Warren Buffett’s Investment Criteria for Berkshire Hathaway Investments

Charlie Munger and Warren Buffett, Berkshire Hathaway

Warren Buffett rarely considers aspects of a stock of a company that he might be interested in purchasing for Berkshire Hathaway. He is more interested in the aspects of the business of the candidate company.

Here’s in an effort to clearly summarize Warren Buffett’s strategies on evaluating potential candidate companies for investments of Berkshire Hathaway. While there are not a clear-cut and hard criteria of financial ratios and calculations that Berkshire Hathaway uses to identify potential investments, a compendium of Buffett’s time-tested principles of evaluating potential investments, investors can filter and further research companies that are sound investments and steer clear of the losers they must be avoided at all costs.

  • A candidate company must not have large capital expenditure, high costs of maintenance, or cash flow need for new investments. In his 1994 letter to Berkshire Hathaway investors, Warren wrote, “If you are right about a business whole value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.”
  • A candidate company must be a player in a good and growing economy or industry. In the Chairman’s Letter of 1996, Warren Buffett stated, “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Over time, you will find only a few companies that meet these standards – so when you see one that qualifies, you should buy a meaningful amount of stock.”
  • A candidate company’s earnings must be on an upward trend with good and consistent profit margins. “Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
  • A candidate company must have high and consistent returns on invested capital. Warren Buffet has written, “Leaving the question of price aside, the best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return. The worst business to own is one that must, or will, do the opposite – that is, consistently employ ever-greater amounts of capital at very low rates of return.” Also, “Buy companies with strong histories of profitability and with a dominant business franchise.”
  • A candidate company must not be exposed to competition from existing and new companies with abundant resources. To quote Warren Buffett, “In business, I look for economic castles protected by unbreachable moats.” When Berkshire Hathaway acquired Burlington Northern Santa Fe (BNSF,) the economic moat was that no other company could easily afford to build a large new rail network across the United States.
  • A candidate company must have a demonstrated history of retaining earnings for growth. In one of Berkshire Hathaway’s annual report, Warren Buffet wrote, “… more subjective, element to an intrinsic value calculation that can be either positive or negative: the efficacy with which retained earnings will be deployed in the future. We, as well as many other businesses, are likely to retain earnings over the next decade that will equal, or even exceed, the capital we presently employ. Some companies will turn these retained dollars into fifty-cent pieces, others into two-dollar bills.”
  • A candidate company must have a strong pricing power and must be free to adjust prices for inflation. In a 2011 interview with the Financial Crisis Inquiry Commission, Warren Buffett stated, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
  • A candidate company must enjoy a low debt/equity ratio or a high earnings/debt ratio. To quote Warren Buffet, “I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.”
  • A candidate company and it’s products must enjoy a consumer monopoly or have a loyalty-commanding brand. Warren Buffet has said, “I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty.” Charlie Munger, business partner of Warren Buffett, stated about Harley Davidson, “Any company that gets its customers to tattoo ads on their chests can’t be all bad.”
  • A candidate company must have a strong management that has a history of allocating capital to good business opportunities and profit from such investments. On management, Warren Buffett is quoted as saying, “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” On capital allocation, Warren has stated, “To decide whether to retain the capital, we have to answer the question: do we create more than $1 of value for every dollar we retain? Historically, the answer has been yes and we hope this will continue to be the case in the future, but it’s not certain.”

Bertrand Russell Critique of Christianity and Religion

British philosopher and Nobel Prize winner Bertrand Russell argued very persuasively through his writings and speeches that religion was merely a fallacy and, notwithstanding any positive effects that religion might have on a person’s emotional or psychological well-being, the concept of religion is for the most part detrimental to people. Bertrand Russell resolutely believed that religion and a religious point of view serve to hinder knowledge and cultivate a fear of anxiety, fear, and dependency.

Bertrand Russell, like Christopher Hitchens, Richard Dawkins, and other critics of religion who came after him, held that religion was to blame for war, coercion, tyranny, and misery that have weighed down the world. Here is an excerpt from his essay, “Why I Am Not A Christian”, first a lecture delivered by Russell on 06-Mar-1927 at the Battersea Town Hall (now the Battersea Arts Centre in London) to a gathering of the National Secular Society, South London Branch.

Religion is based, I think, primarily and mainly upon fear. It is partly the terror of the unknown and partly, as I have said, the wish to feel that you have a kind of elder brother who will stand by you in all your troubles and disputes … . A good world needs knowledge, kindliness, and courage; it does not need a regretful hankering after the past or a fettering of the free intelligence by the words uttered long ago by ignorant men.

Bertrand Russell on Belief and the Value of Religion

TV Interviewer: Why are you not a Christian?
Bertrand Russell: Because I see no evidence whatever in any of the Christian dogmas. I have examined all the stock arguments in favor of the existence of God and none of them seem to me to be logically valid.

TV Interviewer: Do you think there is a practical reason for having a religious belief for many people?
Bertrand Russell: There can’t be a practical reason for believing what isn’t true. I rule it out. It is impossible. Either a thing is true or it isn’t. If it is true, you should believe in it. If it isn’t, you shouldn’t. And if you can’t find out whether it is true or it isn’t, you should suspend judgment. It seems to me fundamental dishonesty and fundamental treachery to intellectual integrity to hold a belief because you think it is useful and not because you think it is true.

TV Interviewer: I was thinking of those people who find that some kind of religious code helps them to live their lives — it gives them a very strict set of rules — the right and the wrongs.
Bertrand Russell: People are generally quite mistaken. Great many of them do more harm than good and they would probably be able to find rational morality that they could live by if they drop this irrational traditional taboo morality that comes down from savage ages.

TV Interviewer: But are we, perhaps, the ordinary person, perhaps, is not strong enough to find his own personal ethic. They have to have something imposed upon them from outside.
Bertrand Russell: I don’t think that is true. What is imposed on you from outside is of no value whatever. Doesn’t count.

TV Interviewer: You were brought up, of course, as a Christian. When did you first decide that you did not want to remain a believer in the Christian faith?
Bertrand Russell: I never decided that I did not want to remain a believer. Between the ages of 15 and 18, I spent almost all my spare time thinking about Christian dogmas and trying to find out whether there was any reason to believe them. By the time I was 18 I had discarded the last of them.

