Bandwagon2009

Global IT Cloud Computing: India vs. China

Huh? So the point of this article is that:

a) India has an advantage because they speak English, and there are existing Indian IT services companies with decent reputations
b) that China has a long term advantage of cheap labor, and good infrastructure, and existing presense of Western companies like HPQ

Hmm...other than the really obvious facts restated, how does this help me in my investment decisions?

HP's Executive Comp Is Troubling in a Year of Worker Pay Cuts

Bingo. Again I am not for compensation controls, but this is the type of excess which creates a populist uproar and will have the government start looking at general corporate pay practices, rather than at just banks.

Why do the execs of HP deserve more than any other $100B revenue Fortune 500 company with equivalent profit profiles? Is it harder to run HP than it is to run IBM? And come on folks do you really need to spend hundreds of thousands of dollars of my money to fly folks around in a corporate jet for personal use. I fly over 200,000 miles a year, so I understand the pain of flying commercial...but really those amounts are beyond the pale.

Apple Asks Microsoft to 'Quit Running Those Laptop Hunters Ads'

Here we go again...anytime there is a slight criticism of Apple or an indication that someone might be doing something which puts Apple in a negative light...a whole bunch of Apple die hards jump in to trash talk Microsoft, Palm etc in virulent terms.

Folks get a life...it's just a computer :-)

I own several devices Apple as well as Dell, Palm etc. I like Macbooks...but I am not sure I would pay $2K for a device which has the same technology half life as a $700 unit.

How Does Accenture Today Compare to Post Dot-Com Bust?

The conclusion in this article seems to ignore the cultural buying habits of APAC region -- while consulting can certainly provide higher value (=margins), there is pre-disposition by clients in some Asian countries for not wanting to pay for pure "consulting". Firms like ACN might be able to bundle "solutions" which include a combo of products and services -- and certainly there are some large scale government spoonsored SI projects in India and other countries that ACN could go after...in most cases a local tie up / JV is necessary. A BOT approach might be a better idea.

India Projected to Be the Fastest Growing Economy in 2010

And in my opinion it would grow even faster, and be more sustainable, if they got rid of the last vistages of the "license raj".

I will take an un-controlled, chaotic, anarchic, creative, innovative economic model, over state control anyday...which is why I believe that inspite of the recent hiccups the US economy is going to be more robust in the long term than the our friend in Europe.

For India's sake though I hope the growth percolates down to the 2/3 of the population who still on the edge of abject poverty. What we need is torrent, and not a trickle "down".

The Truth About Unemployment Numbers

Having spent over 25 years working for all manner of companies (from tech to finance) -- at fairly senior levels, I am convinced that there is a knee jerk response on RIF, hiring etc.

Even companies which can afford to hire and should be hiring don't - when confronted by dismal numbers -- so while the published stats maybe a bit of smoke & mirror - it is good to "emphasize" any good news -- however small -- since it will help change the mindset and get us away from the doom and gloom thinking which has frozen all types of investment.

Folks, the economy will never improve untill employment increases. It may be a lagging indicator, but directional improvement is needed now. I am no fan of govt. stimulus or TARP -- but if the govt is going to spend our money - I would prefer it to be spend to directly increase employment.

Key Citi Exec Leaves for MasterCard: TARP Strikes Again

Whilst I agree with the author in general, i.e. pay limits do nothing -- and govt meddling / micro management is not good in the long term. Not sure that was the only reason that Banga left Citi....it could be that he wants a shot at the top spot which would be harder at Citi -- Pandit is not going anywhere anytime soon...and if he does not sure the board/govt would select anyone from the inside.

Why I'm Long Cognizant, Short Infosys

Not sure I buy this. CTSH is growing faster from a smaller base -- and most likely taking share from some smaller players like PTI or SAY. I am not convinced that the growth rate will continue over the long term as market penetration gets a bit higher.

In my personal experience Infosys has a better more respectable brand and client satisfaction levels.

Infosys will however suffer if they do not get aggresive about building newer services like Infrastructure and also in their hiring of locals.

Credit Cards, Guns and Ammo: Thanks, Washington

Somehow we seem to be forgetting the fundamental issue -- it looks like over 50% of Americans carry a balance larger than what can be paid of over serveral months given their incomes.

Credit cards were supposed to be a convenience items -- so that you didn't have to carry large amounts of cash, when you travel, or when you were purchasing large ticket items -- and maybe as a really short term loan for those purchases.

Everyone knows that the interest rate of the loan was floating, and yes - that the interest rate were high given the short term nature of the instrument and the fact that the loan was un-secured.

