QR codes and barcodes

Was mildly suprised today to learn QR codes was born in the automotive industry by none other than Denso, subsidiary of Toyota. This newly acquired knowledge led me to think which industry was responsible for inventing barcodes. Was suprised again to learn that barcodes was used first in transportation, to label rail road cars.Both technologies innovated in transportation industry but commercially successful in another industry applications, retail.

Way to play growth in tablets..

I have been thinking of a way to play the Tablet category without betting on the success of either ipad, amazon kindle or even samsung galaxy. A play which is device/platform agnostic has to be something which is common to either three and will do well no matter which one succeeds the most in the marketplace. That common play has to be a componentwhich is common to all three, could think of three names: one a semiconductor processing company to remain nameless on my blog.:), second ARM Holdings, third Corning (GLW). GLW's gorilla glass goes in either device. The stock appears to have bottomed recently, with a buy back program in place. Insiders have been buying at avg price around $14. Just one issue is that Gorilla glass isnt the majority contributor to GLW's business. I am long the stock at avg price of $13.20.

Quote of the day

"Most of the world's ills are caused by "liquor and leverage." - Charlie Munger

business school lingo..

Dark pools of money, shadow chasing and high frequency algorithmic trading..all terms learnt in business school coming straight at my portfolio..interestingly no one taught strategies to avoid or lessen the impact of these on portfoilio..

Ouch..

..this is going to hurt ..S&P a credit rating agency had a first hand role in creating and triggering the financial crisis in the first place by not doing their job which ultimately is leading to downgrade of US debt..a criminal also being a judge..kind of ironical and nonsensical..

Several Catalysts for MSFT

MSFT has been getting some positive inflow lately. A lot of catalysts for the tech giant in the immediate to near term future
1. Introduction of Office 365
2. Integration of Skype with FB
3. MSFT gets paid for growth in Android phones. 3 OEMS including HTC already on board, trying to secure Samsung
4. Bing ties up with Baidu in China
5. Partnership with Nokia and launch of Windows phone with partner soon
6. Kinect and Xbox platform doing quite well.
7. Mgmt active in dividend and share buyback. Dividend announced with record date in August

Got in very recently when it was trading in $23.75 level. Expect a 20%+ return.

Turnaround stock - Leap Frog

Looking at Leap Frog as a turnaround investment opportunity. Like few things about the company and trending events associated with the name.

1. Trading at all time low, kind of binary path forward, doesnt do well and goes bankrupt or trades higher from all time lows.
2. Strong brand name with educational and entertainment associations in the minds of the parents.
3. New CEO has made some positive comments and action plans in the press recently.
4. Tackling low hanging fruits like focused communication and better packaging similar to what Starbucks did when Founder came back as CEO.
5. New product dedicated mobile tablet kind of device for kids on track for launch.
6. ~$1.2 in cash per share
7. Doesnt have any short term debt commitments enabling management to focus on business decisions.
8. Cash flow positive in the last quarter, working capital changes mostly based on Inventory which might be a risk if it doesnt sell through.
9. Trading at multiples below peers.
10. turned profitable in FY10 after 4 yrs of losses. so good momentum for now.
11. effective cost management for Q1. SG&A and R&D are both down and so is advertising, though ad spend is expected to catch up in the year.


Near term Catalyst: Launch of new product in Q3.
Estimate price: $6 and up

Duck test

If it smells like a duck, swims like a duck and quacks like a duck, it is a duck.

The letter from the Audit Committee of Berkshire Hathaway concludes that Sokol violated ethics and insider trading laws.

http://www.businesswire.com/news/home/20110427006990/en/Berkshire-Hathaway-News-Release

Team Blue

The color blue has a whole new meaning. Never imagined to associate with a color so deeply and meaningfully. It has left a memorable impression and feelings of joy, pride, success and so much more.

Attention deficit disorder

"The market has attention deficit disorder, a lot of the market participants with a short term time horizon have a levered attention deficit disorder which has a capabilty of destabilizing the market. It is the job of a long term investor to take advantage of this disorder and volatility in market."