TV Interviewer: Do you think that that gave you an extra strength in your life?
Bertrand Russell: No, I don’t know. No I shouldn’t have said so. Neither it’s a strength nor the opposite. I was just engaged in the pursuit of knowledge.

TV Interviewer: As you approach the end of life, do you have any fear of some kind of afterlife?
Bertrand Russell: No, that is nonsense.

TV Interviewer: There is no afterlife?
Bertrand Russell: None whatsoever.

TV Interviewer: Do you have any fear of something that is common among atheists and agnostics who have been atheists or agnostics all entire lives, who are converted just before they die to a form of religion.
Bertrand Russell: Well, it doesn’t happen nearly as often as religious people think it does. Because, religious people, most of them, think that it is a virtuous act to tell lies of the deathbeds of agnostics and such. As a matter of fact, it doesn’t happen very often.

Bertrand Russell’s Books on Religion, God, and Atheism

Book Synopsis: ‘Shift:’ Carlos Ghosn takes you Inside Nissan’s Historic Revival

Carlos Ghosn, Renault-Nissan

In the year 1999, Japanese automaker Nissan was in a downward spiral. The company had accrued massive debts, severe losses, and a badly damaged brand. Nissan had exhausted its strategic options and its managerial resources. It dreadfully needed a global partner and a new chief executive officer. Renault, the French multinational vehicle manufacturer, answered this call for desperation. Established in 1899, Renault was a so-so European automaker with far-from-inspiring prospects.

Renault had thus obtained a 36.8 percent stake in Nissan. Renault CEO Louis Schweitzer put Carlos Ghosn, the company’s second-in-command, in charge of Nissan. Ghosn seemed a perfect choice for the job. At Renault, Carlos Ghosn had earned his standing as a savage cost-cutter and first-rate manager. The French labor unions had begun to call him “Le Cost Killer.”

When he become heir to the helm at Nissan in 1999, it was clear that Carlos Ghosn had been training all his life for this mandate of turning around Nissan. Ghosn’s multicultural background made him unusually well matched to take on the Nissan challenge.

The Making of Carlos Ghosn

Shift: Inside Nissan's Historic Revival by Carlos Ghosn At Nissan, Carlos Ghosn was the definitive outsider. A multi-disciplinary talent who could speak more than a few languages, Ghosn was born in Brazil to Lebanese parents. As a youngster, he relocated to Lebanon at age six and was educated by Jesuits in Beirut. From there, he relocated to France, where he earned degrees in engineering from the prestigious Ecole Polytechnique and Ecole des Mines de Paris, two of France’s most esteemed universities. Alongside, Ghosn learned five languages, a passion for logic and statistical precision, and a gift to perform in unfamiliar—even multi-cultural—landscapes.

In 1978, after graduate studies, Carlos Ghosn joined Michelin, the French tire manufacturer. He swiftly moved up the ranks, from an engineer to plant manager to chief operating officer. He then took a seven-year stint in the United States integrating the Uniroyal-Goodrich operations, which Michelin had just acquired. During his 18 years at Michelin, he established two approaches that would stand him in good stead later in his career: an approach to cross-functional teams, and a methodology to rationalize and consolidate manufacturing operations.

Over the years at Michelin, Carlos Ghosn had recognized that his advancement at the family-owned company was limited. In October 1996, he transited to Renault as its executive vice president for purchasing, manufacturing and R&D. He soon called for upheaval by closing a Renault factory in Belgium and squeezing out billions of operating costs by initiating several efficiency programs with suppliers and in-house units alike. Following a string of efficiency improvements across Renault and consolidations of operating plants, Carlos Ghosn became known as “le cost killer.”

Renault-Nissan Alliance

Carlos Ghosn Led Nissan’s Historic Revival

At Nissan, Carlos Ghosn recognized that crisis was not only essential for organizational transformation, but also a powerful catalyst for it. After years of regretful leadership and disoriented policies, Nissan was headed to bankruptcy. Ghosn first determined just how deep the financial rot ran. He discovered that, inside Nissan, there was a sense of deep denial about the company’s perilous operating and financial condition. Carlos Ghosn went about slashing purchasing costs by 20%, reducing capacity by 30%, closing five factories, and ousting some 20,000 workers through layoffs and attrition. In Japan, large companies were viewed as simply too big to fail. Then Japanese government was expected to rush to the aid of companies if Japan’s keiretsu-linked financial institutions did not.

In his business career, Carlos Ghosn has brought a composed, analytical approach to each managerial problem he has faced. As Ghosn went about in his efforts to transform Nissan, he implemented a quantitative, results-oriented methodology of setting numerical targets and then holding his leaders and their organizations accountable for them. Carlos Ghosn also announced the conclusion of seniority promotions and financial cross-shareholdings with other companies, set meticulous financial targets and declared that he would quit if he did not meet his own demanding targets. His drastic plans made were opposed by Japanese management traditionalists. He was also reprimanded by the powerful Japan Auto Parts Industries Association.

Carlos Ghosn also invested heavily in Renault-Nissan’s technological abilities. He set up cross-functional Renault and Nissan management teams in engineering, design, and marketing. These cross-functional teams were asked to uncover every problem and set new, realistic-but-tough performance goals. In addition, Ghosn was a tough taskmaster and executed with discipline. He made it clear he would not tolerate any backsliding: he writes, “If you disagree with the plan, you’ve got to leave the company.”

Carlos Ghosn with Nissan 350Z

As cost saving programs, consolidation of operations, and reduced reliability on debt improved Nissan’s financial performance and Nissan’s operating efficiency, Carlos Ghosn took courageous steps to invigorate the Nissan brand. He revitalized the Z-series sports-coupe line with the Nissan 350Z, a model that had been terminated previously in 1996. In the U.S., the world’s largest automotive market, Nissan jumped into new market segments with the Nissan Murano SUV and the Nissan Quest minivan. Nissan also flourished from Nissan Titan truck, the Nissan Armada SUV, and the Infiniti QX56, full-size vehicles that accounted for higher profit margins.

