THE SCAFFOLDING PROBLEM

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

In the most recent issue of The Atlantic there is an article by Henry Kissinger, Eric Schmidt, and Daniel Huttenlocher about artificial intelligence.

They describe how Google's AlphaZero was able to teach itself chess and within 24 hours become the best chess player in the world - beating both humans and computers.

What was interesting was many of the moves it used were counter-intuitive. It was being "Asymmetric on Purpose".

THE UNSURPASSED ESTER BOSERUP

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

Take a look at the graph below. It recently appeared in the Financial Times.

This is not supposed to be possible. Thomas Malthus predicted rising populations would mean food shortages. He argued food production increases arithmetically while populations increase geometrically. In 1798 he predicted mass starvation was imminent.

Except - the exact opposite happened…

STAY POSITIVE

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

Once, I got into an argument with a really smart person about negative interest rates.

He claimed that negative interest rates were not possible.

I found that argument really odd, given that we were both staring at Bloomberg’s European Rates screen which at that time was filled with negative interest rates.

Wednesday of last week, the total amount of negative-yielding debt hit an all-time high of $12.5 trillion…

ASYMMETRIC ON PURPOSE

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

Modern computing power enables an unprecedented level of data analysis.

Above, is an auto body design created by Autodesk’s Dreamcatcher software.  Autodesk put sensors in a custom race car to measure a variety of stresses in order to create a vehicle to optimally withstand those stresses.  They then fed the data into Dreamcatcher.

REACHING THE 88%

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

Every spring, Bank of America (BoA) does a survey of small businesses (link below).  This year, BoA found that in the year ahead, 59% of small businesses expect revenue to increase and that 67% plan to expand their businesses. 
 
They found that 82% of small businesses have not been negatively impacted by the recently implemented tariffs. 
 
The National Federation of Independent Businesses is also seeing small business optimism near historic highs…

Charleston Capital Names John McAvoy Chief Executive Officer

Charleston, SC, 11 June 2019 -- Charleston Capital today announced the appointment of John McAvoy to the position of Chief Executive Officer and Chairman of the Board of Directors, effective immediately. Mr. McAvoy has over 30 years of experience working in equity and debt capital markets and senior investment management roles.

LOSE THE PAPER TRAIL

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

With today’s technology, even small merchants can afford sophisticated payment processing.

We have moved with amazing speed from an economy that pays with paper to one that pays with plastic.  

As recently as 2005, most payments were still made with paper.  Payments via debit and credit card have blossomed while payments via check have shriveled. 

THE ULTIMATE USER EXPERIENCE

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

Alternative Finance Platforms see user experience as one of their major advantages over traditional lenders.

To them, banks are hopelessly stuck in the past when it comes to building software that will maximize customer satisfaction.

Is there any way to determine how satisfied small businesses are with alternative finance platforms?

THE GOLDRUSH NEAR YOU

Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.

At Charleston Capital, we are frequently asked why a small businesses would use high APR, short-term financing.

Often, they need capital to grow.

For a small business, raising equity is rarely a viable option.  Small business owners usually do not have the time or the resources to find new partners. 

And -- as good as the modern world is at distributing goods geographically, it is horrible at distributing capital geographically.