Stock Market: Guts And Brain

(Drivebycuriosity) - The stock market is again in a situation that needs guts and brain. The masses are selling like crazy. Once popular stocks like Facebook, Netflix, Tesla, Twitter, Biogen and 3D Systems are almost in a free fall now. The Nasdaq Composite Index, which comprises the most risky stocks, tanked 3,6% last week; even the broader S&P 500, the gauge for the US stock market, lost 2.6%.

The headlines in the media are gloomy. The usual alarmists predict a nascent stock market crash. This reminds me of the situation in the second half of 2011. Then stocks, especially the risky Nasdaq papers, also got battered. From mid July 2011 through mid August 2011 the Nasdaq papers plumed around 20% to 2,340 points, thanks to the panic selling by hedge funds and other speculators. Since then the index gained around 70%.

The precent panic is ridiculous again. The weekly job market claims fell on a seven-years low, other indicators like the purchasing manager indices for manufacturing & services, industrial production and retail sales also show that the US economy is in a solid upwards trend and Europe`s economy is recovering.

Especially the selling-off of technology stocks doesn`t make sense. We are experiencing a new industrial revolution: Rapid advances in 3D-printing, robotics, nano-technology, bioengineering (new medicaments) and more industries are working together and are reducing costs, opening new markets and making our lives better. And: The number of Internet users - and hours & money spend online - is worldwide exploding thanks to cheap smartphones and other devices which give access to the worldwide net.

I reckon that the bull market, that started in spring 2009, will continue and believe that the recent losses on the stock market will soon be forgotten like the ridiculous turbulences from 2011.

Media: A New Golden Age Of TV

(Drivebycuriosity) - If we believe the New York Times a "new golden age of TV" has arrived (nytimes). I agree. I am under the spell of series like "True Detective", "Homeland", "Breaking Bad", "The Americans" and more.

And it will even get better I believe. The reason: The number of suppliers is rising. Traditional producers of quality TV like HBO, AMC, FX and others are getting more and more challenged by newcomers like Netflix ("House of Cards", "Orange is the New Black"). Amazon.com. started recently the production of at least six TV series and Yahoo, Sony and Microsoft also announced that they will produce their own TV series (imdb investors). 

I think that the growing competition is generally lifting the quality of TV productions. Competition is always good for consumers because producers have to be better than their competitors or at least as good as them to stay in business. TV-top dogs like HBO and AMC have to invest more money to defend their turf against the newcomers who on the other hand need quality to "steal" the viewers. According to BusinessInsider HBO spend  $8 million for just one episode of their famous series "Game of Thrones", the site also claims that an average cable episode costs around $2 million (businessinsider).

Behind the rising TV competition - and the quality gains -  are 2 trends:


1. Technological progress.

Without the technological advances of the recent years newcomers like Netflix and Amazon wouldn`t exist. The possibility to downstream TV programs on a growing number of devices - TV-receivers, computers, tablets, smartphones, games consoles and other platforms - creates new markets and expands the number of potential viewers enormously. This encourages the producers to spend more money for script writers, actors, directors, cinematography and post production including special effects.


The technological progress also helps producers to realize their ideas because they can alter scenes in the (digital) post-production and make the results looking better. And technological advances are reducing costs of production. For instance a scene which needs many actors can now be faked in post-production by digitally multiplying the photographed persons. 

2. Globalization

I also believe that the ongoing globalization contributes to the rise of TV quality.  Producers can sell their series in many countries (to local TV-channels or directly as downloads to the consumers) which again justifies costlier productions. I also expect that the number of foreign productions we can see will sharply rise in the coming years which will strengthen the competition. British TV-series like "Sherlock" and Downton Abbey" are already popular in the US. Why not some fresh TV from Scandinavia, China or Latin America. Enjoy!

New York City: An Early Spring Day At Washington Square Park 2014

(Drivebycuriosity) - Sometimes many people have the same idea. Yesterday my wife and I decided to walk to the Washington Square Park in Southern Manhattan. The lovely spring day after a long and exhausting winter was really inviting.

Apparently many people had the same idea. The park was much more crowded than usual. Many New Yorkers - and tourists - enjoyed sunshine and unfamiliar mild temperatures in the company of others.

A lot of street artists - also more than usual - used the occasion for their performances. Here some impressions from an early spring day in Southern Manhattan.

Enoy!