As a result, Nissan not only reached Carlos Ghosn’s demanding targets, but also exceeded them. Again, Carlos Ghosn was promoted. In May 2005, he rose to become the president and CEO of Renault.

Currently, Carlos Ghosn is the Chairman and CEO of the Renault-Nissan Alliance, the global strategic alliance that oversees the unique cross-shareholding agreement between Renault and Nissan.

Book Recommendation: “Shift: Inside Nissan’s Historic Revival”

“Shift: Inside Nissan’s Historic Revival”, by Carlos Ghosn and French business journalist Philippe Ries, offers a treasure trove of practical guidance to executives who find themselves in challenging business cultures, especially in a global business environment, and are faced with diverse expectations for engagement of employees and managers.

History and Operations of Delta Airlines’ Scissors Hub at Tokyo’s Narita International Airport (NRT)

Delta Airlines Scissors Hub at Tokyo Narita

Delta Airlines Boeing 757-200 aircraft in Tokyo Narita Airport

Delta Airlines operates a scissors hub at Tokyo Narita International Airport (NRT.) Delta inherited a majority of its Tokyo Narita operations in 2008 following its merger with Northwest Airlines. Before the merger, Delta Airlines had been operating flights from the United States to Tokyo since 1987. Currently, Delta also operates flights from the United States and Asia-Pacific to Tokyo’s Haneda International Airport (HND,) Nagoya’s Chubu Centrair International Airport (NGO,) and Osaka’s Kansai International Airport (KIX.)

Northwest Orient Airlines Advertisement: Great Circle Route

History of Northwest Airlines and Flights to Japan

Northwest Orient Airlines (as Northwest Airlines marketed itself for these routes) had first established its service to Japan and onward in 1947 as part of its ‘Great Circle’ route between the United States and Asia. Northwest Orient initially formed its hub in Tokyo’s Haneda International Airport (HND, then Haneda Air Force Base,) and operated flights to China, South Korea, and the Philippines.

Northwest Orient Airlines Advertisement: Orient Express Route

  • On 15-Jul-1947, Northwest made flew a Douglas DC-4 aircraft named “The Manila” from Wold-Chamberlain Field (formerly part of the full name of the Minneapolis-Saint Paul International Airport MSP) in Minneapolis, via Blatchford Field in Edmonton (Calgary,) via Elmendorf AFB in Anchorage (Alaska,) via Eareckson Air Station (then Shemya AAF) in the Aleutian Islands (Alaska,) landed in Haneda Air Force Base, and continued to Lunghwa Airport in Shanghai and onward to Nichols Field at Manila.
  • On 20-Oct-1947, Northwest flew between Tokyo and Seoul’s Gimpo Airport.
  • On 16-Nov-1947, Northwest made a transit stop in Okinawa’s Naha Airport on its way to Manila’s Nichols Field.
  • On 3-Jun-1950, Northwest added Taipei’s Songshan Airport on the Tokyo-Okinawa-Manila route.
  • In 1951, Northwest helped found Japan Air Lines (JAL) by supplying aircrafts on lease and crewmembers to the new airline.
  • In 1952, a bilateral aviation accord between the United States and Japan made Northwest Airlines and Pan American World Airways as two US-based airlines allowed to fly from the United States to Tokyo. As part of the bilateral agreement, Northwest also procured fifth-freedom rights to carry passengers between Tokyo and Seoul (Korea,) Busan (Korea,) Taipei (Taiwan,) Manila (Philippines,) Hong Kong, Bangkok (Thailand,) Singapore, and the US territories of Guam and Saipan.
  • In 1978 when the New Tokyo International Airport (now called the Narita International Airport NRT) opened as the principal international airport in Tokyo, Northwest shifted its hub from Tokyo’s Haneda International Airport to Narita.

Delta Airlines Flights from United States to its Tokyo Narita Hub

Delta Flights from Various United States Cities to Tokyo Narita

  • Atlanta to Tokyo Narita. Delta flight 295 operates from Delta’s hub in Atlanta’s Hartsfield-Jackson International Airport (ATL) to Tokyo Narita International Airport (NRT.) The return flight is Delta 296. The aircraft used on this route is usually a Boeing 747-400. These flight numbers also operate between Tokyo Narita and Taipei, Taiwan.
  • Detroit to Tokyo Narita. Delta flight 275 operates from Detroit’s Metropolitan Wayne County Airport (DTW) to Tokyo Narita International Airport (NRT.) The return flight is Delta 276. Delta’s Boeing 747-400 aircraft usually fly DL 275 and DL 276. Detroit is Delta’s primary Asian gateway hub. Delta also flies to Nagoya’s Chubu Centrair International Airport (NGO) from Detroit.
  • Honolulu to Tokyo Narita. Delta flights 579 and 639 operate from Honolulu International Airport (HNL) to Tokyo Narita International Airport (NRT.) The return flights are Delta 578 and 638. DL 579 and DL 578 are operated using Delta’s Boeing 767-300ER aircraft while DL 639 and DL 638 are operated using Delta’s Boeing 747-400 aircraft.
  • Los Angeles to Tokyo Narita. Delta flight 283 operates from Los Angeles International Airport (LAX) to Tokyo Narita International Airport (NRT.) The return flight is Delta 284. Delta currently uses Boeing 777-200LR on this route. Flights DL 283 and DL 284 are also used for flights between Tokyo Narita and Bangkok’s Suvarnabhumi Airport. Delta also flies to Tokyo’s Haneda International Airport (HND) from Los Angeles.
  • Minneapolis/St. Paul to Tokyo Narita. Delta flight 621 operates from its hub Minneapolis-St. Paul International Airport (MSP) to Tokyo Narita International Airport (NRT.) The return flight is Delta 622. This route is presently operated using a Boeing 777-200LR aircraft. Further, these flight numbers are also used for Delta’s flights between Tokyo and Singapore.
  • New York to Tokyo Narita. Delta flight 173 operates from John F. Kennedy International Airport (JFK,) it’s gateway hub in New York City, to Tokyo Narita International Airport (NRT.) The return flight is Delta 172. Delta usually flies a Boeing 747-400 on this route.
  • Portland to Tokyo Narita. Delta flight 617 operates from Portland International Airport (PDX) to Tokyo Narita International Airport (NRT.) The return flight is Delta 618. This 4822-nautical mile route is flown using a Boeing 767-300ER aircraft.
  • San Francisco to Tokyo Narita. Delta flight 209 operates from San Francisco International Airport (SFO) to Tokyo Narita International Airport (NRT.) DL 209 and the return flight, DL 208, are currently operated using a Boeing 767-300ER aircraft.
  • Seattle to Tokyo Narita. Delta flight 155 operates from Seattle-Tacoma International Airport (SEA) to Tokyo Narita International Airport (NRT.) The return flight is Delta 156. Delta usually uses a Boeing 767-300ER aircraft between Seattle and Narita. Delta also flies to Tokyo’s Haneda International Airport (HND) from Seattle.

