Thursday, February 24, 2011

Middle East Crises: A Play of Thoughts

North Africa is on fire, parts of Arabia too. The leaders of Tunisia and Egypt had to go, Libyan-dictator Muammar el-Qaddafi is fighting his own people, and many Libyans lost their lives. And what about Saddam Hussein?

Oops, I almost forgot. Iraq isn`t a dictatorship any more. Former US President George Bush put the dictator out of office and the dictator was executed by his own people. But Bush didn´t get much credits for it, and many people hate him for that.

Yes the war in Iraq was (is) ugly, as any war is. But what would be, if Saddam Hussein were still in office? The dictator was as ruthless as his colleague in Libya. Hussein used gas to fight the Kurdish people (inhabitants of the Iraq) and his neighbor Iran. What would he do now? It seems now that the Iraq war saved the people from a very messy civil war. If Hussein were still in command, the disaster in Middle East could be much messier.

Saturday, February 19, 2011

Stock Market: Celebrating the Double

Last week we had reason to celebrate: The stock market doubled since its financial meltdown.

The S&P 500 index, the barometer of Wall Street, climbed from its low of 666.79 on March 6, 2009 to 1.344 on Thursday Morning. Yesterday the S&P closed on 1,343.01.

This was the fastest double since the research firm S&P started publishing the index in 1957.

Why is that?

The world economy, especially in Asia is healing much faster than many thought. That translates into rapidly rising company profits.

Both processes are continuing, thanks to the high productivity of the economy. In the last recession companies learned to be more efficient, and now they will be mean & lean in the global economic upswing.

When will we see the next double?

Friday, February 18, 2011

Cinema: The Fighter

Life has many issues, one of them is fighting. You have to stand up to many fights, with others, with the environment, even with yourself.

Such clashes & skirmishes are the subject of a very impressive film: The Fighter. This ambitious flick is one of the most promising contenders in the upcoming race for the Academy Awards. Rightly so.

The movie tells the story of a man, who tries to become a boxing champion. On his way to the top he has to fight not just with his opponents in the ring, he has also to struggle with his "white trash" environment: His manager, his girlfriend, his family. In each case he has to defend his plans, wishes and ideas.

It seems his heaviest fights are against his own brother. The older sibling is an ambivalent character. One part of him is an eminently respectable former boxing champion, a coach in sports and a teacher in managing life. The other side is irresponsible, undependable, destroyed by drugs. One part of him builds his younger brother up, the other draws him down. To watch; which parts finally wins, was the most interesting issue of the film for me.

It´s fascinating to see the fights between Mark Wahlberg ("the boxer") and Christian Bale ("the older brother"), also with Amy Adams ("the girl friend)" and the rest of the cast. The acting & dialogues are worth the costs of the ticket. The cream on the cake is the strong soundtrack, a fitting blend of Rock Music, including Led Zeppelin, the Red Hot Chilli Peppers and Aerosmith. Enjoy!

Wednesday, February 16, 2011

Kindle: Making the Girlfriend Happy

It`s always nice to make my girlfriend happy. And sometimes it`s easy. I found a effortless way to please her. Last Thanksgiving, she got a Kindle. And now she is even happier.

She likes to use the Amazon E-Book-Reader in bed (when I am not there, of course). The device doesn`t weight much, less than a book with hundreds of pages. And the Kindle cover is illuminated, which allows her to read in the dark.

She also enjoys reading the Kindle on the subway.  A trip in that Manhattan network can take a long time. With a Kindle she can take a whole library with her. Who wants to carry the New York Public Library in a crowded subway train?

On Kindle she finds also a lot of books for free. Now she is reading F. Scott Fitzgerald´s novel "The Beautiful and Damned", which didn`t cost her a cent. This makes me happy too, although I am far away.

Tuesday, February 15, 2011

Theater: How Funny is Being Mad?

Being funny is trendy. It seems we live in the century of the comedy. Especially on TV the comedy shows are blooming.

Apparently this inspired BAM, a culturale institution in Brooklyn. It seems they like to transform classical pieces into modern comedy shows. I saw "Metamorphosis" there last year.  They translated Kafka´s sinister masterpiece (a story about man transformed overnight in a big bug) into a funny play. It worked well and was entertaining.

Last week I saw "The Diary of a Madman", based on Nikolai Gogol there. This time I was less impressed. They transformed the Russian story in a kind of a circus show.

Yes, Geoffrey Rush, the star of the show, is an impressive actor. The Academy Award Winner delivered an amazing performance. But he acted also like a clown in a circus tent. His witty monologue about the world around him was "spiced" with a goofy behaviour, while everybody has to understand that this man is getting more and more insane.

Many of the spectators seemed to like the show anyway.  There was much laughter in the circus scenes. Funny is trendy, comedies rule.

Friday, February 11, 2011

Investing: The Merits of Eating Healthy

Eating healthy gets more popular. People feel better, look better, live longer. It seems that eating healthy is also a good investment.

The Stock of Whole Foods Market (Nasdaq: WMFI) jumped yesterday around 12%. In the last 12 months the stock gained more than 80%. The reason: The sales-growth of the biggest seller of organic and natural food products in the United States is accelerating.

The food chain reported yesterday that its sales climbed in the last quarter 9% compared with the year-earlier period. The company raised also its outlook for profits and revenue for the whole year.

These upscale food chain benefits from several trends:
- People are willing to spend more for things they consider as healthy.
- People are getting also more wealthy. Therefore they can afford to spend a higher percentage for things they like, the so called luxury goods. Thus Whole Foods should benefit above the average during the economic upswing.
 - And: People are living longer, which expands the market for expensive health goods.

