The Stalwart

Blogger As DJs

I'm tired, so I won't add any extra comments, but I think Tyler Cowen's attitude toward's blogging is spot on, and his analogy between good bloggers and DJs is really sharp.

Think of a blog as competing with both Google and Wikipedia, among other aggregators.  If you knew you wanted to read about "the minimum wage," you could bypass Tyler and Alex and Google to the best entries (some of which might include us, of course).  But with Google and Wikipedia you must choose the topic.  A good blog writer can randomize the topic for you, much like a good DJ controls the sequence of the music.  Sometimes you might trust us more than you trust other aggregators, but we can't count on that and arguably the other aggregators improve at a rate faster than we do.

I've voiced my frustration on aggregators several times. I think the best way to harvest interest insight from the internet is to just find a handful of intersting bloggers and let them spin their stuff. Trying to cull interesting posts from a long list of sites has proven to be tough.

We Need More HVAC Bloggers

A smart post over at MetalMiner:

I really enjoy when our HVAC repair guy comes to pay a visit (not because I enjoy sweltering in 90 degree heat mind you when the AC isn’t working) but when you talk to someone in the trades who really knows their business and who happens to recognize some interesting trends. My first question, “have you seen any copper thefts in Chicago?” His answer did not surprise me, “more than I have ever seen since I have been in this business.” The copper line set is quite valuable and he’s seen more than a few stolen just this season. But then we got onto that exciting topic of plumbing. I asked him if he felt any of the alternative products out there would begin to eat into copper’s market share. And he said, “I have no doubt that PEX will make a huge dent in copper’s market share within the plumbing world.”

Pex is a polyethylene-based alternative to traditional piping, apparently.

Anyway, that's interesting, but it also speaks to something else. It's too bad more people aren't blogging their trade, so we could really start to harvest and glean more of this knowledge. Right now, there are plenty of people blogging the industries they work in and tech and media, and that's great. It's a great education. But we need more HVAC bloggers. And cattle bloggers. And aggregates bloggers. And fishboat captain bloggers. If you know of any good ones, pass 'em on.

Apple's Infantilizes An Anonymous Flack

Let me start off with all kinds of disclosures: I'm really not into Apple the brand, at all. Folks who lined up for hours to get the iPhone on the first day are silly. The way folks fawn over the company is embarrassing (to themselves) (all my friends excepted, natch.)

That being said, they do make some good products. I'm seriously getting an iPhone 3G and my wife, who does video editing, just ordered a MacbookPro. I don't blame her for not wanting to deal with Windows these days.

Anyway, perhaps you know Apple's been having some problems with its MobileMe service, which is some kind of evolution of .Mac, but more mobile. Something about having access to your "cloud" wherever you go. Not sure exactly. But the service has not worked well at all since its launch. Anyway, that prompted Apple to put up this quasi mea culpa. It starts off like this:

Steve Jobs has asked me to write a posting every other day or so to let everyone know what’s happening with MobileMe...

Ha! "Steve Jobs has asked me..." That's like when your parent makes you go apologize to the neighbor for terrorizing their dogs. "My mother told me to apologize..." What's more, this 'Status update' has no byline, so it's an attempt to personalize "Steve Jobs has asked me" without explaining who the "me" is. Pathetic and silly.

Meanwhile, if you're an Apple hater, looking for another reason to dislike Steve Jobs, check out Joe Nocera's piece in the NYT today, discussing the company's culture of secrecy and all the stuff about Steve Jobs' health. Apparently Jobs called Joe Nocera up to clear the record:

On Thursday afternoon, several hours after I’d gotten my final “Steve’s health is a private matter” — and much to my amazement — Mr. Jobs called me. “This is Steve Jobs,” he began. “You think I’m an arrogant [expletive] who thinks he’s above the law, and I think you’re a slime bucket who gets most of his facts wrong.” After that rather arresting opening, he went on to say that he would give me some details about his recent health problems, but only if I would agree to keep them off the record. I tried to argue him out of it, but he said he wouldn’t talk if I insisted on an on-the-record conversation. So I agreed.

Because the conversation was off the record, I cannot disclose what Mr. Jobs told me. Suffice it to say that I didn’t hear anything that contradicted the reporting that John Markoff and I did this week. While his health problems amounted to a good deal more than “a common bug,” they weren’t life-threatening and he doesn’t have a recurrence of cancer. After he hung up the phone, it occurred to me that I had just been handed, by Mr. Jobs himself, the very information he was refusing to share with the shareholders who have entrusted him with their money.

Anyway, that's that. Saturday morning rant ends now.

Hedge Fund Has Water Rights for Three Glaciers

A Canadian hedge is hoping to make good returns off of water rights it bought for three glaciers in Northern Europe. Seems like these rights also last 95 years, so I'm curious what kind of price was paid. The hedge fund plans to fill tankers with water and to eventually sell to those in need. They are making a bet that we'll see an expansion of market-based pricing systems whereby demand for private owned (and market-priced) water grows.

Otto Spork has hired three glaciers. He is siphoning off the melting glacier water, and plans to put it in tankers and ship it to thirsty companies and countries across the globe.