Delta Airlines Flights from its Tokyo Narita Hub to Asia-Pacific

Delta Flights from Tokyo Narita to Various Destinations in Asia-Pacific

  • From Tokyo Narita to Bangkok, Thailand. Delta flight 284 operates from Tokyo Narita International Airport (NRT) to Bangkok’s Suvarnabhumi Airport (BKK.) The return flight is Delta 283. Delta’s Boeing 777-200LR currently operate between Tokyo and Bangkok.
  • From Tokyo Narita to Beijing, China. Delta flight 618 operates from Tokyo Narita International Airport (NRT) to Beijing Capital International Airport (PEK.) The return flight is Delta 617. Currently, Delta uses a Boeing 767-300ER aircraft between Tokyo and Beijing Capital. Note that Delta also operates Boeing 777-200 aircraft non-stop between Detroit and Beijing and another 767-300ER between Seattle-Tacoma and Beijing Capital airport.
  • From Tokyo Narita to Guam. Delta operates two flights from Tokyo Narita International Airport (NRT) to Guam’s Antonio B. Won Pat International Airport (GUM.) DL 97 and DL 649 operate on the outbound and DL 96 and DL 648 operate the inbound. All four flights of Delta’s flights between Tokyo and Guam are operated using Boeing 757-200 aircraft. Delta also operates 757-200 from Guam to Nagoya’s Chubu Centrair International Airport (NGO) and Osaka’s Kansai International Airport (KIX.)
  • From Tokyo Narita to Hong Kong. Delta flight 156 operates from Tokyo Narita International Airport (NRT) to Hong Kong International Airport (HKG.) The return flight is Delta 155. Currently, this route is operated using a Boeing 777-200LR aircraft. These flight numbers are also used for Delta flights between Seattle and Tokyo.
  • From Tokyo Narita to Manila, Philippines. Delta flight 172 operates from Tokyo Narita International Airport (NRT) to Manila’s Ninoy Aquino International Airport (MNL.) The return flight is Delta 173. Delta usually flies a Boeing 747-400 on this route. Delta also operates another Boeing 747-400 between Manila and Nagoya’s Chubu Centrair International Airport (NGO.)
  • From Tokyo Narita to Saipan, Northern Mariana Islands. Delta flight 297 operates from Tokyo Narita International Airport (NRT) to Saipan International Airport (SPN.) Saipan is the largest of the Northern Mariana Islands, an unincorporated territory of the United States. The return flight is Delta 298. Delta also operates flights 287 and 288 on this route. Delta operates its Boeing 757-200 aircraft between Tokyo and Saipan. Delta also flies between Saipan and Nagoya (NGO) using a 757-200.
  • From Tokyo Narita to Shanghai, China. Delta flight 296 operates from Tokyo Narita International Airport (NRT) to Shanghai’s Pudong International Airport (PVG.) The return flight is Delta 295. Currently, an Airbus 330-300 operates between Tokyo and Shanghai. Delta also operates a non-stop Boeing 777-200 service between Shanghai Pudong and Detroit.
  • From Tokyo Narita to Singapore. Delta flight 622 operates from Tokyo Narita International Airport (NRT) to Singapore’s Changi Airport (SIN.) The return flight is Delta 621. Delta currently uses Boeing 777-200LR on this route. Currently, these flight numbers are also used between Narita and Minneapolis/St. Paul.
  • From Tokyo Narita to Taipei, Taiwan. Delta flight 276 operates from Tokyo Narita International Airport (NRT) to Taiwan Taoyuan International Airport (TPE.) The return flight is Delta 275. Delta’s Boeing 747-400 aircraft usually fly DL 275 and DL 276; the same flight numbers are used on the flights between Tokyo Narita and Detroit. From Taipei, Delta also flies the Delta’s Boeing 747-400 aircraft directly to/from San Francisco and Los Angeles.

References

The Seven Deadly Sins (Christianity) and the Five Poisons (Buddhism)

The Seven Deadly Sins

The Seven Deadly Sins (Proverbs 6:16-19)

Proverbs 6:16-19 in the Book of Proverbs in The Holy Bible lists “six things the Lord hateth, and the seventh His soul detesteth” (from the American Standard Version):

  1. haughty eyes,
  2. a lying tongue,
  3. hands that shed innocent blood,
  4. a heart that deviseth wicked purposes,
  5. feet that are swift in running to mischief,
  6. a false witness that uttereth lies,
  7. he that soweth discord among brethren.

The Seven Deadly Sins (The Common List)

In AD 590, Pope Gregory I amended and consolidated the various lists of seven sins that were in vogue then and created the more common list of Seven Deadly Sins. Even Dante Alighieri, the celebrated Italian poet of the Middle Ages, quoted this list of Seven Deadly Sins in his epic, The Divine Comedy.

  1. lechery / lust (luxuria in Latin)
  2. gluttony (gula in Latin)
  3. avarice / greed (avaritia in Latin)
  4. sloth / discouragement (acedia in Latin)
  5. wrath (ira in Latin)
  6. envy (invidia in Latin)
  7. pride (superbia in Latin)

“Five Poisons” in the Mahayana tradition of Buddhism

The Mahayana tradition of Buddhism inventories five kleshas, mental states that can cloud the mind and result in unwholesome actions:

  1. Ignorance. Also: confusion, bewilderment, delusion, disorder
  2. Attachment. Also: desire, passion, yearning
  3. Aversion. Also: anger, hatred, rage, fury
  4. Pride. Also: arrogance, conceit, overconfidence, condescension
  5. Jealousy. Also: envy, spite, covetousness

Japan’s Demographic Problems

Japan's Serious Demographic Problems

Japan fell from grace after its booming 1980s, largely due to bureaucratic overindulgences, political slip-ups and unsustainable growth rates that fueled its prosperity for decades.

