Wind Mobile

February 12th, 2010

I am puzzled. Wind Mobile has opened for business in a few select Canadian locations and has a rate plan that kicks king Maya Maya ass. Yet the formerly cartelish giants Telus, Roger’s, and Bell still not only are not penny stocks but after a quick slap to their share prices all seem to be doing fine. I don’t understand? I look at the plans offered by these three bozos and then I look at Wind Mobile’s plans and my jaw drops. Any Canadian with half a brain will switch over to Wind Mobile and either cause the big three to drop prices or lose customers. This will drain the mega profits from these companies faster than a vampire drains blood. I won’t go into a blow by blow of plan vs plan but I will pick a pair of subtle but important comparisons. Wind does not have contracts. No 1 year contracts and certainly no 3 year contracts. So how much is this worth to the average customer? It is certainly worth a huge amount to the big three bozos Roger’s, Bell, and Telus as they expend a huge amount of energy trying to lock people in for as long as possible. The other comparison is that I understand Wind’s plans. I can calculate what I will get and for how much. I gave up a long time ago trying to figure out the various plans from Telus, Roger’s and Bell. I use pay as you go from Telus and they still manage to screw me every once in a while. In fact tonight I have to call them and beg for them to unscrew me. I would much rather tell them to “go to hell” and the moment Wind comes to Halifax, Nova Scotia I will. I won’t just drop Telus as a mature adult should but I will call them and tell them to go F themselves. (Telus customer since 2001).

So this brings me to a stock analysis. Why didn’t the big three lose their shirts the first day that Wind opened? I suspect that Wind will run a tight ship and thus their opening salvo of prices isn’t their bottom line pricing. If anything by looking at some European prices they probably could be profitable at half or even a quarter of  their present rates. Whereas old fattened pigs like Telus, Roger’s and Bell are generally old and creaky and filled with bloat. They generally have old infrastructure that is costly to run. They usually have perceived obligations that prevent them from becoming lean predators. They were built like elephants for grazing and just being too big for any little predators that might pop up in little old Canada. But now they are faced with a T Rex that can bite huge chunks out of them and barely notice their pathetic bleating. Mobile telephony is not a terribly complicated technology and getting set up in markets across Canada should be easy with the funding behind Wind. So if I were an institutional investor with large holdings in the formerly bluechip telcos I would be dumping them like an old moldy leftover found in the back of the fridge. You know the ones where you even toss the Tupperware out as something you don’t dare open. That is; even the Tupperware doesn’t have a future.

So this one is a lesson in progress. I think there is a deep lesson in Canadian business life to be found in this set of stocks. Wind is a monsterous lean and hungry competitor that will lessen the financial burden of the vast majority of Canadians. Thus they not only should have market forces pushing them to future success but they have moral virtue on their side in that breaking the back of what appears to me to be basically a cartel or a blended form of monopoly is simply the right thing to happen. But obviously the brainiacs on Bay street (Wall Street Jr.) don’t agree with me and think that the big three have bright futures. So what is up? This is one situation where I would have thought the facts were clear and a short of the big losers would have been a sure thing but I would have been right for around 1 day.

I can’t wait for two things. For this story to play out and for Wind Mobile to come to Halifax, Nova Scotia. For the love of God come quickly.

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Reply to an interesting comment.

November 14th, 2009

Here is an interesting comment. I thought it deserved a reply.

It’s not about technology, moreover, you totally missed the point on why people own BlackBerrys. BlackBerry will dominate anybody who is serious about their business (except for industries that are socially relevant like media/entertainment/fashion), and iPhone will be a price cool thing for people who want to think they are cool. Android made by nerds for nerds, and is after the iPhone market which will crush them.

I agree and disagree Blackberrys are for business; absolutely.

Backberrys used to be for people who wanted to be cool. Business warriors now have them strapped to their belts (Khaki pants, blue shirt); which most people think is sort of sad.

Non business people sometimes got them but found them generally useless for their lifestyle. Any keyboard phone was good enough.

Now iPhones are for people who want to be cool. (My phone is cooler than your phone)

iPhones have an apps avalanche which is making the iPhone more and more attractive for more people in both a superficial way (iFart) and a useful way. (Metronome for musicians)

But where it all boils down is that I have found that a successful product will appeal to people’s base needs: ego, greed, sex, stupidity, boredom.The iPhone has these covered in spades.

Ego (I’m cool for having this)

Greed – iPhone, not so much. Blackberry might win here a bit.

sex – Great browser plus many apps cater to this.

stupidity – the great browser makes wikipedia usable and other apps that can make you look smart

and finally boredom. I see so many people plunk themselves down and pull out their phone (any phone) and try to entertain themselves with whatever their phones can do. The iPhone does this really well with movies, podcasts, music, and games all at the ready. Other phones can do this but the iPhone does it in spades.

The last point is that the Blackberry has hit its highpoint. Damn it emails well. But my sister (government funded) has the same blackberry from 4 years ago. She has no desire for the coolest and newest in that offers nothing more for her. So cameras GPSs and whatnot probably won’t send sales spiking.

The android is still the wild card. Since this is a blog from a tech point of view I will end on a technical note.

Years ago (circa 1999) I downloaded the Blackberry SDK. Wow the engineers made it easy for me to make an app. Didn’t do anything for me to help sell it. Not a damn thing that I could see. When I contacted some large telcos to try and sell some apps through them they seemed shocked that you could even sell apps.

Then along comes the iPhone SDK in 2008 after a few hiccups Apple slams 3rd party apps right into iTunes and bang the app avalanche began. I have begun the development of some apps and it is fun and easy. I can’t wait to see the results. Once development is complete I throw my app into the app store and begin attracting interest where my app will live or die on its own merits. I get 70%, Apple keeps 30%. Then when apps are sold they wire the money to me. That rocks. From a programming standpoint it uses a language called Objective-C. This language is not hard to learn but it isn’t a commonly used development language outside of Apple products but Objective-C is based upon C which is one of the hardest of hard-core languages available. Most commercial apps are developed using either C or C++. That would include things like most operating systems, video games, most Microsoft products, your browser, almost everything. Basically you can do anything that pops into your brain and is theoretically possible on the computer. This leads to Android. Android apps are primarily programmed in Java. While Java is a perfectly nice language it is, in my opinion, a huge steaming pile of crap. Many business apps, your company’s payroll system for example, are generally programmed in Java. But in my experience it is too easy to end up either avoiding cool functionality due to the limitations of Java or getting stuck in a programming quagmire where you spend months spinning your wheels in the mud. Lastly there are lots of bozos programming in Java. They learned it in school last week and now they are churning out code this week. Thus Android is a bit handicapped by this. With no empirical evidence at hand I would guess that the general quality of apps will end up being lower on Android due to this Java development path.

