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Great blog post on investment by Mark Cuban...

http://www.blogmaverick.com/entry/2252572946170125/

Check it out.  Talks about a book called "The Number" by  Alex Berenson.  I thought I was hardened and cynical enough to know all the dirty tricks played by insiders, but Mark let slip a few that I didn't know (or rather, were obvious, but slipped under my radar, so it's the same as not knowing).

Crimson
Thursday, July 22, 2004

Excellent article. Thanks.

www.MarkTAW.com
Thursday, July 22, 2004

Err yes.  This quote is interesting...

"We talked about token ring topologies that didn’t work on 10BaseT. "

Flim flam.
Zero credibility.

Simon Lucy
Thursday, July 22, 2004

The book referred to was published a while ago and the author has a whole series, according to Amazon.

Nemesis
Thursday, July 22, 2004

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/view/

Blogs and online videos are contributing to the culture of enlightened distrust. Our system works through people pushing for their own best interest. In politics, business, etc. The problem is when people act irrationally, thoughtlessly aligning themselves with people who aren't incentivized to act in their interests.

You can see that a lot on forums, in fact. People talk about Opensource, which is not aligned with most users or businesses. Also Microsoft no longer seems aligned with rewarding certain businesses which build on Windows. Essentially, a lot of talk is about getting people to act irrationally by aligning with the poster's views. I don't even think it's conscious. (But forums do help, by getting people in touch with disagreers.)

Systems analysis is quite interesting, looking at vicious cycles due to bad incentives. People like Jerry Weinberg and Richard Gabriel seem to talk about it quite often.

BTW, this is why it's a fine line between an ad hominem attack, and pointing out the poster's incentive to post.

Tayssir John Gabbour
Thursday, July 22, 2004

"Our system works through people pushing for their own best interest. In politics, business, etc."

it always amazes me when people regurgitate this garbage.

every system works best when there is balance...that means when there are people acting in their own best interest, people acting in the best interest of others and people acting for no reason at all.

Look at a marriage....2 people in a marriage only pushing for their *own* best interests results in divorce (unless they are incredibly lucky in having their best interests exactly aligned)

The marriages that work best have both individuals watching out for their own interests *and* watching out for the best interest of the other partner with equal ferocity.

The same can be said for businesses, for households, for neighbourhoods and for entire societies.

Selfishness as a way of life is genuinely stupid and destructive of both society and the individuals practicing it.

FullNameRequired
Thursday, July 22, 2004

i may pick up the book just 'cause of the blog...

he's got a good writing style.  i normally find stocks to be dead boring, but i read through his article without any problem...

Kenny
Thursday, July 22, 2004

He makes a lot of good points, especially about the increasing tendency of insiders to steal money from outsiders by diluting their shares through options and other awards fro insiders.

What he fails to mention is that his view of the stockmarket is a result of the stock bubble of the 1990s.  This was an unusual situation adn we are now living in the backlash.  I'm not saying insiders no longer skim; just that they are able to do it at a more historically average rate than during the 1990s.  Anyway, these schems tend to fail if pushed too far because they are ultimately reflected in the share price (once all the accounting tricks to hide that are revealed) and then investors look elsewhere.

His idea that a non-dividend paying stock is the equivalent of a baseball card is a bit stupid though.  The assumption is that eventually a company will mature and have to pay dividends and in the mean time the company is intrinsically worth something because it could pay dividends.

name withheld out of cowardice
Thursday, July 22, 2004

Keep in mind:  blog author != book author.

Greg Hurlman
Thursday, July 22, 2004

"His idea that a non-dividend paying stock is the equivalent of a baseball card is a bit stupid though. "

I think he really hit it right on.  If a stock doesn't pay dividends then what value does it have?  None, unless you can sell it to someone else.  Just like a baseball card.

Rammalamma Dingdong
Thursday, July 22, 2004

"it always amazes me when people regurgitate this garbage."

FullNameRequired, for one thing, blow me.

Anyway, you do have a point, but I'd respond that you don't know about how such systems deal with negative externalities. Sometimes it doesn't work. Sometimes it does. People who study systems try to figure out how to incentivize people to work for the best of the system as a whole, when possible.


