Seeking Alpha

Keith Woolcock

 
View as an RSS Feed
View Keith Woolcock's Comments BY TICKER:
Latest  |  Highest rated
  • On Chinese Property and Tech Demand [View article]
    that's a really interesting comment, thanks. Do you think that any western firms, such as UPS or Fedex are plays on internal Chinese expansion?
    May 11 03:30 PM | Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    you raise a number of good questions, which Im not sure I can answer. On your observation about the US still dominating tech, that is absolutely right and one good reason why it does not pay to bet too gloomy about the US. Actually, demographics would be another - china's demo profile is not as good as that of the US and nor is its geo location.

    If i look at tech across Asia, ie Taiwan, Japan, Sth Korea etc, it is predominantly hardware focused. Microsoft and Intel own the key IP and so everyone's margins are wafer thin. Samsung is the biggest tech name in Asia, but most of its profits come from making memory chips and screens, the consumer brand is secondary .
    There is good media in Asia and great computer games (if you can trade Sth Korea look up a stock called NC Soft), but the US dominates software. Maybe that's part of the key.
    The other ingredient would be Silicon Valley - great universities, venture funds, lots of 1st rate engineers and entrepreneurial role models. In addition, US tech companies have customers who are prepared to experiment with the new stuff. All in all a winning combination that it is hard to replicate.
    May 6 04:20 AM | 1 Like Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    i certainly agree with the carla bruni example.
    May 6 04:09 AM | 1 Like Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    Yes, Admiral Zheng He did explore the coast of Africa and other parts of South East Asia with an armada of ships in advance of anything in Europe. However, as has been pointed out by historians, the reason for this mission was not exploration, to engage with people or to embark upon trade, it was to project the power and magnificence of the chinese emperor.

    Asia has a different mindset - thank god, because I am rather partial to Japanese art, and many aspects of Asian philosophy. We in the West know and have achieved a lot through individualism and science. However, I rather think that the direction that science and contemporary thought about the nature of the self and happiness are becoming increasingly inflected by Asia/Buddhist thought. Quantum physics seems, at times, to echo aspects of Buddhist thought and Asians in the main have much calmer view about religion.
    As for comments elsewhere in this stream that it is somehow racist to append a value of Westerness to Apple, Mercedes, or Disney, Coco Cola, Harry Potter etc, that is complete poppycock. Ninja Turtles, Spirited Away, Japanese cars - the reason we love them is that they open up an Asian world to us. Does that make us racist?
    May 6 02:43 AM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    now i think of it, the question that can't be answered is why did china, who discovered so many things first - paper, gun powder, printing and the compass etc, fail to do so much with any of these inventions. Joseph Needham spent a life time studying this matter and wrote the monumental, Science and Technology In China - to the best of my knowledge, I dont think he ever came up with an answer. Some historians term china a 'Hydraulic Civilisation'. ie, a state where irrigation was large scale and centrally organised. this then gave birth to much greater state machinery than found in any western nation - even france under louis XIV. that may have shaped the country - rather like russia and the rest of asia, china has always had a fondness for despots.
    To point out that countries may have different qualities is not racism but to deny difference is a racism of sorts.
    May 5 02:52 PM | 3 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    surprised you think its racist - more a statement of where they are now. the japanese had a long history of developing good products before America tried bombing them back to the stone age. china has further to go that's all. actually, if you read my stuff more carefully you might have spotted that i said that when it comes to social networking they are more advanced. chinese brands, such as tencent, baidu and ali baba are unlikely to ever be big in the west but they can dominate greater china.
    design is a difficult thing, in the main the europeans still dominate, in fact the design brain in apple is english. the great thing about jobs is that right from the off he understood design. some call that style over content, but like maths - the truth usually has symmetry and beauty. whats wrong with trying to fill the world with a little more beauty - once that was a common thing before the industrial revolution.
    May 5 02:43 PM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    the one thing you can say about microsoft is that it has not problem living down to expectations
    May 5 02:35 PM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    agree with most of what you say, other than the point about asians liking asian products. the key is what is regarded as a luxury item. asian governments, particularly in Japan and Korea have done a very good job at barring key western products and services - GOOGLE being a case in point.

    There is little real luxury in asia - those who have the money want western goods. a friend of mine, who speaks chinese - he's a broker- who was in taiwan for 7 years. he's just moved firms and has been beijing for a couple of months. i met him in HK in March. He told me: Keith, you wouldnt believe how lacking in imagination the chinese are. so, there is little a richer chinese can spend their money. there is no chinese prada, rolex or bmx. there is no private equity to invest, no nice condos by the sea. If you have money you want western stuff. not only is it better but it is cooler too. the only exception are Korean pop groups and Japanese modern art.'

    Well, Apple has plugged into this. It is cool and it is luxury. it is Zen, it is Wabi Sabi, it is a lot of highly emotive asian terms but it is supremely western in the best way - unlike Microsoft. Jobs was right, the really bad thing about companies like Microsoft, Dell and all that other dross was a colossal lack of taste. If I am going to spend c $1000 on something it has to at least work well and look good. Why is apple the only IT company that has ever grasped this truth.

    Yes, you are right, they are fickle. A year ago few had heard of apple or took it seriously. However, reading all the posts on this stream I think the 2 things that people are under estimating is the 1) the world has become even more psychological than it was before. the reason for this is that we have become richer and so have more time to think/worry about image and social standing. Check the Pepsi Paradox on Seeking Alpha. Lots of people are sceptical but this is so important, it is key to why some brands do so well where others, that might have a better product fail.
    2) The Apps store is the game changer - it means that Apple is a social networking phenomenon. It also means that it has become a lock in - like the snow ball it will get bigger.