Water is the new oil, says Mr Spork, chief executive of Canadian hedge fund Sextant Capital Management: "Two years ago we were looking for the next big commodity and settled on water. It was under appreciated, mispriced, and growing scarce." ...

Sextant bought 95-year water rights to three glaciers in northern Europe, all close to ports. One glacier will be used to create bottled water; the other two will provide bulk water transported to customers in 24,000 litre containers or supertankers. Mr Spork plans to float his glacier-owning companies in the next six months

Oh wait. So perhaps he's actually looking to make money off of the water fund concept, rather than the actual water assets. Maybe he's going for a quick flip. We should be at least somewhat skeptical at first blush. Nevertheless assuming he's genuine, water shortages are a pretty interesting long term trend and there's probably good money somewhere along the line.

Merrill Lynch estimates that by 2025 two-thirds of the world's population could be living in conditions of "water stress", which would have a big impact on farming (which uses 70 per cent of the world's fresh water), industry (22 per cent) and day-to-day living (8 per cent.)

Statistics like that have persuaded the "commodities king" Jim Rogers, who has a track record for timely and lucrative investments, of Mr Spork's point of view. ...

Legendary oil investor T.Boone Pickens agrees, and has spent $100m buying up water rights in Texas and building a 250-mile pipeline to the city of Dallas, where he hopes to sell it.

But water is not yet traded as a global commodity. It is owned, by and large, by governments, not by private companies. It is heavily subsidised in many countries, particularly for farmers, exacerbating waste and inefficiency. Prices vary hugely across the globe, and often the poorest people without access to municipal water pay huge premiums.

Water needs to become more expensive, says Mr Rogers, and the free market is the best tool for the job.

An interesting article worth a full read. Personally, I have thought that things like water purification and desalination technology would be the most interesting angle, avoiding the political complications of trying to hike the prices of privately owned water. If anyone knows a legitimate water technology pure play, feel free to tell us about it in the comments.

James Randi, the Paranormal, and Investing

Thinking further along about the belief in the supernatural and its existence among powerful professionals further, even beyond investing, I was reminded of the odd situation how US police forces sometimes use psychics to help them in their cases. I found an interesting Anderson Cooper video in regards to a horribly botched predicting not too long ago, and it includes my favorite James Randi. I highly recommend watching many of his videos found via YouTube of James Randi vs. "Gifted" individuals. In case you don't know, he has offered a million dollars for anyone to prove paranormal powers under controlled conditions, and is still waiting for a taker. The funny thing about some of the videos is how a well spoken psychic can sound like they'd be a great sell-side analyst when you hear them dodge and weave skeptical questioning. If you're not quick enough, you might just think that they "won" the debate and were correct vs. Mr. Randi. News "debates" frequently favor these kinds of people I feel in that they can kind of look like they are correct to many who don't take the time (or have the time) to really sit down and think through the logic behind arguments and counter arguments. Hopefully the YouTube link below works.

From Mineral Mining To The iPhone App Store

I've always felt you could tell a lot about what's hot and peakish by the type of stuff that seedy penny stock firms announce. Just thought I'd pass along this press release which arrived in my inbox, as an example of what I mean:

Almadoro Minerals Corp.  announces the acquisition of       Intellectual Property pertaining to mobile phone application development       from Michael Stemple, a veteran of the mobile content industry. This       acquisition includes TapSlide’s (Mr. Stemple’s       current venture) membership in the Apple, Inc. (NASDAQ: AAPL) Developer       Connection for the iPhone platform. The Developer Connection will enable       the Company to develop applications for use on Apple’s       iPhone, and the new iPhone 3G, released on July 11, 2008. Almadoro       Minerals Corp. intends to change its name to TapSlide, Inc. to reflect       its new line of business and also obtain a new trading symbol.

Oh and there's more:

      As part of the acquisition, the Company has acquired access (through       TapSlide) to the Google Android developer program, the Symbian developer       network, Nokia Developer program, Motorola developer network, Sony       Ericsson Developer program, and the AT&T Developer program.

Basically, assuming the release is true, the company got some dude that's registered in some mobile developer platforms. But then again, the truth isn't the point. The point is to include your name in a press release along with ticker symbols and names of several other blue chippers.

Feng Shui and Investment Management Don't Mix

When it comes to Feng Shui for the home, I guess it can't really hurt if someone wants to spend money on what is essentially an interior designer. And when it comes to investing, I can imagine its pretty widely accepted that Feng Shui should not directly apply, even by those who perhaps use Feng Shui for their home.

But here's my question... "Should you trust someone in investment management who even believes in Feng Shui at all?" we could even take it further and include anyone who believes in any sort of lucky numbers or other similar forces. For those with money invested in Asian mutual/hedge funds this is a pretty fair question.

The reason is that the world  of investment methodology is a pretty confusing place to be with a  good deal of nonsense. One of the greatest challenges is probably not to get caught up using a perspective or tool which is foolhardy. If one person's reason allows for Feng Shui to seem proven, then what is one to expect of them when they are confronted by some sort of bogus stock market indicator being hawked by a financial charlatan? If you believe that some numbers/colors/days are just plain lucky, then what's wrong with believing that the number of eyeballs might justify an internet company's stock price?

