Archive for the ‘business’ Category

Gas and Houses are still cheap.

Wednesday, August 23rd, 2006

Average house price in the US, Aug 2006:
$230,000

Average house price in the UK, Aug 2006: $376,600

Average gas price per gallon in the US, Aug 2006: $3.04

Average gas price per gallon in the UK, Aug 2006: $6.46

There will almost certainly be a recession in the US soon, caused primarily by inflated gas and house prices. One will continue to go up and the other will crash - a problem for people who own houses and drive cars, i.e. are long in real estate and short on gas.

But these prices are actually very, very cheap compared to places like the UK, which didn’t go into recession with much larger costs and similar wages. The principal difference being the rate of consumption.

average home sales prices in all regions of the united states

Why entrepreneurs should ignore markets.

Tuesday, July 25th, 2006

Old farts like myself, who were tinkering with the Internet in the early 90s will remember that there was a sudden surge in interest in the Internet a year or so before the web.

The tendency is to think that the Web was the prime reason for the increased adoption of the Internet, but in fact it is more likely that the Web was actually the result of an evolutionary niche being opened up by the spread of the Internet.

Once the Web was born, of course, it did help fuel the growth of the Internet, but like almost any other ‘ecosystem’ from the autocatalytic reactions in a single cell organism, to the money flow in an industrial economy, it was based upon a circular feedback loop, making it difficult to separate the chicken from the egg.

The are two other very important examples of cause and effect which were not what they seemed: oil and coal.

It would seem plausible to assume that the industrial revolution created engines which needed coal, which was eventually replaced by the more transportable oil.

In fact the demand for coal was stimulated by a decline in the available wood during the mini ice age in the 17th and 18th centuries. Steam engines, often running on wood fires, were developed to pump water out of coal mines. Later, a positive feedback loop would mean that more coal could mean more steam engines.

Similarly, the demand for oil was created by a demand for lamp oil to light the factories of the industrial revolution, long before it was used to transport the workers and the goods they produced, creating a bigger marketplace and demand.

The lesson from this, is perhaps that:

1. looking for cause and effect in a strictly linear fashion is nonsense.

2. business plans that are looking to change the world by attracting a significant slice of an existing market or ‘ecosystem’ would be better off focusing on how to step up between small to large marketplaces.

If you like this is similar to the vogueish marketing books of the last dotcom boom, like Crossing the Chasm or Inside the Tornado. The difference being that there is not one tornado but a series of ever increasing ones, with fractal like self similarity. The inverse pattern of turbulent air flow.

Perhaps the skill (or luck) of the entrepreneur is to find the seemingly trivial niche (like selling crude oil instead of Sperm Whale fat for lighting) that could interconnect all the way to the top.

The people that did this in the last boom were not Napster or Webvan, but people like Blogger or Ebay. And before you say, oh but Blogger never became a huge company, consider this:

The founders made more than the founders of some billion dollar companies, and they got to change the world at the same time.

Even if Webvan had succeeded, it was kind of boring and complicated and difficult to setup in your garage.

Vonage stock in free-fall a week after IPO

Wednesday, May 31st, 2006

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A Venti Chocolate Malt Frappuccino with whipped cream has about as many calories as a BigMac AND Fries. Starbucks - rhymes with?

Wednesday, May 3rd, 2006

The film Supersizeme made a good case for why a diet consisting entirely of McDonalds food could transform your body quicker than Robert De Niro in Raging Bull. Recently evidence suggests that the main culprit may not be fatty food, but sugared, caffeinated water. The beverage industry is scheduled to announce today that it is voluntarily removing high-calorie soft drinks from all schools.

This may not be entirely fair. An average 12 ounce can of cola typically contains 120 calories. However its not just sodas that pack in the calories, fruit juices have more and the same size serving of grape juice, an elementary-school lunchroom staple, contains a whopping 165 calories.

