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Since late 2006, Davy Bui has publicly posted stock picks, research reports and market commentary on his Enlightened American blog, outpacing the market by 9%, 13.5% and 17% in 2007, 2008 and 2009 respectively (http://www.enlightened-american.com/wealth/portfolio.html). Adapting a value-based... More
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  • Tech Titans On Verge Of Obsolescence? 0 comments
    Jun 16, 2009 1:09 AM | about stocks: MSFT, GE, IBM

    My colleague over at Complete Growth Investor, Tom Jacobs, and I have a long-running discussion over Microsoft (NASDAQ:MSFT) and its ability to maintain its earnings power. Tom asserts that Microsoft's days as a near-monopolistic giant are numbered as personal handheld devices and computers converge to some hybrid. Perhaps as an artifact from my computer science days, I find it difficult to envision a handheld device that can displace the personal computer. Specifically, the keyboard/mouse interface seems particularly well-suited to power applications such as spreadsheets, media editing and even internet browsing (try web-surfing on a text-only browser or through audio-only cues).

    But I fully allow that the difficulty may lay more with my imagination than any technical limitation. After all, as a musician, I never would have believed my most useful music consumption device would be a glorified mp3 player called the iPod.

    Along this train of thought, I direct readers to this interesting full-page analysis in this weekend's Financial Times. The author summarizes the recent history of "disruptive" innovations in the gadget/PC field and looks ahead at possible candidates to upend the landscape in the near-future.

    FT: Companion of Wisdom

    The funny thing about disruptive technologies is just how difficult it is to predict them. Much ink has been spilt and many fortunes have been lost trying to spot the next hot thing: Web 2.0, e-retailing, social networking, etc. Keep that in mind as you read the article.

    The other thought that springs to mind is that even as new technologies displace current products, the largest companies seem to have the resources to change with the times. General Electric has morphed several times over, most recently from an industrial concern to mainly a financial company and now back again. Today's IBM went from a company that sold mainframes and invented the technology fostering the personal computer to an information technology and services company.

    If Microsoft's operating system and productivity software went the way of the dinosaur, the company's vast resources may allow it to undergo some metamorphosis to a different, viable concern much like the previous examples. Perhaps Bing is the first step in this transformation.

    And to end on a Microsoft note, the company's move to preempt the European Union on the issue of internet browsers is absolutely brilliant, as the FT summarizes in this article. After all, one could argue that the EU regulators set a precedent in the previous media player case, when they demanded that Microsoft unbundle Windows Media Player from the operating system. By removing Internet Explorer, the company follows the guidelines set previously, blocks competitors like Firefox and inconveniences end users courtesy of regulators.

    Of course, tech geeks recognize this "removal" as cosmetic only because as far as I can remember, Microsoft has integrated the browser into the operating system -- just pull up a Windows Explorer window (the one you use to browse folders and files) and type in a URL in the "Address" toolbar and witness your files browser instantly transform into an internet browser. It looks like Microsoft will just make sure users can't find the Internet Explorer icon.

    Your move, EU.

    FT: Companion of Wisdom

    FT: Microsoft replies to regulator with decision to delete browse

    Disclosures: Long GE, no position in the rest

    Stocks: MSFT, GE, IBM
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