Daejeon is not in Silicon Valley

Thursday, July 31, 2014 Francisco Carneiro 0 Comments

The numbers: Grim, as expected. Samsung Electronics’ second-quarter profit was its worst in two years, as it warned earlier this month. Operating profit plummeted 24.6% (pdf) from the same period last year to 7.2 trillion won ($7.1 billion), and profit from the flagship mobile unit fell 29.6% to 4.42 trillion won. The company also kept its dividend flat, an unpleasant surprise to those who had hoped it might be boosted to reward the company’s beleaguered investors. Samsung shares fell 3.9% in midday trading, one of their biggest drops of the year.



I guess with internet & Globalization things tended to flow more into the center. Contrary to some perceptions that you could work from home, that you could work everywhere things are more & more in the center. In Financial Services London & New York concentrate almost everything.

In tech i see Silicon Valley and of course SAMSUNG is not in Silicon Valley. To do well you need to be near the best and the bright and the best are not in Korea. The best even if they are not Americans flow to Silicon valley because that's where you can get funding and get paid in a big way.

more on this

http://thoughtmeme.blogspot.pt/2014/01/no-convergence-at-all.html






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I am going to sell my TV soon!

Tuesday, July 29, 2014 Francisco Carneiro 0 Comments


From the FT



Do not exclude wealth from the happiness equation



Research in the 1970s suggested that within one country, richer people were happier than poor. This tended to confirm the belief that as humans we are programmed to compete, But it also found that countries grew no happier as they grew wealthier, while rich countries were no happier than poor countries.



However recent research shows that

There are also signs, from what is still very limited data, that growing wealth tends to make nations happier – and the reverse. Americans grew far less happy once their economy slipped into a severe recession in 2008. And people in rich countries are happier than in poor........................And some paradoxical implications of earlier research now vanish. Letting some people be richer than others is not a problem – the key is to raise income for all, and not to worry if some do far better.

With Globalization & the information age we compare ourselves with all the world. If someone on the middle east see on TV that people in Europe & USA live well, with safety and peace & food is not a consideration at all they become unhappy.

Only growth & wealth can help. However it's difficult to create growth. No one is growing/improving. In my view only the best companies on each class of products are winning. Only the Big&best on each class get bigger. Apple in Phones, TESLA/Mercedes & BMW in Autos, Specialized in Bikes, Shimano in Bike Brakes, SIDI in Bike Shoes,  etc.... 

The best & bigger companies in the world are not in my country ( Portugal )or the Emerging markets. The best are mostly in Germany & USA with some exceptions (SIDI bike Shoes are Italian). And these are the only countries that are doing well. I am going to sell my TV soon.(I must donate it because no one pays for a used TV anymore!)

If you are not getting richer is better to turn off the TV!

If you live in a poor country turn off the TV asap



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Style over Function!

Monday, July 28, 2014 Francisco Carneiro 0 Comments

funny-guy-sun-hat-glasses-dumb


http://themetapicture.com/theres-no-other-way/

More and more people do things that don't make sense. To me the top is to use high heel shoes and be almost prevented from walking!

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Holidays in Portugal

Monday, July 28, 2014 Francisco Carneiro 1 Comments

Just returned from Holidays!

this pic was taken in the early hours of the morning before going out with my bike.

Vila Nova de Milfontes





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Are Kids a bad business?

Friday, July 11, 2014 Francisco Carneiro 0 Comments

Children aren’t worth very much—that’s why we no longer make many

The economic value of children has decreased, but this is not the most important cause of the fertility decline. The transformation of countries from predominantly agricultural to predominantly urban reduced the value of children, especially where the industrial employment of children was restricted. Each child’s labor contributed positive value to a family farm or cottage industry, but in an urban setting, children began to have negative economic value. Indeed, the fertility decline correlates somewhat—though not perfectly—with the transformation from agrarian to city life.



In the paper  Mass education as a determinant of the timing of the fertility decline, John Caldwell argues that the vector of this cultural transformation has been mass education.

Before Mass Education children where an asset. They helped at home, they worked hard, demand little, and respect the authority of the old. When kids start their working life they helped their parents and even their grand parents. They start contributing from the age of 10. Families had lot's of kids.

