Saturday, November 27, 2010

How Wealthy is America?

"How wealthy is the USA?" This is a critical question as it lies at the heart of so many other issues:

"Can the US service its debt?"
"Can we afford health care for the Boomers?"
"What backs the US Dollar?"
"Is the US becoming a "banana republic"?"
"Should the US Dollar remain the world's reserve currency?"
"Will the US remain an economic superpower?"

You could answer all of these questions in countless ways, but here is at least one quick perspective that may help those who are riddled with concern about the future of America:

Per the most recent date from the Federal Reserve, U.S. Household Net Worth (assets less all mortgage, credit card or other debt) totals over $53 trillion.

Interestingly, per the World Federation of Exchanges, the total market capitalization of global equities is $52.7 trillion.

So, the people of the U.S. collectively, theoretically, have sufficient wealth to buy all the publicly traded stocks in the world!

Further, foreign currency reserves of China total under $3 trillion. U.S. households possess over $7 trillion in deposits.,19&id=4

When was the last time you heard someone say: "the citizens (not the government) of the US have more economic power than China." ?

Friday, November 26, 2010

10 Questions for Ray Kurzweil

At the below link, Kurzweil answers a number of the key questions asked by those unfamiliar with the Singularity literature in a very brief form:

10 Questions for Ray Kurzweil

Friday, November 19, 2010

Growth in China is Self-Defeating; Growth in Innovation is Self-Reinforcing

The perception that growth can only be found in the emerging markets is slowly eroding. China is increasingly faced with high inflation, infra-structure challenges, a weak consumer segment, political pressures, environmental threats, unfavorable demographics and it is bidding against itself in the commodity markets. Technology/innovation ( nanotechnology, life sciences and information technology in particular ), on the other hand, is accelerating, converging and reinforcing itself. The below chart shows that the NASDAQ 100 (a proxy for innovation) has outperformed the Emerging Market Index (very sensitive to economic activity in China) over the past 3 years and I believe this will continue for several years to come:

The above is not a recommendation of any particular security or investment strategy. It is simply a statement of personal opinion.

Explore Nanotechnology !

Thursday, November 18, 2010

Advantages in All-Cap Investing

Advantages in All-Cap Investing

The above link should be read in conjunction with the "Is Domestic Really Domestic?" link. Together, the concepts they put forth, form a foundation for dismantling the dysfunctional, consultant-driven "style-box" mentality of the investment industry. If you want "true" growth, go small and/or to the emerging markets. If you want dividend income, go to the developed coountries (Europe in particular). If you want a value/contrarian play, go where the negative signs in front of the trailing, multi-year returns lead you, regardless of geography, size of company or newspaper headlines.

Life Technologies Launches EZValidation™ Online Tool for Clinical Laboratory Market

EZValidation is an example of how information technology is assisting in molecular diagnosis and helping to make costly research more efficient:

Life Technologies Launches EZValidation™ Online Tool for Clinical Laboratory Market

Many times the contribution from advances in one technology can have a profound impact on the profitability of another. For example, while it is great when a new compound is discovered that can cure a deadly disease, significant contributions can result from bringing the often cited "$1 billion and 10 years" investment to create a new drug down to say "$800 million and 8 years". This may not seem so dramatic as a cure for AIDS, but any improvement in the calculus of ROI on health care R&D serves to attract more investment dollars and increased potential for innovation. So, something as simple as simplifying work flows and coordinating clinical work can have profound benefit on the effort to improve the state of mankind as a result of that marginal dollar of investment that "tips" the odds toward a radical discovery.

Please note: The above entry is not a recommendation of Life Technologies as an investment. It is an illustration of how technologies reinforce each other. I currently hold a position in the stock of the above company. I also owned the predecessor companies, Invitrogen and Applied Biosciences, which merged into Life is a small world in many ways.

Is Domestic Really Domestic?

Is Domestic Really Domestic?

Quote from above link:

"Gauged according to underlying sales, after all, the S&P 500 isn't a domestic-stock index. It's an international benchmark, one whose companies streamed in 46.6% of their revenue from foreign shores last year, according to S&P's estimates. Approximately a third of that sum, moreover, was rung up in emerging markets."