"2 people in a marriage only pushing for their *own* best interests results in divorce"

Why'd they marry in the first place, if they didn't think a stable marriage was in their best interest? So if they have any foresight at all, they'd figure out what they want, and see if a good marriage outweighs their other interests.

And you know what, some people don't know what they're getting into when they marry, and if they made a mistake, better divorce sooner rather than later.

Same with this message. It would be best if I accepted your words and responded rationally, but I'm still recovering from a bad coding session, and it makes me feel a little mentally healthier to call you a shoot-first buffoon who doesn't let the mental gears turn a bit before vomiting to screen. ;)

Tayssir John Gabbour
Thursday, July 22, 2004

"The assumption is that eventually a company will mature and have to pay dividends and in the mean time the company is intrinsically worth something because it could pay dividends."

I think the baseball card analogy stands. No regular dividends means that your stock is only worth what someone will pay for it ‘right now’. A public corp is under no circumstances obliged to issue dividends.  It took Microsoft how long to start paying dividends? Of course, he’s not saying that corps offering no dividends have /no/ value, just that they might not be as good a return as if they did, which makes sense.

Captain McFly
Thursday, July 22, 2004

Read Mark's latest article on the market:
http://www.blogmaverick.com/entry/2375049848426815/

boy is nuts

ed
Thursday, July 22, 2004

Bigger Fool Theory:
Buy a stock and you'll make money as long as some other fool is willing to buy the stock from you at a higher price in order to sell it to an even bigger fool at an even higher price.
-- Crash, Arbel & Kaff

Tapiwa
Thursday, July 22, 2004

"The assumption is that eventually a company will mature and have to pay dividends and in the mean time the company is intrinsically worth something because it could pay dividends."

There is NOTHING that says a company "has" to pay a dividend.  Ever.

Steamrolla
Thursday, July 22, 2004

"Microsoft no longer seems aligned with rewarding certain businesses which build on Windows."

I'm not certain what you mean by this or where it came from?

Philo

Philo
Thursday, July 22, 2004

Certainly not in the week that Microsoft announces its issuing a special dividend.

Simon Lucy
Thursday, July 22, 2004

Philo

Not an ad hominem, but please don't defend MS even when evidence to convict exists. I think there are clearly demonstrable areas where Microsoft has moved into markets that were previously the domain of ISVs.

I am possibly the most capitalist person on this forum, and I am not remonstrating MS. Their goal is to make money, and if they see a market they think they can do that in, then they should. I just think it is a fine line to sell an OS, and dev tools, in theory to foster apps on that platform, when the tendency is to move into a market when an ISV has done the legwork in creating it.

One of the reasons for Windows' success is the sheer number of apps. When you begin to be percieved as predatory in any successful market defined by some ISV, people will have disinsentives to break new ground.

You piss off enough people, and all the innovation will happen on other platforms. A trickle at first, but at some point someone will develop that killer/must-have app on some platform (or it might be series of companies/individuals), making the switch from Windows a compelling move.

When that happens, MS is toast.

In making more money now, they might just be killing the goose that laid those eggs.

Tapiwa
Thursday, July 22, 2004

> If a stock doesn't pay dividends then what value does it have?  None, unless you can sell it to someone else.  Just like a baseball card.

This is utter bullshit.  It is called equity.  Read Buffet.  Even if Microsoft didn't pay a dividend, their stock would still have value.  If for nothing more than to get hold of their massive cash horde.  That doesn't even count their IP, distribution chanels, etc., etc....

People that believe this should stay out of the stock market. 

Consider this Onion-esque headline from 1999:

Investor Christopher Baus has taken control of all of Microsoft's public shares this morning.  The stock was trading at $0.00001. 

According to Baus he, "had a hundred dollars lying around.  I was debating whether or not I should take my take my girlfriend to dinner.  I decided to buy Microsoft instead.  The first thing I did as the owner of Microsoft was fire all the programmers, and Open Source Windows and Office."

Some considered it a radical move, not Baus.

"I figured what the hell.  I can live pretty fat on $40billion, so decided to just call it good.  I put a Tahoe Lakefront into escrow this morning.  Life is good.  I was fortunate, that nobody saw any value in these non-dividend paying tech stocks.  I think $100 was a pretty good price for a company that generates a few billion in cash annually.  I'm what you call a value investor." 

christopher (baus.net)
Thursday, July 22, 2004

"Anyway, you do have a point, "

:) I do, dont I.