Under this system, the patriarch, as head of the family, exercises authority. Children are employed from an early age and are valued as an addition to the work force. The flow of wealth is upward from children to parents and even grandparents, and high fertility is profitable, at least in the long run, to the parents


Now with mass education, children are dependent on their parents sometimes until they are into their 30's without helping at home since their " job " is to study.
When they start to work they pay taxes to the state and not to their parents. There is no way parents recover their big investment in their children. And children are more and more demanding these days. They came from school and they want what the other kids have, it's a competition. Parents this days are a bit slaves of the kids and not the other way around.

 The greatest impact of education is not direct but through the restructuring of family relationships and, hence, family economies and the direction of the net wealth flow. It is postulated here that education has its impact on fertility through at least five mechanisms: First, it reduces the child's potential for work inside and outside the home. This occurs not merely because certain hours are subtracted from the day by school attendance and homework, but, perhaps more importantly, for two other reasons. The child is frequently alienated from those traditional chores that he feels to be at odds with his new learning and status. .....................Second, education increases the cost of children far beyond the fees, uniforms, and stationery demanded by the school. Schools place indirect demands on families to provide children with better clothing, better appearance (even extending to feeding), and extras that will enable the child to participate equally with other school children. But costs go beyond this. School children demand more of their parents than do their illiterate siblings fully enmeshed in the traditional family system and morality. They ask for food and other things in the house in a way that is unprecedented, and they ask for expenditures outside.

Hell what to do? I try not to be the best dad in the world. I don't spend weekends driving my kids from event to event and from party to party. They don't have everything they want (Although they have a lot). I don't give them money, sometimes they don't have any. However i feel all that this paper highlights, they are a big burden and sometimes they are demanding, asking all my friends have this and that and I don't have.

The way to educate and to keep the things in perspective is to balance a bit the burden, give them love and money but expect a bit back. And always don't compete with the other parents. It's a lost war. Keep things as natural as in the old times. Try to offer them the basic but everything else they have to get from themselves.

Above all it's important that they don't have everything they want. They have to get no's. this is very important in my view. 

And never ever think that you are not giving enough. It's always enough as long as there is love and care.


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To me they are a short!

Tuesday, July 08, 2014 Francisco Carneiro 0 Comments

Samsung's marketing budget has always been vast, but in the last quarter it was far larger than even the manufacturer itself would have liked. The company admits that it's been forced to spend extra money on promotions for older and lower-end devices that have been filling up its warehouses due to "weak demand." This dip in trade, combined with the extra spend on publicity, is causing the company's recent, gradual profit decline to quicken: it now expects to earn around 24 percent less this quarter than it did a year ago, with underlying sales down by an estimated 8-11 percent.



I wrote this in January in the Blog

To me Samsung is a outlier and they will not be able to keep up with Apple & other high tech american companies. To me Samsung is a short because i think it's much easier to invent/discover the next thing if you are in Sillicon Valley near Colleges & other companies that do what you do. 



I am not sure this  recent, gradual profit decline from SAMSUNG is already a sign of what is coming. I think the only way to make money is through building a Brand, a reputation. I am not sure SAMSUNG has done that.

To me they are doomed. They are a Short

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Everybody wants a MERCEDES

Monday, July 07, 2014 Francisco Carneiro 0 Comments

“It's all in the mind.”
George Harrison



From, Business Insider- 
Mercedes-Benz just reported the best six months of sales in its history, with deliveries through June up 13%, to more than 783,000 units. Although sales in its German home market were flat over the period, buyers in the company’s other key markets turned up in droves:


No surprise here they have a brand. When you think about buying a car you know a Mercedes it's reliable, enduring reputation in engineering and some style. 

But there are other car's that are also reliable (LEXUS) but no one wants to have a LEXUS unless it's much cheaper. Why is that? Because Mercedes built a reputation and we trust a Mercedes. No surprises.

The important thing to keep a brand is no Surprises and no discounts. If they have a reputation for quality if they did a campain with big discounts that would hurt the Brand.

Only inferior products need to do discounts. I guess that is the way the mind of must people work.

