en-us http://www.keithwatanabe.net/index.php Keith Watanabe's Website http://www.keithwatanabe.net/blogs/2007/12/5/d8d4d0011c849354b45175764130e372.html
I think the whole web 2.0 thing has been limited to a few companies. The IPOs are not as hot as in the 1.0 as people are super cautious of overvalued, under performing stocks. Not to mention considering that the ad market is essentially circulating money coming from an ethereal source, that makes the whole 2.0 web just theoretically valued until the moment the source comes crashing down (and with Google, it's hard to say). But there are a few very interesting industries to look at:

• Green energy. This seems to be the big topic right now. With oil constantly hitting new highs and cost of energy rising, alternate, renewable and safe energy sources need to be considered. The biggest two talked about green energy will be solar and hybrid technologies. There's a few interesting companies like Energy Innovations that are focused in the area of solar power. But it'll take a significant period before companies start adopting it in larger quantities. So far only Google and Sony have made their move at least with regards to Energy Innovations (and with Google recently announcing their participation from their non-profit branch).
• Hybrid technology is the next hot topic, but it's mostly in the automakers where this technology plays the biggest key. Unfortunately, the US market will severely lag since the auto industry is going through a tough period. However, Japan's automarket is booming and probably will see the biggest benefit in this at least for the next 3-5 years while the US manufacturers play catch up both in sales and in research.
• International stocks. Obviously, the bigs ones are China and India. These are just hotbeds with all their huge developments in software and hardware. But with their massive populations, it's no wonder why so many people want to invest in those countries.
• Online media. Obviously, internet advertising has experienced a massive bubble but it's hard to say if this cycle will end soon. Nonetheless, the competition is perpetually fierce and looks to cook even hotter. But I expect more money to be put into advertisement, video and audio online more than anything.

Tech stocks, in my opinion, will not be smashed as they once were back in the dot boom era. I think most companies are better put together these days and don't have to worry about the ambitious and massive overheads of the pure ecommerce sites. Tech companies will probably be focused more on building better client-server software while infrastructure companies attempt to improve on reliability and bandwidth.

However, areas which I would avoid investing in are the following:

• Traditional publishing. I like paper books as much as the next person but any news related print media has no value in the internet age. I think newspapers and magazines will be eradicated and turned into a purely online, even community supported spots. I mean, it makes no sense to buy a newspaper when the latest news can go to your keitai or RSS reader....and for free! Also, traditional publishing makes no sense in the Green Economy.
• Non-digital media. Most media companies are quite clueless when it comes to digital media distribution. It's why their only response is in the form of lawsuits (because they can't stop their bitching). But I'm a firm believer that all media will be consolidated into an online format dished out as a service. I can easily see homes having their own large, networked storage spaces like a new room in the garage which is cooled. Once networks are globally interconnected with 1-10gb ethernet/wireless, people will have little to no use for computers. They'll eventually evolve in a simple interface to your network storage device, which contains some service that connects to other services. You can still house your own media but it'll be proxied through some legal, standardized means onto your storage device. Regardless, this vision will happen in my estimation within the next 3-5 years. When this happens, portable media like CDs, DVDs, etc. will fade out completely since the amount of information will be far too large, but the wireless networks would be able to support near instantaneous connectivity to your mobile devices. You'll just need something like an iPhone that does everything and has a nice interface for all your on-the-move needs.
• Securities/Stocks. I've said it before and I'll say it again: Stocks are meaningless in the digitized age. They're too unreliable as money makers except for institutions and the most wealthy of investors. Stocks will be replaced by keywords that you can own part of from internet advertising. These keywords will have more monetary and USEFUL value in the information age and will be tied into your monetary account. So imagine this: instead of speculating on a company, you speculate on the value of keywords in the market place. You buy into these keywords to either drive more value to your customers or the customers driving the value to themselves. Useful, highly valued keywords will bring you higher quality information. As a community process, you're able to democratically increase the value of these pieces of information rather than just benefiting the pockets of a few shareholders.
• Big media corporations. I think the writers strike in Hollywood as well as the monetization of video for anyone with a simple web cam has signaled the end of Hollywood as we know it. Surely, only Hollywood has the funds to produce monstrous effect movies, but I've constantly problemetized Hollywood's self indulgence with regards to effects and stars over plot, character and quality. With online software allowing people to freely touch up photos and video, we'll see more independent shows spring up. This system will compleletely dismantle the whole notion of Hollywood's vision of the reality show as the people in Hollywood would look like spoiled brats with a camera in front of them saying and doing nothing interesting, compared to the huge wealth of independent film makers that just have a simple web cam and pass their videos to their friends. The other thing is that Hollywood is so full of shit and slow to react that they'll dismantle themselves with their internal problems. By then the web will win by a monstrous margin and Hollywood will be a sad footnote in humanity's history.

