{"id":5417,"date":"2011-01-14T09:11:33","date_gmt":"2011-01-14T14:11:33","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=5417"},"modified":"2011-01-17T06:55:48","modified_gmt":"2011-01-17T11:55:48","slug":"diversification-is-a-great-idea-but-it-comes-at-a-major-cost","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=5417","title":{"rendered":"Diversification is a great idea, but it comes at a major cost."},"content":{"rendered":"

Monday, January 17, 20111. <\/strong>Exchanges are closed in the US in celebration of Martin Luther\u00a0 King Day. I’ll see you tomorrow. Meantime, watch David Einhorn be interviewed by Charlie Rose. It’s a great interview. Click here.<\/strong><\/a><\/p>\n

Friday, January 15, 2011. <\/strong>My friend Scott Udine, money manager,\u00a0 writes yesterday:<\/p>\n

Tonight begins the “official” start of the 4th quarter earnings reporting season as we hear from Intel and they offer their take on the state of the world and more importantly the technology sector. The analysts will be sharpening their pencils and preparing to note every shift in managements tone and will scrutinize every “line” item. All of this reminds me of the very important reality regarding the markets and that is “the leaders coming out of a crisis are rarely the same as those who enter it”.\u00a0 Case in point is what happened back in 2000 as we went through one of the most devastating periods in the financial markets. If you remember, some of the leaders then were: Microsoft, Cisco, Citigroup, Dell, Intel, Pfizer, Merck, General Electric and many other well known and great companies. Here is how those names have performed for the last 10 years (most down significantly):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
How “Leaders” Of the Past Performed in the past decade<\/strong><\/span><\/div>\n<\/td>\n<\/tr>\n
<\/td>\n\n
1\/1\/2001<\/span><\/div>\n<\/td>\n
\n
1\/1\/2011<\/span><\/div>\n<\/td>\n<\/tr>\n
MSFT<\/span><\/td>\n\n
$20<\/span><\/div>\n<\/td>\n
\n
$28<\/span><\/div>\n<\/td>\n<\/tr>\n
CSCO<\/span><\/td>\n\n
$38<\/span><\/div>\n<\/td>\n
\n
$21<\/span><\/div>\n<\/td>\n<\/tr>\n
C<\/span><\/td>\n\n
$47<\/span><\/div>\n<\/td>\n
\n
$5<\/span><\/div>\n<\/td>\n<\/tr>\n
DELL<\/span><\/td>\n\n
$17<\/span><\/div>\n<\/td>\n
\n
$14<\/span><\/div>\n<\/td>\n<\/tr>\n
INTC<\/span><\/td>\n\n
$30<\/span><\/div>\n<\/td>\n
\n
$20<\/span><\/div>\n<\/td>\n<\/tr>\n
PFE<\/span><\/td>\n\n
$46<\/span><\/div>\n<\/td>\n
\n
$18<\/span><\/div>\n<\/td>\n<\/tr>\n
MRK<\/span><\/td>\n\n
$88<\/span><\/div>\n<\/td>\n
\n
$35<\/span><\/div>\n<\/td>\n<\/tr>\n
GE<\/span><\/td>\n\n
$47<\/span><\/div>\n<\/td>\n
\n
$18<\/span><\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

So, what’s my point? The point is that while, yes, those are still “great companies”, they have all been terrible investments. Someone that has been sitting on a basket of these so called “blue chips” have missed major significant moves in new and exciting industries and companies. So, tonight’s Intel numbers will be interesting but keep in mind that the stock and company are not what they once were and in fact, Intel now has a scant 2% weighting in the Nasdaq Index.<\/p>\n

The reason we spend so much time doing fundamental and technical research every day is not to crunch Intel and Microsoft’s numbers and compete with EVERY analyst on the street to decide if it is undervalued but rather to find the next Intel or Microsoft that is still in it’s early stages, doesn’t have tons of research coverage, still has a relatively small float and is still in the beginnings of a multi-year run. Very hard to do, but if it were easy, everyone would be making huge returns year in and year out and it would be called “winning” instead of “investing or trading”.<\/p>\n