Japan is undergoing a slow but certain social, economic, and political transformation. The Japanese are reinventing their society with a growing sense of urgency.

Over the last fifteen years, Japan has experienced a steady decrease in the number of people in the working age of 15 to 64. Experts estimate that by 2050, this working population may shrink to just 54 million from a high of as much as 87 million.

Simultaneously, Japan’s population is rapidly aging. A 2007 report by Japan’s government stated that Japan’s population dropped for the first time since the first census records from early 1900s. Overall, Japan’s population of 129 million is expected to decline to 100 million by 2050. An estimated 30% of Japanese are older than age 65 leaving a smaller workforce to sustain the ever-increasing needs of the country’s national pension system.

Compounding these problems is the fact that Japan has the lowest birthrate among developed countries — 1.34 children per woman. Fewer women get married and have children. In addition, employed women work long hours leaving little time to devote to childcare.

The Japanese government announced an elaborate plan to stimulate the birthrate, provide for better day care in hopes that it would increase the number of women in the Japanese workforce, and ultimately boost economic growth.

List of Hospitals in the 13 Counties of Southeast Michigan


Hospitals in Eaton County, Michigan

Hospitals in Genesee County, Michigan

Hospitals in Hillsdale County, Michigan

Hospitals in Ingham County, Michigan

Hospitals in Jackson County, Michigan

Borgess Medical Center, Kalamazoo, MI

Hospitals in Kalamazoo County, Michigan

Hospitals in Lenawee County, Michigan

Hospitals in Livingston County, Michigan

Hospitals in Macomb County, Michigan

Hospitals in Oakland County, Michigan

Hospitals in St. Clair County, Michigan

University of Michigan Health System, Ann Arbor

Hospitals in Washtenaw County, Michigan

Henry Ford Hospital, Detroit

Hospitals in Wayne County, Michigan

Apple’s Double Irish Scheme for Tax Avoidance

Apple's Double Irish Scheme for Tax Avoidance

Turns out that Apple might be paying about 10% of its pre-tax income in taxes as compared to a 35 percent federal corporate tax rate. However, details of Apple’s tax practices indicate that there Apple engages in merely tax avoidance. Tax avoidance is not quite unlawful. There seems to be no evidence that Apple engaged in tax evasion, which is indeed unlawful.

Apple uses a tax avoidance scheme known as The Double Irish, which came under scrutiny during the Senate testimony. Using the Double Irish scheme, Apple instituted a shell subsidiary in Ireland, an offshore tax haven, and assigned the majority its intellectual property rights to this shell subsidiary. In turn, the subsidiary charges fees and royalties and receives billions of dollars in revenue. On these receipts, Apple pays about 2% in corporate taxes in Ireland instead of the high tax rates it would pay for the same receipts in the United States.

It can be argued that the Apple’s management is indeed doing what is best for Apple’s shareholders. Apple’s senior management and the board have a fiduciary responsibility to do anything in the best interest of its shareholders, as long as such actions are lawful. Had Apple ignored this prospect of reducing its corporate tax bill by using the Double Irish scheme, the senior management and Board may possibly be accused of being negligent in their responsibilities towards shareholders.

The actual problem might just be that the Congress hasn’t taken any wide-ranging measures to make all tax avoidance schemes illegal and ensure that companies pay their fair share in taxes.

ExifTool: Command Line & GUI to Remove EXIF Image Metadata in Photos

ExifTool: Command Line & GUI to Remove EXIF Image Metadata

Nearly all cell phones, digital cameras, and scanners insert metadata in the digital photos they capture. This is done using the Exchangeable image file format (Exif) data structure or standard.

Some devices just embed the make and model of the camera. Other devices insert more extensive data such as camera settings, GPS location data, and other information that might be specific to that camera or cell phone. Many owners of digital cameras and cell phones are oblivious that their photos are tagged with sensitive information.

Since the Exif data contain information about the photo, the Exif data pose privacy and security concerns. When pictures from these devices are posted online, the Exif metadata can be used to sense the time the photo was taken and the location where it was taken, if the camera or cell phone has the GPS location data feature. The distinctive ID number of the camera device can be used to identify the owner of the camera. It is therefore best to remove Exif data before publishing or posting pictures online and avoid privacy and security concerns.

My favorite software to remove Exif data is ExifTool by Phil Harvey. Exiftool is a cross-platform tool that can remove, modify, and add Exif and other metadata in various file formats. The software is intuitive and easy to use. I use the command line to manipulate whole directories of files using a combination of command options and wildcards.

exiftool.exe -all= -overwrite_original *.jpg

Timeline of the Airbus A350 XWB (Xtra Wide Body) Program including Orders-History

first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus's paint shop on 13-May-2013.

  • On 16-Sep-2004, Airbus top executive Noel Forgeard confirmed that Airbus had proposed a new twin-aisle mid-size aircraft to customers. This adaptation of the A350 resembled the A330 in fuselage cross-section and assembly, but with new engines, new wings, new horizontal stabilizer, and additional composite materials. For years, Airbus had publicly cast off the threat of the Boeing 787 Dreamliner to the Airbus A330.
  • On 10-Dec-2004, the boards of EADS and BAE Systems, who then owned 80% and 20% of Airbus respectively, approved the “authorization to offer (ATO)” for the now- called A350.
  • On 13-Jun-2005, at the 2005 Paris Air Show at the Le Bourget Airport north of Paris, Qatar Airways announced an order for 60 A350s.
  • On 06-Oct-2005, Airbus announced the full industrial launch of the A350. The aircraft was to be first available in two versions: the A350-800 (8,800 nmi, 253 passengers in a three-class configuration) and the A350-900 (7,500 nmi, 300 passengers in a three-class configuration.)
  • On 28-Mar-2006, the President of aircraft lessor Infrastructure Leasing and Finance (ILFC) Steven F. Udvar-Hazy publicly derided the Airbus’ strategy as a poor reaction to the Boeing 787 Dreamliner.
  • On 30-Mar-2006, Finland’s Finnair became the first airline to place a firm order for the A350. It ordered 11 A350-900s with an option for four more A350 XWBs.
  • On 22-Jun-2006, Singapore’s Singapore Airlines ordered 20 A350-900s.

