A stock I pitched to the Cornell Investment Management club came out with better than expected results. Apple seems to be defying the recession-- as I had predicted-- although not so much through the iphone sales but through the ipod sales. But my thesis was still correct. The new ipods, with their ability to surf the internet and download apps are like cheap netbooks.
Apple remains on my conviction buy list, despite Steves ill health. I feel that great design is-- after 10 years of Steve being at the helm-- imbedded into Apple' genes.
Friday, January 23, 2009
Wednesday, January 14, 2009
Steve Jobs Takes Leave of Absence
Today Steve announced, "....during the past week I have learned that my health-related issues are more complex than I originally thought... In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June."
The Stock fell 8% in after hours.
Steve led Apple over the last decade or so to great heights. But should we expect that Apple will not be able to keep producing great products without him? I don't think so. Indeed, it was not Steve who came up with the click wheel. Or the design for the iBook's, iMac's. etc.
Apple has a great industrial design team for that. Jonathan Ives who designed the most of the hit products for Apple is a cult figure himself (more popular in the UK that JK Rowlings. See article:
http://news.bbc.co.uk/2/hi/entertainment/3481599.stm ).
What Steve did well was able to identify good design and not let it be ruined by what is known as "design by committee" (DbyC). DbyC or its sister, design by programmers (what Microsoft does) takes even good designs and dilutes them till they are indistinguishable from bad ones.
If you look at the stunning growth in Apple you realize that Steve has educated all of us about good design. He has taught all those who love their ipods and the iphones, that design matters. That technology doesn't have to be dull, but can have a style and sensibility, that makes these objects of affection; "cool" rather than just tools that make our lives more efficient (which they do as well).
If he could have taught all this to us, the general public, it seems likely that those that have been closest to him, those that have actually made the designs that he then pushed forward (or modified) know this too.
I believe that Steve has, over the last decade, put in place a brand which such a strong sense of style that the products that will be coming out of apple are almost obvious. So, for example, a larger iphone type tablet device, in the range of 8 to 9 inches diagonally, is on its way sometime this year. How can I be sure? Place all the apple devices that apple has current from the smallest (the ipod nano) to the largest (the plasma display) and you will notice a gap in the size in this range. More on this anther time...
My point is this. As long as Apple does not fall for DbyC, they should be fine, with or with out Steve. And I don't think they will fall for DbyC, because if I'm telling you about it, its such an obvious trap that the smart people at Apple will know about it too!
The Stock fell 8% in after hours.
Steve led Apple over the last decade or so to great heights. But should we expect that Apple will not be able to keep producing great products without him? I don't think so. Indeed, it was not Steve who came up with the click wheel. Or the design for the iBook's, iMac's. etc.
Apple has a great industrial design team for that. Jonathan Ives who designed the most of the hit products for Apple is a cult figure himself (more popular in the UK that JK Rowlings. See article:
http://news.bbc.co.uk/2/hi/entertainment/3481599.stm ).
What Steve did well was able to identify good design and not let it be ruined by what is known as "design by committee" (DbyC). DbyC or its sister, design by programmers (what Microsoft does) takes even good designs and dilutes them till they are indistinguishable from bad ones.
If you look at the stunning growth in Apple you realize that Steve has educated all of us about good design. He has taught all those who love their ipods and the iphones, that design matters. That technology doesn't have to be dull, but can have a style and sensibility, that makes these objects of affection; "cool" rather than just tools that make our lives more efficient (which they do as well).
If he could have taught all this to us, the general public, it seems likely that those that have been closest to him, those that have actually made the designs that he then pushed forward (or modified) know this too.
I believe that Steve has, over the last decade, put in place a brand which such a strong sense of style that the products that will be coming out of apple are almost obvious. So, for example, a larger iphone type tablet device, in the range of 8 to 9 inches diagonally, is on its way sometime this year. How can I be sure? Place all the apple devices that apple has current from the smallest (the ipod nano) to the largest (the plasma display) and you will notice a gap in the size in this range. More on this anther time...
My point is this. As long as Apple does not fall for DbyC, they should be fine, with or with out Steve. And I don't think they will fall for DbyC, because if I'm telling you about it, its such an obvious trap that the smart people at Apple will know about it too!
Friday, January 9, 2009
On the Demise of the US
Its seems to be trendy to say the US is on a steady decline and a superpower for only a while longer. China is sure to be kicking US ass shortly (economically at least), they say.
Reason's given are based on the unsustainable US government deficit (40% of GDP), the current account deficit, social security crisis, rising military spending, etc.
These proclamations are not new. I asked Peter Bakstansky – Senior Vice President (retired), Fed Reserve of NY the question (week on wall street): does the fed worry about the current account deficit. He said yes, its discussed but its never been a real cause of concern. On the current account deficit he said, "they said it (the current account deficit) would be unsustainable at 5% (of GDP) that came and went, then they said 7% and that too came and went".