But now for something about android that from a programming perspective is completely backwards from what the general public might perceive. There are around 50 Android phones out or coming out soon. This might seem like a good thing but from the perspective of a programmer this is a nightmare. It means that if I make an Android app I would have to test it on 50 platforms. Each platform could be quite different. This sucks. This really sucks. Programming for the iPhone can be hard enough and the various iPhones and iPod touches are almost identical to each other. Same basic screen. Similar processors and the core capabilities are nearly identical.

All these Android phones will make programmer’s brains explode but it does have one advantage. The iPhone is generally getting better and better with each release. But the Androids will be pumped out by many companies. If any one of them hits a home run they stand a chance of leaving the iPhone behind. But I suspect the opposite will remain true unless Apple drops the ball with the iPhone. I suspect that the niche that the Androids will occupy will be iPhone clones. They will appeal to people who can’t afford the absurdly expensive iPhones. This is a perfectly profitable place to sit whereas mounting a challenge to the iPhone will probably be financially ruinous even if the company in question wins.

So in summary. From a technical point I love the iPhone. As a technical consumer I love the iPhone. I also want the latest and greatest iPhone.

From a technical point the Android annoys me. As a technical consumer I don’t have any interest in the Android.

From a technical point the Blackberry confuses me. As a technical consumer the blackberry is useless to me.

From observing people; nearly everyone I know wants an iPhone and those with them either have the latest or wish they did. In fact I meet many people who pull out their iPhones and we spend 20 minutes comparing apps. The few who have blackberries either are happy or wish they had an iPhone but have zero desire for the latest and greatest blackberry.

So will RIMM die? No. Will the iPhone crush them like a bug? No; but who crushed the pager?

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Windows 7 Yeah whatever

September 6th, 2009

Microsoft has come out with there shiny new Windows 7. I have heard nothing but praise for it. That is good but not a huge surprise after the disaster that was Vista. As far as I can see Windows 7 is Vista done properly. No doubt sales will be OK as many hold outs who avoided Vista might very well buy Windows 7. But among my technology buddies very few have jumped to the new version. Those who still use windows are nearly all sticking with XP not out of a fear of Windows 7 but more that they just can’t be bothered making the switch. Also it isn’t cheap and since it holds no perceived value they would rather not waste their money.

So what does this mean for Microsoft. Basically, in my opinion, they have missed the boat again. They aren’t listening to their audience and are putting out more product that serves Microsoft’s needs more than those of the public. There is nothing inspiring me to go back to Windows. Installing Windows 7 should be like opening a present on Christmas day; not a chore that very well could turn into a battle. When I turned on my Mac for the first time I did a little dance. I was lost and it was unfamiliar territory but with the exception of a few bumps it was a fun ride. So Windows 7 is no fun. People need more fun in their lives, not less. So my guess is that Windows 7 sales will pick up a few of the hold outs that are stuck with XP but won’t stop the bleed to Linux and Mac.

But as we all know there is a bit of a cash flow problem out there so MS sales would normally be down around now. Thus Windows 7 will at best probably fill in a hole instead of being a revenue home run.

If you want to see the long term prognoses for Microsoft just find out what your kids want to bring to university this year. A mac or a PC? I suspect that many will go with PCs but wish they had macs. A fair number will go with Netbooks as those are cheap as dirt; yet these kids too will wish for a mac.

Does this bode well for mac? Not really as much as you would think. Most people wish for a German car yet end up buying Japanese. So yes apple will benefit a bit but it is Microsoft who will be the big loser here.

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Microsoft and the death by a thousand MBAs

May 25th, 2009

I heard a rumor that Microsoft just did a 4 billion dollar bond issue. If true this is odd for a company with around 25 billion in cash sitting in a big vault with Microsoft surfing the waves of gold coins. This is odd for two reasons. One is that right now is about the worst time in many many decades to be issuing bonds (unless it turns out people are looking for reliable bonds and Microsoft is taking advantage of that) and what profitable thing could Microsoft be planning that is worth having that kind of debt? The next part that make it odd is that Microsoft must have watched companies die after they cleared out their war-chests and raced off and bought something that turned out to be stupid. Time-Warner buying AOL would be a great example.

So unless Microsoft is getting into some completely unrelated business like mining they are probably buying something tech and something that will cost the better part of 29 Billion dollars. So you can cross out most American companies as the courts would jump all over Microsoft if they bought anything that left Microsoft a monopoly. The leading candidate rumor is SAP. I like this rumor so I will explore it as the probable future.

I hate SAP. Not a little bit but a huge amount. If I were to go into detail I could make a sailor blush so let’s just say I hate this hard sell, high priced, company that smells like the breath of the slimiest MBA that you have ever met and had do the double gun fingers to you. This is somewhat different than the origin of Microsoft. Microsoft was founded by a bunch of geeks who struck gold. This attracted many more geeks who continued to mine gold at a furious pace. Some business types snuck in and no doubt helped to keep the books straight. Also like any collection of humanity Microsoft was probably slightly populated by charismatic ladder climbers but seeing that many of the original founding technical staff had senior positions and money coming out their ears these ladder climbing backstabbers probably didn’t get the same traction that they might in, say a government department.

But I suspect that the senior management at Microsoft is starting to follow Bill Gates to the exit and are being replaced by those charismatic ladder climbers who don’t have money coming out of their ears. But they want money to come out of their ears and thus are looking for the big score that selling another few million copies of office just won’t provide. A merger with something big might just do the trick. SAP would seem to be a good fit. They are big and provide what I call a big bang solution. A big bang solution is where you throw out your entire set of old software and you bring in a whole new software universe that you must live with no matter what. SAP provides an end to end solution that seems to be very hard to escape from. Microsoft provides an operating and server environment that is also very hard to escape from. Combined and their customers may very well find themselves caught in the software equivalent of a black hole.