    As for Coke, no contest. More consumer money goes to tech- fast forward five years, then ten, what do you think people will be spending money on. coke will still be there but it will be an even smaller fraction of people's spending that it is now.

    My fav' stat: 1st quarter last year when the US consumer was on his/her prayer mat begging for redemption,the stock market was in the toilet and some people were opining that it might be the end of civilisation as we know it. Well go check Samsung and LG Display's flat screen TV sales to the US - up about 35%! 35% in the middle of the worst consumer down turn that anyone can remember - come on this is a big deal. Check out the statement of the CEO of Best Buy - tech has gone beyond a discretionary good, its a must have. Thorstein Veblen - 1899, The theory of the Leisure Classes - nailed it. No one seems to read Veblen anymore but like Keynes and Schumpeter he put his finger on some universal truths. we dress them up in new terms, like social networking and some of the neuroscience stuff i talk about in the Pepsi Paradox, but basic human nature has always been the same: self image/group image is key. this seems to really screw up some economists, but hey, that's good news isnt it?
    May 4 04:43 PM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    like your comment - interesting stuff. i always used to use: Only Connect, as my moniker, may be now ill change it to Invert, invert
    May 4 03:56 AM | Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    www.nytimes.com/2010/0... . in view of what i have been saying about smart paradigm, this piece in today's NYT is relevant
    May 4 03:54 AM | Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    My favourite Buffett/Munger story is the one where Buffett is explaining the benefits of using discounted cash flow to a journalist. Munger says, but Warren, I've never seen you a discount model.
    Buffett - Charlie, there are some things you should never do in public.
    Buffett knows about how to use information. that is why he likes to either own the company or sit on the board.
    May 3 04:14 PM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    BTW - have you seen that Apple has sold 1m iPads? IE, it is taking off faster than iPHone. This is going to be so important for media companies. Look at rise in Akamai last week, up 20% in one day. Another clear sign that digital content is becoming a mega money spinner.
    May 3 03:31 PM | 6 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    John,
    Lots of good points.
    1. Yes, of course tech is destructive, but some tech companies can still achieve a position of market dominance not seen in other industries. Ie, Intel, etc. There is a Uk company called ARM, that licenses the cpu design used in 95% of mobile handsets. Intel can't touch it despite trying. In fact, just last week HP and Microsoft announced that they were dropping plans to do tablet computers. HP said that Intel and Microsoft OS and CPU consume too much power. If you want to make a battery powered device the chances are you have to go with the ARM design.

    ARM, like those other great tech names, has its customers locked in. This is very rare - but when it happens only a government anti trust can demolish your business. Apple is well on the way to creating just such a lock in. First off, it is already taking 40% of smart phone profits - that is extraordinary. Nokia spends more than 10% - actually i think its 15% on R&D- RIMM close to 10% yet these guys cant compete with Apple who spends just 3%.. The reason Apple doesnt have to spend much is the APPS store. If you are a developer or media company you have to chose the Apps store, just as once you had to go Wintel. It becomes self re-inforcing - a bit like a snow ball rolling down a hill.
    2. You are right to pick me up on my Coco Cola comparison. Maybe I should have said Apple will be the next Sony. But I am making a big point. Within three years close to half the planet will be connected to the internet. Already, there are more than 4bn mobile phone handsets out there. In some emerging markets - India for instance - the first reading and text that a kid sees is on a mobile phone. Think about that for a moment - a generation is growing up whose first experience of text and reading is all digital. that is their normal. that is not so different to remembering that your first drink was a coke. I think Apple, or some other tech company we haven't yet heard of, will actually be much bigger than Coco Cola, or Microsoft, or Exxon.
    3. The direction of human history is to ever closer nit communities - we like to think of ourselves as Clint Eastward or John Wain, ie individualistic but we are less individual than we think. Humans are programmed to copy and communicate. We operate in herds and tribes, our brains are wired with 'mirror neurones -only discovered in 1995- that make us copy and mimic. Coke plugged into this strong psychological force. Watch teenagers dating, they start off talking about what music they like and then it swiftly turns to phones, gadgets and then they communicate over facebook etc.

    So, tech has/is becoming tied up with personal lives and psychology in a way that consumer products like Coke used to do.
    You look at coke today - a company over 100 years old- and compare it to apple, a company founded in the late 1970s. Apple is going to be so much bigger than Coke in another few decades - unless steve jobs is followed by a complete idiot, of course. :)
    May 3 03:23 PM | 4 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    apple only spends 3% on R&D, so its not a tech company like Intel or Microsoft is. What I like is that fly wheel now driving the company forward is the Apps Store - ie Apple has everyone else doing its work for it. What I need to look at and expand in another piece is the dynamics of branding. Dell, Microsoft etc may have grown rapidly but they were not (maybe Microsoft got close) such a branding success. Just as Coke -see my Pepsi Paradox Piece- is tied up with the self identity of consumers, Apple is doing the same. Putting white ear phones on the iPod was a stroke of genius - that meant iPod users stood out in a crowd. Apple is luxury product, it has that cache, but it is a luxury, cool product that a lot of people can buy and so make a statement about self. Didnt really have the time or space to put that in this piece, but will revisit it. The point is - apple is maybe less dependent on new product than many think - it has become an enabler for developers, content generators etc to express themselves. that's a pretty good place to be.
    The meme is travelling quickly - a year ago in Asia locals there would say that Apple was irrelevant. That changed almost over night - it is the APPs that the asian's love.
    May 3 01:48 PM | 2 Likes Like |Link to Comment
  • Who Will Be the Coca Cola of the 21st Century? [View article]
    spot on question. owned it from april 2003 to december 2009 and foolishly sold. looking to buy back, but as i keep recommending it to clients it is difficult to find the window. stock not that pricey when you back out the $42bn.
    May 3 01:39 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
63 Comments
161 Likes