bullish on who will be Time’s Person of the Year 2013

Drones (or "The Drone") (as of 2012 NOV 10) 

bullish on who will be Time’s Person of the Year 2012 

actual result: Barack Obama

Xi Jinping (as of 2012 SEP 16); Aung San Suu Kyi (as of 2012 APR 3); Bo Xilai (as of 2012 MAR 24) 


 

Saturday
Apr072012

The National Copyright Administration of the People’s Republic of China (“NCAC”) is seeking public comments on a controversial draft amendment to China’s copyright law. A number of recording artists and musicians have reacted strongly against this proposed amendment because it appears to encourage using others' works without compensation.  The amendments that have drawn particular ire are Articles 46 & 48.  Per Article 46, one does not need have consent to make recordings of another person’s musical work if 3 months have passed since such work was published. Per Article 48, to use such person’s musical work, one must contact the NCAC, identify the published material and its author, and within 1 month of use, submit a usage fee as per the NCAC, to facilitate the distribution of payment to applicable parties. A copy of the draft (in Chinese) can be downloaded here. Comments on the draft must be received before April 30, and can be sent via post, fax or email to the addresses provided here.

Friday
Apr062012

No time like the present.  If the choices are past, present, or future, I would have to be bullish about the present--at least that's where I get to after trying to reconcile 2 recent studies which find correlations between a population's wealth and their views toward the future. A study in Nature's Scientific Reports looks at Google searches and uses a measure called a "future orientation index" which appears to show that populations which use Google to search for information about the future are likely to have a higher GDP than those whose searches relate to the past.  On the other hand, a study from Yale looks at populations' language syntax and uses a measure called "future-time reference" (FTR) to determine that speakers of languages whose syntax makes a strong distinction between present and future, i.e. have a strong FTR, don't save as much as those with a weak FTR.  This is because speakers of weak FTR languages are more likely to prepare for the future (e.g., save money) because grammatically, the future feels more like the present to such speakers.

Based on the first study, it appears that the UK and Germany have a high future orientation index (searches focused on the future) and have high GDPs, while Russia has a lower future orientation index (searches looking at the past) and a lower GDP.  Based on the second study, speakers of weak-FTR languages (e.g., Chinese and German) save more of their GDP than do speakers of strong-FTR languages (e.g., English, Spanish and Greek).  Perhaps its not fair to compare these 2 studies, as there is a distinction between the size of one's GDP and how much of it one saves (at least that's what those with a small GDP say--sorry, it was too easy).  Nonetheless, it is a bit irresistible to look at these 2 studies side by side.  When taken together, it’s unclear what the most profitable way to look at the future is.  Since we are always advised to careful with forward looking statements, the best I can takeaway here is to be bullish on the present (or perhaps bearish on the results of correlation studies).

Wednesday
Apr042012

Google Project Glass.  Finally, something that is not shaped like a rectangle.  Things are looking up.

Wednesday
Apr042012

Pink Slimed.  Longstanding industry term "lean finely textured beef" gets dubbed "pink slime" in 2002. Celebrity calls attention to it on TV in 2011.  Media hysteria ensues.  Consumers decide chopped meat is now gross.  Chopped meat demand falls.  Meat processor AFA Foods Inc. files for bankruptcy.  Whoa.  An investor could not be faulted for considering the risk that someone could sound a "pink slime" alarm in respect of any investment.  Take Apple (I will explain why this company came to mind before the bottom of this post). What if wifi was shown to cause autism in children?  What would happen to demand for Apple (AAPL) wifi dependent devices like the iPad?  Wifi is fundamental to a number of Apple products (some of which cannot access the internet at all without wifi).  There is speculation that Apple stock could reach a trillion dollar market value. Who knows?  The cell phone industry has done pretty well managing the occasional expression of concern over the effects of cell phone radiation (although the fears did help sell a lot of wired ear piece accessories in the late 90s).  It might make a difference, however, if many more of the customers using tablets turn out to be younger than the typical young users of cell phones. 

There may be other companies with latent pink slime-type risk, but here is the reason Apple came to mind. My fiancée is pregnant, and we both have been taking care to ensure that she eats and lives healthy throughout her pregnancy for the sake of the developing baby.  Perhaps we have been more punctilious (or not) about health than others, but we have made a general point of avoiding radiation—to the extent modern living allows. She has stayed away from our microwave when it is in operation.  I also made a point of changing our computer connections to our router to utilize a wired ethernet connection rather than a wireless connection (I also turned off each machine’s wifi functionality, and, via a Cisco browser-based control panel, turned off the wireless broadcast from our router).  A bit frustrating was the fact that our iPads had to stay wireless to use the internet, as there was no way to connect our iPads to the internet via wire (but if someone knows of a way to do so, please advise).  The result has been that I have been staying away from her when using my iPad on the internet, and she has just been reading on her iPad in airplane mode most of the time (and has been doing the bulk of her web surfing on her ethernet wired Macbook).

