Tuesday, June 29, 2010

Advice to Google

This morning, while the market was tanking, I read an internet article about a rumor that Google is working hard on a social network that is intended to be a Facebook killer. The word is that Google will essentially reproduce the Facebook model.

I was moved to attach the following comment to the article:

If Google needs to put up an anti-Facebook (and they do), they should not copy Facebook. They should build a serious place for serious people, even businesses. Demote the "friend" notation which, in FB, limits the discourse to silliness, and elevate user-defined roles and relationships that can be multiply assigned within groups. Groups should be expanded to include user-defined "offices" and "organizations". Finally, tie the concept of "actions" to an easy-to-use work-flow engine, and promote it with all the people who work for a living and are candidates for Google apps which will be integrated with the system.

There it is, the once and future next big thing.

Thursday, June 24, 2010

With or Without the Money

GOOG close: $475.10

Damn. Another six weeks of winter.

As a certified Long Distance Runner in GOOG, at times like this, I often say to myself: why should I worry? I won't need the money any time during the next six months.

Which beggars the question: when will I need the money?

I expressed this thought a few posts ago and have been pondering it ever since. Since I retired, we have been living substantially on my secure government pension without having to impair the quality of our deliberately modest life at all.

Over the past 15 years, our net worth has greatly increased, but very little of it has been due to my stock trading prowess. I must do this for fun. I'm lucky. Even when I'm unlucky.

My confidence is that, over time, I won't lose so much of it that, when I need some, it won't be there.

Tuesday, June 22, 2010

Applespeak 2010

In 1984, during the Super Bowl, Apple put up a commercial that ripped the doors off, originating the tradition of earth-shattering commercials on that hallowed sports occasion.

The commercial showed a great hall, filled with row after row of identical, seated clones, all watching a large screen which projected the flickering image of a dictator, bellowing Newspeak to the throng. Then, down the center aisle, an athletic man, carrying a sledge hammer, ran toward the screen. As he neared the front, he began swinging the hammer around his head. When he let it go, the hammer made a graceful arc toward the screen and smashed it to smithereens. The inmates, deprived of their sustenance, began to howl, identically.

The message was clear: Steve Jobs was way cooler than Bill Gates.

So far in the new millennium, Steve Jobs is still the coolest guy around. But I'm here to tell you that the jig is up with these 1984 metaphors.

Today, in 2010, Larry and Sergey ought to remake the commercial with the two of them running down the aisle with hammers to throw up against a big screen of Steve Jobs, bellowing Applespeak to an admiring Bog.

Monday, June 21, 2010

How long, Google Eve?

A few minutes ago, Tim Collins noted on RealMoney that Google is testing a big technical level today. From my view, if GOOG closes below its 30-second moving average, we may be in for a bit of nasty weather.

This would be no concern of a long-distance runner in GOOG like me, if I didn't insist on following the play every day. Silly me. Come Google Eve, it will all be made straight.

Saturday, June 19, 2010

Cleaning the Black Swan

My experience with problems and problem solving is that problems always seem insoluble until the requirements for a solution are defined. When requirements have been defined, then practical, simple and economic solutions can, with a little ingenuity, always be found.

There's no reason to believe that this kind of thinking can not be applied to the catastrophe in the Gulf of Mexico.

In my opinion, the high-level requirements for an ideal "Oil Spill Cleaner" would be a system in which:
  • oil-befouled water would be "vacuumed" up and run through a process which would separate the oil from the water, with the cleaned water being returned to its repository and the oil being directed to tanks for reclamation.
  • Additional mechanisms would be designed to perform the same operations below the water surface to any arbitrary depth.
  • The process must be available and ready to be deployed immediately to any location where an oil spill has been detected.
  • The process must be scalable to contain oil spills of any size.
A system to fulfill these requirements can easily be imagined:

I see the basic component as a sea-going vessel, where the "gill" for taking in oil-spilled water would be a mechanism running the entire length of the vessel. The vessel would be designed so that it could move sideways through the water at a very low rate of speed. It would also be designed to move forward through the water in the normal way at higher rates of speed. Finally, the vessel would be designed as a large oil tanker for receiving and storing oil.

A vessel, so designed and outfitted, could motor normally and quickly to a spill location and then begin moving sideways at a slow speed to take in a broad section of oil-water for processing through its vessel-long "gill". It would not be necessary to build longer vessels for larger spills - the vessels would be designed as components that could be deployed in larger numbers to scale up to large spills. The strategy would be to deploy a sufficient number of vessels to encircle the spill. (Note that, with such a system, most oil-spills could be contained by a small number of vessels while the spills were still small.)

For oil that collects below the water surface, it may be efficacious to design an additional, submersible component that could vacuum up oil at any arbitrary depth. These components could be made relatively small so that they could suck up a quantity of oil, and then return it to the "mother" vessel by making frequent round trips. The "mother" vessel could process surface oil at same time that it was deploying and receiving oil obtained by the deep-water submersibles.