Verizon’s phones revisited, yet again. <\/strong>Verizon’s present CDMA phones and its upcoming Apple iPhone cannot multi-task. That means you can’t speak on the phone while searching the web or doing email. AT&T’s iPhone can multi-task. It runs on a different cell phone system called GSM. Multi-tasking is critical if you’re stuck on hold with a call agent and need to find alternatives via the web — e.g. being stuck at an airport. The only way to multi-task on a Verizon iPhone is to connect to a WiFi network while making a CDMA phone call. That may or may not be possible, depending on where you are. <\/span><\/span><\/p>\n

Verizon’s new Android 4G-LTE phones which will be out in coming weeks can <\/strong>multi-task. They will also be ten times<\/strong> faster than Verizon’s iPhone — at no increase in price. And, if they can’t reach the 4G LTE, they’ll slip back to the slower, older CDMA.
\n<\/span><\/span><\/p>\n

As I wrote earlier, it makes no sense to buy an iPhone from Verizon at this point. Remember, too, Apple will introduce a new iPhone also in coming months.<\/span> <\/strong><\/span><\/p>\n

Meantime, 100% of my AT&T iPhone calls in the last few days failed. But I dialed back from a different place (often only 100 feet away) and they worked fine.<\/span><\/span><\/p>\n

Joel Scholfield, a reader,\u00a0 offers his two cents on Sirius (SIRI)<\/strong><\/span><\/p>\n

Please be careful with Sirius. They facing strong competition now and more competition in the future from streaming music services such as Pandora (free) and Rhapsody ($14\/month). Both services are excellent and I suspect many more are on the way. Both my wife and I are satellite radio subscribers and we were discussing just the other day how we do not use it that much anymore due to Pandora.<\/p>\n

Cars come now with Ipod input jacks, as do many home stereos. Also, the newer stereos are coming Wifi ready now. Streaming internet content is improving at a pretty fast clip.<\/p>\n

So what’s in it for him? <\/strong><\/span><\/span><\/span><\/p>\n

A Chassidic gentleman is standing in a a hotel lobby about an hour before Shabbat, all dressed up in his finest Shabbat attire.<\/p>\n

A magnificent blonde, with legs that go on forever and breasts that fill her sweater, has just finished checking in and is on her way to the elevator, when she sees the Chassid. Stopping dead in her tracks she walks over to him.<\/p>\n

“Hi,” she says.<\/p>\n

“Hello,” he answers.<\/p>\n

“I have a confession to make to you.”<\/p>\n

He nods.<\/p>\n

“I have a sexual fantasy.”<\/p>\n

Again he nods.<\/p>\n

“I don’t know how to say this, but I’ve always wanted to be with a Chassidic man.<\/p>\n

I want to run my hands up and down his white silk stockings and over his tzitzis, play with his gartel and streimel, run my fingers through his lustrous beard and fiddle with his payot. In fact, I want you right now and I have a room upstairs. Will you join me?”<\/p>\n

Looking at her thoughtfully he asks, “And vot’s in it for me?”<\/p>\n

\"\"<\/a>
\n<\/strong><\/div>\n

Harry Newton who got up at 3:45 AM with great ambitions to clean his desk and write the world’s greatest column. Cleaning the desk took hours. The lesson of my desk is “diversification is a wonderful investment tool, but i sure takes a lot of management time.” Meantime, I hear great things about Office 2010 (I’m running Office 2003). On its web site, Microsoft offers a free trial on Office 2010. Just download it and run it. Great idea. But it didn’t work for me, despite several wasted attempts. I really dislike that company. Can’t they get anything right?<\/p>\n","protected":false},"excerpt":{"rendered":"

Monday, January 17, 20111. Exchanges are closed in the US in celebration of Martin Luther\u00a0 King Day. I’ll see you tomorrow. Meantime, watch David Einhorn be interviewed by Charlie Rose. It’s a great interview. Click here. Friday, January 15, 2011. My friend Scott Udine, money manager,\u00a0 writes yesterday: Tonight begins the “official” start of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5417","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/5417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5417"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/5417\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}