A350 XWB wider fuselage to accommodate 10-abreast seating in high-density configuration

  • On 14-Jul-2006, at the Farnborough Airshow in Farnborough Airport in Hampshire, England, Airbus presented a redesigned aircraft now called the A350 XWB (Xtra-Wide-Body.) The A350 XWB included a wider fuselage cross-section that could accommodate 10-abreast seating in high-density configuration. All twin-aisle Airbus aircrafts (A300, A310, A330, and the A340) had a common cross-section that could accommodate eight-abreast seating in standard configurations.
  • On 01-Dec-2006, the board of directors of Airbus approved the industrial launch of the A350 XWB. The aircraft was available in two variants: the A350-800 (8,480 nmi, 270 passengers in a three-class configuration) and the A350-900 (8,100 nmi — 10,300 nmi, 314 passengers in a three-class configuration.)
  • On 04-Jan-2007, Aircraft lessor Pegasus Aviation ordered two A350-800s.
  • On 18-Jun-2007, during the 2007 Paris Airshow at the Le Bourget Airport north of Paris, Aircraft lessor Aviation Lease and Finance Company ordered 12 A350-900s with an option for six more A350 XWBs.
  • On 18-Jun-2007, Qatar’s Qatar Airways ordered 80 A350 XWBs: 20 A350-800s, 40 A350-900s, and 20 A350-1000s at Paris Airshow.
  • On 20-Jun-2007, Aeroflot Russian Airlines from Russia ordered 18 A350-800s, and 4 A350-900s.
  • On 20-Jun-2007, Libya’s Afriqiyah Airways ordered six A350-800s.
  • On 20-Jun-2007, Aircraft lessor CIT Group ordered five A350-900s.
  • On 20-Jun-2007, Kingfisher Airlines from India ordered five A350-800s.
  • On 05-Oct-2007, America’s US Airways ordered 18 A350-800s, and 4 A350-900s.
  • On 26-Oct-2007, Aircraft lessor ILFC ordered 6 A350-800s, and 14 A350-900s.
  • On 11-Nov-2007, Dubai’s Emirates ordered 120 A350 XWBs: 50 A350-900s and 20 A350-1000s with an option for 50 more A350 XWBs.
  • On 13-Nov-2007, Yemen’s Yemenia ordered 10 A350-800s.
  • On 14-Nov-2007, a VIP customer ordered one A350-900.
  • On 26-Nov-2007, Portugal’s TAP Portugal ordered 12 A350-900s with an option for three more A350 XWBs.
  • On 28-Nov-2007, America’s Hawaiian Airlines ordered six A350-800s, with an option for six more A350 XWBs.

first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus's paint shop on 13-May-2013.

  • On 10-Dec-2007, Libya’s Libyan Airlines ordered four A350-800s.
  • On 21-Dec-2007, Vietnam Airlines from Vietnam ordered 10 A350-900s with an option for two more A350 XWBs.
  • On 21-Jan-2008, Avianca from Columbia ordered 10 A350-900s with an option for 10 more A350 XWBs.
  • On 22-Jan-2008, Taiwan’s China Airlines ordered 14 A350-900s with an option for six more A350 XWBs.
  • On 13-Feb-2008, TAM Airlines from Brazil ordered 27 A350-900s with an option for 10 more A350 XWBs.
  • On 11-Apr-2008, Ireland’s Aer Lingus ordered nine A350-900s with an option for six more A350 XWBs.
  • On 04-Jun-2008, Italy’s Alitalia ordered 12 A350-800s with an option for 12 more A350 XWBs.
  • On 09-Jul-2008, Airbus began wind tunnel testing for the A350.
  • On 14-Jul-2008, Abu Dhabi’s Etihad Airways ordered 12 A350-1000s with an option for 10 more A350 XWBs.
  • On 15-Jul-2008, Tunisair from Tunisia ordered three A350-800s.
  • On 16-Jul-2008, Korea’s Asiana Airlines ordered 30 aircrafts: 8 A350-800s, 12 A350-900s, and 10 A350-1000s with an option for 10 more A350 XWBs.
  • On 17-Jul-2008, a VIP customer ordered one A350-900.
  • On 13-Jan-2009, Airbus began construction on the Final Assembly Line (FAL) for the Airbus A350 XWB model. Once the plant hits full production, the FAL is expected to employ some 1,500 people, build ten aircraft a month beginning 2018, and have an area of 74,000 square meters.
  • On 16-Jun-2009, AirAsia from Malaysia ordered 10 A350-900s with an option for five more A350 XWBs.
  • On 29-Sep-2009, Airbus successfully tested the wing tester (“demo box 2”) on an installation of the wings of the A350 XWB.
  • On 15-Nov-2009, Ethiopia’s Ethiopian Airlines ordered 12 A350-900s.
  • On 10-Mar-2010, America’s United Airlines ordered 25 A350-900s with an option for 50 more A350 XWBs.
  • On 13-May-2010, Airbus launched three-dimensional validation of the A350 XWB electrical harness installation. It was problems with installation of the electrical harnesses that delayed the delivery of A380 to customers.

