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Sandy Lighthouse's  Instablog

Sandy Lighthouse
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Self employed for 35 years in construction. PHD from school of hard knocks. Tend to have a macro macro perspective.
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  • Where The World Economy Is Headed July Edition

    Everyone knew that the numbers for the U.S. economy for the first quarter were not too good. But what was the reason? Certainly not the weather again. As of early July, the consensus understanding has become that the strong dollar hurt exports enough to slightly slow the overall U.S. economy. This is huge. This verifies my thesis that the world economy must be evaluated on a holistic basis. The U.S. economy no longer calls the tune and everyone else follows. The EU started quantitative easing in January, the Fed's been talking about raising rates since last summer, the dollar gets stronger and the U.S. economy slows. And then the fed pushes out raising rates and the dollar gets a little weaker.

    Here's another way to look at it. There is indeed a lot of excess production capacity in the world. And consumers are still retrenching and paying off debt, so don't look for consumption to pick up the slack. So the easiest way for a given economy to grow is to steal the growth from someone else's economy by using monetary stimulus and devaluing their currency. "Currency Wars" are indeed a reality.

    So maybe the great U.S. recovery has been more a matter of beggaring the E.U. and China than the powerful organic dynamics of Keynesian monetary policy. Same with Great Britain's economy. World wide economic growth is not coming back. It really is a zero sum game at this point. Theft is the new growth.

    So where do equity markets go from here? Without growth as a catalyst, equities aren't likely to go up. What could cause equities to go down? A blow up in the credit markets, as always. And that looks to be not only a possible event in the near future, but a probable event.

    This is not investment advice.

    Jul 02 8:19 PM | Link | Comment!
  • Iwatch: You've Got To Be Kidding Me

    The Iwatch has gotten a lot of media attention and is hyped as Apple's (NASDAQ:AAPL) latest great product innovation. I think not so much.

    The Iwatch is "safe" design, both in concept and execution. Instead of defining a clear and compelling function for the IW and designing to that, Apple went the "Swiss army knife" design route by trying to include every conceivable function in one device. Jack of all trades, master of none. Most of the time when I pull out a pocket knife, all I want is a good sharp knife to cut something. And a thin light locking blade knife is a lot easier to carry than a Swiss army knife. Plus smart phones are already the Swiss army knife from hell. Seriously Apple, viewing color photos on your wrist- WTF?

    The obviously compelling function of a bluetooth digital watch (Iwrist?) is to effortlessly convey desired information contained within the smart phone it's linked to. Tack on only a few health tracking sensors and there's your product. And it should serve those functions effortlessly. This points out the "killer flaw" of the IW design: one more expensive piece of hardware to keep track of, charge, learn, and think about. The Iwatch complicates one's life instead of simplifying it.

    So here's the design for the Iwrist free of charge for anyone who wants it. The display should be a long and narrow black and white LED (same tech as Amazon Paper White Kindle) for super long battery life. The display should have two surfaces for viewing. The wider surface would be curved to fit the wrist and be about 5/8" wide and display three long lines of text. The second display surface should be about 5/16" wide, run along one edge of the main display at a 45 degree angle (making it viewable without raising your forearm), have one line of text, and be seamlessly manufactured into the main display like the Samsung Edge. The main display would be blank except when motion activated. The smaller display would always be on and would show the time by default until some text is pushed to it by the smart phone.

    There would be only a minimum of input methods available on the Iwrist. The band would be a woven fabric that dirt and oils could not attach to on a molecular level. Pricing would be under $100, eventually dropping to $25. The overall appearance would be stone cold utilitarianism with a flash of style only in the color of the band. How hard is that, Jonie Ivie?

    Tags: AAPL, Iwatch
    Apr 28 10:19 AM | Link | 5 Comments
  • A Macro View Of Apple

    Something like 70% of Apple's (NASDAQ:AAPL) revenue comes from Iphone sales. China sales of Iphones accounted for a lot of the increase in quarterly sales, with pent up demand for larger screen Iphones accounting for the rest. The smart phone market is getting to be a crowded space. Even the superior closed ecosystem of the Iphone may not be immune to pricing pressures. So where is "The Iphone Company" headed from here?

    The Iwatch is Apple's latest product release. It's basically just another build out of the Iphone ecosystem. And that's the biggest innovation Apple has brought to market of late, incremental improvements to the Iphone ecosystem. Which is becoming less and less price competitive. Are there any massively disruptive products in the Apple pipeline?

    The thing that set Steve Jobs apart as a true genius was his ability to synthesize smaller technological trends into "insanely great" products that were years ahead of the competition. To "Skate to where the puck is going to be, not where it has been.", as Jobs liked to quote Wayne Gretzky. In about 2004, Jobs recognized that cell phones were about to integrate MP3 players into their functions, and the market for the Ipod would be decimated. Jobs also recognized the potential for a new cell phone that synthesized five major tech trends into one product:

    1. The decreasing power usage per computing unit of ARM micro-processors.

    2. The increasing bandwidth and lowering costs of cellular networks.

    3. The increasing power to weight ratio of lithium ion batteries.

    4. The improvements in reliability and performance of touch screen technology.

    5. The miniaturization of electrical sensors and components: GPS, motion, proximity, etc.

    That product was the 2007 Iphone, which set off the smart phone revolution and destroyed major competitors like Nokia and Blackberry.

    Apple no longer has the genius of Steve Jobs at it's disposal. Tim Cook is super competent, but he is no product visionary like Jobs.

    Apple appears to be getting into the self-driving electric car business. I believe it will do so through a smart phone accessed transportation service like Uber, rather than retail sales of vehicles. This is a massively disruptive business of the future that synthesizes many tech trends into one product:

    1. Smartphones, GPS, and mapping software.

    2. Social networking software.

    3. Improvements in battery cost per KWH, which moves the source of power generation pollution from the streets of cities to remote locations or eliminates it because of:

    4. The rapidly declining cost of solar photo-voltaic electricity.

    5. The improvements in sensors and software that make self-driving vehicles possible.

    The fly in the ointment for Apple's entry into this business is that it's entering the business late, behind some tough competitors: Google, Uber, Mercedes, and other legacy auto makers. Apple does have some major advantages:

    1. Huge capital reserves.

    2. Deep experience in integrating software and manufacturing into global scale closed ecosystems.

    3. Experience in implementing large scale solar farms. (as does Google)

    I think Apple will succeed in the transportation as a service business. The questions are how profitable it will be and how soon it will be up and running.

    This is not investment advice. You would be crazy to base investment decisions on the opinions of a nobody like me.

    Tags: AAPL
    Apr 05 4:11 PM | Link | Comment!
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