Archive for February, 2009

There is a reason why stock prices are depressed

Thursday, February 26th, 2009

Most companies are out of good ideas. That’s why share prices are severely depressed. It is evident that well-known companies haven’t had much to offer in terms of a promising future, Motorola has been struggling for many years to get in touch with the market, and take Microsoft for example: Management focused on bringing Vista to the market and it’s not very good, it doesn’t seem to have a substantial edge, and Microsoft for too long has been focused on things in the market that don’t matter that much – come on, browser wars, they let Google rule a profitable ad market and then Google eventually introduces a browser (Chrome).  Now Microsoft wants to put the future promise on Windows Mobile 7, fine, but now it has to compete with Google’s Android mobile OS… this recovery thing may take awhile to sort out – and maybe there will be another new and powerful challenger. I think Ballmer is a smart guy, but shouldn’t he be preparing for the semantic web? I bet the next new market leaders will be able to use the semantic web in meaningful/powerful ways that change our online experience. And with a lack of promising ideas from established companies it is evident why share prices are stagnating. Nobody wants to invest in the companies that made yesterday’s news unless they’ve got something worthwhile to engage in which aids in restoring them to glory.

Pennystocking

Wednesday, February 25th, 2009

“How have you been doing in the market?” the man asked on the telephone. It was a business associate that wanted me to do training in Indonesia on trading stocks for the U.S. market and how it may apply to foreign markets. Of course, even when I thought I saw a good deal on companies with well-known brands, like Dell, the share prices get lower and lower. So, although tempted I haven’t bought brand name companies at penny stock prices because it becomes a game of trying to get the stock for the cheapest price, rather than at the most opportune time. Buying something cheap doesn’t make you money, you need sustained buying pressure underneath that stock to push it up and maintain the momentum. Some folks think it’s a novelty to see such companies trading for so low… but there’s a reason for that – they were good companies with promising earnings, but that’s all in the past. What’s going to drive the share prices upward from this point? The question is, are they great companies now that will get even better?

Running money

Tuesday, February 24th, 2009

Running money: Hedge fund honchos, monster markets and my hunt for the big score is a book that makes a point about some of the pointlessness of investing strategies, and the author provides detailed accounts of his own experiences running a fund, which not only makes an interesting read, it’s seems like you’re learning the lessons of the game as you go along. What the author felt was important was that no one can see into the future to know what a share of stock will be trading at (except at times feeling out a very short-term movement but it’s one heck of a way to live by staring at a screen all day – that’s not investing), but it might be possible to concentrate on real business trends that would hold for ten or more years that would impact a business. Seeing out to meaningful implications related to the business environment meant an escape from staring at a screen and investing on the basis of what would be important in a long-term sense. The author, and his partner in the fund didn’t want to be tied down to a screen… they had to find a way to articulate their edge to prospective investors. And eventually what you view as an edge will be commonplace and no longer the one thing you do better than anyone else. That may be the time to take a break from the game. The author ended the fund after a short but impressive track record.