But: Investors should never forget the competition. Shopping chains like Wal-Mart, Kroger or Safeway are also in the market and want a big piece of the growing cake. And: The online giant is testing delivering fresh food in his hometown Seattle.

Cinema: "The Rite"

Does the devil exist? Satan doesn't fit in a modern scientific world view, but many religions still need an antipode to "God". Anyway. Lucifer can be entertaining. Hollywood likes him a lot as the long list of movies with the subjects "Devil", "Exorcism" and "Demons" show. Some of them were big hits.

 "The Rite", the newest incarnation of this genre, is now running in US cinemas. Its about 2 priests practicing exorcism in Italy. The film is not as good as the "The Exorcist". It´s not a masterpiece but would please friends of the demon genre. They get the always strong Anthony Hopkins, nice shots from Rome and a lot of cats. The film isn´t about special effects, instead it tries to build up a sinister atmosphere. The result is just "so-so", but on a chilly winter night there are worse places to go.

Wednesday, February 9, 2011

Stock Market: Victoria`s Surprise

Blizzards? Weak job market? It seems the US consumer doesnt care. In January the sales of many retailers were surprisingly strong, yet last week many shopping chains reported more sales-growth than expected.

Despite the dull job market, consumers are more optimistic and in a spending mood again. The comeback from the consumer is partly fueled by rising salaries. Companies pay their employees more because their productivity is raising and they can expand production to participate in the economic recovery. And: Many consumer are invested in the stock market. They strongly benefit from the ongoing rally on the stock market.

Beneficiaries of the consumer comeback are for example Macy`s, Aeropostale, Gap, JC Penney and Kohl’s. Costco (COST) recorded 9% growth year over the year. The greatest surprise came from Limited Brands (NYSE: LTD), the owner of the brands Victoria’s Secret and Bath & Body. Limited posted a 24% gain, versus analysts’ expectations for 6.7%. It seems, the consumer is more willing to invest in beautiful things, a good sign for the whole economy.

Tuesday, February 8, 2011

Stock Market: The Magic of Efficiency

The rally on the stock markets keeps rolling & rolling. The chances are high that the uptrend stays for years.

Why`s that? The answer: Companies are becoming more and more efficient - and progress is running fast and strong.

Last week the Federal reserve reported that the productivity of U.S. worker increased in the fourth quarter at a 2.6 percent annual rate. For all of 2010, the employee output per hour climbed 3.6 percent, the most since 2002.

This is great news for the economy and the stock market. Companies can produce more and more with their existing work force, therefore their labor expenses shrink fast. Falling costs translate into rising profits, the motor of the stock market rally. Rising profits translate also into economic growth, the animation that motivate companies to produce and invest more.

We have observed the rise in the productivity for more than 100 years. The amazing productivity gains we have enjoyed explain the economic miracle of the last 2 centuries. People work now much less than 100 years before and their wealth has exploded in the process.

We owe the strong gains in productivity to the amazing ability of people to learn. They get every day better in the things they do. One of the fruits of the learning process is technological progress, which almost every day gives us new devices and techniques which make life better.

It seems that we now experience a new industrial revolution with strong productivity gains, thanks to computers, chips, the internet and other software applications. Thus there are good prospects for economic growth and the stock market.

Thursday, February 3, 2011

Book Comments: China. A History

Action, homicide, revolution, treason, intrigue, heroes & villains, blood and thunder. You will find all that and much more in just one book: "China. A History", written by John Keay. It`s not just another history book, it`s a thriller, but not based on fiction, and instead on the recorded ups and downs of a gigantic nation.

China is rising and will soon rule the world, the media tells us.  This books shows - and explains - why the awakening "of the dragon" is just a comeback.  For example, in the 16th century China was the largest and wealthiest nation on Earth. The Asian giant had many "golden ages"  before then. The Han Empire (202 BC till AD 220) was as large as the coeval Roman empire, and China`s brightness lasted until the end of the millennium, not just half way through it. But for China, after each "golden age" came a deep fall.

The history of China is as colourful as a Chinese New Year Parade. It´s also a tale about fights, and a permanent struggle about power. Keay describes the many battles between the "Kingdom of the Middle" and her neighbours, the clashes between emperors and their usurpers or families about dominance. Very often the rulers struggled with the bureaucrats, who were eunuchs. Most of the time the administration was the true ruler of the vast empire.

The giant struggles China had to suffer in over 2,500 years brought the world many gifts. China invented paper, book printing (before the Gutenberg Bible), the compass, banknotes (paper money), kites (ancestors of airplanes), rockets, noodles and much more.

"China. A History" is highly recommend, not just for historians or students of economics and politics, it helps everybody to understand why the globe is changing again now.  And - it is an exciting read.

Tuesday, February 1, 2011

Stock Market Philosophy: The Flip Side of the Economic Winter

The northern USA is drowning in snow again, at least parts of it. Not just people are suffering in the severe winter, but nature too. Many trees are losing their branches under the heavy weight of the snow. But at least the weak ones are down now, and the strong trees made it through.

The same is happening in the economy. The companies which survived the harsh economic winter of 2008 seem to be stronger than before. In the last few days Caterpillar, Intel, General Electric and many other companies reported in the last days fast rising profits for the last quarter (Q4 2010). Some of them climbing on new records.

The reason: The companies reacted to the crises of 2008. They reduced their cost drastically and became much more efficient & leaner. Now they are becoming stronger in the upswing of the economy. Bloomberg reported today that manufacturing in the USA accelerated in January and grew at the fastest pace in more than six years.