Movies: Nymphomaniac: Vol. II

 

(Drivebycuriosity) - Human sexuality has many facets. Sex can deliver pleasure, excitement and lust, but could also lead to pain and self-humiliation. Lars von Trier´s newest masterpiece describes and analyzes most of them (imdb).

In "Nymphomaniac: Vol. II" Jo continues to tell the story of her life (Vol. I reviewed here, no spoilers  driveby). The plot gets darker and much more violent: Less fun, more pain. Her manical sex drive leads here into a personal downdrift including a pathetic ménage à trois with two African males,  professional sadomasochism, illegal debt collecting and more. 

Because the story is told as a dialogue it has a lot of room for discourses about different sex-related subjects like religion (the differences between the Roman Catholic Church and the Eastern Orthodox Church).

William Dafoe, one of my favorite actors, has a short but striking part, I also enjoyed a cameo of Udo Kier and was impressed by the performance given by the newcomer Mia Goth.

Like part one the film is a kaleidoscope of different parts, some are funny, others are shocking & depressing. It has again a lot of explicit sex scenes. The complete movie (Vol. I& II) may be a parable about the depths of sex. "Nymphomaniac" is a very academical, but also realistic looking study about the philosophy & psychology of sex - a movie people will talk about many years.

Stock Market: Tech Is Not Dead

(Drivebycuriosity) - Tech stocks are in a free fall. Last week names like Facebook, Twitter, LinkedIn and Yelp have been absolutely pummeled and Netflix, Tesla, Biogen and other technology and biotech stock have found themselves caught up in a mass de-risking this spring, writes the blog "The Reformed Broker" (thereformedbroker). It seems that growth stocks (share of companies with over average growth rates) are out of favor.

The selloff is a typical herding behavior. Hedge funds and other speculators often behave as a herd that gets into panic and runs in a stampede when lightning strikes. Now they are dumping tech stocks - and anything which had gained over average in the recent 12 months -  just because these papers are falling and others are also selling - out of fear that these papers could drop much deeper.

I believe that the selling spree is myopic. Tech is not dead - quite the opposite. I think we are in the beginning of a new technological revolution. We are experiencing rapid advances in 3D-printing, robotics, nano-technology, bioengineering (new medicaments) and more industries which all are reducing costs, open new markets and make our lives better.

Consumers love smartphones, tablets, e-book readers, game consoles and other high tech devices. Those gadgets, which didn´t even exist in the year 2000, are rapidly getting better thanks to new apps and other software. Many digital devices can be used to access the Internet which accelerates the mobilization of the World Wide Net. The number of frequent Internet users is climbing sharply - especially in China and other emerging markets.

As a result people worldwide are spending much more time and money on the Internet for E-commerce and other services. Billions are using Internet and other incarnations of software to organize shopping, leisure time, traveling, dating, eating out and more.

Therefore online shops, search providers, social networks and a lot of other Internet based services are growing fast. Simultaneously there is a thriving demand for devices & software that enable the burgeoning data streams (chips, server, router, transmitters, satellites and more).

We are also in the beginning of the "Internet of Things": Consumers, for example, can now use smartphones to remotely check if they locked doors, left the lights on or turned down the thermostat. Retailers can help smartphone users find goods on store shelves, and wirelessly pitch sales promotions, reports the Wall Street Journal (wsj.com). Parking meters can communicate with smartphone users. Companies sell wireless meters to manage energy usage, while General Electric exploits data generated by sensors to monitor the health of jet engines and gas turbines.

Technology in general is getting more and more important for our every day life. Chips & software are increasingly used for entertainment, communication, security, controlling room conditions, monitoring cars, steering household appliances and a lot of medical purposes.

Technology also is getting more important for businesses. Companies have to invest into Internet and other hard- and software technologies to adapt to a rapidly evolving world. They will use more technology to reduce costs (for instance via robotics and other forms of automatization) and to process a deluge of data to respond to competitors and to exploit chances on global markets.

Therefore I expect that the selloff in technology share will be short-lived and the technology sector will resume his rally soon.

Disclosure: I am an investor in Amazon.com, Apple & Baidu.

Technology: 3D Printing - A Glance Into The Future

 

(Drivebycuriosity) - Yesterday I saw the future. I visited the "Inside 3D Printing Convention" at the Javits Convention Center, New York City (mediabistro). This is a kind of global traveling circus which shows new developments in 3D printing - "the third industrial revolution" - around the world. The convention comprises a row of speeches about the state of art in the industry and an exhibition where the producers display their machines & programs.