But I don’t think that this business strategy, (on paper probably the best merger in many years) can survive the human equation. SAP in theory would be the junior partner but the technically minded staff would almost certainly be overwhelmed by a tidal-wave of senior SAP personnel who come from a sales background. From a Machiavellian point of view this would be like shooting fish in a barrel. But while this might be fun for SAP I suspect that the disruption to Microsoft would be massive. Also many of its resources would be turned to making Microsoft a SAP selling monster resulting in their neglecting their bread and butter of Office and Operating systems. So long term SAP would go all Microsoft and Microsoft would go all dead. In the short term SAP sales would go up and Microsoft sales would be sustained. But long term Microsoft sales would fade and SAP sales would be dragged down with them. Then if SAP were to abandon Microsoft as a platform then the death to Microsoft would be accelerated and who knows what would happen to SAP.

In the short term, even without SAP, I think Microsoft is facing a huge problem. Windows version 7 is about to come out. Not one of my geek friends has come to be with wonder in his eyes with tales of some cool feature. Also not one of my geek friends has tried out Windows 7. In years past my friends would install the latest operating system as fast as they could get their hands on them. I am talking about pre beta highly unstable operating systems that would explode over and over. But after Vista turned out to be such a huge honkin’ dud most of my friends either went with Apple or are sticking with and are happy with Windows XP. So this same bunch are not even bothering to look at Windows 7. None of us have seen any compelling reason to make the switch. Not a single one. It is people like myself who advise many companies what they should do. Unlike Vista I won’t advise avoiding Windows 7 like the plague but I won’t be pushing it or using it myself. This says to me that Microsoft won’t get a crazy surge in sales. They will pick up some of the people who refused Vista but their sales will certainly be made up mostly by new computer sales and the fact that Microsoft comes with the computer by default. I still don’t commonly advise Linux as a desktop but Linux is getting closer to crossing that threshold where I would make that suggestion. What one must take into consideration is that I suspect that the bell curve of the Linux switch is a very sudden bulge. Thus when Linux gets just a little better it might not trickle onto the desktops of the world but it will flood.There are organizations such as the national police force in France who have made the jump and I suspect that many people will analyse situations like that to death and eventually be able to make the case for Linux. So some day the Economist Magazine will have a cover with a penguin (Linux logo) saying that any sensible company uses Linux. That will be the death of Microsoft and SAP will take a body blow if they have become part of Microsoft.

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Oracle and MySQL

May 25th, 2009

Oracle has bought SUN and thus have purchased MySQL. As far as I can tell Oracle has two competitors: one is Microsoft SQL which I don’t like but it has good sales in the Enterprise market; the other is MySQL(a free widely used database). Over the last half decade MySQL has probably put a serious dent in the Oracle market. I used to advise clients to get Oracle for serious databases but for the last few years I have advised that people use MySQL for just about everything big or small. Companies like Facebook and Google use MySQL so there are few companies that have data needs greater than those two. So it seems the FTC is not complaining about this deal so that puts MySQL in the hands of a company that has no doubt had pictures of dolphins on their dartboards for some years (MySQL’s logo). MySQL might survive this process due to the nature of how open source as many of the original creators have taken off and done something called forking which is where they are able to take the source code and create their own version but while this could breath life back into an otherwise dead product it can also cause confusion among the users as slowly but surely the world ends up with multiple versions of what used to be a standardized product. This is the key advantage of any given database; it has its own quirks but as time goes by a community of users get used to those quirks and help each other out and knowing that database becomes a skill in and of itself. But if there are multiple versions of the same database that skill set loses value as it becomes smeared out over a larger and thinner set of databases.

Keeping all this in mind I suspect that one strategy that Oracle might employ would be to claim that they not only will continue to support MySQL but that they will even go further and support the various MySQL forks. Thus for a few million dollars in “support” they could buy the death of what is arguably their worst nightmare.

Even if the FTC were to intervene and insist that MySQL be separated from the SUN purchase Oracle could still kill MySQL with love by not only supporting MySQL with what looks like some serious cash but they could also saddle it with a serious number of SUN employees who were the same ones who chased away the talent who created MySQL in the last while. That strategy could be combined with the previously mentioned strategy of sending some love to each of the forks so that they basically all end up killing each other. In effect it would be like sending weapons to both sides in some foreign war along with sending them both some of your worst generals as advisers. If you are really lucky the generals are killed too.

The only possible strategy that the FTC or justice could employ would be to force Oracle to reconstitute MySQL as it was before SUN bought them. The key being that they get the key employees all back into their old positions. But this might be a humpty dumpty situation so that the only hope at this point is that one of the forks of MySQL becomes the de facto fork and thus the best realistic strategy would be for the FTC types to force Oracle to kill their entire MySQL department prevent them from any involvement with any fork of MySQL and allow the forks to fight it out until the Open Source user community finally picks a fork and then it would be the de facto revival of MySQL. The key being that other communities like RedHat pick up the new fork.

Anything else and all we might be left with is SQLLite and that would be dire. :)

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Microsoft’s sinking ship

January 24th, 2009

Before reading this blurb, please understand that I am not a Linux zealot. There are many people out there who cross their index fingers at the sight of Microsoft products. I have used many of their products over the years and have generally found Linux annoying as a desktop and cannot foresee myself ever using it. Recently I have made the switch to Apple and continue to program for Linux servers and Windows desktops. My theory is that I will use the best product for the job at hand. So with this in mind…

I had a problem and that problem is that around a year ago my father bought an underpowered Acer machine with Vista on it. Even with the crappy Acer software removed and the trial of Norton AV removed the computer was a total dog. New, it booted in around 3 minutes and opening things like a browser or a word processor took so long you almost forgot what you were planning on doing when it finally got around to opening. So I was going to dumb it down to Windows XP when I thought I would try the latest Ubuntu….

