The Google Super Bowl Ad SUCKS and Factually Incorrect!

I suppose I have been too long in Europe, but the Google Superbowl ad just sucks! The first time I watched it I stopped. Then I read what it was about, and it sucked again… It is a dumb story! I suppose this is due to the fact that I live in Europe and the story is so cliche that it is not even interesting anymore.

But the ad is in fact factually incorrect!

Namely…  If this person were indeed traveling to France, and indeed putting in his search requests they would have french references!

What am I talking about?

One of the annoying features of google search is that when you are in the local country the search defaults to the local country and the language. Even if you switch languages you get the results and hints to the local country. This tends to make sense since most people are interested in searching for things around them. Though I get annoyed because most of my searches if I use Google are non-local.

Another factual issue is that when he types in “translate tu es tres mignon” he has the apostrophe as he is typing. Notice I don’t since I don’t have a French keyboard. I have a Swiss german keyboard with Canadian English bindings. Thus it brings back my point. If he has access to the French keyboard then he would be in France and be referencing Google France.

Why am I being picky? Because I expected more from Google! I expected more because I thought they were geeks…

BTW I thought the monster.com add with the mounted moose hilarious, and the Doritos underdog ad was not bad.

Dick Brass: Microsoft’s Creative Destruction

Many of you know that while I use Microsoft’s products I am very critical of the management. Especially when news on Windows Mobile 7 come out that makes the Microsoft mobile OS seem like an iPhone.

Later this month, Microsoft will most likely unveil Windows Mobile 7 Windows Phone 7 at the Mobile World Congress. Rumours abound, and the latest set of rumours paint a rather dramatic turnaround for Microsoft’s mobile platform – no more multitasking, application distribution limited to official channels, and a whole lot more.

What I truly wonder is who the f**k made this decision? I mean really, 3 and a half years later some manager comes out with the decision to make their operating system look, and behave like iPhone? If this turns out to be true, this is not only lame, but grounds for firing! I said it back then, and will say it again. Microsoft should have chucked their mobile OS department quite a while ago.

But hey what do I know about Microsoft, after all somebody who was in Microsoft was just as scathing.

Microsoft has become a clumsy, uncompetitive innovator. Its products are lampooned, often unfairly but sometimes with good reason. Its image has never recovered from the antitrust prosecution of the 1990s. Its marketing has been inept for years; remember the 2008 ad in which Bill Gates was somehow persuaded to literally wiggle his behind at the camera?

While Apple continues to gain market share in many products, Microsoft has lost share in Web browsers, high-end laptops and smartphones. Despite billions in investment, its Xbox line is still at best an equal contender in the game console business. It first ignored and then stumbled in personal music players until that business was locked up by Apple.

Microsoft’s huge profits — $6.7 billion for the past quarter — come almost entirely from Windows and Office programs first developed decades ago. Like G.M. with its trucks and S.U.V.’s, Microsoft can’t count on these venerable products to sustain it forever. Perhaps worst of all, Microsoft is no longer considered the cool or cutting-edge place to work. There has been a steady exit of its best and brightest.

When I wrote my scathing set of articles of Microsoft it is that reliance on the past that concerns me the most. I would add another aspect to what happened since the 90’s. Nobody is scared of Microsoft! People laugh about Microsoft.

Take for example the tablet. Microsoft pioneered, but I am going to guess Apple will dominate it. What happened? Simple, Microsoft never made the Tablet PC unique. While Windows 7 and the tablet is pretty cool, there are still way too many apps that simply do not work with the Tablet PC. These apps are geared towards being used as regular PC applications.

In essence what has happened is that Microsoft has not forced their market to grow.

Apple is pretty clever that way. Apple by cutting off old platforms forces people to upgrade. We always hear that if Microsoft stops backward compatibility then it would be a death blow to Microsoft. I disagree because look at what Apple did, and it only enhanced their bottom line.

I had a long talk with an analyst and what he told me is that Apple takes a few problems and solves them very very well. Whereas other tech companies present technology and say, “hey you can solve problems with this right?”

Back to Dick Brass, what was Microsoft’s answer?

At the highest level, we think about innovation in relation to its ability to have a positive impact in the world. For Microsoft, it is not sufficient to simply have a good idea, or a great idea, or even a cool idea. We measure our work by its broad impact.

I say this sums up the problem of Microsoft in a nutshell. Instead of saying, “hey we help as many people solve as many problems”, they give a speech like Sheldon on “The Big Bang Theory.”

