Even as Comcast celebrates gaining a controlling interest in NBC-Universal, there’s a flashing red light on the horizon warning of the company’s potential demise.

This is a guest post by Ken Krushel, a senior alliance member of the Devil’s Advocate Group. Ken has held senior strategy positions at NBC, Paramount and MGM. He has consulted with Warner Brothers, Sega Corp., MGM and Lifetime Television. He was CEO of College Enterprises, Inc., which merged with Blackboard, Inc., to create the largest enterprise educational software company in North America. He also founded Proteus, Inc. a pioneer in marketing specialized subscription-based content for mobile phones.

Our book, Billion-Dollar Lessons, is now in paperback. We’ve updated the paperback to incorporate our thoughts and experiences in the year since we put the first edition to bed. The paperback includes a new preface that reflects on the lessons to be learned from the Great Recession, which unfolded just as the first hardcover edition was published. The paperback also has an expanded Part Two, “Avoiding the Same Mistakes,” where we’ve incorporated our recent consulting experiences helping executives stress test their business strategies.

If you already have the hardcover and have kept up with our blog and white papers, you’re only missing the paperback’s new preface, which we called, Make that “Trillion-Dollar Lessons.” We’d be delighted if you’d buy the paperback anyway, but you can also read the preface below or download it here.

Following up on yesterday’s post about John Cassidy’s New Yorker article, “The Real Reason that Capitalism is so Crash-Prone,” we want to highlight an alternative theory put forth by Calvin Trillin. Trillin’s recent NY Times op-ed starts with this intriguing line:

“If you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence.”

We found John Cassidy’s essay in the Oct. 5 New Yorker, “The Real Reason that Capitalism is so Crash-Prone,” to be illuminating about the challenges of managing in an irrational context, like the recent credit craze or the more distant dot-com and telecom bubbles. Cassidy argues that, even if managers know that they are in the middle of a bubble, they have little choice but to go along. Boards and investors tell them: “Do it, or move aside so that someone else can.” Few can resist such pressure.

Having failed in the markets for MP3 music players and for high-definition televisions, Dell now says that is going to try its hand at smartphones. We hope that Dell’s board and management are asking how this foray into consumer electronics will be different than Dell’s previous efforts. Otherwise, it won’t be.

Unless it asks itself tough questions, Dell will again fall victim to what’s known as the Red Queen Syndrome, so named for the queen in “Through the Looking Glass,” who says, “It takes all the running you can do to keep in the same place.”

We think it’s great that people are delving into failures like Merrill Lynch’s compensation plan to look for the roots of the problem. This investigation is especially important given that Congress seems likely to pass legislation that will dictate what Wall Street can and can’t do in paying employees, as the federal government tries to rein in the excesses that contributed to the Great Recession.

From our standpoint, there certainly seem to be problems with Merrill’s approach.

Private equity is supposed to be capitalism at its purest–you make a kill, and you devour it. But it turns out it’s not that simple. As one of private equity’s stars explains in this piece in the New York Times, compensation issues can cloud anyone’s judgment and get executives to make bad decisions. While those problems may be more acute in large companies, with their complicated political environments, it seems that no one is immune.

Most of the coverage of Dell’s decision to buy Perot Systems for $3.9 billion says the move makes strategic sense, because the big players in the computer industry have large services businesses, and Dell will now have a much stronger services offering. Some writers also note that Dell paid a steep price: nearly 30 times estimates for Perot Systems earnings this year, and a 68% premium over where Perot stock traded before the takeover announcement. But no one seems to have tried to assess whether the price is so high that the deal shouldn’t have been done. The answer is that the price is likely way too high–the deal will make Dell shareholders poorer. How is that strategic?

Title insurance is such a weird beast. While health insurers pay claims that equate to 90-plus cents of every dollar of premiums they take in and property and casualty insurers pay out some 65 cents on the dollar, title insurers pay four-tenths of a cent, according to a major study conducted by the California insurance commissioner. Yet title insurers are heavily protected by archaic laws and regulations that make it hard for consumers to see how little they’re getting for their premiums and that deter competition.

We promise not to write something every time there’s a surge in mergers and acquisitions, but we wanted to note that there has, in fact, been the sort of increase that we expected. Deals are out there, and financing is available, as was noted in The New York Times. Good deals will position companies well as we make the slow climb out of the Great Recession.

Bad deals, of course, will not. So those considering M&A still need to stress test their ideas to weed out the bad ones or at least to be fully aware of potential problems and negotiate more carefully.

Bad deals, of course, will not. So those considering M&A still need to stress test their ideas to weed out the bad ones or at least to be fully aware of potential problems and negotiate more carefully.