Alternative Investments (I): Art, Gold, Wine

04.02.2019   |  Capital Market

If the investments in shares, bonds or bank deposits seem boring to you, then you should have a look at the so called alternative investment market, which can be very roughly described as being everything that does not fall under the categories above. Maybe, in this case, you will be surprised to see that success is even more problematic here than on the classic markets.

Art

This is very glamorous topic, which we have encountered also in movies and in the news. However, we need to know two things about a real art investor. Firstly, they need to suppress their own aesthetic taste in favor of the profitability criteria and, secondly, they need to have a vast experience and matching knowledge. On stock exchanges, for instance, insider trading (trading based on confidential information) is severely punished. The art market, the same as other alternative markets, would not exist without this type of strategy. It is obvious that in order to be successful, you have to deal more or less on insider information.

On the other hand, not only in case of art, but also in case of all forms of alternative investments, you must be ready to wait in order to make a profit. Artsy, the well-known platform of art dealings, says that it is easier to buy art than sell it. The auction houses and art galleries worldwide tend to favor famous artists, but in their case the profit margin is much lower.

Gold

They say about gold – and this goes also for the other precious metals – that it is infallible, as its value increases constantly. This is true, but only on the long run, dozens of years. More precisely, gold is a crisis asset, which preserves its value during hard times (booming inflation, armed conflicts). During the periods of economic growth, its value may decrease, or at least, the value of company stocks increases at a faster pace.

You should also know about gold that it is difficult to purchase, keep and trade in physical form. In Romania, there are banks, such as BCR, which redeem it if you keep it deposited in the bank’s safes. However, the redeeming price is visibly lower than the purchase price.

If physical gold is a difficult investment, there are various forms of gold related investments, such as or CFD (contracts for difference). These refer to the speculative profit by sale or redeeming at a date subsequent to the contract date, fixed in case of futures. The investment in the shares of a company specialized in mining for precious metals is also strongly influenced by the price of gold.

Wine

You may have heard that the wines of Bordeaux and Burgundy have increasingly become a trendy investment, especially since 1999, when a specialized exchange was set up in London, London International Vintners Exchange. This is, however, a market on which you can venture only helped by a specialized manager. The entry threshold amounts to several thousands of dollars or euros, as the price of a collector’s – or investor’s – bottle of wine starts from $ 5-600. Which means that drinking non profitable bottles is only to a small extent a practicable alternative, no matter what the novices might think.

Storage conditions are also important. In case of a significant investment, of thousands or hundreds of thousand euros, wine is stored in specialized facilities, for an annual fees. Besides the fee, you should also consider insurance. In 2012, WineCare, a specialized store in in the USA, was destroyed by the hurricane Sandy. Having no insurance meant a disaster to all who had kept their assets there.

This story was also published in Romanian on News.ro, on 15 January 2019.

Octavian Pătrașcu  |   04.02.2019   |  Capital Market

Three things to test and maintain in HR: hard skills, soft skills, and motivation

25.04.2019   |  News  |  Startup
The quality and efficiency of an employee mainly depend on their professional qualifications, but the modern human resources theory refers to this only through a partial term, namely "hard skills". In terms of evaluations and professional management, these “hard skills” are supplemented by a range of different qualities defined as "soft skills", such as the motivation that an individual demonstrates or chooses to develop.

Hard Skills: Easy to identify, necessary, but not enough

The term "hard skills" applies especially to fundamental professional knowledge, skills, and abilities, but not only. For example, if a programmer has to write code in Java, he will obviously have to know the programming language. In the field of hard skills, however, complementary skills such as foreign languages ​​or driving licenses also come into play. If the job description is not IT-related, the computer skills - quasi-generalized today - are also in the same complementary category. Upon hiring, hard skills can be easily tested or proven. Basically, all the skills in this category can be certified through a diploma or a certificate of qualification. These skills are the basis for the future work of the employee, but in the vast majority of cases, they are not enough to ensure good performance at the workplace.

Soft Skills: harder to test, especially required for higher positions

These are somewhat social qualities, relating especially to people-interacting abilities. Soft skills include teamwork skills, communication skills, leadership qualities, and the ability to solve problems as they come. From simple politeness to a nonconflictual attitude, a whole range of attributes can be added here, including good time management or the desire to conform to strict professional ethics. If hard skills are easy to identify, in the case of soft skills, the stereotype enumerations present in CVs are never enough proof of their existence. They can somehow be felt when hiring, during their interview or, possibly, through psychological tests set up by human resources specialists. As they mostly focus on human interaction, soft skills are increasingly needed as the position of the employee in the hierarchy is higher, but the situation differs from one job description to another. If the programmer we had as an example earlier does not necessarily need soft skills when writing code, a sales or marketing specialist will interact with the top management and thus cannot work without them.

Motivation: differs from case to case

Motivation is a problem that concerned psychologists way before Maslow's Human Pyramid of Needs. There are many hypotheses and models that relate to this theory. I will just state that a first classification refers to financial and extra-financial motivations. The former refers to material compensation and are accepted unanimously. However, since the beginning of the 20th century, it has become clear that there is no direct link between payment and the efficiency of a person. 100 years ago, however, besides the famous $5-a-day salary, Henry Ford offered land lots, kindergartens for their children and, in the case of immigrants, English courses to help them integrate into the mass production processes. Today, large companies provide health insurance, relaxation areas, various educational classes, physical activity facilities. All of these include career plans and contract terms that offer job security and much more. Perhaps, the first thing to remember is that motivation differs greatly from one employee to another. Effective management should be as flexible as possible, in accordance with the needs and incentives of employees, beyond the standard packages.

The Employer’s Perspective

From what we described above it seems that that the employer will consider the three components as we’ve structured them. Hard skills are easy to identify and absolutely necessary to ensure performance in a particular position, so these are the first ones that will be tested. Soft skills can be identified to a certain extent in the midst of the employment process, but initial perceptions can be confirmed or denied later on. What’s more important is sustaining them at the workplace, often as a necessity for promotion on a higher hierarchy level. As final words, motivation has qualitative rather than quantitative aspects. Employers should be less concerned about the answer to the question "how motivated is an employee?", but rather show concern towards the type of motivation that employees are most responsive to. Schematically speaking, if hard skills are mainly the employee's concern, soft skills relate to a process that takes place between the employee and the company, and in the case of motivation, it should meet the needs of the employee. Only by paying attention to all the three components, the employer and the employee can have a mutually satisfactory and productive relationship.
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Alternative Investments (I): Art, Gold, Wine

04.02.2019   |  Capital Market
If the investments in shares, bonds or bank deposits seem boring to you, then you should have a look at the so called alternative investment market, which can be very roughly described as being everything that does not fall under the categories above. Maybe, in this case, you will be surprised to see that success is even more problematic here than on the classic markets. (more…)
Read full article

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