Joe, Wickwire - Fidelity Portfolio Manager

Can anything else go wrong?

Unpredictability in the market is just not predicated on happening of any one event. It can be any of the below or possibly a combination of any below.

1. Anticipated End of Quantitative Easing in June and the reaction of the US economy after that
2. Impending nuclear event and already happened natural disaster in Japan
3. Concerns of slowing growth in China, implying slowdown for jobs and instability for chinese govt
4. inflation concerns in india and other emerging economies
5. protests in middle east region spreading implying disruption in oil supply and price hikes
6. problems of sovereign debt in europe

Can anything else go wrong in the world? can the market/investors be blindsighted by something else..

...yes of course, they can get caught unprepared by Analyst downgrades.

Good to read and Better to follow

7 Immutable Laws of Investing - James Montier

They are as follows:
1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand

'Not worried about competition'

It really boggles me when CEOs of big companies in a fast moving industry, come out and say publicly that they are not worried about the competition at all. But their actions point to something else, contradicting their just made public speeches. Is it the same when it comes to the financial condition of a troubled company? Do the CEOs deny uncertainty of revenue and profitability and seek for strategic alternatives like holding their assets up for sale?

Some recent collations from earning announcements and press releases by CEOs and executives on addressing competition and their actions shortly therafter.
Google’s CEO Eric Schmidt has been denying worrying about Facebook on public forums like Charlie Rose etc. and yet his stepping down for speeding decisions and streamlining future is so contradictory to his earlier statements. Excerpt below from press release:

Google CEO Eric Schmidt along with Google co-Founders Larry Page and Sergey Brin expressed that they are not concerned with the growth of Apple and Facebook. Brin stated that their indicators “show that when Internet users become Facebook users they actually do significantly more searches on Google.” The Google trio declined to comment on the rumor that Google is currently building a social networking site to rival Facebook called “Google Me,” reports Reuters

"The Street will think it's a negative, that there is probably some issue going on. Google is trying to get more efficient and trying to get a tech guy in the seat to compete with Facebook," said UBS analyst Brian Pitz.

Recent article by Business Insider read ‘Intel: We're Not Worried About Microsoft's ARM Move’. With a slower start on the growing tablet space and 30 year partner deciding to go with other companies as partners can’t be putting Intel into anything other than a tight spot.

AT&T exec’s recent interview said “we are not worried about a Verizon iphone”. Really? It’s difficult to digest that a competitor enroaching on it’s most profitable and exclusive relationship with a growth engine is not worrying execs at AT&T. What’s interesting is the Operator’s actions: It has spent more than $18 billion both this year and last to improve its network.

I guess this is not just true of the telecom space. CEO’s of financial institutions including Lehman were denying any risk even right before the collapse. Next time when you hear a CEO or a senior executive mention publicy that they are not worried about the competition, do believe them, because they are not just worried they are PETRIFIED.

Watch out for..

..some strong tech M&A activity, specifically in the mobile semiconductor space. Samsung Chief annoucning at CES that his company is open to acquisitions. Also with Microsoft announcing its Arm strategy and Qcom getting into smart connectivity, Intel will be pressured to buy some growth in the near term.

The year that was 2010

2010 has been a year of learnings, discovery and a year of some good calls and some not that good. Watching firecrackers (tax money blow up in front of my eyes in all directions) bring in the new year, it is a time to reflect and rejoice the year that was. The year has taught me the true meaning of patience and what in reality it means to keep moving and not to settle for anything less than your dreams. I have discovered new cities, new cultures and a new lens to my own origin.

I couldn’t stay away from the time of the year when people make lists and rankings. Two good calls that I made last year have been IMAX and SPRD. I couldn’t be happier to see IMAX lead the charge on the last trading day of the year. The stock has more than doubled in less than a year. SPRD has also moved 3 times from the beginning of the year. A good lesson from a trade carried from last year is to walk away from speculative acquisition plays. Picks for next year include small / mid cap companies with IP in mobile space, internet commerce company and constant search for companies trading below book value. Starting the year with the thought that what the future holds for me depends on what I hold for the future.