It is worth noting that we even looked into maternity clothing designed to protect against radiation.  A search for the phrase "maternity radiation" on Amazon (AMZN) turned up a number of products including a radiation blocking blanket, maternity dress and camisole, however, we did not purchase any of these as we were lacking information on their efficacy.   There actually appears to be a bit of a market in Asia for this kind of protective clothing, but it may just be a fad. Of course, if we really want to keep covered,  there’s always the heavy duty stuff, but that would just be extreme.

Tuesday
Apr032012

Aung San Suu Kyi (Nobel laureate and dissident formerly under house arrest for 15 years) and most of the candidates in her National League for Democracy (NDL) won seats in Parliament in elections held on April 1 in Myanmar, a country which has been under military rule for decades.  This bright event may or may not portend the lifting of economic sanctions and development of democracy, but either way, its bullish.  Investor, Jim Rogers, likes Myanmar and advises that one should go there.  Myanmar is not a BRIC country nor one of the PIGS, i.e., as a topic, it’s fresh.

Tuesday
Apr032012

Evernote Corp.  This company just reeks of innovation and inhales customer loyalty.  The company's flagship product (or service), Evernote, is innovative, and I find it increasingly useful over time.  Evernote's free version is great on its own, but customers apparently are eager to purchase paid versions of the service.  Presumably, loyalty is enhanced because of the unrestrictive nature of the application.  It works across a wide set of devices and the web.  One is not locked into its ecosystem either, as it is simple to take all of your information out of it.  It’s bullish because it encourages creative utilization, and it has spurred on creation of and integration with applications of numerous other developers.

Tuesday
Apr032012

Digital Rights Management (DRM) and a 4th Sony PlayStation.  According to Kotaku, the PlayStation 4 is rumored to have controls built into it which prevent the console from playing used games.  DRM is always bearish.  No one ever gets excited about DRM.  You never hear folks bragging about how they upgraded to the latest version of DRM for their electronic devices.  People don't go out looking to spend money on DRM.  People like to spend money on innovative stuff. Sony (SNE) might want to consider trying to develop a loyal customer base by diverting some of its DRM resources to creative research and development.  Or.....maybe Sony wants to continue to use DRM to destroy product lines (e.g., when it hastened the demise of minidisc), dissuade people from purchasing online music (e.g., the Sony Connect Music store closed in 2008), and generally alienate customers from purchasing even traditional products like home audio or even music CDs (i.e., when it enraged purchasers of music on CD who discovered that Sony sneaked DRM software installations on to PCs when its CDs were inserted into PCs for audio playback).  

Personally, I would vote for loyalty.  When a company makes a product that is genuinely good, customers may actually pay even when it is given away for free, e.g., like Evernote (a product which is so good that a discussion of it doesn't belong in this bearish post, so I will save it for a bullish one).  Also, aren't gaming consoles dead (or going to the birds)?

Monday
Apr022012

Commenting on microblogs in China is banned due to rumor spreading following the dismissal of Bo Xilai from his position as Communist Party secretary of Chongqing.

Monday
Apr022012

"Red songs" programming moves from a daily to a weekly broadcast in Chongqing. 

Monday
Apr022012

From the "Hey-you-can't-do-that-why-because-well-then-just-try-and-stop-me-department", comes Aereo and Onlive.  I just checked my iPad this morning, and amazingly, the following two services are still working: broadcast TV from Aereo.com and free cloud-based Microsoft Office from Onlive.com.  Aereo innovates by using the internet via iPad to deliver over the air broadcast TV, without the involvement (i.e., consent) of the broadcasters.  The company believes it can do this because it claims to have an antenna for each stream of broadcast TV it delivers over the internet.  That's a lot of antennas.  Onlive.com uses virtualization software (like the kind one might use to view their home pc on one's iPad ) to deliver free Microsoft Office to iPad users from Onlive's virtual machines in the cloud.  Onlive's service actually falls into a category that already exists, which is called Desktop as a Service (DaaS).  Existing DaaS providers already have more structured services (and pricing).  What's interesting about Onlive's model is that it doesn't appear to deliver a service in a way that Microsoft has contemplated (i.e., doesn't follow Microsoft's licensing rules).  Onlive appears to have provided inspiration to a company called TuCloud which is threatening to deliver its own virtual desktop service.  Aereo TV is $12/month after a free trial.  The basic Onlive Desktop service is free with 2GB of cloud space, and for more functionality, the pricing starts at $4.99/month.  

 

On the surface, the recent introduction of these services feels bullish because of the novel application of ideas brashly being pursued by risk taking entrepreneurs.  Upon reflection, however, the innovation here is superficial--it involves creatively tweaking existing products, but it does not create something entirely new.  Will these 2 services survive?  Aereo is in litigation, and Onlive appears to have licensing issues.  It reminds me of Michael Robertson's MP3.com, which in January 2000 began its service My.MP3.com service which was brashly creative in providing a music streaming service based on the registration of previously purchased music.  The service would stream a song to a user at whatever computer such user was using as long as such user had already registered such song.  Registration of a song was achieved by inserting a physical copy of a CD containing such song into a computer which the service verified.  The service did not actually copy and upload the song from the CD, but rather just verified the song and streamed a copy of the song that the system had.  MP3.com was promptly sued by Recording Industry Association of America.  Also worth noting is that the dot-com bubble popped 2 months later in March 2000. 