I don't know if Mercedes didn't hurt the Brand a bit with Class A, it's a small car and Mercedes is a CEO car. Never confuse the prospect.

On the same subject last here






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Big banks should be broken

Friday, July 04, 2014 Francisco Carneiro 0 Comments

Regional banks are trading well above book value.

Big Banks no.  Why is this since there are big economies of scale?

I guess in a huge bank the level of control is small, the CEO has to delegate big time and the room for big surprises is huge. That is the reason for the discount.







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It's possible to go under doing Bread & Butter stuff

Friday, July 04, 2014 Francisco Carneiro 0 Comments

The too-big-to-fail concept originated in the 1980s when
Continental Illinois had to be rescued. That bank wasn’t
involved in exotic financial activities but rather
straightforward commercial banking, taking deposits
and making loans. Unfortunately, it made too many bad
loans, as have failed predecessors over the centuries.

A.Gary Shilling

The idea that banks go under because they engage in trading is not correct. I guess most of the Banks problems arise from

a)Cheap credit. To much credit at small spreads. Business at the wrong price.
b)Liquidity problem. Central Banks prevent this from happening.
c)loss of confidence. If this happens everybody want their money back now!

As A. Gary Shilling says in his excellent INSIGHT when a lot of people lose money there is a cosmic need for scapegoats. Derivatives & trading are easy ones but the most of the time the real reason for Bank failures is Cheap Credit. When you want to grow, be number one on the league tables you do business at the wrong price.




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Zero interest rates = Zero GDP growth

Friday, July 04, 2014 Francisco Carneiro 0 Comments




In Japan you can borrow at almost zero for the past 10 years and GDP,  Real Estate & Stock's have moved zero! 10 years ago Nikkei was at 15,000 and now is still at 15,000.

Why when rates stay at zero the economy stall's, why?

a)Joseph Schumpeter believed that wealth and growth is created as capital moves 
from weak hands to strong hands. This cannot happen if capital has no cost. We 
have seen this in Japan, where zombie companies can survive forever, thanks to 
cheap capital injections, and prevent the re-allocation of scarce resources (land, 
labor, capital…) to managers best able to maximize returns. In Schumpeter’s 
world, the willingness to let inventions/more efficient operators kill obsolete 
businesses is key to societal progress. (From Gave Kal, The High Cost of Free Money)

b)People who have savings and were used to make a good living from getting money from deposits (My Mother) now live with much less money. What do they do, cut big time on expenses.

So once the market get's used to low rates the economy & the stock market is going to stall. However in Germany & in the US 10 year rates are still falling and that helps the market. I guess as long as the graph is from the upper left to the lower right stocks can climb a bit more.

Once you get to zero everything is going to stop.


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One helmet per family max!

Wednesday, July 02, 2014 Francisco Carneiro 0 Comments

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Can you find any worker in the Pic?

Wednesday, July 02, 2014 Francisco Carneiro 0 Comments

Ford's assembly line


I guess this is the present.

The way i see the future is a man controlling a machine. And one man controlling a machine can do the work of 100 man. That is the future and that man is going to make a good living.


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The worst President since WWII

Wednesday, July 02, 2014 Francisco Carneiro 0 Comments

President Barack Obama is the worst president since World War II, according to a plurality of voters in a new poll published Wednesday.

The Quinnipiac University survey found 33% of American voters named Obama as the worst while 28% named his predecessor, George W. Bush.
"Over the span of 69 years of American history and 12 presidencies, President Barack Obama finds himself with President George W. Bush at the bottom of the popularity barrel," Tim Malloy, assistant director of the Quinnipiac University Poll, said in a statement.


Read more: http://www.businessinsider.com/poll-barack-obama-worst-modern-day-president-2014-7#ixzz36JuaVQSH



Well S&P is near all time high, close to 2000. The only 2 stock markets in the world that are at all time high's are Germany & USA. Since Americans don't like Obama at all 3 explanations come to mind:

a)market is at all time high because of the FED

b)The fact that Obama can not do much harm (He can't pass reforms on Congress) is good for the market.

In my country if the Government said the laws are going to stay unchanged for 5 years the stock market & the economy would go trough the roof. We are sick of reforms & new rules.

c)Perhaps people always name the current president the worst?

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