This year´s show was larger than last year`s, more exhibitors (producers of 3D printers, software and materials, now around 25) needed more room. This shows the growing importance of the new technology and may also be a response to the stock market rally of the leading providers in the recent 12 months: 3D Systems Corporation (NYSE:DDD) gained more than 70% (google) and Stratasys, Ltd. (NASDAQ:SSYS) climbed almost 50% (google). 

But the technology is still in an early phase. The displayed 3D printers looked a bit like microwaves but they are much more sophisticated. They all have a moving part which resembles a sled, but this device is much more complex. Watching those "sleds" - which are steered by some software - reminded me a bit of icing a cake. But I guess, the picture of a spider, who spins its web by emitting silk, is more appropriate. Anyway the displayed machines use cables of plastics or metals which get melted inside. Then their jets - which are working like the glands of a spider - are adding layer on layer which produces any kind of shape the software demands.

The exhibition showed a piece by Ioan Florea. The artist used 3D printing technologies, nano-materials, and his original transfer technique to customize a classic Ford Torino. I guess you won`t meet this car on the streets, but the gives an expression how the technology can be used already.

According to Wikipedia the 3D printing technology is used in architecture, construction, industrial design, automotive, aerospace, military, engineering, dental and medical industries, biotech (human tissue replacement), fashion, footwear, jewelry, eyewear, education, geographic information systems, food, and many other fields (wikipedia). The industry aims to produce almost any product designed particularly for each consumer with the low cost of industrial mass production.

The convention - and the exhibition -  attracted a lot of visitors: Engineers, consultants, stock market analysts, geeks, curious bohemians and TV reporters from Fox and other media. I plan to visit this convention again if it comes back to New York City sometimes.

Culture: Can We Still Afford Museums?

 

(Drivebycuriosity) - The New York Times has a piece about the "Detroit Institute of Art" (nytimes). This Museum - and all the collected art there - belongs to the City of Detroit, which is now bankrupt. The paper muses about selling at least some of the museum´s prestigious paintings to satisfy Detroit`s debtors and to finance "safer roads and better schools". 

Robert Frank, the author of the article, especially points to “The Wedding Dance,” a 16th-century work by the Flemish painter Pieter Bruegel the Elder. According to the auction house Christie’s, this canvas alone could fetch up to $200 million.

I think this proposal is short sighted. Museums - which are already magnets for many educated people - are becoming more and more important as cultural hubs. They are fun and educating, they broaden your mental horizon and make you more sophisticated - all valuable attributes in a world which is becoming wealthier and more sophisticated, at least in the long run. I believe that the "Detroit Institute of Art" can benefit from this trend and use her prestigious art work, besides "The Wedding Dance" you can find there Van Gogh`s "Portrait of Postman Roulin". Auguste Rodin´s "The Thinker" and more (dia.org),  not just to gain more visitors, the place also could use her reputation to attract more donors. Their number could grow as a result of the climbing wealth of the US.

Thus the museum could be a valuable asset for the future of Detroit. The city has to reinvent herself and to adapt to a modern world which is more and more a service & leisure economy. The former automotive center could learn from the "Ruhrgebiet" in Germany which has transformed from a coal mining and steel cooking area into a cultural center which attracts a lot of visitors.  

The "Institute of Art" could help to make Detroit more modern, attractive & sophisticated. This would not only attract tourists - a revenue source which should get much more important in the future because of the rising global tourism - it also could be a magnet for ambitious job seekers who want to live - and to uprise their children - in a place with a high cultural standard, an argument for modern companies to move to Detroit.

The author recommends to replace the highly valuated "The Wedding Dance" with contemporary art which could be bought cheap. I consider this as a mistake, even that I love modern art. There is no substitute for a masterpiece from the 16h century and contemporary painting can certainly no replace is. I could create  contemporary paintings - and you could.  The "Detroit Institute of Art" needs prestigious art works as a tent pole for its reputation.

And: The City of Detroit didn`t go bankrupt by buying expensive paintings. The insolvency is the result of the industrial decline (especially of General Motors) and the mismanagement of the city. Selling irreplaceable art work would not help the necessary transformation of Detroit.