Will I actually use Aereo or Onlive Desktop?  No. I already have broadcast TV coming at me from cable, from a Time Warner (TWC) iPad & iPhone app, from a regular TV antenna, and probably from some other sources I am not even aware of.  As for Onlive, I would be afraid that if I saved something on its virtual desktop, that I could potentially lose access to such files if licensing issues were to precipitate litigation and an injunction against the service.  

Friday
Mar302012

Patent portfolios. If you have to sell your patent portfolio, you probably need money.  If you have to describe your patent portfolio to someone, you're probably being defensive about not having innovated recently.  If you have to go after someone else's patent portfolio, you probably need money and you're defensive about not having innovated recently.  The phrase "patent portfolio" has apparently spiked on the web according to a query I just made with Google Trends.  

Check out the latent bearishness in this Bloomberg article--it identifies more companies than innovators, and everyone is talking about intellectual property.

Friday
Mar302012

Apple iOS devices are expected to integrate Baidu at the expense of Google.  Google is looking to expand beyond Sprint and add other partners to "seamlessly" integrate with its Google Voice service.  The foregoing are arguably short term negatives for Google (GOOG) and Sprint (S), but taken collectively (and more important from a macro sense), these constitute a more extended term bullish indicator for technology because (1) they involve change, and (2) they will require 2 companies (Google and Sprint) to innovate that much more.
Friday
Mar302012

Bump Pay, which allows you to pay friends by tapping phones is bullish because it advances the flow of money.
Friday
Mar302012

Google and the great flickering firewall of China.  The great internet firewall has been flickering on and off this month. Interestingly, this coincides with the swirl of rumors of dramatic power struggles between Maoist-minded and reform-minded Communist leaders surrounding the (dramatic) removal of Bo Xilai from his position of party chief of the south-western region of Chongqing, China.   The great firewall has flickered before, or at least had the occasional brown-out. If this virtual wall were to fall, there would be nothing to photograph (like there was in when the concrete wall in Berlin fell in 1989), but its impact would be significantly bullish.  The designers of China's great internet firewall are associated with the  Maoist traditionalists.  If the reformers win a putative power struggle and the great firewall falls, it will be hard not to ask whether or not it would constitute a significant opportunity for Google (GOOG).  In 2010, in a surprise afront to the Chinese government, Google announced that it would not agree to filter search results, which would impact Google's ability to do business in China.  Google decided not to even play ball because of filtering.  Filtering is basically a common denominator across internet companies inside & outside China.  If filtering is removed, it would be a green light for Google.  Google would still have challenges. 

Challenges for Google: 

  • Removal of filtering would also allow Baidu (BIDU) and other Chinese internet companies make more competitive and enticing content available too.
  • Google’s relationships in China could be several years behind competitors (both Chinese internet companies & foreign internet companies who do filtered business in China). 

Advantages for Google: 

  • Chinese develop very strong tastes for foreign brands (e.g., Kentucky Fried Chicken and American Apparel).
  • Android has a high market share in China (IDC analyst from Beijing, Teck-Zhung Wong, forecasts that Windows Phone will capture 7.5 percent of the smartphone market in 2012. He expects iOS to claim 12 percent and Android to dominate with 70 percent.). While Android has been made available on an open source basis, my understanding is that Google is becoming more controlling about how Android is used.  If this is the case, I presume as newer versions of Android are released, we would see more manifestation of Google’s control over the operating system (although, I wouldn’t be surprised to see localized splinter versions of the system developed). 

A check for “great firewall of china” on Google Trends indicates peaking searches at the beginning of this year (which includes when China Vice-President Xi Jinping visited the US) and the beginning of 2010 (which includes Google’s decision regarding pulling back from doing business in China because of filtering).

There were reports this week that Youtube was partially unblocked in China.  This may be a sign of more to come, or perhaps some software was down for system upgrades.

Friday
Mar302012

Can't help but think that should Facebook (reserved ticker FB) have its IPO in May, that it would help offset actions of the acolytes to the old saw "Sell in May and go away".

Friday
Mar302012

Tim Cook's visit to China may facilitate Apple's expansion of business there.  A skeptical observer might note that the summit-like meetings and media attention afforded to this CEO on his visit has some other effects. To a certain degree, it distracts from other issues of the day (like the status of Bo Xilai); and for some reason this news almost dulls an observer into feeling like the country has suddenly made new strides in its enforcement of intellectual property rights (whether or not such is actually the case).  Based on history, an observer would not be faulted for acknowledging the host country's business acumen in not putting all of its eggs into one basket (Airbus vs. Boeing in 1999). I.e., it would not be inconsistent to, say 8 months from now, see another high profile reception on the Mainland from a CEO of a competing tech company in the US (or another country, for that matter) making the current excitement feel a bit like yesterday's news.     

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