I set up my father’s desktop with Ubuntu and it rocks. He can boot up and be in his email or on the web it a tad over a minute. I put the icons for Skype, Firefox, Word from openoffice and Email on his desktop so he probably won’t notice anything is odd at all. What is important about all that is that his computer now functions far better than it did with Vista and with no compromises as far as he is concerned. He now has no Microsoft software running on his computer.

I would say the worst risk that he runs with Linux is that he will buy a new printer that won’t have the linux drivers. Most of the mainstream printers will be fine though.

The security on the system is basically off the scale. As the person who gets called with every problem I don’t anticipate getting any calls.

Microsoft is in big trouble. Even if their new Windows 7 is reliable and not too demanding they will still be losing to free Linuxes. The only way for Microsoft to pull ahead will be to have some feature that has the status of Killer. Basically they need monkeys to fly out of their butts.

For the average user Linux would be a perfect set up. But there are two big holes. Games won’t work and once you step outside of the word processing, surfing, and emailing basics you are basically screwed. No software you buy at staples will work and any extra device you buy such as a web cam will not probably be installable by your average user.

So I would say that right now Linux is ideal for servers and old people. Microsoft’s other problem is that younger people want Apple products. So the main group of people who will continue to use Microsoft products will be the corporate world. That might be big but Microsoft will lose the hearts and minds of people at home and those same people will be quick to drag Linux and Apple into the workplace as fast as they can.

So as I have mentioned before, my long term forecast for Microsoft is a long slow slide into obscurity. This will take forever and a day due to their lack of debt and a captive market that will be slow to change; but like companies of the Sun and Novell types once the necrosis sets in the company has little chance to ever thrive again.

What stock advice comes from this? Well Linux is not really a company. A few companies like RedHat nibble at the corners of Linux for a few crumbs of profit but since the core product is free I don’t see this as a huge success business model. At best other companies that provide services that leverage linux will do a tiny bit better as their server costs will continue to drop. Microsoft’s fall from grace will be so slow as to be useless to bet against unless you are into 10 year short sided bets. Microsoft will occasionally announce that a Monkey has flown out of their butt but I suspect that these monkeys will turn out to be the stuff that usually comes out of people’s butts. So except for day traders I would say to just put Microsoft thoughts aside unless somehow they get their fire back. To test to see if that fire is real; look at your desktop and see if that firey product is rocking your world. If not then ignore the hype.

Lastly there is a path for Microsoft to be successful. It is a contradictory path. First is that the new Operating system must be stripped way down. Get rid of all the bits that are there to sell customers all the other products that Microsoft makes. Toss .net, sharepoint, database connectors, Active Directory stuff and everything. Make the operating system completely bare. I want an operating system that takes up less than 100M of drive space and uses a less than 50M when freshly booted. But make the OS very modular. If you want sharepoint interaction then you can add it. But when you add something to the OS don’t integrate it, keep it very separate. No more registry, windows, or system directories all piled up with crap. Right now most operating systems have a security model that will ask when the user tries to do something fundamental. Well make it so that these fundamental modifications are not required by newly installing software. Hard drives are basically free so if every application needs to have its own .dll files that is fine. Make the computer boot in like 5 seconds.

But next, and this is the near opposite of what I just wrote, make your OS do something with all those computers in the office. I could go into huge and complicated details about a solution, but Microsoft has the opportunity to do something really cool that they won’t be able to do in just a few years. Something that would cement their place in the computer world and blow Linux back a decade in their progress to win desktops.

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Recession and technology

December 16th, 2008

My theory is that this recession will be nasty but short. People are losing confidence in the various markets including money itself. The success of the various markets and the usefulness of money are all based upon confidence. But enough general economics. The key difference between this recession and all others is the common use of technology for communications, modeling, and analysis. This is different from every other bust in history including the tech bust. The tech people were using modern technology but the rest of the world were still using fax machines, telephones, and couriered documents. This time people are using email, blackberries, google, along with a host of other tools. Information is moving much faster.

Basically this disaster was caused by a lack of information. People trusted the old ways. What were the rating agencies doing? What is hidden in all these OTC things? What kind of reserves do the companies issuing CDSs have? What exactly was backing the various MBS? These are all questions that we are quickly finding the answers to. People are both able to find this information but are also able to realistically demand this information be quickly made available.

Other key questions that people are now asking are: Where do I find a new source of credit? Where are the best deals? Along with many other financial questions where the answers may not lay with the old school players.

So the key to a functioning market is open information. The existing market became horribly dysfunctional as huge chunks of it were either incomprehensible or hiding in a sea of fog. As people are now demanding ever greater access to timely information the trust in the markets should return as fast as this information becomes available as well as the money rushing to the areas of investment that avail themselves most to the levels of transparency demanded.

In past recessions people might have taken months or years to get these new patterns of business going; this time around it might be one google search and an email away.

There is a catch. It is a famous concept that Generals fight the last war. I suspect that people will look to the past recessions including the great depression to find their answers. It looks like huge public spending on infrastructure will be a cornerstone of the new White House; I suspect that the time involved will be glacial as compared to the speed that could be achieved by simply opening up the information to the investing public. This lack of awareness of the advantages of letting the market in on what is happening is exemplified by the Fed’s refusal to say who has received what. I suspect that the various insiders know exactly who received what but the general public does not. Thus the general public cannot trust the market. Even the insiders might not be completely sure thus squirreling the entire exercise of having an open market.

As a simple example of the openness needed yet probably not forthcoming; companies like GM will insist that as much as possible be hidden during their inevitable bailout. They will argue that the Unions and their competitors would take advantage of the information. But I suspect that the Unions and competitors know every detail anyway. GM will really be trying to avoid embarrassment. I suspect that the management have made such huge blunders, one after another, that even their own employees would be chasing them around the parking lot with pitchforks let alone the tax-paying public. But beyond embarrassment this openness would not hurt anything but the egos of the GM management. If we don’t find out what went wrong, how can we avoid doing this all over again?

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I am now down on Canadian Banks

November 20th, 2008

To start with the Royal Bank is now worth, roughly, more than Citi. How can this be? Well I can understand a few issues that might make Citi weak but my key question is: How have Canadian banks been so smart as to not either buy a bunch of CDOs or sell a bunch of CDSs? Are our bankers so much smarter than the rest of the world?

