What's with the tech sector?


#121

Men in their caves with no interest in the company outside their little box don’t have a clue what the company’s financial position is or how it interacts with the rest of the economy shocker…

Men in their caves feel undervalued because only they can understand the awful code they or one of their equally evil twins wrote shocker…

Programmers (let’s call us what we are) - dumb as a box of spanners outside our area…


#122

Early days yet…87% of stock does not an successful acquisition make.

From someone who has been in the business for almost thirty years. (P.M me the next time you’re in NorCal and I’ll give you the guided tour and history of the Valley. Pretty much everything between 101/280 in SoMa to 85/101 south of SJ. Seen it all since the mid-80s) Twenty years investing? Never thought of actually doing something productive? Like shipping useful products that people actually use? You know, activity with real economic utility. Rather than trying to guess which numbers go up or down. Always trying to elbow your way to be near the front of the herd every time it spooks and heads off in another semi-random direction. Not exactly a socially redeeming activity…

So Hurd bought Palm right before he was ousted… For a lot of money. And where are they now a few years later? Shut down and dispersed. And the money? Another billion dollar write down… Still not worked out that what happened with the Palm acquisition , an acquisition that made some sense, is more likely to happen with Autonomy, an acquisition than makes no sense what so ever? Except to “investors” like you, it seems.

We about to go through the biggest software / platform shift since the late 80’s. The world will be very different place in five years time. About the same level of changes as between 1984 and 2000. Unlike the dot.com / web 2.0 world there is some very real money to be made out there (not just rent extraction) as whole bunch of market niches get opened or reopened in a way that they have not in a long time. Brand names will survive (they usually do) but a lot of the organizations behind them will not survive in their current form. Think IBM in 1990 v IBM in 2000.

Its going to be a very exciting decade in the Valley and the VCs dont have a clue about whats going on. Way behind the curve as usual. But that’s their nature. Only invest in something if everyone else is doing it. Which is why investors are always the last people to know what is actually going on.

As for Autonomy. There will be lawsuits. There always is. Read the 10Q’s for an idea of just how many lawsuits there are that outsiders will never have heard of. Plus all the other legal wrangling that never even gets to court. The brand name will probably be around in 5 years time. Just like the name Digital was still around five years after the acquisition. But the components? Shutdown, sold-off or so restructured as to bear little relationship to what was bought. The Interwoven and Verity product lines will survive in some form no matter what happens. Real value there. Maybe $2B valuation max. The UK operations spun off, shut-down or maybe a management buy back. Watch the HP 10Q’s for a bunch of EBay/Skype level write-offs. Probably $10B (minus tax angle - not insubstantial in these situations) The losses might be useful to HP if they have other accounting sins they need to bury.

…and now back to our regular programming. Why nobody in my company loves or appreciates us nerds…


#123

Um, yes it does.


#124

That made me smile. Not just because you’ve made presumptions about me, but because it echoes the sentiments of some that are blinkered to the role of investors and can’t fathom the fundamental difference between a plain, vanilla, long-term, long-only strategic investor/partner and a highly-leveraged, short-term, high-frequency trading hedge fund.
Is that a serious offer to meet on my next visit to SF Bay area? If so, I’ve had less vitriolic ones…. :smiley: In the meantime, I’ll try to answer your questions and keep it nice.

I’ve actually been in IT for most of my working life. I started out as a software developer and had a few years of moderate success at the business end. I’ve worked with many Silicon Valley big-names, but there is much in the IT world beyond that, even in the US. And, after meeting some real gems in the smaller, lesser-knowns, I became hooked on the small caps.
My “twenty years investing” were a part-time activity for most of that. I made a small fortune in the late 90s and lost most of it in the bust. Gut-wrenching though it was, it made me more determined to use the experience. I quit my job, went back to school and to cut the story short, I’m now on the board of an investment firm.

Many at the sharp end of IT don’t appreciate the unique insight they have into future industry trends and how they can apply that to successful investment. They are more than a few steps ahead of The Street and applying that knowledge to investing your hard-earned doesn’t mean you’ve crossed to the dark-side. I recommend Kenneth Fisher’s early 8os book, Superstocks. Fisher is a big believer in investing in what you understand best.

In the primary market, I’ve put my own and other investors money into dozens of projects, helping to create jobs and further economic activity. It’s a tough business and many haven’t worked out. However, it’s the performers that provide the returns and capital for other projects. You might not like it and think it not “socially redeeming”, but that’s how it works and NorCal would look very different today were it not so.

As we all know, the current environment makes access to capital very tough. More worryingly the banks are pulling the plug on potentially successful, early-stage businesses at first signs of a glitch. The role of equity investors is especially important now.

I can’t disagree with your thoughts on industry developments, jmc. There are huge changes afoot and not just in software. The effects will be deep and far reaching. Exciting, isn’t it? 8DD This happens in the Technology industry every few years – the cycle of innovation is incredibly disruptive and economic commentators focusing on the gloomy macro-economic picture are missing this point, as they have before.