But Microsoft really misses Dick’s point as follows:

Now, you could argue that this should have happened faster. And sometimes it does. But for a company whose products touch vast numbers of people, what matters is innovation at scale, not just innovation at speed. And in response to Dick’s comment about Tablets and Office, I’ll simply point to this product called OneNote that was essentially created for the Tablet and is a key part of Office today.

The real issue is not to develop a custom app that can only be used on a single platform. But to make the other applications like Word, Excel, and Powerpoint behave like OneNote! For example, do you really thing Apple is going to release their Office suite (iWork) for the iPad as Office suite for the iPad plus an application suited for the iPad? No Apple is going to totally re-engineer their application so it works very very well for the iPad. Microsoft if you are reading this, this was Dick’s point! And you only just proved his point.

The iWork productivity applications that people know and love on the Mac — Keynote, Pages, and Numbers — have been completely redesigned for iPad. So you can create incredible presentations, word processing documents, and spreadsheets by touching words and images on the large Multi-Touch screen. Each of these apps has been designed specifically for iPad, with all-new features. So while they’re easy to use, they’re also the most powerful productivity apps ever built for a mobile device.

–http://www.apple.com/ipad/app-store/

I will say it again, to make Microsoft work, fire Steve Ballmer and anybody who has been at the company longer than 5 years!

Patrick Makes An Excellent Point

I am going to post Patrick’s comment in its entirety, because it is very insightful:

What’s your long-term on gold? As the half-life between bubbles gets smaller, we approach a 1987 moment most likely where not just extreme volume ratios but infrastructure drop the market. Remember in 2008 it was metals in Feb/March, Grains in April/May, Energy in June/July and then finally a “bubble” in dollars as everything finally couldn’t hack it anymore and unwound. Maybe we’re approaching something similar but bigger… might want some allocated gold receipts to fall back on when those banking and money market deposits seem no longer beyond reproach, as in Sept. 2008

My counter-point to this instance is that the CDS is gapping up to track the sell-off in bonds rather than leading it as the leveraged speculator theory might suggest. As in any gamma-inducing, high-speed, mass-correlation, volatile event, on scales as short as intraday or as large as multi-year, the force driving it is the closing of positions, not the opening of highly leveraged speculative positions. The speculative positions are often in the minority and benefit quickly from the excess of larger, longer-term position clusters being closed out in panic or, as the case is often these days, an automated panic-once-removed.

That, to my understanding, is how the market works, massive inefficiencies build up and then get flushed out, it’s as natural as accidental death or unplanned birth. Shutting down hedge funds isn’t going to do a damn thing to stop financial Armageddon, you’d just be taking away a small fraction of the contributing volume. The only thing that can stop financial Armageddon is an abandonment of fractional reserve banking for interest-free credit clearing, but considering the entrenched oligarchies involve, I suspect we’ll need the ultimate wash-out first.

Note, while shutting down hedge funds or banning them would be trivial and medio-fascist, preventing “banks” with access to deposits, fractional reserve lending terms, and the Fed’s ZIRP discount window from doing practically unlimited leveraged speculation and front-running is a different story, that’s endemic enough that it can really exacerbate things. Caps on AUM might be reasonable, my reading of the LTCM story was that they were not only too big to fail, but too big to succeed, their positions simply could not be unwound gently in the event of a margin call. Position limits are also worth considering. Let’s just not throw the baby out with the bathwater, speculation plays and important role in the market, it checks the madness of the herd and at the risk of those doing it.

I was not thinking of shutting down hedge funds. What I was trying to say is that hedge funds should step back and think a bit. They should study the behavioural aspects of this situation. I also completely agree with the last paragraph of Patrick’s statement. He nailed it on the head.

Regarding gold. I have always been one to pooh-pooh gold. But after long discussions with other professional traders I have come to the conclusion that when everything else in the debate is removed, you have to go for whatever is left no matter how ludicrous. And right now left standing is gold! I personally don’t invest in gold, but I can understand (unlike my previous snickers) those who do invest in gold. I am diversifying using currencies. Namely I have started to purchase Canadian dollars.

BTW Patrick feel like writing blog entries? If so email me christianhgross at gmail dot com.

Please Keep Selling the Euro Because It Will Only Strengthen Obama!!

As I have been saying before people are selling the Euro because of the worries regarding Greece. Folks, here is the interesting thing, most people in Euro land are not that concerned, whereas people outside of Euro land are.

Does that not seem odd to you? Should you not be asking why nobody in Euro land is concerned? Are the Euro land people that dumb? Notice how somebody appears to be concerned?

The Swiss Franc fell sharply against Euro and the Dollar very quickly. Such a moved could be motivated by an intervention by the Swiss National Bank to weaken its currency.
EUR/CHF jumped from 1.4635 to 1.4760 in 15 minutes to the highest price since January 20. But the pair is now pulling back and trades at 1.4720/25 at the moment of writing.