It seems now that that folks assume that the cerdit card is a type of income supplement -- i.e. as a country those who can least afford to to do it (i.e. the low to mid income folks) are spending beyond their means and using credit cards as the enabling mechanisms.

Do they need some addtional protections -- maybe (some might have been confused by the advertizing). Do the banks have a point as well -- maybe (they wrote a valid legal contract).

BUT unless the ordinary citizens do not balance their spending with the income stream -- this will be a never ending problem.

India: Optimism Triumphant in the Near Term

I think we in the west may be overreacting to this story. Congress and their partners may have a majority in the central govt, it does not change the equation in the states. Also a strong center can sometime cause a problem -- folks old enough to remember might recall the congress of the 1970s under Mrs. Gandhi -- a strong majority was not good for the economy or democracy at that point. Mr. Singh seems to be genuine intellectual (in the good sense of the word) who favors market reform - so let's hope the new majority govt doesn't get carried away with new pork barrel projects.

Smartphones: The Mobile Industry Is About to Get 'Blown Apart'

This is not a scientific conclusion -- so please feel free to flame :-) -- but my own observation is that many of the folks who are proponents of the Apple model seem to be the same folks who value "open source" or open systems -- and very anti Microsoft.

Apple is the closest of the closed systems. Granted they have done a better job on user interface/usability front -- but certainly has the makings of a monopoly. I guess you could argue that a munificent dictator is better than a democratic govt.!

What's Behind Cognizant's Outperformance?

Naveen - good analysis, while CTSH has a lot going for it, I continue to believe it is a "bubble stock". I get the sense that there is a bit of spin in their commentary (more than normal). INFY tends to be fairly straightfoward in their comments.

Second I am concerned about the management bench strenght at CTSH. A very concentrated power structure with limited exposure or visibility at the next level is a cause for concern as well. While I don't believe DeSousa and Coburn are no where near retirement age- it would be useful see beyond them.

Third, lack of geographical diversity is a long term concern as you noted, as is their lack of interest in the emerging markets (including India, China, Brazil etc.) While TCS may seem over-extended - I think their strategy is rigth and if execution continues without any major glitches CTSH and others will never catch up.

Lastly, I know most will not agree, but I think CTSH lost the chance to change the game by not pursuing SAY aggresively. I appreciate there are risks, but as a US based firm they could have been given the benefit of the doubt and would be credible as they clean up the governance mess.

Are We at the Beginning of a Bull Market?

Hmm...to Chistletoe....optimism is a state of mind...and while I am not suggesting we all bury our head in the sand, a certain amount of optimisim is justified based on history. Things do recover...though in some cases it may take time and painful effort, if there is a will and desire. Fatalism was never an American trait. Pessimism and looking for bad news in everything becomes a self fullfilling prophecy.

This is true in real life and is true in the economy and is especially true in the market.

Flinty determination, and a quiet optimism will get us out of this. So here is my message to the shorts -- have fun while your party lasts...but don't bet your retirement on it :-)

Cramer's Lightning Round - First Solar's Day in the Sun (5/8/09)

Ok, so why the animosity towards Cramer...I am not a big fan, I think he is a bit of a loud mouth, and his comments in many cases are superficial -- but at least he says what's on his mind - in relatively clear language -- without the mumbo jumbo and pevarications of other so called pundits!

Dow 10,000 and More Irrational Exuberance

I guess we have not learned anything from the last two debacles -- i.e the two very loud bubbles bursting in this decade.

Lesson #1 -- stop listening to pundits on "live" media (incl CNBC) -- most of these guys know less about almost everything than they pretend (I know I am generalizing - so apologies to the few who actually know something) -- how do I know? -- in a different context, I used to be one. The pressure to say something smart or make predictions is strong, and you do get carried away.
Lesson #2 -- fundamentals, fundamentals, fundamentals...need to drive the market -- we still seem to be looking at the stock market as an uncorrelated / independent entity -- the whole idea that the market should (can) behave irrespective of how the rest of the economy (incl unemployment) is doing may be true but is the main problem with our current thinking (remember the sub prime problem)
Lesson #3 -- isn't most exuberance irrational ? the flip side is also true - we can't (to borrow a phrase) continue catering to the nabobs of negativity -- yes Mr. Roubini I am talking about you. Granted you were right, but let's not get the constant fear mongering create a self fullfilling prophesy -- in most crises the key ingredient to getting out is optimism (not exuberance, but a quiet steady, flinty optimistic outlook)...what did Gandhi, Churchill, Roosevelt, King, Dalai Lama and others have in common with the great capitilists of the world (JP Morgan, Andrew Carnegie, Henry Ford....) -- yep -- you guessed...

ok - time to get off my soapbox........