Apple WWDC – The Mystery

Apple NewtonApple does a lot of things right, especially since Mr. Jobs righted the ship. Yet it still boggles my mind that each and every year the announcements from Apple’s WWDC make front page news around the world. The New York Times, CNN, and every major media outlet fall over themselves regurgitating the key-note ‘announcements’. Does this surprise only me? Hello? It’s a campaign rally…

Possibly, it touches a nerve, I participated in the early conferences, when Newton was released, for example, or NEXT was all the saving rage. I remember clearly the circus-like atmosphere Apple produced for its developers, we were chomping at the bit (16 at the time) for a multi-threaded operating system. Maybe the NEXT OS was finally something that would play well with Windows, and we could finally sell something. Windows was eating Apple’s lunch, everywhere, and as an Apple faithful, the future always seemed just out-of-reach. At the time our sect was a self-contained band of developers, and a small group of passionate users. The faithful have since taken on Tea-Party or Green Bay Packer type proportions, thanks to the iPhonePadGadgetMac. Crafty, very crafty.

I’ve come to realise that what the press should be watching (or listening to), isn’t what Apple has to say, but how Apple chooses to say it. Like any good politician,  their basic strategy has worked for decades, they’ve mastered generating buzz. It may seem relatively ‘recent’, but they’ve been perfecting buzz-craft since the inception of the first Mac. Apple has been setting the WWDC as a target each year, not just for the press and the developers, but for each and every employee at Apple. On one hand, I can’t think of a more manipulative use of smoke and mirrors, yet on the other, imagine how this must focus attention from the inside of Apple. Everyone is ALWAYS working for THIS conference, every single employee works to contribute to the success of this conference.

Can you think of another company that has such focus? I can’t.

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Airbnb in Lille, France – No Starbucks?

I just had my first Airbnb experience, I was a virgin Airbnb’er. No longer. I’m a fan. Their technology is excellent, their coverage in a skeptical Europe surprised me.

Uber impresses me, Airbnb impresses me. These companies aren’t just technology darlings, and they don’t seem to be just ‘fads’. They’re pushing aside decade old monopolies around the world. And profiting handsomely, how can you not like that?!

The growth here in Europe seems overnight. But where’s my Starbucks which after 10 (maybe 15) years in France, still isn’t in Lille – the 4th largest city. I was surprised not to stumble on a few, and so were these fans petitioning on Facebook… The old continent takes their sweet time, but I’m happy to see success of private companies like these. Airbnb is private and valued at around $10 billion. (They were founded in 2008…)

Lille has more restaurants than inhabitants, the best beer in France, no dog excrement on the sidewalk (Parisians leave shooshoo a la maison), an endless supply of impressive architecture, and rental bikes available for about $2 a day.

This was the view from our Airbnb, a property owned by a young couple, probably inherited.

Airbnb-View-LilleStumbled on this:

Porte-LilleThis gave me a chuckle:

Funny Garbage CanGood Trading.

Herbalife & Trading Psychology – Media Darlings

The Brandnet Cycle for Trading Hedge Fund Pissing Matches

Most of you are familiar with this chart describing the psychology of trading, it speaks for itself, and speaks a universal truth for every new trader.

Trading Psychology

Media darlings follow different cycles: The Herbalife trading psychology, for example…

Herbalife Trading PsychologyI guarantee that both of these famous hedgies are going to make a killing!

Bags in Bags and Bags in Bags

ikea bagWith spring comes spring cleaning. I approached my garage yesterday thinking it’s time to make space for the bicycles and garden tools that have been hidden away all winter. The garage is the place where time hides out, too–ours is filled boxes of clothes that the kids have outgrown, half empty paint cans, projects forever on hold, plus all the other stuff that accumulates over a winter spent indoors. Part of the problem is that now, at least here in France, when you go into a grocery store you bring your own bag or buy one of theirs – to bring back the next time. That’s not really a problem of course, it’s good for the environment apparently, but if half the time you forget to return with a bag, you accumulate dozens and in my case, millions of bags. What most people do, including me, is stuff one bag in the other (again and again) and toss it in the garage – so you have one when you need one. I have millions, and not just grocery store bags, I have bags-of-bags from Ikea, and plasticized bags from every shop in Paris. You never know when I might need one… My garage was starting to look like the Pacific Ocean garbage patch.