It doesn’t really matter how healthy, natural or traditional the drink may seem when you are eating or drinking too much. Despite marginal differences in the way we digest different foods, the bottom line is that calories in = calories out, and unfortunately there is a tendency to think that drinks don’t count in the same way that food does.

So what about coffee? A Starbucks Cappuccino manages to combine fat with caffeinated sugared water by adding milk, combining all of the ingredients in a fast food meal into one nasty-tasty little package.

The combination of three principal food vices with a habitual daily buying pattern that makes ordering a Grande Latte as automatic as taking a morning shit is clearly a money earner. A ritual morning coffee even facilitates the shit.

In a report whose findings are ’something of a mystery,” according to Richard Suzman of the U.S. National Institutes of Health, the latest Journal of the American Medical Association shows that despite spending twice as much per person ($5200) on healthcare, Americans have more diabetes, heart attacks, strokes, lung disease and cancer than the English, with middle class Amercans having the same health profile as blue collar English. The English probably shouldn’t smile about it - on account of their teeth, of course.

Diet seems to be the problem - and drinks may be what are tipping the balance - because they don’t seem to count, but they do.

White bread was our top source of calories as recently as ten years ago. People living in America now take in more calories from soft drinks than from any other category of food, about 10% of daily intake, on average, compared to white bread at 6%.

50 years ago, in the days of the classic Raymond Loewy Coke bottle, the average size of a soda was 6 to 8 ounces, today it is 12 ounces and a 64 ounce soda can be bought at most convenience stores or movie theaters.

But while everyone blames White Bread America,, fast food and soda in school, what about Frappucino America? After all, as teh finding says, the health problems are across all income levels.

The smallest Cappuccino size in Starbucks, the ‘Tall’ is the same size as a can of Soda, (12 oz), and has almost exactly the same number of calories: 120. A Starbucks Grande is 33% larger at 16 oz and a ‘Venti’ is 80% larger at 20 oz.

The Economist magazine publishes the Big Mac index (the average cost of a Big Mac in various parts of the world) as a normalized measure of the cost of living.

Lets take the same item to create an easily visualizeable measure of calories in drinks vs food to see whether you should be treating your morning drink as a coffee flavored desert rather than a desert flavored coffee.

A BigMac has 576 calories = 100% BigMac.

Lets see how coffee weighs in on the BigMac Index.

A Starbucks Capuccino: Tall 120 calories - 21% BigMac; Grande 150 - 26% BigMac; Venti 180 - 31% Big Mac.

Other Grandes: latte: 260 - 45% BigMac; caramel Frappuccino: 310 - 54% BigMac; mocha: 400 - 69% BigMac; caramel mocha with whipped cream: 470 - 82% BigMac

But If you really want to think how bad your morning coffee may be for you if you don’t count it as food:

A Venti Chocolate Malt Frappuccino with whipped cream has about as many calories as a BigMac AND Fries (760 calories - 132% BigMac).

Source.

Web 2.0 officially over because…

Friday, February 3rd, 2006

Boo.com is relaunching in June.

They have a fantastically witty strapline, presumably created by the people that Pajamas media originally hired, wait for it…

“The Boo is Back”

That’s right, the Boo is back, cos Boo.com was so successful the first time it was called ‘the Boo’ - boooolshit. You can almost hear the distant rumble of discount Aeron chairs.

Boo.com

Con(n)Ed - their name says it all.

Saturday, December 31st, 2005

ConEd win this years prize for worst customer service.

Having waited on the phone for half an hour because they don’t take credit card payments over the web (I mean my corner store does that), they don’t take credit cards over the phone - despite the fact that they say they do.

Not just that - but if you change your bank and your payment doesnt go through, in their infinite wisdom, they decide that they will stop you from being able to pay by phone for six months. They basically don’t want your money.

Please, please let Con Edison go bust.

Bullshitter’s investing guide

Thursday, July 21st, 2005

My bullshitters investing guide, based upon absolutely no analysis or experience. I don’t even know if ‘Hearst’ is public - I don’t care.

Iwonder how it will do? I’ll check back in a year.

