Friends are going increasingly to cash. They fear a significant pullback after the last six months’ heady rise. Caution is in the wind.
Entrepeneurial opportunities abound. But entrepreneurs don’t. Here’s this week’s list of why intelligent, energetic people don’t become entrepreneurs — all the reasons I’ve heard in recent days.
1. Risk. “Starting your own business is risky.” Working for a jerk is less risky, I ask?
2. No money. Your family and friends have money. So do your doctors and dentists. Fact of life: They’ll be less annoyed with you if lose their money than if you become successful and they didn’t participate.
3. I get a regular salary. Whoopee!
4. No time. No energy. Plenty of other nonsense excuses.
I landed in Vegas at 3:00 AM east coast time. Vegas is amazing. From the air: an oasis of lights in an otherwise pitch black world. On the ground; Highways, bridges and tunnels. And lights. They’ve cleaned this place up since I started coming here in the 1970s. It’s family entertainment.
Talking of family entertainment: Playboy is the biggest selling magazine on the Apple App Store. 99 cents an issue. A bargain. One thing is missing: nudity. Apple won’t allow nudity on the iPhone and the iPad.
Buffett on the U.S. Vanity Fair, February, did a short interview with Warren Buffett on who his successor might be. No answers. Except that Berkshire Hathaway would go on long after Warren Buffett had gone on.
Rivaling Buffett’s confidence in Berkshire Hathaway is his faith in the United States. “We had four million people here in 1790,” he tells Vanity Fair. “We’re not more intelligent than people in China, which then had 290 million people, or Europe, which had 50 million. We didn’t work harder, we didn’t have a better climate, and we didn’t have better resources. But we definitely had a system that unleashes potential. This system works. Since then, we’ve been through at least 15 recessions, a civil war, a Great Depression.. All of these things happen. But this country has optimized human potential, and it’s not over yet. It’s like what’s written on the tomb of Sir Christopher Wren: If you seek his monument, look around you.”
For the entire interview, click
here
.
Goldman’s brilliant Facebook coup. First, they didn’t offer me, one of their clients, any shares in Facebook. Second, had they, I wouldn’t have taken them. I’m off illiquid investments that have long lockups, which typically stretch into the next boom and bust cycle (and with my luck, the bust part of that cycle).
Goldman did good for itself. The $450 million that it invested is trivial. If it brings Facebook public, it can easily earn a 7% underwriting fee. That will be at least $525 million if you assue Facebook will be valued by then at $75 billion. From there, the fees just start . Not to mention the 4% fees from selling off some of the Facebook shares to some of Goldman’s high net worth clients. Plus the 0.5% a year “management” fees to manage nothing. Plus. Plus.
Am I jealous of Goldman’s brilliance? Yes. Do I begrudge them their fees? No. They earned them by coseying up to Facebook management. Heck, that’s what investment bankers are meant to do. That’s their business.
Now to the next issue. Is Facebook actually worth $50 billion? Measured the traditional way — profits multiplied by say 12 times — it’s nowhere near worth $50 billion. It will be a while before Facebook hits even $1 billion in annual profits.
The theory is that Facebook hasn’t even tried to sell advertising — its source of revenues. Its computers are so powerful, they will learn everything about you and categorize you as the perfect target for some product. Well, they haven’t learned much about me. The ads they’re running on my Facebook page last night were for: Flat abs tip, coversations with myself from audible.com, 90% off luxury (fake replica) watches, 3 foods kill belly fat, and best men’s pants.
None of these got my juices flowing. And based on that sample of one, I figure that seriously “monetizing” Facebook will be a serious uphill task.
Contrast that task to Google. You search for a Canon G12 camera. Google throws all the retailers peddling the camera up on screen and then charges the one who gets the clickthrough 50 cents, irrespective of whether they sell anything.
Facebook’s roots stem from the libidos or horney college men trying to seduce young ladies. It’s morphed into more benign forms of social networking. Single under-30 year olds might find joy in Facebook. But a xenophobic 68-year old happily-married male (i.e. me) finds his limited social networking to be a decided blessing. Why there are actually days in my exciting life when my phone never rings. Even the Florida bond salesman has given up on me.
Put my skepticism to one side. If Facebook is worth $50 billion with 500 million “subscribers,” it will be worth $75 billion in six months with 600 million subscribers. And Goldman Sachs will look like a genius. I bet Goldman will engineer to get rid of all its shares on the IPO — irrespective of the “lockup” period.
If you are on Facebook, be warned: You have no privacy. Zilch. Nada. Despite that Facebook maintains. A teacher got fired because of stuff critical of parents and students which she wrote on a “private” Facebook page. Turned out everyone could and did read her burblings.
Useless AT&T. AT&T’s 3G, 4G, 5G or whatever they’re calling today, is useless. The only way you can pick up and send emails is through WiFi, which, fortunately, the iPhone will use — when WiFi available. I’m sitting on the tarmac at La Guardia Airport trying to send one miserable, short email. My phone is doing its twirly thing, telling me it’s sending and sending my one email.
I finally got it to send by using my trusty Verizon MiFi unit. The iPhone will use Verizon’s MiFi as its’ WiFi. Amazing technology.
Bad racial profiling
An Italian, a Scotsman and a Chinese man are hired at a construction site. The foreman points out a huge pile of sand. He says to the Italian guy, ‘You’re in charge of sweeping.
To the Scotsman he says, ‘You’re in charge of shovelling.’
And to the Chinese guy, ‘You’re in charge of supplies.’
He then says, ‘Now, I have to leave for a little while. I expect you men to make a dent in that pile of sand.’ So when the foreman returns after being away for a couple of hours the pile of sand is untouched.
He asks the Italian, ‘Why didn’t you sweep any of it?’
The Italian replies, ‘I no hava no broom. You saida to the Chinesea fella he a wasa ina charge of supplies, but he hasa disappeared and I no coulda finda him nowhere.’
Then the foreman turns to the Scotsman and says, ‘And you, I thought I told you to shovel this pile.’
The Scotsman replies, ‘Aye, that ye did laddie, boot ah could nae get meself a shoovel. Ye left th’ Chinese gadgie in chairge of supplies, boot ah couldna fin’ him neither.’
The foreman is really angry now. He storms off toward the pile of sand to look for the Chinese gent.
Just then, the Chinese man leaps out from behind the pile of sand and yells, ‘SUPPLIES!!!!’
Harry Newton who is spending a little time with his son Michael at CES this weekend. So far, all the news reports of new products show very little true innovation. This is The Year of the Tablet. Last year’s show was The Year of 3D TV. That didn’t pan out. Consumers didn’t buy 3D TVs. I suspect that this year they’ll buy Apple iPads but few of the ones from every computer and PDA maker and their uncle, including BlackBerry — which requires you to tether your BlackBerry tablet to your BlackBerry PDA for you to get contacts and (I believe) your calendar.
I messed up the spacing on this morning column. It looks squashed. Apologies. Not easy to fix.
Harry, I think our friend Warren is being a bit disingenuous. Comparing the America today with the America of 230 years ago is like comparing apples with oranges. 230 years ago we were a rapidly developing economy with MASSIVE resources and opportunities per capita just waiting to be exploited. We also had a very tiny federal government that stayed out of the way of entrepreneurial activity and foreign wars.
Today, we have a bloated, indebted government working in collusion with giant corporate collectives while over- regulating and stifling entrepreneurial activity. I think we have more in common with 1900 England- a great empire in decay.