So why would the Swiss bank be intervening? Simple they don’t want a strong Swiss Franc. The Swiss bank likes to keep the Swissie in a certain range as it keeps things running smoothly.

But here is the biggest irony. Most likely everybody is jumping on the dollar long trade as a trade because after all Greece will collapse, and then Portugal, Spain and everyone else. However, it is only making the leaders of Europe excited. In 2008 Berlesconi and Sarkozy complained about the strong Euro.

"A very strong euro is hurting Italy’s economy. I will discuss intervening with the ECB with Sarkozy," Berlusconi said last week, referring to his hopes of forging a common front against the central bank with France’s President Nicolas Sarkozy, and possibly also with Spain. Berlusconi claims that the central bank’s policies have kept the euro too strong, squeezing European exporters out of world markets.

With a stronger dollar who do you think gets hurt? The American worker. Did Obama not say he wanted to grow exports? I ask how! American exports will be completely uncompetitive. So who do you think will call out for stronger speculation controls? Those getting hurt, namely the UK and the USA. Where this becomes really funny is that the UK and the USA have the biggest financial institutions. But the financial institutions in these countries are completely tone deaf! As they say, what goes around, comes around!

So PLEASE KEEP SELLING THE EURO! I live in Switzerland and have Euro land all around me. Me I am just laughing sitting on most of my cashed out positions. Remember at the beginning of Jan I said I was about to unload most of my portfolio. How much lower will we go? I am going to wait until the next earnings season to see the damage of the change in the strength of the US dollar.

The Amazon Supporters are in Denial!

I keep hearing on CNBC,

“You can have more than one e-readers, and people will remain loyal to the Kindle…”

Oh REALLY?

I can remember words like this. Actually seriously I can remember it very very well, and it was painful for me. Two tickers illustrate my pain; GRMN, and TOM2. These two tickers were the top of the line GPS makers. Wind back the clock, and around 3 years ago these two companies were the big dogs.

But then something happened; Apple came out with GPS included. We GPS supporters who owned Garmin and TomTom were in denial and said, “oh this is a fad and will not kill off these two companies with good balance sheets”.

Then Google came out with free GPS, and now Nokia has said they are giving GPS away for free! I eased out of my positions for the past year, and when Nokia said that they were giving away their maps I cut my ties with my last shares of TomTom.

This will happen with the Kindle because the onslaught is about to start. Do you really think that the iPad is the last draw? Microsoft is coming out with a the iPad competitor via HP in the summer. These two companies will destroy the Kindle and the Amazon business model in books, music, and DVD’s.

So get over your denial and see where the world will be going….  Trust me I have seen this with GPS and it is not going to get easier for Amazon…

Thank-you Apple For NOT Supporting Flash!

Adobe is crying that Apple is not supporting Flash on the iPad. Apple, I want to thank you that you are not supporting it. Sure I miss on certain applications, but thus far it has not hampered my browsing experience.

By Rochelle Garner
     Jan. 28 (Bloomberg) — Adobe Systems Inc., maker of the
Flash video software, said Apple Inc. isn’t supporting Flash on
its iPhone and the new iPad, making it difficult for Apple’s
customers to view 75 percent of the world’s Web sites.
     “It appears that Apple is continuing to impose
restrictions on the relationship between content publishers and
consumers,” Adrian Ludwig, group product marketing manager for
San Jose, California-based Adobe, said yesterday in a blog post.
“Without Flash support, iPad users will not be able to access
the full range of Web content.”
     Adobe Flash provides video and animation on about three-
quarters of the world’s Web sites, according to Adobe. It’s
installed on about 98 percent of Internet-connected computers.
Apple Chief Executive Officer Steve Jobs said in March 2008 that
Adobe’s Flash software is too slow to be useful on the iPhone.
He said the mobile version of Flash “isn’t capable enough to
actually be used with the Web.”

Want to know why I hate Flash? Because of advertisements! Advertisements are completely annoying because they have this habit of sucking out all of the CPU that I have available. It is not just a little bit annoying, but a whole lot annoying. And without Flash I don’t have that annoyance!

So THANK-YOU Apple!

Adobe, smarten up!

Off Topic: Barefoot Running…

I just saw a report that said barefoot runners do less damage to their body, at least according to the study.

Runners who eschew shoes may be less likely to do serious injury to their feet, because they hold their feet differently, Daniel Lieberman of Harvard University in Cambridge, Massachusetts and colleagues found.

Writing in the journal Nature, they said runners who wear shoes tend to hit the ground with their heels first, whereas barefoot runners put the balls of the feet down first.