bags of bags

It was a personal challenge to throw out a very solid colorful Disney store bag with light blue fabric cords, I’ve been holding it unconsciously since my daughter was 5, she’s 16 now. We bought an ‘Ariel’ figurine. I remember her euphoria and how crowded the Disney Store was on the Champs Elysees. We had developed the habit of taking a walk along the Champs on Saturday mornings when the weather was nice. Ariel was irresistible.

Bags have a history and despite the fact that they’re just bags, try desperately to maintain value. They don’t want to be discarded. If I mention to my daughter that I threw out an Abercrombie and Fitch bag, now containing the Disney Store bag (which contains others), I risk the wrath of an adolescent girl. So I hid them – at the bottom of the garbage can. Au revoir, bags. You held a lot even empty, it turns out.

This is a finance blog, right? Sorry… There are a few possibilities; I’ve never seen an analysis of bag quality vs. market price, there’s likely a correlation. The other is that cleaning out a garage clears out the head, and I recommend that to anyone trying to trade on a daily basis.

Good Trading.

Herbalife, how the two 1%’s, unproductively spend their money

It’s time again to renew our interest in this non-story. Herbalife (HLF) against the world.

Now that the short-squeeze is over and Bill Ackman’s equity investment has been transformed into a derivatives investment, he can manage his losses as, “the cost of doing business” against Carl Icahn. They both probably have nothing better to do. Wouldn’t there be more productive uses of capital. I know a few… Seriously!

As you’ve probably heard the FTC is launching a civil probe into Herbalife’s practices. Though the results of that probe might take a year or two, the expectations are already being communicated  (Bloomberg).

The investigation will most likely end with Herbalife intact while paying a “palatable fine” and agreeing to stricter controls on its multilevel marketing structure, said Robert Chapman, founder of hedge fund Chapman Capital LLC in Manhattan BeachCalifornia. Chapman, who has been critical of Ackman, owns Herbalife stock and bullish derivative options.

And on the other side of the isle, the obligatory lobbying…

The FTC, along with the U.S. Securities and Exchange Commission, had been asked by SenatorEdward Markey, a Massachusetts Democrat, to look into Herbalife’s business practices. An advocacy group called the League of United Latin American Citizens also has met with FTC Chairwoman Edith Ramirez to describe alleged abuses by the company. Ramirez told Markey in a letter last month that his concerns were being “carefully considered.”

The New York Times reported this week that Ackman had donated $10,000 to the advocacy group and hired a former aide to Markey as part of his anti-Herbalife campaign.

I’d bet $10,000 only scratches the surface.

This got me thinking of the irony of the argument. The League of United Latin American Citizens is challenging Herbalife because the Hispanic community is unfairly being targeted by Herbalife; a pyramid scheme praying on the local hard-working community. Shame, though you would find the same behaviour at Anheuser-Busch InBev. Hypocracy aside.

In their own words (here),

The League of United Latin American Citizens, this nation’s largest and oldest Hispanic civil rights organization, welcomed the news that the Federal Trade Commission (FTC) has opened a formal investigation of Herbalife’s business model.

LULAC has maintained that the company has been defrauding hundreds of thousands of their own distributors by promising a lucrative business opportunity when the vast majority suffer financial loss.

Now my confusion  Here’s a financial whale in a billion dollar pissing match, paying a lobbyist to convince the FTC that HLF is praying on the small guy – which is illegal – while the very act of paying this lobbyist to move the FTC, prays on ME – which is in NO WAY illegal.

HLF-FTC

 

I’m not Hispanic and I don’t buy or distribute Herbalife, but I do buy stocks, futures and derivatives. I want to believe that financial products, serve a valuable purpose, and speculating pits my capacity to measure opportunity against the traders at funds like Pershing Square or Chapman Capital.

I’m clearly holding on to a naive notion. Good Trading

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