"but I'd respond that you don't know about how such systems deal with negative externalities."

thats an interesting phrase.  <g> entirely meaningless in and of itself, but implying such a depth of knowledge.

Lets talk about how such systems deal with negative externalities then....perhaps you could fill me in?

"People who study systems try to figure out how to incentivize people to work for the best of the system as a whole, when possible."

why? 
you said:
"Our system works through people pushing for their own best interest. In politics, business, etc"

so surely that implies all that we need to do is 'incentivize' people to act in their *own* interests....isn't that what makes our system work?

"Why'd they marry in the first place, if they didn't think a stable marriage was in their best interest?"

come on, that question so clearly focuses on one small part of the truth that even you must see it.
Relationships are hugely complicated things, and they depend entirely on 2 people *not* pushing only for their own best interests.
The same thing is true of business partnerships, households, communities, neighbourhoods, cities and governments.

where would we be if our great american leader focused only on pushing for his own best interests?

"So if they have any foresight at all, they'd figure out what they want, and see if a good marriage outweighs their other interests."

heh, spoken like a man with absolutely no experience in marriage.

"some people don't know what they're getting into when they marry, and if they made a mistake, better divorce sooner rather than later."

yep, but that has nothing to do with the topic at hand, surely?


"it makes me feel a little mentally healthier to call you a shoot-first buffoon who doesn't let the mental gears turn a bit before vomiting to screen."

god knows I like to help out fellow programmers :)  let your abuse fly.

(but dont let it distract you from the reality...your point about the system working best etc etc is *entirely* indefensible.)

FullNameRequired
Thursday, July 22, 2004

"I am possibly the most capitalist person on this forum"

I might fight you for that title.  ;)

You make a good point, though - even if Microsoft is not moving in on markets that Windows-based ISVs have proven out, there certainly is a percetion that they are doing so, and that is sufficient to damage the market for Windows-based development.

Are you concerned about any markets in particular?

www.ChristiopherHawkins.com
Thursday, July 22, 2004

"thats an interesting phrase.  <g> entirely meaningless in and of itself, but implying such a depth of knowledge."

If you think so. <shrug> If you think people always act in their best SHORT-TERM interests, I can't help you. I know many people who disprove your idea.

I feel better now, btw, just had to have a break. Thanks. I don't think your post contradicts mine, just you don't see where they intersect.

Tayssir John Gabbour
Friday, July 23, 2004

(Incidentally, do a search on "negative externality" and educate thyself. And if your marriage is so codependent and frustrating as you mention, I forgive you for your insulting nature. I mean, I was in a bad mood for only a day, but with a marriage like yours, I'd be a perpetual bitch, just like you. ;)

Tayssir John Gabbour
Friday, July 23, 2004

" If you think people always act in their best SHORT-TERM interests, I can't help you. I know many people who disprove your idea."

what on earth does this have to do with the topic under discussion? 
your statement was:

""Our system works through people pushing for their own best interest. In politics, business, etc""

thats clearly nonsense, the system works best when things are more balanced, an entire country of people pushing for nothing more than their own interests has absolutely no future.

"I don't think your post contradicts mine, just you don't see where they intersect."

I know what you are saying, Im just pointing out that it is *wrong*
the system does *not* work through everyone pushing for their best interests, both in reality and in theory it works through different people pushing for different things...some for their own best interests, some for the best interests of their children, some for the best interests of their schools (often to their own personal detriment at all levels) and so on.

The world where everyone is striving for their own personal interests and thereby improving the world around them for all is a fantasy world created by right-wing zealots, it does *not* exist in reality, and any half-way intelligent appraisal of its theory shows it to be a nonsense :)

(no offence meant, of course...)

"And if your marriage is so codependent and frustrating as you mention, I forgive you for your insulting nature. I mean, I was in a bad mood for only a day, but with a marriage like yours, I'd be a perpetual bitch, just like you. ;)"

heh.  you'll always be my bitch old friend.

FullNameRequired
Friday, July 23, 2004

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