There is an interesting story from Chernobyl. The first sign that the reactor blew up was from Sweden when their nuclear reactors thought they were having a leak as the radiation wafted their way. For the next many weeks the wind blew this radiation back and fourth across Europe, but it spared France. Daily maps showed the radioactive wind in European newspapers. After a while though it turned out that France’s nuclear system, then considered to be the best in the world, had been lying about all problems for years. Thus by reflex they lied about the radiation levels from a disaster that wasn’t even theirs. Due to this lack of openness, and thus public oversight, it turned out that France actually had the worst nuclear safety record in the western world.

I think that this now applies to Canadian banks. I believe that the world does not yet have a clear picture of the health of Canadian banks. So the result is the same, the financial fallout is wafting all over the world but somehow avoiding Canadian banks. Their stocks have been falling but not to the degree that they should if they had jumped onto the toxic waste bandwagon.

So my second last question is: When the party was ending in places like Lehman Brothers, did the Lehman people realize that their Canadian cousins had bags of cash and could buy their toxic waste for one last quarter, and do you think a bunch of podunk Toronto bankers could resist personallized seminars at the four seasons that would then be given to them about the huge returns available to their investment divisions if they were to jump into these vats of toxic waste?

So my last quesion is: Would the cozy government regulators jump all over the banks and expose their weaknesses or would they agree to let them play their cards close to their chests and try to bluff their way through this economic disaster?

Now from an investment point of view if and when will this shoe drop? People talk so never is not a possible option. The sure sign that they are strong is if they start buying things. But if they start talking merger again then they are weak.

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Financial Naughty and Nice list.

October 22nd, 2008

I suspect that out of my usual stocks that some will recover along with the rest of the market but that others will be huge underperformers.

Apple will probably have a bad quarter this time around as will Google. But not terrible. Then when people have money they will flock to them.

Microsoft will also have a slightly dissapointing quarter but their customers won’t flock back but they will do sort of OK.

RIM will bomb this quarter and basically never recover drifting along with people saying that they are a buyout target. They will never be a buyout target as I think their brand will be a hasbeen in less than a decade and they will have nothing to offer but outdated infrastructure.

SUN will have a slightly bad quarter but this will be more do to their generalized rot as opposed to anything else. They too are not much of a buyout target for the same reasons that RIM won’t be a buyout target.

Canadian banks will eventually get some bonus or kick from the government so in the long term they will do well as usual, but for the short term I smell pain pain pain.

Back to Google. I believe that the ad world will discover that in the recovery quite a few of their customers tasted the Google koolaid and won’t ever be coming back. So all old media will be be wailing and gnashing their teeth come the recovery. A few old media outlets will reinvent themselves into either extremist media or actually focus on what people in their areas want and thrive. So most old media will suffer the death of a thousand cuts from bozos like this blog. Again, some will hope to be taken over but who the hell wants a 100 ton printing press going into the age of electronic ink?

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MySQL and that bad smell called SUN

October 22nd, 2008

A year ago I had such great hope for SUN(JAVA). But it looks like they lost another key founder of the MySQL product they recently bought. So it looks like SUN is just incompatible with success.

I have generally found that with most successful software projects there are just a few people who really drive the product along. When they leave or lose control the product typically gets driven from marketing meetings and thus driven into the ground. Often this is usually not instataneous as the Marketing people initially do sell more of the given product but the product, being rudderless, drifts onto the rough shores of the land of Suck and breaks apart.

So I expect Sun to release some charts that show how great they are doing with MySQL over the next few quarters but I also expect to see my geeky compatriots start to drift to the next great database. I wonder what that is?

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AAPL

October 22nd, 2008

Apple looks good. But is it time to buy? They kicked Blackberry’s butt but could that be because blackberry sales sucked? Are they reaching market saturation? One thing about Apple machines is that for the average person an older machine is enough. I will watch to see if average users around me upgrade. Also a bit of a driver of PC upgrades is their capacity to play games. New game often requires a new PC. Apples generally suck at playing games, so this is less of a driver. But the latest Apples are getting OK video cards. So maybe games will start coming out in ernest for the Apple line and thus drive some sales.

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Canadian Banks & The Dutch Effect

October 22nd, 2008

I wonder now about Canadian banks & The Dutch effect. It is my belief that the Canadian banks are being allowed to hide their sub prime toxic waste cards close to their chests. Plus Alberta is turning out to be a huge sucking sound that the entire country has had to listen to. The rush of wealth to Alberta has trashed the remainder of the Canadian economy as witnessed by the huge drop in value of the Canadian dollar in rough lockstep with the drop in Oil prices. Now while this benefits exporters like myself, I don’t think it will last long. Exporters cannot build businesses worrying that the Candadian dollar will skyrocket next week. So while various indicators from the government show strength(relative to say… everyone else) in our economy those numbers due come from the government.

So I think that it might now be time to dump my Canadian banks.

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Google Android vs Blackberry vs iPhone

October 6th, 2008

In summary Google will win and Blackberry will lose. A quick summary of the three products from a simplified technical point of view.

iPhone is cool and plays music. It surfs the web very well unlike almost any other web capable phone. It will show you the web in miniature as well as your desktop will show you. Except for pages using flash technology. The biggest inherent obstacle for business users is the lack of a keyboard. This means the iPhone user is mostly limited to consuming information. Cool is a major feature here. Everything about this phone is quite cool. It has quite a few applications being developed but Apple seems to want to battle with developers. Microsoft lost a whole generation of developers by doing this “our way or the highway” thing.

The blackberry line is as everyone knows is very good at email. But that is about it. Its web capability is squirlly and nobody that I have ever met uses any of the other applications. Technically it is possible for developers to make things for the blackberry but I don’t see much of this. In my opinion all RIM products are ugly and aimed at 50 year olds who think they are cool but truely truely aren’t. RIM does not seem to have much of an idea that phones are jewelry for some people.