They talked about this study in Germany and all of the experts said the ideas were crazy. I want to add my own experiences. About 8 years ago I was jogging, and then one day my knee decided to become stiff. I stopped jogging for a couple of days and it went away. But then a year later I jogged and exercised again, but instead of the usual stiff knee my knee started to expand like a balloon. I could barely walk.

I went to my doctor and he instructed me to see a physiotherapist. That sort of helped. But it did not get rid of the pain in the immediate. So I then decided to take things into my own hands. The first thing I did was get a knee brace. Whenever I went walking I wore a knee brace, and with a year of wearing my knee brace my knee finally stabilized. So I decided to jog with my knee brace and found out things went back downhill. Albeit not as badly.

It was then I decided to figure out what was wrong with my jogging, since I actually prefer to jog. Upon doing plenty of research I learned that the way we jog today is wrong. We overstress our joints because we keep pounding our joints the same way over and over and over again.

The recommendations were two fold:

1. Jog using the barefoot technique which means strike with the ball of the foot first.
2. Jog on country terrain, not city terrain. City terrain is too same, and joking in the countryside forces our joints and muscles to act on the alternating terrain.

I did both of these things, and a year later I don’t need a knee brace anymore. These things actually work, and anybody who says that barefoot jogging is a dumb idea should explain why I can actually jog again.

BTW I did go to a professional jogging store and bought the best shoes for my condition. And it did not help whatsoever! Though I can understand why the shoe industry does not want to hear about barefoot jogging. You don’t need an expensive shoe, just well trained calves. An additional bonus came from my wife. She used to think I had horrible legs, now she says I have nice legs. So no more Mr Chicken legs for me…

Alert: I Take Everything Back About Apple

Wow, all I can say is wow! The iPad is quite impressive, and they nailed the prices. Good going Apple. Will I buy Apple shares? Nope, but I will probably buy an Apple iPad…

Pullback is Due To Obama, and Politics! [Sarcasm]

Oh yes, the pullback is due to the “politics” of the situation. Yes, yes let’s all delude ourselves on that issue.

After all was the election of Scott Brown not supposed to cause a market rally? John Stewart himself talks about it. (Fast forward to 7:30 minutes into the show).

As Jim Cramer says, “Just the truth [that the market will go up due to the election of Scott Brown]”. Of course we know happened, the market has completely collapsed and is heading downwards. Yet the media seems to have forgotten that.

For those readers you will know that I have been complaining about the bubble and have been easing out of positions. The selloff started about 2 to 3 weeks ago. It was at that time I was being knocked out of stocks. Now I am being knocked out 4 to 5 stocks per day. Right now I am 81% cash. If one more day like this happens I will be about 90 to 95% cash.  So why am I being knocked out? My stocks are very high beta, and I am being knocked out with 50% to 150% gains on the stock.

Will this be a full correction or minor blip? No idea, but I am now looking for bargains, of which there are NONE! Well, not true, I invested in one stock WNR. But my Bloomberg scanner showed a grand total of 6 stocks!

Quick question, to all of you, the company Hot Topics seem to be a play. Anybody know anything about this company. I am tempted, but just have not pulled the trigger.

That’s why I say this selloff and its excuses of “politics” are just that excuses to sell! Because after all, as Jim Cramer said, with the election of Scott Brown the market SHOULD HAVE GONE UP!  And anyone that says otherwise is full of it…

Starbucks Red Flags…

So I saw the earnings of Starbucks and thought, “really? That well? Really?”

And I dug into the earnings transcript and found something that made me think otherwise.

Favorable commodity costs and sales leverage in relation to our occupancy costs have also contributed to the improvement.

…

Moving now to results in our international segment. International total net revenues increased 19% to $591 million in the first quarter of fiscal 2010 driven by favorable foreign currency translation, the acquisition of the France market and positive comparable store sales of 4%. The comp growth was driven by a 4% increase in traffic while the average value per transaction remained flat compared to last year.

Ok, that may be the case, but what are you assuming?

With respect to commodities and foreign currency we except the balance of the year to be flat compared to last year with unfavorable dairy costs offset by favorable coffee costs and foreign currency. This compares to a favorable impact of roughly $0.01 in the first quarter driven by both commodities and foreign exchange.

Ok so dairy will be unfavorable, but coffee and foreign currency will be favorable? Really? Look around and smell the coffee [wink, grin]. Coffee has gone up, and the USD is going up. It is not going to be favorable for you, unless the USD decides to change direction.

Thus these are two red flags for me, and it makes me wonder what else is a red flag at Star Bucks…