Pharma and cosmetics.

L’Oreal
They make proper sunscreen that the FDA haven’t yet approved, apparently. Or so some geezer down the pub said.
Buy

All the best deals are here, but nobody understands it, including professional investors.
Buy into the people that make lab coats instead.

—————

Media

Hearst
If big media doesn’t own little electronic media -
Sell

Clearly all media is undergoing a massive revolution everything big is going tits up. But the small stuff that will replace it is not public. So only big people who can invest in VC funds etc. will make money out of the little guys.

—————

Commodities:

Oil
There is no way that the Saudis are telling the truth about reserves.
Buy

Gold
Lot of bad stuff brewing in the newspapers
Buy if you are a wuss.

—————

Retail

The People who make True Religion Jeans
Even bigger wankers have started to wear them recently
Sell

Walmart
Think Woolworths where everything is expensive cos. Chinese imports increase in price.
Sell - eventually

Wholefoods
A Texan hippy store, how perfectly hedged
Buy

Virgin (the music bit, or whoever owns them)
Once fresh brand, starting to look dated and shabby, like the music industry.
Sell

—————

Tech and DOTCOM

Microsoft
Cummon they are not waiting to pounce. A company that sells Personal Computer software (small business computer software) when the market wants personal computer software.
Sell

In fact, sell all software companies, apart from the ones with call themselves media companies. Some of those are OK.

—————

Real Estate:

Real-Estate in London.
London houses are too expensive, interest rates can only go up, doing anything in London is too expensive.
Sell

Real Estate in the US
Interest rates can only go up.
Sell

Real Estate near future Wholefoods in US
You are what you eat. Wholefoods is the best real estate developer in the US.
Buy

Real Estate in Croatia
I have never been there - the postcards of Dubrovnik look nice.
Buy

Comment spam trail leads to a company with pending $1.5billion IPO with CSFB

Wednesday, May 4th, 2005

I disabled comments a while back because of the spam issues from gambling and porn sites, but noticed that 10% of my traffic was to inbound links to some poker site comments that I hadn’t deleted.

The inbound linking is to game Google into indirectly boosting pagerank for the eventual destination using clustered keyword terms, a more sophisticated variant of placing outbound links in comments.

The traffic came from what appear to be affiliates of a CPA affiliate program site, 888.com, which in turn linked to poker sites that were owned by the same company as 888.com, operating out of the UK’s Gibraltar.

These companies are owned by Cassava Enterprises, who, one might imagine, are a small, shady company, operating offshore.

However, it turns out that Cassava Enterprises are in the process of going public in the UK for an estimated $1.5 billion, underwritten by Credit Suisse First Boston.

See the Sunday Times article below:

Poker firm float flushed out - Sunday Times - Times Online

“Similarly, Cassava Enterprises, owner of the 888.com site, has hired CSFB to advise it on a possible flotation. It is reported to be considering a listing that would value the business at more than

Greenspan shouts and nobody listens

Thursday, April 21st, 2005

Below is the top story on Reuters: it shows a recent trend where Greenspan has had to repeatedly warn against government spending and yet the markets and the party favored by the markets doesn’t react…

There was a point when the government and markets would quiver if Greenspan looked like he had got out of bed on the wrong side. Nowadays, idealogy and faith seems to be driving capitalism too - a dangerous thing.

Greenspan Warns Deficits Endanger Economy

“Much of the Fed chairman’s testimony echoed prior cautions he has made to Capitol Hill lawmakers. He stressed that steps to fix the problem were essential.

“As the latest projections from the (Bush) administration and the Congressional Budget Office suggest, our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken,” the Fed chief said.”

Latest Business News and Financial Information | Reuters.com

Yahoo Flickr acquisition

Sunday, February 27th, 2005

Foremski ups the ante on the Flickr/Yahoo partnership rumor, suggesting that an acquisition is about to be announced.

Silicon Valley Watcher: Scoop! SiliconValleyWatcher reports Yahoo is negotiating acqusition of Flickr