The current economic crisis has given second wind to these theories. Seventy years ago, during the great depression, I bet these theorists might also have found lots to clamor about. To such people, the end of the US should seem eminent at every recession.
My position is simple. We simply do not have sufficient data at this point to say either way.
To take an analogy from picking stocks-- analysts and those trained in the art know how hard is it to call a stock. Where will GE trade a year from now? Most would shy away from making a call on GE given its complexity and diverse business. Yet, when it comes to the $40 trillion firm called the USofA everyone seems to know and is ready to call which way the stock is going.
Reason's given are based on the unsustainable US government deficit (40% of GDP), the current account deficit, social security crisis, rising military spending, etc.
These proclamations are not new. I asked Peter Bakstansky – Senior Vice President (retired), Fed Reserve of NY the question (week on wall street): does the fed worry about the current account deficit. He said yes, its discussed but its never been a real cause of concern. On the current account deficit he said, "they said it (the current account deficit) would be unsustainable at 5% (of GDP) that came and went, then they said 7% and that too came and went".
The current economic crisis has given second wind to these theories. Seventy years ago, during the great depression, I bet these theorists might also have found lots to clamor about. To such people, the end of the US should seem eminent at every recession.
My position is simple. We simply do not have sufficient data at this point to say either way.
To take an analogy from picking stocks-- analysts and those trained in the art know how hard is it to call a stock. Where will GE trade a year from now? Most would shy away from making a call on GE given its complexity and diverse business. Yet, when it comes to the $40 trillion firm called the USofA everyone seems to know and is ready to call which way the stock is going.
On Technology Trends
Three trends in personal technology are note worthy:
1) The User Interface (UI) is the computer
2) Different UI's fill different needs
3) Data doesnt differentiate between UI's
1) The UI is the computer:
Once upon a time, computers filled entire rooms. Then they came in big beige boxes. Finally, the iMac shrunk all the innards and hid them behind the LCD screen and thus began the age of the UI. The iPhone is one big UI.
2) Different UI's fill different needs
In olden times, a warrior carried a knife, a shield, a sword and other fighting equipment. Today, in the information age, the UI is the equipment we take to battle. I might take just my mobile device on my jog to listen to podcasts/news. To a meeting, I'll take my laptop to make presentations. At home I'll use a desktop (or desktop replacement laptop) to complete multiple tasks efficiently.
3) Data doesnt differentiate between UI's
Data is UI agnostic. Today, I cant have a video conference on my cell phone as easily as I can on my laptop, or create or edit documents as easily. Just like my laptop will not be as portable as my mobile device (by definition) there are some inherant reasons why differnet UI's will always have some advantages, but they will converge.
1) The User Interface (UI) is the computer
2) Different UI's fill different needs
3) Data doesnt differentiate between UI's
1) The UI is the computer:
Once upon a time, computers filled entire rooms. Then they came in big beige boxes. Finally, the iMac shrunk all the innards and hid them behind the LCD screen and thus began the age of the UI. The iPhone is one big UI.
2) Different UI's fill different needs
In olden times, a warrior carried a knife, a shield, a sword and other fighting equipment. Today, in the information age, the UI is the equipment we take to battle. I might take just my mobile device on my jog to listen to podcasts/news. To a meeting, I'll take my laptop to make presentations. At home I'll use a desktop (or desktop replacement laptop) to complete multiple tasks efficiently.
3) Data doesnt differentiate between UI's
Data is UI agnostic. Today, I cant have a video conference on my cell phone as easily as I can on my laptop, or create or edit documents as easily. Just like my laptop will not be as portable as my mobile device (by definition) there are some inherant reasons why differnet UI's will always have some advantages, but they will converge.
On the trends
The Cornell MBA "week on wall street" came to an end yesterday. I couldnt help but think it should be called the "weak" on wall street.
Among the highlights were meetings with analysts from The Capital Group, Jim Cramer, S & P and Mavrick Capital.
Gunnar Overstrom – MD, PM at Mavrick mentioned that he looks at three things while picking stocks. The secular trend, the cyclical trend and particular bottom up trends (the last being things like management, accounting standards. fraud, etc.)
Deeper evaluation is done on the basis of fundamentals, (market) expectations, valuations (which he considered the least important) and management.
I like this way of breaking things down.
Among the highlights were meetings with analysts from The Capital Group, Jim Cramer, S & P and Mavrick Capital.
Gunnar Overstrom – MD, PM at Mavrick mentioned that he looks at three things while picking stocks. The secular trend, the cyclical trend and particular bottom up trends (the last being things like management, accounting standards. fraud, etc.)
Deeper evaluation is done on the basis of fundamentals, (market) expectations, valuations (which he considered the least important) and management.
I like this way of breaking things down.
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