10 Friday AM Reads

The work week is ending, the Superbowl is almost here, and we have our guaranteed 13.5 PSI morning train reads:

• How, and Why, Apple Overtook Microsoft (NYT)
• Legends of Indexing: Rob Arnott (ETF.com)
• Gold Tarnishes as U.S. Economy Strengthens (WSJbut see Foreigners Are Failing to Buy Enough Stuff (Bloomberg View)
• Thanks a lot, austerity! We could have had 2014’s economic recovery in 2011. (The Week)
• Building The Perfect Investor (Millennial Investsee also An Investing Frankenstein (Reformed Broker)

Continues here


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Discussions found on the web:
  1. Concerned Neighbour commented on Jan 30

    It’s remarkable that Apple managed to overtake Microsoft by catering to the luxury smartphone market while Microsoft practically owns a monopoly in the personal computer market.

    Apple faces two main challenges going forward as I see it:
    – It’s now a huge company, and huge companies invariably find it difficult to grow at fast rates. That’s why its latest blowout quarter is all the more impressive. When you’re selling 75M phones a quarter, a mere 10% increase yoy is a huge 7.5M.
    – It will be hard to maintain its margins and volumes as Asian manufacturers begin to introduce phones with similar or better specs and the latest Android for literally one third of the price (I’m thinking specifically about the recently announced Asus Zenfone 2 here, but there are other examples). I can see the value proposition for their laptops (I own one) and to a lesser extent their laptops, but I think their phones are selling mostly for their “it” factor right now, which can be fleeting.

    • willid3 commented on Jan 30

      maybe Apple just picked the ‘right’ customers, i.e. the 1%. or maybe its that in the US the phone companies have subsidized phones so that buyers will get every couple of years.

  2. rd commented on Jan 30

    deflate-gate is a data-less controversy. It turns out there is no record of what inflation pressure the footballs had when the officials handed them off in the locker room. It is also unclear if there is any written record fo the actual pressures at half-time. I would be surprised if they have any calibration records of the pressure gages used to measure the football pressures. Everything appears to be based on the recollection of the officials. http://profootballtalk.nbcsports.com/2015/01/29/nfl-didnt-log-the-psi-of-each-patriots-football/

    Since physics can explain a pressure loss of 1 to 1.5 psi pretty easily, it seems like they would need to have pretty good video evidence of actual tampering with the balls to be able to say anything definitive. Fortunately, all of this occurred in a place where there is probably more camera coverage during the period in question that the Secret Service would have of the White House grounds. If they can’t find anything conclusive on video, then hopefully it will just die a quiet death.

    • willid3 commented on Jan 30

      without records of what it was to start with, or what it was at half time, its hard to judge isnt it? it doesnt seem to have been a big deal in the past, as the home team always brought balls. and not knowing what the colts balls pressure was at the same time makes it hard to say if they were messed with or not. but both should have the same pressure after the same time in the same environment ifg they started at the same pressure. guessing the NFL will change how that works. 3rd party will bring them, check the pressure, and there might not be a range, as both have to be the same

  3. hue commented on Jan 30

    i could post last night, but not today

  4. rd commented on Jan 30

    Actually, NYS gets a bunch of jobs from fracking now. Most of the Pennsylvania fracking areas are in the northern part of the state. Those areas typically have not had a lot of jobs there before, so there aren’t a lot of hotels, restaurants, equipment and material supply companies etc. However, just north of the PA border is Route 17/I-86 in NYS that runs parallel to the PA border in a couple of hundred mile long valley that has lots of major towns and small cities that have been part of the American industrial boom since the late 1800s (Binghamton, Corning, Elmira, Olean etc.). So you actually see a lot of fracking support vehicles in those areas when you drive through them. In many cases they are staying in hotels there or buying supplies. A number of the workers on the fracking projects live in NYS in the Soutehrn Tier.

  5. VennData commented on Jan 30

    Jeff Bewkes was on CNBC this AM telling us why we want the cable bundle.

    If you gotta tell the customer what they want when they’ve had it for over a decade and are telling you they don’t, you got a problem.

    I’ll say it again: I don’t want your bundle.

  6. RW commented on Jan 30

    Just some random thoughts on this lovely Friday morning:

    If Germany had its own currency it would be more expensive (AKA ‘stronger’) right now, possibly a lot more expensive, than the Swissie or $USD global disinflation/deflation notwithstanding.

    There is a strong case to be made that the Greeks, Greek economy and financial markets will be significantly better off this time next year than now; e.g., post-election panic and bloviations about ‘Marxists’ convinced me it was time to pull the trigger on a contrarian play.

    I still occasionally regret not buying more APPL when it was at $20 some years ago (pre-split) but then again I occasionally regret not asking Gwen out for a second date in the sixth grade so there it is.

  7. rd commented on Jan 30

    Best column I have seen on the Greek debt situation so far: http://www.marketwatch.com/story/lies-damned-lies-and-greeces-debt-default-2015-01-29?page=1

    One of the things not mentioned in the column, but should be part of any debt restructuring is a commitment by the Greeks to eliminating corruption and the underground tax-free economy. A bunch of the unemployed people are probably doing something, probably much using a barter system, but it won’t show up in the economic statistics or tax collection. Rationalizing the system so that everything is above board with reasonable tax collection is how an efficient economy works. The pre-crisis tax evasion and underground economy was one of the triggers for their economic collapse as honest people got hammered while corrupt people prospered. That is never a recipe for long-term national success.

  8. Singmaster commented on Jan 30

    Brownback/Laffer Fallacy: Appeal to Probability or Ad Hoc Rescue?

    Type Deductive Logic Arguments, Formal Argument
    Description Assumes that because something could happen, it is inevitable that it will happen.
    Ad Hoc Rescue
    Description: Very often we desperately want to be right and hold on to certain beliefs, despite any evidence presented to the contrary. As a result, we begin to make up excuses as to why our belief could still be true, and is still true, despite the fact that we have no real evidence for what we are making up.
    There is no proof that it is working.
    They are convinced it will, give it time and it will, we just know it.

  9. intlacct commented on Jan 31

    A legend of investing utters:

    “I recall Jack Bogle once likened ETFs to giving gasoline to an arsonist because intraday trading is, in his view, very dangerous. Well, what about daily trading at daily net asset value? It’s not that different. If people want to be able to do something, they will; and if they do something that they’re not very good at, well, it’s a free market and a free economy. Some people are good at it, and having this tool available to them is wonderful.”

    Actually, I once heard Jack Bogle compare ETFs to shotguns. So the Legend’s argument, paraphrased, is

    “Guns (ETFs) don’t kill (retirements); people kill (retirements).”

    PS Mr. Arnott’s PAUIX has and expense ration of 170 or so basis point (123 if you exclude interest) and has underperformed its bogey by 338 basis points, per annum, for the last ten years.

    PPS IINM, Mr. Arnott continues to pursue his hobby of collecting vintage motorcycles and criss crossing the globe to view eclipses.

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