 'simple- minded' but 'myopic'. Simple minded yes but myopic I quite disagree. You see the problem with a lot of people in the world of finance is that we tend to suffer from the mentality of "group think".Group think is a psychological phenomenon that occurs within groups of people that share a common denominator i.e studied the same course, attended the same university,etc . It is the mode of thinking that happens when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives. It is this mentality of group think that blinded most of the finance analysts to the presence of the 'invisible gorrilla' in the room pre 2006 subprime lending crisis in the US because they were too busy thinking alike, looking at excel spreadsheets and crunching numbers, hence precipitating a global credit crunch that the West and most parts of Europe is the trying to recover from. The same group think that has led to the bungling of the facebook IPO. A flotation that 'all things been equal' could have been a catalyst for the resuscitation of the capital market.

I think there is a slight contradiction with the "myopic aspect of your comment" or maybe I don't understand it quite well, hence I will await some further clarification from you. This said I want to opine that the fisherman had a long term perspective in mind hence his "then what" questions at the end of each paragraph and this is maybe what has informed his decision to remain where he is. Change is inevitable in our society but remember this "if it is not broken, don't try to fix It"!

On a light note, it is said that Warren Buffet, has amongst his team people from all walks of life anytime he wants to embark on his seminal money making deals. In fact there is a popular story which connotes that he picked innocent passers by randomly on the street and took them along for one of such deals, asked their opinions during the deal process and rumor has it that he made over a billion from the transaction alone. When asked why he adopts such unorthodox measures he simply replied 'elegant simplicity'.

Finally, if you really want to know how overrated finance is,ask a seven or eight old kid questions about the world of finance and you will be amazed at how the whole concept will be de mystified by them.

@ T22, One phrase-Elegant Simplicity!


I am not going to provide an answer using some complex charts or graphs. Neither will I try to back up my assertion with some seminal theories or financial models. Also there won't be any figures or historical data included herein. No far from it, what I will do is to direct your attention to the story pasted below. It is not an original piece of work hence credit should be accorded to the person who conceived the idea of the story in the first place. I am sure you must have come across it somewhere. I will then leave you alone to decipher the message herein whilst asking your self certain poignant questions. Happy reading!

The Mexican fisherman and the Investment Banker

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, "only a little while."

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years."

"But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

The fisherman smiled at the businessman, quietly gathered his catch and walked away.