There you have it. My little prophesy. Stay tuned to see if it comes true!]]> Wed, 05 Dec 2007 10:02:44 -0700 http://www.keithwatanabe.net/blogs/2007/12/5/d8d4d0011c849354b45175764130e372.html http://www.keithwatanabe.net/blogs/2007/12/25/47e7ed528b2e0714fc43715626f0d569.html
On the other hand, web technologies really made a comeback in the past few years, with the most emphasis being placed on online advertising. And of course, with the gas/oil crunch comes the whole desire to look towards alternate energies, which now is a huge buzzword, even with the elections drawing near.

The thing is just based on what I've said, the key is momentum and enthusiasm when it comes to investment. A lot of investment is based on raw emotion and the energy shared by something. But a lot of that is really focused on areas where buzzes are generated.

Truthfully though, if we are to use Graham's notion of investment, what I'm talking about is more speculation than investment. So I guess we could focus on sector based speculation as something more appropriate here. But I think there's a lot of truth to what I've said.

For myself, I'd prefer to get into specific areas of funds that handle these things. It's far too difficult to watch each and every stock, but you can read about an entire industry. And I think it'd be a lot easier shifting funds around compared to dealing with large numbers of cumbersome stocks.]]> Tue, 25 Dec 2007 14:05:15 -0700 http://www.keithwatanabe.net/blogs/2007/12/25/47e7ed528b2e0714fc43715626f0d569.html http://www.keithwatanabe.net/blogs/2008/9/13/bc59e66825594464c034dab3bcd2b843.html Intelligent Investor". Based on Benjamin Graham's theory of investing, it seems that the only surefire method of understanding when or where to invest your money is to find companies with long histories. Well, when large legacy companies start biting the dust, that theory becomes nullified to a huge degree.

For myself, I can't imagine now feeling safe in putting my money in any company for long periods. Within the past few years, I've seen normally long, stable companies eat the dirt. Places like Circuit City, CompUSA, Levitz, Mervyn's all are dying or have died. Then you can even talk about Detroit and long standing companies like GM and Ford. Take another look around and you see the airlines industry, something people in fact need, getting decimated. Food, too, can't be trusted although it's needed.

If that's the case, how can we count on companies with long histories? In fact, how can we count on having an economy when you see everything get destroyed around you?

Ironically, it's the new industries that are taking over. Companies with short histories but are doing innovative things like Google, Amazon, Solar/Green, Tesla, etc. I think are the real places we need to put our money. Even Apple (actually Apple is a great bet, but you can nod your head at one person). Sure, some people are thinking energy like Exxon. But if the well is drying up, some day there might not be anything for Exxon to shell out. It might be Energy Innovations or eSolar that are the forerunners for energy because demand is driving the real supply.

Part of me believes that investment means putting money into a cause to let it grow. Of course, making money is key but how they use that money is equally important. The housing market demonstrated that they were completely incapable of handling money.

You get older companies that are trapped under a mound of bureaucracy, greed and complacency. Why did it take GM so long to react before pushing out their first hybrids or shrinking their production of SUVs? Will Exxon be the same in this sense, waiting until the last possible second to make the big switch from squeezing customers of their dollars before even bothering to think about future energy plans? Will M$ continue to just copy what other successful products and companies are doing rather than thinking about the future and innovating with all their talented engineers?

Maybe the next round of big hits will come to the food industry after they've squeezed the budget in creating low grade, cheap food that continuously poisons people. I think there's going to be a revolution there too.

I think the key is that investment should be also driven by innovation. We've lost that vision and only scramble to put money where we think we can make a quick buck. We forget that companies are built to improve lives, perform services and create products that are upgrades from older, less efficient models. But we aren't doing that and I think that's where we're missing the boat.

Even if a company misses their forecast on finances, we shouldn't short them if they're still doing a generally good job. That's just short sighted punishment. We can certainly do better and we ought to demand better for ourselves.]]> Sat, 13 Sep 2008 21:50:47 -0600 http://www.keithwatanabe.net/blogs/2008/9/13/bc59e66825594464c034dab3bcd2b843.html