Since the system would result in the reclamation of spilled oil, the process could pay for itself. However, since actual spills will be relatively rare events, it would not be profitable for even a consortium of private corporations to design, build and maintain such a system in constant readiness. Governments will have to subsidize the entire process. They will pay for the system, but, of course, they should contract the design and development to the private sector.

The question may arise as to whether it would be feasible even for governments to maintain a system that might never be used. But that's not the issue. Such a system will be required for governments to be willing to allow deepwater oil wells to be used in the future.

Another question involves the feasibility of testing such a system in the absence of a major oil spill. The testing will be crucial for convincing the governments to put their faith in the system.

This brings me to my final thought: I say, give the job to Google to head up the design and martial the required, expert resources for development. Tell Larry, Sergey and Eric to have a prototype ready for testing by the end of the month. We may never again have a better test bed than we have today in the Gulf of Mexico.

Friday, June 18, 2010

BP's Black Swan

Congress is beating up BP on the charge that BP should have built in the available technology that could have eliminated the risk of the catastrophe that has happened. But that's not the way corporations work. I'm sure that they calculate the probable risks of untoward events occurring, and they measure these risks in relation to the expense of eliminating them.

You can't mitigate all risk, so it's a question of how much can reasonably be tolerated. No corporation allocates capex to defend against a meteor hit on its corporate headquarters. In like fashion, I'm sure that BP did not plan to prevent an oil spill on the scale of what occurred, on the rationale that nothing like that has ever happened before. We thought that the financial industry is the only area where Black Swan Events can arise. Not so - any complex enterprise can have them too.

The Black Swan swam into BP's waters. BP never saw it coming.

Monday, June 14, 2010

Gimme a dozen IPads

One reason Apple stock is a perpetual high flyer is that its products are the darlings of stock traders. I remember another stock with products that Wall Street traders went gaga for and it, too, had a great run that defied gravity - Krispy Kreme Doughnuts.

Sunday, June 13, 2010

Business to Government: Get Out of Dodge

Unemployment remains in the vicinity of 10%. In the opinion of everybody, that is too high.

But consider this: the ranks of the unemployed are now swelled by a group of people who, in former times, were not looking for work, because they didn't have to work - they were retired. This time around, they want to be retired, but they're looking for work because their nest eggs have been savaged. These folks are Baby Boomers - and there's a lot of them.

Baby Boomers are a bubble all to themselves. They're now reaching retirement age, but they are staying in the job market and clogging it up, and a lot of them are not finding work. They're making that unemployment number higher than it would otherwise be.

The question is, why are these people unable to find work? Because businesses are not hiring. Business collectively has a staggering amount of capital laid up. They have the wherewithal to hire us right out of this recession, but they're not doing it because they are fretting that the Government is not subsidizing them further in the process.

Business wants the Government to give them all the money, with no strings attached, before they will start.

The message from Business: No more trickle-down until the Government leaves town.

Friday, June 11, 2010

From the Undisciplined Trader's Handbook

Homily for the day:

Always trade what you see, what's in front of you right now.

That's what the smart guys say. But when I, the Undisciplined Trader, apply this rule, I see a five-cent gain and I sell to protect it. What I don't see, is the stock five bucks higher. So I'm nickel-and-diming when I should be big-timing.

I need to learn how to trade what I don't see.

Thursday, June 10, 2010

BP Tube

"Why don't we just plug up the tunnel
with you on one end and the Commandant on the other?"
Animal to Sgt. Schulz in "Stalag 17"

Everybody is coming up with their own solutions for plugging the BP leak. Meanwhile, on RealMoney, Tim Collins is trying to master the arithmetic involved in determining the amount of oil that's currently being captured by BP's engineers and how much is still leaking.

Forget about that - all we need to see is that pipe in the video with nothing coming out.

Wednesday, June 9, 2010

Musing, into the close

This morning, things were looking up.

GOOG was holding its own, around 485. My big oils (XOM and COP) were moving with the pop in the price of oil. And there were early rumors that some oil company in the Gulf of Mexico is going to sue the Government to remove the moratorium on drilling, so my little oil (ATPG) shot up 12% right out of the box. ATPG's daily chart in Google Finance was a thing of beauty - a picture of a short squeeze in motion, which is to say, a vertical line, straight up. Even Citibank popped 5%, which is to say, +17 cents.

This afternoon, around three, something happened. The Euro declined. Or Steve Jobs caught a cold. I'm not sure. But the market went to hell. Everything went down.

Fortunately, I don't need the money today. Chances are, I may not ever need the money.

Friday, June 4, 2010

Just in from the bleachers

Right now, in midafternoon, the DOW is down a bracing 311 points. Another couple of days like this and we'll be looking at Cramer's (projected) bottom, from below, looking up.

And, as the DOW is drum major to the band, everything is looking puny today. XOM and COP are both down big, mainly because I bought more of them yesterday, two points higher. However, GOOG and ATPG, of late descending faster than the speed of falling, have apparently cast off ballast and are resisting the trend. They're still down, but inveterate watchers of these stocks will testify that they are giving up ground grudgingly.

That's the way it looks to the Undisciplined Trader, me.