I have a feeling that belief in Feng Shui, lucky numbers, and other forces is pretty wide spread amongst investment managers in Asia, based on personal experience. Even the ones managing funds of non-asian houses say, just for the sake of random example, a Fidelity or Legg Mason fund. I'm sure things like Feng Shui aren't being directly applied to the investment process per se, but you have to imagine that if someone's capacity for reason can't discern that Feng Shui is bogus, or at least lets nicely say completely unproven by the world of science, then you would have to wonder what sort of reasoning they bring to the table when confronted by the myriad of investment justifications out there for stocks.

Belief in special forces is pretty widespread in Asia, even amongst otherwise highly educated people.

In Hong Kong and Singapore, it is taken so seriously that corporations consult feng shui experts about business strategy as well as interior design. Disney changed the angle of the main entrance of its Hong Kong theme park after consulting a feng shui expert.

CLSA, a regional brokerage firm, issued a feng shui note to clients predicting that the stock market would rise from May to August and that the dollar would remain weak.

"Be mindful of your speculations, especially in the third quarter," said the note, which CLSA described as "topical," rather than a formal investment advisory.

Raymond Lo, a feng shui master in Hong Kong who does readings for corporations, expects industries linked to earth and metal signs to flourish during the Year of the Rat.

"The rat is a symbol of money to the earth industry," Lo said, adding that "strong water element in the year indicates productivity and strong activity in the metal industries."

Lo suggested that investors put their money into property, mining and gold.

Now I'm sure most investment professionals would say that they simply enjoy the entertainment value of CLSA's Feng Shui piece, but deep down might it actually influence them, even if they cover it with a fundamental-sounding overlay? And again, my argument is more about discerning someone's ability to sift the nonsense from what matters in a stock market. This isn't meant to be some sort of anti-Eastern view. The financial community in general, including the US and Europe, has a whole host of questionable beliefs pretty institutionalized into what is deemed "professional investment management." Things such as market efficiency and using standard deviation of returns to build theories and forecasts (since it doesn't work for non-normal distributions - ie. future stock market returns) are pretty questionable.

I just use Feng Shui since it is more easy to expose the fallacy of belief in things like feng shui, than for someone's belief in a stock market prediction model. Perhaps I am alone here, but its a bit scary that pensions are invested into well regarded mutual fund companies, which then have fund managers whose belief structures are steeped in mysticism. Again, I'm sure this will apply to many major fund management companies. I guess you just need to hope for the best, that somehow mystical beliefs and its related lack of critical thinking stays mentally segregated from the investment management process.

Why the Surprise Over Private Banking?

With recent news of UBS helping Americans evade tax and previously Germans using Switzerland for the same purpose, I'd just like to highlight that private banking and its use for tax evasion are a pretty badly kept secret and nothing new. I have always seen "private banking services" as nearly synonymous with "tax evasion"? Thus its a bit funny that suddenly a government acts surprised.

While I haven't personally worked within the private banking world, I can imagine its a place of double-speak where the term "Tax efficiency" is probably the term to use for tax evasion.

What is interesting about the "discovery" in the US, and the decision by UBS to wind down its offshore services in the US, is that it still leaves open the question "well, what UBS's services in other countries?" Private banking exists all over the world, especially for the rich in developing countries where tax authorities don't have the means, nor sometimes the willingness, to track down wealth. Its highly likely UBS and other private banking providers are up to the same tricks in most countries. I'm not saying this is a surprise, again its a badly kept secret, but its funny that UBS basically says "we'll stop this criminal activity in the US." Full stop. Because it leaves open, well, that they will continue in the rest of the world.

The real fun could come if UBS is forced to divulge its long list of client names. Likely to be some well known people amongst the 20,000 names or so...

Under pressure from the authorities, UBS is considering whether to divulge the names of up to 20,000 of its well-heeled American clients, according to people close to the inquiry, a step that would have once been unthinkable to Swiss bankers, whose traditions of secrecy date to the Middle Ages.

And while Switzerland might be getting the heat right now...  we should also think about the up and coming Switzerland of Asia, Singapore. This clean, straight, respectable looking place has a thriving private banking industry with its own badly kept secrets as well. In fact, the entire private banking industry could probably be worth a massive crackdown, if the will ever actually existed.

Updated: Sponsored Twitters?

Update: Just heard fromTwitter's Biz Stone. The thing I saw was a bug, not an ad. Too bad. The first person who spots a real Twitter ad in the wild is going to be famous.

Nothing is more exciting on the internet than the question of how Twitter is going to make money. So I thought I'd throw this out there.... this morning while looking through my feed, I saw an entry show up from a user that I don't follow.  I checked, I'm definitely not following this user. And yet it was right there in my feed. I'll ping Twitter later to see if it was sponsored or if it was a glitch. But anyway, here's a screenshot of me following something called @musickradio. Again, certainly possible that it's a glitch.:

The AP Gets Creative With Headlines

Who knew they got so whacky:

Elevators lift United Technologies' 2Q results