Sunday, July 19, 2009

Will there be another Cronkite?

VentureBeat asks the interesting (if perhaps rhetorical) question of who will be the Walter Cronkite of the blogosphere. The question makes us realize for what we have gained in “democratizing” the media through online publishing, we’ve lost in credible, authoritative voices. I put “democratizing” in quotes because although blogs allow many people to come online and report/voice opinions, it also makes it far easier to tune out voices and ideas that one may not agree with.

It may be a democratization of voices (anyone can contribute) but I fear more often than not it is a ghettoization of ideas; meaning that disparate ideas are kept in various corners of the blogosphere that are visited only by people who agree and support those ideas.

So will there be a new Walter Cronkite? Probably not, because at the moment there isn’t a single online platform that has the universal reach and authority of a CBS news (back in the day.)

It is kinda like asking if anyone will sell more records that Michael Jackson. The answer is nope, because no one is making records.

Who will be the Walter Cronkite of the blogosphere? | VentureBeat

Wednesday, July 15, 2009

Venture capital in America: The brightest and the rest | The Economist

Few thoughts here based on the Economist story:

Is it really “Too much money has been chasing too few great start-ups” as written in the subhead or is the problem as indicated further down the story“…much of the money has ended up in me-too companies that will not become the shining stars venture funds so badly need. All that cash has also inflated valuations of fledgling businesses, making it harder for VC funds to turn a profit on them.”

To modify the sub-head, I’m inclined to think that it is too much money chasing the same types of companies; everyone simultaneously going after Web 2.0, cleantech or whatever is sexy at the time. Potentially great companies that are not a flavor-du-jour are left behind while Paris Hilton companies (trendy but vapid) are actively sought after. (Is she still trendy… I’m so out of touch!)

Also, this is focused on the US. I think there are great VC opportunities abroad. The challenge here (as highlighted before) isn’t the lack of money or the lack of good business ideas, it is the lack of highly experienced VCs who can play the mentoring role to help local entrepreneur with great technologies build great companies.

Venture capital in America: The brightest and the rest | The Economist

Tuesday, July 07, 2009

Food stamps as stimulus

I remember when the various Stimulus packages were discussed a few months ago, there was scoffing in some corners about how providing money for low income people in the form of added food stamps, unemployment insurance and so on would count as “stimulus.”

Well, here is your answer:

Mr. Kraklio now regularly takes in several hundred dollars a month from food-stamp sales, a vital new revenue stream that has allowed him to hire another assistant to help tend a cornucopia of fruits and vegetables. The new worker, in turn, spends her income in nearby stores, restaurants and gas stations.

Money from the program -- officially known as the Supplemental Nutrition Assistance Program -- percolates quickly through the economy. The U.S. Department of Agriculture calculates that for every $5 of food-stamp spending, there is $9.20 of total economic activity, as grocers and farmers pay their employees and suppliers, who in turn shop and pay their bills.

When rich people get more money, they tend to spend less of that incremental income because...well... they already have what they need. Having stuff and not really being in need is one of the many benefits of being rich. If you have a ton of cash, and someone gives you a bit more, you’re not going to rush out to spend it. (Or so I’m told, I have no direct experience owning a ton of cash.)

But if you’re poor, and you get access to incremental income (either through direct cash infusion or through something like food stamps that offsets an expense) you’re going to spend more of that income on other stuff you need (or want) but that you regularly couldn't afford. Poor people may have less disposable income, but they spend a greater percentage of it because they have more unfulfilled needs.

Call it trickle-up economics.

So while some of the stimulus package remains mired in bureaucracy, it is nice to see a simple, logical, economics-backed idea take shape and actually provide some real stimulus.

Boost in Food-Stamp Funding Percolates Through Economy -

Sunday, July 05, 2009

Working on my new investment strategy

So over the past couple of months/years, my personal finances have become a bit of a mess. I had too many accounts with too many brokers and it was too hard to tell what was going on. So some accounts got super-whacked by the recession and some got brutally-whacked. I wasn’t sure which got whacked the hardest and why so over the past little while I’ve been consolidating all the accounts into one place, so I can get a nice overview of what is going on.

I got phase 1 completed a few weeks back and now have a single view on our various retirement and retail accounts (well, sorta, no sense in going into the gory details.)

Now, what to do with what little cash remains?

The accounts are currently filled with a variety of funds but I get the sense there is a lot of overlap here. Different funds, probably covering the same parts of the market, exist in different accounts; I’m going to have to spend some time untangling and figuring out which are the funds to keep and which I should jettison. Diversity is still your friend, and I think I have a lot of redundancy.

I’ve already done a couple of moves. In one account (Roth IRA) I loaded up on a TIPS fund. Yes, I am very worried about inflation and since that account didn’t have any bonds in it, I took the TIPS mutual fund route. My wife and I have a Roth each so I don’t mind sacrificing growth on one, if I think it is a little less risky. Right now, a TIPS mutual fund sounds like the right kind of risk mitigation.

In the retail account, I went back to an old friend, EWZ (Brazil ETF.) I made pretty good money off if this ETF over the past 5-6 years. Last year I fell asleep at the wheel and got totally spanked in Oct when this ETF fell like a ton of bricks (BRICs?)

Anyway it seems to be coming back and while I’ve missed some of the early upside, there may be more to come (I hope!) I’ve always liked Brazil. It has a solid financial sector, good exposure to commodities but still pretty diversified with a strong manufacturing base as well.

In the retail account I also bought into a California Municipal Bond fund. Yes, I know the state’s finances suck but I’m counting on it not defaulting. The yield may go up on the state’s munis so that may be nice plus I’m looking for a little tax protection.

I’ll let you know as to my other moves. Basically in my other accounts (IRA, Roth IRA) I’ve got a bunch of large-cap funds, which I need to diversify away from, and a REIT, which I may keep, I’m not sure yet.