The android is pretty ugly but cooler than anything RIM makes. It has the RIM keyboard and the iPhone web capability. But Google is doing a good job of wooing developers to make apps for the android. This will probably allow the android to be all things to all people. Quite simply it will have all the best features in both the iPhone and the various RIM products. Some coolness, a keyboard for email and stuff, and great web browsing.

The various reviews of the new Android phone compare it mostly to the iPhone and a few compare it to the Blackberry. Most of these reviews either call it a tie or they give the Android a close second place. A very few call it a winner. None of this is relevant until you consider that this is google’s first phone. What will their second phone be like?

The people who I see running around with blackberries are government people, finance people, and real-estate people. The last two groups are taking a huge hit both in jobs and budgets. Thus I foresee a general drop in all smart phone use but mostly blackberries. This will hurt the android somewhat in that it won’t be the raving success that might have come its way with a boom economy but overall this might benefit Google. From a technical point of view it looks like the Android might be cheaper to run than blackberries and iPhones and due to what google is providing to geeks it will soon have applications that will cover any software feature found on the other phones. So if you like some software feature on your favorite phone it will be matched and bettered by the android.

So I see a market that will be looking to cut back hurting blackberry and iPhone but not Android as they have doubtfully built up much dependancy on their tiny market share where as RIM basically has a single product and will be seriously hurt by any drop in revenues. iPhone will be less affected by this but it will give their many competitors such as samsung to catch up with cheaper units. This will hurt things like RIM’s R&D and general moral.

Then I see some companies adopting some Androids to cut cost. This won’t amount to much but it will get people exploring non RIM options. Then when the market rebounds people will not all return to the RIM family. Many will go to Android for both capabilities and cost.

So the timing of this bust will only put nails in RIMs coffin and open a door to Google. I don’t see this as being a huge revenue generator for Google but I do see this as being a massive revenue eraser for RIM.

So in summary Google will do OK; RIM will die a slow death; and Apple will just continue along.

PS My prediction is the RIM will fade in spurts. Basically look at the history of companies like Novell and Sun. They just sort of faded from relevance. Once in a while they would make headlines with a sizable layoff but due to a lack of any crushing debt they just sort of faded from the scene. One customer base that probably won’t switch and will keep RIM plodding along will be governments. Due to the lack of real impact by the economy they won’t cut way back and since they generally are very old school people who are very uncool they will keep on and on with their blackberries. That should fit in well with their various Novell and Sun systems.

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September 7th, 2008

Here is a great reason for dumping sun. In response to a rumor that MySQL co-founder Micheal “Monty” Widenius may quit Sun Microsystems one of the SUN people said, “Second, Monty’s resignation has been a possible outcome already since years before the Sun acquisition. Perhaps his resignation at some point is inevitable, given that the type of skills and qualities needed to make MySQL great are different from those needed for working productively in a larger organisation (and I am referring to the size of the MySQL team, not Sun).”

This quote has two wonderfully revealing parts. First; wouldn’t everyone who works have resignation as a possible outcome? Short of slaves all workers might resign at some point. The real question is when? So right here we have a large company trying to spin this. Why. Either he leaves or he doesn’t. If he doesn’t you have the guy say that he isn’t or he does and you deal with it. What would spinning this do for a company when if he just pops out and resigns anyway. The only thing that I would learn from this if his resignation was important to me would be that Sun can not be trusted to be forthcoming with the truth. If he isn’t resigning then the PR flacs should parade him out and have him tell it.

The second sentance kills all hope I have for sun in the future. “the type of skills and qualities needed to make MySQL great are different from those needed for working productively” Great products were the only thing that could bring sun back. But this flac seems to think that working productively is better than making MySQL great. What is this productive work that somehow results in not great MySQL? Could it be endless reams of meaningless reports and meaningless meetings?

I am just guessing this but looking at the history of MySQL (created one of the greatest databases ever with little budget) and the history of SUN (sold sort of big iron to big stupid companys until linux kicked their asses and the companies became less stupid) that there might have been an uncomfortable situation every time this guy came into a room. The courtiers would worry each time what was going to come out of his mouth. Might he tell the truth again and point to another naked emperor? Then the courtiers probably just shut him out. Just a guess.

So what have I learned from three crap investments(VMW, MSFT, JAVA) in tech?

Nimble is good. Big and old is bad.

Who is important to the company? Has their position changed? If so then just stay away. Watch for code words/phrases such as ‘allowing him to focus’, ’spend more time with his family’, ‘the new ceo is better suited to the demands of running a public company’ et tu brute?

If you see the founders of a nimble company being pushed around by someone who has an MBA and has read the prince a few too many times then this is bad.

Bill Gates and Microsoft would be a great example. This company grew and grew under his control but once the charity work came the company faltered.

Apple would be another example with a well known story of founders and such.

VMWare looks like it is in the same boat.

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Air Canada Jazz

August 31st, 2008

This life jackets thing is a classic example of bean counters running a company. They plan on saving 25Kg which is the weight of a heavy bag or the extra weight of a single fat person. I suspect the in-flight magazines weigh nearly 25 Kg. But all companies make mistakes but the good ones come clean and just say oops and move on. But in this case an Nova Scotian NDP official was berated by the company for commenting on this stupidity. The last time I heard of Air Canada berating a political type they were berating the premier of New Brunswick for some deal he was doing with Delta Airlines because people in New Brunswick seemed sick of going to Toronto to get to the US. A sort while later Air Canada declared bankruptcy.

So if I were playing with real money I would look into seriously shorting Air Canada. This might not be a great plan as people are probably shorting most of the airlines. The real problem is that the present ownership structure of Air Canada seems complicated so I am not sure exactly who would be best shorted. Maybe if you could find out who they owe the most money to. They might be good to short if the damage could be deadly.

So my prediction is that Air Canada is potentially in more trouble then people realize and this tension recently splashed onto a local NDP player. I will look back in a while to see how this plays out and how best I could have monetized the situation. I could also look back to their last bankruptcy and see how money was made then. I am not sure if their liabilities are high enough to force a bankruptcy but what would get the big guy so wound up? It might be something simpler like his own job in jeopardy. So if their debt is not crushing what would the effect of this guy “Leaving so that he could spend more time with his family” on their stock price?