Rolls-Royce Trent XWB test engine on an A380 'flying-testbed'

  • On 04-Aug-2010, Hong Kong’s Cathay Pacific ordered 36 A350-900s.
  • On 13-Oct-2010, a second Hong Kong-based airline, Hong Kong Airlines, ordered 15 A350-900s.
  • On 04-Nov-2010, China’s Air China ordered 10 A350-900s.
  • On 12-Nov-2010, Airbus announced that the first delivery date of the A350-900, the first model to be developed, had slipped from mid-2013 to the second half of 2013 due to the “transition phase from design to manufacturing is a bit longer.”
  • On 18-Jun-2011, Airbus and Rolls-Royce declared the development of the A350-1000 XWB model (8,420 nmi, 350 passengers in a three-class configuration) with powerful Trent XWB engines capable of delivering 97,000 pounds of thrust.
  • On 11-Aug-2011, Thai Airways from Thailand ordered four A350-900s.
  • On 23-Dec-2011, Airbus began assembly of the fuselage the first A350-900 XWB (MSN1) in Toulouse, France.
  • On 18-Feb-2012, Airbus and Rolls-Royce successfully tested the Rolls-Royce Trent XWB test engine on an A380 “flying-testbed.” The test aircraft conducted tests at different altitudes and speeds. The A380 reached a maximum altitude of 43,000 feet and maximum speed of Mach .9 (1102 kph).
  • On 05-Apr-2012, Airbus began final assembly of the first A350-900 XWB (MSN1) in Toulouse, France.
  • On 08-Aug-2012, Hong Kong’s Cathay Pacific converted 16 A350-900s from an earlier order to the -1000 model, and ordered 10 more A350-1000s.
  • On 01-Oct-2012, Libya’s Afriqiyah Airways cancelled six A350-800s and ordered 10 A350-900s.

Airbus transferred the A350 XWB static test airframe to a test facility for validation of the A350 airframe.

  • On 23-Nov-2012, Airbus transferred the A350 XWB static test airframe to a test facility for validation of the A350 airframe.
  • On 03-Dec-2012, Qatar Airways converted their original order of 20 A350-800s, 40 A350-900s, and 20 A350-1000s to 43 A350-900s and 37 A350-1000s. For several years, Boeing’s marketing campaign has tried to cast doubt on the viability of the A350-800 model. Airbus has tried to switch customers to the -900 model casting doubt about the future of the -800 model.
  • On 13-Dec-2012, Singapore’s Singapore Airlines ordered 20 A350-900s. This was a repeat order from the world’s premier airline.
  • On 03-Jan-2013, Aircraft lessor CIT Group ordered 10 A350-900s.
  • On 04-Feb-2013, Aircraft lessor Air Lease ordered 20 A350-900s and 5 A350-1000s with an option for five more A350 XWBs.
  • On 07-Feb-2013, the European Aviation Safety Agency certified the Rolls-Royce Trent XWB Turbofans.
  • On 15-Feb-2013, Airbus reverted to proven nickel cadmium main batteries to avoid unnecessary delays to the A350 program’s timeline.

Final Assembly and Preparations for First Flight

  • A350 XWB final assembly facility groundbreaking ceremony, 14-Jan-2009 On 14-Jan-2009, Airbus held a groundbreaking ceremony for the A350 XWB final assembly facility in Toulouse, France. This assembly line (FAL,) built close to the existing A330-A340 production line, was scheduled to be completed during the third quarter of 2010. Once the plant would hit full production, the FAL is expected to employ some 1,500 people, build ten aircraft a month beginning 2018, and have an area of 74,000 square meters.
  • On 19-Feb-2013, Airbus began final assembly of the third A350 XWB (MSN3.)
  • On 26-Mar-2013, Airbus completed installation of the flight-ready Rolls-Royce Trent XWB engines and the Honeywell GHT1700 APU on the first flight-test A350-900 XWB. The A350-900 aircraft MSN1 became a finished aircraft to be handed to the Flight Test Team after additional testing and painting.
  • On 22-Apr-2013, Aircraft lessor International Airlines Group ordered 18 A350-1000s with an option for 18 more A350 XWBs.
  • On 30-Apr-2013, Airbus’s tabulation of orders and deliveries showed that a VIP customer had cancelled orders for one A350-900.
  • On 13-May-2013, the first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus’s paint shop. Speculation intensified that Airbus might attempt first flight by the middle of June and debut its aircraft at the 2013 Paris Airshow at the Le Bourget Airport north of Paris.
  • On 30-May-2013, Singapore Airlines announced a firm order for 30 more A350-900s and options for 20 more A350 XWB aircraft. According to the terms of the deal, Singapore Airlines could choose either the A350-900 or the A350-1000 model when exercising the 20 options. This third order from Singapore Airlines for the Airbus A350 XWB (Xtra Wide Body) brought the total A350 XWBs ordered by Singapore Airlines to 70 firm orders and 20 options for the A350-900.
  • On 2-Jun-2013, Airbus fired up the Rolls-Royce Trent XWB engines and the Honeywell Auxiliary Power Unit (APU) on the first A350-900 XWB aircraft (MSN001 / F-WXWB) in preparation for the aircraft’s debut flight. Airbus also released the A350 XWB Magazine App for iPads and Androids in preparation to use social media for publicity for the A350’s first flight.
  • On 07-Jun-2013, in a video posted by Rupa Haria of Aviation Week magazine, Airbus’s A350XWB project test pilot Frank Chapman confirmed that MSN001 / F-WXWB had completed taxi tests on 05-Jun-2013. Having completed the high-power runs of the Rolls-Royce Trent XWB engines previously, the test flight department planned to perform high-speed taxi speeds in preparation for first flight. Aircraft prototypes typically undergo a two day-long full engineering check after high-speed taxi tests before first flight.
  • Airbus A350-900 XWB First Flight ((MSN001, F-WXWB)) on 14-Jun-2013On 12-Jun-2013, Airbus confirmed that the first flight of the A350-900 XWB was planned for 14-Jun-2013 (Friday) pending final pre-first flight tests and inspections. Subject to favorable weather conditions, MSN001 / F-WXWB was planned to take off from the Toulouse-Blagnac Airport in Southern France at 10:00 AM. Airbus had scheduled the A350’s first flight three days before the opening of the 2013 edition of the Paris Air Show (Salon international de l’aeronautique et de l’espace, Paris-Le Bourget) where the A350 XWB was expected to perform a simple fly-past.