Ah, those nasty investors. Of course, there are good ones and bad ones. Just like IT companies. VCs don’t have a clue? In my experience, they can to be more savvy than some CEOs. I know how disliked investors can be - it’s tough to walk away from a business failing to deliver, despite some great people and products, and having previously shown so much promise.

My focus is outside the Valley, mainly because that’s where most others are looking. I believe one of the key characteristics of the current boom (I’m calling it that) is that success stories will emerge far and wide.

I appreciate what you do, even if it’s not reciprocated. :smiley:
f


#125

That’s a really interesting insight flash. Thanks.


#126

Not long for Yahoo now…Essentially up for sale since Bartz was let go. I don’t believe the likes of Vodafone are interested. Names are offered to the media to help bid up the price.

adweek.com/news/technology/microsoft-considering-yahoo-takeover-135517


#127

online.wsj.com/article/SB1000142 … stpop_read

By RACHEL EMMA SILVERMAN

Union Square Ventures recently posted an opening for an investment analyst.

Instead of asking for résumés, the New York venture-capital firm—which has invested in Twitter, Foursquare, Zynga and other technology companies—asked applicants to send links representing their “Web presence,” such as a Twitter account or Tumblr blog. Applicants also had to submit short videos demonstrating their interest in the position.


#128

Yes but programmers are still in demand and their salaries don’t seem to be falling.


#129

online.wsj.com/article/SB1000142 … stpop_read

Average Valley salary exceeds $100,000


#130

Blow out numbers from Apple. Now has nearly $100bn in cash. They should buy Ireland.


#131

ft.com/cms/s/3/3646686e-46e2 … abdc0.html
FT:LEX


#132

Seems to me that Apple’s business model is inherently dishonest.
I don’t hear them trumpeting acquisitions of other companies regularly. It isn’t something they seem to do.
It appears they appropriate whatever they want and worry about litigation after.
I know my former company were almost obliterated from existence when Apple appropriated their IP and even though Apple lost the legal case they won the war.
It appears Jobs learnt well from his humiliating defeat to Microsoft.
Break the rules to take the market and worry about the legalities afterwards along with patenting non-novel technology to put competitors in straight jackets. I would say that Apple in future will be the greatest disincentive to innovation that there will be.
A small player can’t innovate. If they do, Apple will appropriate it, take their market, drive them out of business and less than 50% of the time worry about litigation after.

As you can guess I don’t like Apple and don’t own any of their products.


#133

Well the current Apple is the basically the cult of Jobs. And he was easily the most profoundly unethical cunt that the business has ever produced.A real achievement considering just how many shits there are in the business. He learned nothing from Gates. Jobs was born a sociopath. From the very beginning of Apple he was utterly amoral. (See story of how Jobs tried to steal Woz’s share of the company before Markkula stomped him) So little or no real mourning for Jobs passing here in the Valley. Except among marketing folk. Although I’m one of the few willing to utter in public what so many of us think in private. We’re glad the nasty little fucker is dead. A form of poetic justice that he died prematurely because of his own overweening arrogance.

Apple under Jobs was (and still is) totalitarian to a degree that Microsoft would never have dared attempt even at the height of their arrogance at the end of the 90’s. And just like MS pre Anti Trust they have that winning combination of arrogance, laziness and utter technical incompetence. At the moment Apple are even more unpleasant to deal with than MS people at the height of their cockyness. The last time I saw a company so profoundly hated by everyone in the business was Real Networks. A company so unpleasant to deal with that even their customers wanted MS (their main competitor at the time) to beat them. And where are RN now? Living off a legal settlement with almost zero market share.

Apple are well on their way to getting their clock cleaned legally, the same way MS did by the Anti Trust case. It may take a few years for the ball to get rolling but one day Apple will get their inevitable comeuppance. For starters the way they implement the App Store is profoundly illegal on several levels. The case law covering this going all the way back to the original NCR case and confirmed by the various IBM cases over the decades. Watson Snr. (who later went on to found modern IBM) almost went to jail in the NCR case.

They’ll coast for a few more years and when the end of the current incarnation comes it will be sudden and precipitous. And will be cheered on with great gusto by those of us who remember what a wonderful company Apple used to be. By this stage Apple fully deserve to be destroyed. It is a profoundly malevolent organization.


#134

Has anyone looked at the Facebook IPO? Pretty eye-watering valuation, trading at over 100x earnings. Subscriber growth is also slowing down - allfacebook.com/facebook-growth-2012-01


#135

The bolded part is bit mean spirited, although I have plenty of empathy for anyone whose opinion of Jobs is like Larkin’s of John Coltrane.


#136

Not so fast Madness of Crowds…
huffingtonpost.com/william-k … 44410.html


#137

I still think wishing a man dead is a little extreme. Jailed for H+S lawbreaking, out of the electronics business, whatever, fine. I’m just not hot on homicide.

Just my feelings.


#138

nytimes.com/2012/02/02/techn … technology


#139

So much for Steve Jobs destroying developers…


#140

4bn to 466k developers, i.e. less than 10K a piece, over how many years? And how much money went back from developers to apple in adverts?

I suspect there are less than 5% of that 466,000 number making anything like a full-time salary from it.