Oh and my opinion (as a pilot) on life jackets on air planes: Accidents don’t happen in a controlled planned fashion. Accidents usually happen due to a series of mistakes; each of which was not necessarily fatal on its own but all together result in people being dead. The argument that they don’t fly far over water brings to mind people 75 out of 80 people drowning in the Potomac River in 1982. I don’t know if life jackets would have helped but they couldn’t have hurt. But the key is that the Air Florida plane was probably only dozens of feet from the shore. How many people do you know who could swim from say 10 miles from shore? Or a few hundred feet in icy water? So why begin this chain of mistakes now by taking the life jackets out of the airplanes?

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Not following the VMW news.

July 15th, 2008

I have been puzzled by why my favorite company VMWare has been in near free-fall. This company has been doing everything right their products are great and that type of technology will lead the way for some years to come. I suspect they have some juicy patents and are presently market leaders. Their growth has been stellar in a market that isn’t so why. This is a lesson in not paying attention to two real fundamentals; People and people. It turns out that EDS somewhat controls VMW and I didn’t know this. EDS is a large IT player and I have always hated them. As a technology person I have never had a single iota of interest in their products. If you gave me their entire product line for free I would not even plug a single thing in to see what it does. I would pack it all up and sell it on ebay. I see EDS as products for old boring companies in the same way I see Depends as a product for old boring people. VMWare on the other hand is the future or at least it was. The leader of VMWare recently left to “spend more time with her family” or some such. Well it looks like this woman was a powerhouse that may very well have been driving the company to the heights it was reaching. But now she is gone. So a boring company that sells the IT version of geriatric diapers is now running a company that was trail blazing one potential future for both hardware and operating systems. I suspect that most people don’t think that this is going to work out so well and have have dumped VMWare for the semi digested cabbage dinner laden diaper that it might become. So my lesson here is to not only look at the fundamental technology but to figure out what critical lynch pins are making it so and keep an eye on those as well. Also to look at the personalities involved. Any egomaniacs? Two egomaniacs? So now I have a checklist. Tech fundamental, check. Finances look good, check. Personalities in check, check. Then keep checking these things as time goes by.

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Dumping SUN (JAVA)

June 30th, 2008

I am dumping Sun from my portfolio not only because it is a total dog but also because of what they are doing with MySQL. MySQL is a product that was poised to take on Oracle. It used the open source model and it was going gangbusters until Sun bought it. Sun made the usual takeover promises that they would not change a thing but now they are moving toward closing the parts of the source code. For you less technically minded this is breaking what makes products like MySQL great. This is missing the whole point of the product. This shows that Sun is still thinking like a giant company that it isn’t anymore. I had thought that they were going to be new and nimble but I now suspect that they are going to continue with their long tail slide into the dustbin of history.

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As an addition based on a comment that I received. MySQL is not going completely closed source that is the problem, it is that tiny pieces of it are. This is a tiny change. But it is a change in the wrong direction. MySQL is a great database with huge support from the Linux world along with others. But in the world of Open Source people can be fanatical about the source code being open. The moment you close even one part of the code the open source people will scream and run for other solutions. And there are other free open source databases lurking in the shadows ready to take MySQL’s place.

The key to the success of MySQL is not just that it works well but that it the linux community has adopted it wholesale. It is distributed along with most of the major distributions of linux and linux is what most of the real net is driven by. But many of the Linux distributions are black and white about opens source. If the source isn’t open then they won’t distribute it. This won’t happen overnight and it won’t even happen soon. But with the slightest hint of closed source and many in the linux world will start looking for alternatives to MySQL where they normally would not be looking at all. This would result in MySQL fading away and SUN having squandered 1 billion dollars.

Companies that buy successful things for 1 billion dollars and then change that which makes them successful by making them “better” are companies that get tossed off my portfolio.

This would be like buying a Chrysler right after they invented the minivan and removing the 3rd row of seating and putting in more trunk space. You could validly argue that people had been demanding more trunk space and this was just delivering to a proven market. Your competitors would love it and promptly make minivans that do have 3 rows of seating and kick your ass.

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Switching from PC to Apple; a programmer’s perspective

June 17th, 2008

Over the past week I have finished making the switch from PC to Apple. I think that I have an interesting perspective because over the last 20 years I have nearly elusively used microsoft for my desktop operating system and for many of those years I used Microsoft as my server system.

For the most part the only other operating system that I have extensively used would be the Linux operating system but not as my desktop. My programming has usually been a combination of windows application programming mixed with server side programming. Microsoft served me well providing me with many tools that were the best available and during a period from about 1997 – 2003 were nearly all that I used for the server and desktop. Off and on from 96-01 I also used the Java programming language. But then I discovered the .net environment and from that moment on I was hooked. Many of the hard won coding victories that I had added to my library were mostly to be found in the world of .net with more being added all the time. My programming went quickly and smoothly in Microsoft’s .net programming environment. But then as time went by I started to find that Microsoft was not trying to help me program but was telling me how to program. Also I found myself using fewer and fewer microsoft tools and more and more opensource. Now I am not an opensource evangelist. The tools were just better. MySQL replaced Microsoft’s SQL server. Next PHP replaced .net along with eclipse replacing visual studio. Then linux replaced Microsoft’s server and now all I was basically left with was XP as my desktop.

Next I noticed geeks all around me using Macs. I noticed that the various hackers were also using Macs. Then I found out that the Mac OS is based upon an OS called BSD. BSD is for hard core hackers. But here was BSD hidden underneath the glossy Mac OS. So then I discover that the Mac OS is really a hard core server waiting for me to play with it. So I check to see if all my favorite apps are available for the mac which they were and then I made my move. I get the mac all up and running dual monitors and all. No problems. It sees my usb devices the apps all install and within hours I am up and running. Then for the next few days productivity drops while I get used to the new keys and where everything is hidden. The BSD lurking underneath is completely happy with my Linux / Solaris commands and I even remember my vi commands.