Airbus A350 XWB First Flight (14-Jun-2013)

A350 XWB Pre-flight First Flight

Airbus A350 First Flight Crew Boarding MSN001 on 14-Jun-2013

Airbus A350 First Flight Telemetry

Airbus's first A350-900 XWB (MSN001, F-WXWB) liftoff on 14-Jun-2013

Airbus's first A350-900 XWB (MSN001, F-WXWB) first flight on 14-Jun-2013

Initial flight tracking for first flight of A350-900 XWB

A350 XWB First Flight Fly-by

A350 XWB First Flight over Tolouse City

A350 XWB First Flight Landing

A350 XWB First Flight Landing Taxiing

A350 XWB First Flight Reception

During and at the Paris Air Show 2013

A350 XWB at the Paris Air Show 2013

The 50th edition of the Paris Air Show was held from 10-Jun-2013 through 14-Jun-2013 at the Le Bourget airport outside of Paris, France. Airbus won US$68.7 billion-worth of aircraft orders during the airshow.

  • On 19-Jun-2013, Air France-KLM, the Paris-based French-Dutch airline holding company and parent of both Air France and KLM ordered 25 A350-900 aircraft with options for 25 more A350-900 aircraft.
  • On 19-Jun-2013, Sri Lanka’s state-owned Sri Lankan Airlines ordered four A350-900 aircraft.
  • On 19-Jun-2013, Airbus flew the A350-900 XWB prototype (MSN001, F-WXWB) on its second test flight at the Toulouse-Blagnac airport. The second flight lasted for over five hours where the aircraft flew at its design maximum speed of 0.89 Mach (676 mph) and reached an altitude of 42,000 ft.
  • On 20-Jun-2013, America’s United Airlines converted all the 25 A350-900 airplanes it had previously ordered to the larger -1000 model and ordered an additional 10 A350-1000s. With this incremental order, United Airlines had a total of A350 aircraft ordered from Airbus to replace the Boeing 777s in United’s fleet.
  • On 21-Jun-2013, the last day of the Paris Air Show 2013, the first A350-900 XWB (MSN001, F-WXWB) made a flyby at the Paris Air Show 2013. MSN001 made a conservative sweeping low-fly pass at 600 feet above runway 21 at the Le Bourget Airport, without the steep ascents and sharply banked turns common in flight demonstrations at airshows. This was the A350’s third flight and the aircraft had taken off from Toulouse two hours earlier.
  • On 25-Jun-2013, Scandinavian Airlines, the flag carrier of Denmark, Norway, and Sweden, signed a memorandum of understanding (MoU) for eight A350-900 aircrafts.
  • By 15-Jul-2013, the first A350-900 XWB, MSN1 / F-WXWB, had completed 92 flight test hours of testing. According to a press release from Airbus, this first phase of flight tests had involved tests of the engines, electrical systems, the ram air turbine (RAT), landing-gear, brakes, fuel systems, cabin pressure, autopilot and autoland systems. The aircraft was to go through a scheduled maintenance and upgrades to the flight test installation in preparation for the second phase of the flight test campaign. MSN1 was to be joined by a fleet of four more A350 XWB aircrafts during the 2,500 hour-long testing and certification campaign for the A350 XWB aircraft.
  • On 19-Sep-2013, Germany’s Lufthansa (Airbus’s biggest airline customer and operator) committed to buying up to 55 A350-900 aircraft (25 firm and 30 options). The commitment also gave Lufthansa the flexibility to convert some of the order to the larger A350-1000 aircraft.
  • On 25-Sep-2013, the International Airline Group (IAG) signed a memorandum of understanding with Airbus to buy 18 Airbus A350-1000 aircraft plus 18 options. The International Airline Group (IAG) is the parent company of British Airways and Spain’s Iberia. The 36 A350-1000 aircraft were designated for British Airways.
  • On 03-Oct-2013, Scandinavian Airlines (SAS) signed a memorandum of understanding with Airbus for the order of eight A350-900 plus eight options for A350-900, in addition to four A330-300 Enhanced aircraft. SAS’s Airbus A350 were to be delivered from the year 2018.
  • On 07-Oct-2013, Airbus received a landmark order from Japan Airlines (JAL) 18 A350-900s, 13 A350-1000s, plus options for a further 25 A350-XWB aircraft. After decades of near-dominance by Boeing of the aircraft market in Japan, this was the first order Airbus ever received from Japan Airlines.

First Flight of the second A350 XWB flight test aircraft MSN3 on 14-Oct-2013

  • On 14-Oct-2013, the second A350 XWB test aircraft successfully completed its first flight. MSN3’s first flight lasted approximately five hours. MSN1 and MSN3 were to be joined by three more A350 XWB test aircraft and complete 2,500 hours leading to type certification.
  • On 17-Nov-2013, at the 2013 Dubai Airshow, Abu Dhabi’s Etihad Airways announced a firm order for 50 A350 XWBs, which comprised of 40 A350-900s and 10 A350-1000s.
  • On 17-Nov-2013, at the 2013 Dubai Airshow, Boeing launched the response to the threat that the A350 posed to its 777 and 787 aircrafts by launching the 777X with record-breaking orders. Boeing claimed that the 777X would feature technology introduced on the 787 Dreamliner and evolving newer technologies such as an all-new composite wing and many aerodynamic advances. The 777X would feature the all-new GE9X engines developed by General Electric. Boeing claimed that the 777X would be 12 percent more fuel efficient than the A350. With 259 orders and commitments, the launch of the 777X represents the most successful launch of any airline program thus far. Emirates ordered 150, Qatar Airways 50, and Etihad Airways 25 new 777X aircrafts to add to a previously-announced launch order for 34 777X from Germany’s Lufthansa (34).
  • On 18-Nov-2013, also at the 2013 Dubai Airshow, the Tripoli-based startup airline Libyan Wings ordered three A350-900 jets to build a wider network after commencing short-haul services in 2014.
  • On 20-Dec-2013, Air Caraibes, the regional airline of the French Caribbean signed a firm contract with Airbus for three A350-1000s. Concurrently, Air Caraibes announced that it would lease three new A350-900s from ILFC.
  • On 20-Feb-2014, Kuwait Airways ordered ten A350-900 aircraft as part of its fleet renewal strategy. On 09-Dec-2013, Kuwait Airways and Airbus had signed a Memorandum of Understanding (MoU) in this regard.
  • A350 XWB MSN2 and MSN4 took to the skies for their first flights on 26-Feb-2014

    Executing a Successful A350-XWB Flight Test Program