I would say that productivity is way up with the exception of some key slips where I use the windows key combos. The Mac aluminum keyboard is very nice. I am used to an ergonomic keyboard so my only wish is that they made an aluminum ergonomic keyboard. But all those little things are just better. Printing is better. Startup is quicker. The apps start is less time. Things are snappier. The upgrades are better. And the basic apps like iPhoto are kick ass simple. I have been wrestling with digital photos since the late 90s and nothing touches the ease of iPhoto.

I do have a few complaints about the Mac. Not everything is easier. Dragging applications to the applications folder to install them is just not intuitive. I get it but will a 60 year old first time user of computers get that? Memory. I have my computer loaded with 4 Gigs of RAM and I would not be able to function with less. Ram is cheap if you buy it separately from Apple but would most people be able to install it?  Applications. I am able to get by with the few missing apps that I need by using Darwine and VMWare Fusion but these are not for basic users. A better way to run windows apps is needed. I am fine but I would hate to have to show a basic user how to do all that.

So in summary. I am still producing applications for windows using VMWare fusion and Visual studio but now I port my C++ applications over to mac. My web application programming has improved as I am now working in an environment that more closely resembles the servers that the web applications will end up on.

So joyfully I have sidestepped the disaster known as Vista. But where will this lead. Some people are predicting that Apple will end up with huge percentages of the PC market share. Others predict that Microsoft will pump out a new OS and regain and losses they have to Apple. I suspect that the truth is that Apple will gain some good market share (around 15 to an absolute max of 20%) and then stop. They will stop both because Apple’s are just so damn expensive and also because hardware will get better so new machines will be able to drag the deadweight that is vista around a bit better. Linux is not a player in the desktop world and probably should stick to servers. The primary breakthrough that I see in the Apple market share will be IT people who make the swtich and then drag a small share of their company along. But the accountants will generally fight Apple corporate penetration as they would eat money.

So the real mac commercial should not show the dope smoking artist vs the bloated sack of crap but two businessmen. One with a pc and one with a mac. The Mac guy should then do things that are useful to the business world and do them faster. The Mac guy can then get into his Porsche and the PC guy can get into his Ford.

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iPhone vs RIM

June 10th, 2008

I think this comes down to what people use their device for. For typing text primarily for emails the various blackberry RIM devices win hands down.  Most people that I know who have a RIM device only use it for the two features of email and as a very oddly shaped phone; nothing else. I have only met one person who used the web feature which I suspect is the only other feature that a few people use on their blackberrys.

But the iPhone seems to be missing the keyboard which is simply the best way to enter text so that somewhat excludes the email responding crowd. But the key feature of the iPhone other than a repository of cool is its web browser. The screen is as big as is possible on a reasonably sized pocket device. Plus the browser basically works. I create websites that are quite demanding of the web browser and they basically work on the iPhone. No other portable web device that I have experienced can display the web usably. Most phone browsers mutilate most websites and most websites are not designed to work on phones. Technologies like WAP and such are mostly complete failures. But the iPhone truly brings the power of the internet to your hands in a portable way. But this power is limited to the informational part. The social and communications part is lacking. The RIM gets some of the communications part but not the informational and misses some of the social.

So where will this lead these two companies sales? I think that any head to head comparisons are meaningless for the most part at this time. If you are one of those people who is now effectively on call 24/7 because they are so reachable via their blackberry then the iPhone while probably good for your sanity just doesn’t have the email features that you need.  So at this time RIM need not worry about losing those legions of lawyers and MBAs with their crackberry monkeys. But where iPhone will do well is by getting those people who want more out of their phones and want the wonderful data features and the various gizmo features such as GPS, camera, watching movies, and so on. These are the people who bought the razr and thought that they were getting something newer and better. iPhone will cream off some of the top executives from RIM in that they will want something cooler than their worker drones. So with all this in mind it looks like RIM will continue to grow will little loss to iPhone but iPhone will be growing its market from people who either are looking for something new and better or just want to be the coolest kid on the block.

One twist is that the iPhone is both releasing a 3G version and expanding into Europe and Canada. This will make things like market share, units shipped and so on very hard to compare year to year.

Since there is no shortage of lawyers and MBAs being churned out by universities everywhere then RIM need not worry too much about market share. iPhone does need to worry about regular customers willingness to pay for rather expensive data plans.

With all this in mind RIM is safe and AAPL might be in for a wallstreet let down with the next iPhone.

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Apple is BMW

May 28th, 2008

I have finally figured out who apple is. They are BMW. That is everybody either wants a BMW or has a BMW or is in denial that they want a BMW. By BMW generically mean the higher end Germanic cars such as Audi, Porsche. Basically Apple’s cost more are considered cool and tend to have extra features and be of a generally higher quality. Whereas Dell and HP are like GM and Ford with the sony Vaio series perfectly matching the Japanese car manufactures. Using this interpretation it allows me to predict the future of Apple. Like BMW apple will never take over a majority of the car market but they will hold on to the high end high profit margin of the business. The HPs and Dells will continue to grab the bulk of the market with their basic econ boxes with the occasional profit grab using premium brands like alienware in the same way that American car manufactures use cars like their Corvettes and Vipers to grab a little extra profit from the fools who buy them.
So just like cars people will look at how much they can afford and otherwise justify spending on a computer and most will end up buying a PC for their surfing and emailing. But a few who’s time is worth too much for the hassles of Vista or just have the money to buy a better machine or just want to look cool will buy an Apple.
So sooner than later Apple will have all these consumers and their growth will stop. Apple’s present growth is due to their machines being more useful and Vista dropping the ball for the PC market. The only way for this to not play out in this fashion would be if Apple were to try and enter the lower end market. This would not work as they would damage the prestige of their brand and probably lose as many customers as they would gain. As how many doctors would buy BMWs if a nearly identical looking BMW model was available at say $15,000?

So in summary the present growth of Apple will continue for a little while but not for much longer. Microsoft will eliminate the worst of Vista and machines will continue to increase in power and compensate for Vista’s sluggishness. I will predict that Apple will make one last thrust into the high end corporate market in the same way that the bosses drive BMWs while the worker trolls drive fords then the growth will end. If I were researching this I would count the number of Apples in the executive boarding gates and when it levels out then sell of any Apple(AAPL) shares as they will be then overpriced based on the incorrect assumption of continued market share growth.

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