Archive for the 'Electronics' Category

 

Efficient Market Hypothesis … people will always have to learn the hard way

Oct 07, 2013 in Electronics, Finance

In 2006/07 I started my journey into the financial markets that led me into learning about options, futures and foreign exchange; eventually into taking the CFA program. That journey started with AMD and a study that we had to do for school. That was a time when AMD was running on all cylinders. They were taking server market share, leading on the 64-bit transition and had a general cost advantage over Intel. Major PC makers were moving from Intel only shops to support both companies.

What is did not understand was that the market prices in all of these news topics, and unless I had information that the market had I was just buying a fairly valued stock. If I had predicted their new processors would dominate the market and steal market share, that would be different and I would be able to profit. Once the news is out and the trend is out, people can easily figure out at consensus forecast that prices in the most likely outcome.

Two things happened that were not priced in:

1) AMD bought ATI, a company worth equal to its own market capitalization at the time. They bought it for strategic reasons that were long term, and correct but they could not predict that shortly after the financial markets would be in turmoil just after. They had high debt, no profits, and a terrible environment to raise new capital. They sold off most of their fabrication capacity at very discounted prices.

2) Intel offered their customers financial incentives to discontinue the use of AMD processors. This was illegal and AMD later won the court case, but the damage was done. AMD lost market share literally over night, was forced to heavily discount their products, and this caused a serious financial problem for the company with the point above.

 

The reason I am bringing this up, is that over the weekend someone was pitching AMD and citing currently public information as reason to invest. This is a plan to lose money. Real investors take a position either short if they believe consensus to too high, or long if they believe that the underlying market trends are stronger than they currently forecast. This happens often, but the regular person who picks up investing does not have the skills to do the valuation models or is not informed enough on the underlying macro economic conditions. Their are other ways to do this such as long-short investments, but this is not what is normally talked about. Most of the “retail” herd simply invests in low dollar denominated stocks, and “trades” short term market oscillations.

As a ending to this article, I will play devil’s advocate and list the bear opinion on AMD.

1) AMD sold off their fabrication capacity, they have a long term disadvantage in that they no longer control the platform. Their are successful fab-less companies but they are in high margin markets developing niche products.

2) Europe (one of AMDs largest markets) is in tatters.

3)Interest rates are going up. Intel has no debt, and as such AMD is at a competitive disadvantage.

4)Windows 8 upgrade cycle is in progress and is priced in. New consoles are not significant profit drivers.

How to get Pandora, Hulu, NetFlix (good one), BBC in Canada…

Oct 07, 2013 in Electronics, Gimmicky, Personal

So some Canadians remember a time before the CFTC banned the use of foreign media outlets in Canada who did not comply with certain french requirements. Some other media outlets also closed up shop due to copyright issues in Canada with their service providers.

Pandora is a part of the music genome project and it allows for the use of social engineering to recommend new artists to individuals based on how their current interests align with others in the demographic.

Hulu is the competitor to current media giants like Rogers, Telus, Verizon, and Comcast, but like NetFlix is used the TCP/IP protocol to channel that information to the home. Hulu primarily streams TV show content from the major television stations.

NetFlix is the only one of the three that is actually available in Canada, but unfortunately for most Canadian’s who have never experienced the real thing… is not what Americans enjoy. The selection of movies and TV has been dramatically reduced to comply with their regulations.

 

Fortunately, these companies all use the IP address of the user to determine the originating location. Since day one technophiles have been able to use these services as they were originally intending through the use of VPNs, SSH tunnelling or a proxy. For the masses they were out of reach. Today however, users of Chrome and Firefox can join in on the bandwagon relatively easily. The plugin is MediaHint, and it works… and well. It now only allows the use of the listed services but many others as well; such as CBC and other Canadian outlets when in the US.

For an easy guide visit these guys right here (chome users) or here for Firefox

The user experience is transparent once the plugin is enabled. The site just simply works as if you were viewing the content from the US.

Enjoy,

Thiago

Wii success or failure?

May 18, 2008 in Electronics, Finance, Personal

Despite the massive adoption of the Nintendo Wii and huge fan fare did Nintendo hit a home run or set themselves up for a fall?

Current culmulative sales are as follows:

Nintendo Wii – 19 million

Xbox 360 – 16.8 million

Playstation 3 – 8 million

But what is wrong with the availability, I personally know several people who just can’t buy one. This is a huge problem for Nintendo and a major set back for the stock. The consoles pricing has narrowed huge with Sony and Microsoft both cutting prices for their consoles. Microsoft sells more games per console and has a continuous revenue stream from Xbox Live. It is well known that the major manufacturers take a hit on the actual hardware sale in lieu of a 10% royalty on game sales.

By not being able to meet demand Nintendo has short itself short on the Wii by artificially limiting games sales. Console sales will also slow as news hits the markets about the next generation of consoles based on new hardware. Nintendo bet the farm on Wii’s innovative interface, made money hand over fist but could have made more. The next generation of consoles is going to focus much more on human interfaces and be less about hardware.

Since as long as I have been around the key to console sales was powerful hardware. Nintendo proved that creativity will win and differentiated themselves from their competitors. Sony PS3 sales are improving due to the win by Sony on the bluray format, which is huge disadvantage for Microsoft who bet on HD-DVD. A Sony PS3 at current prices is almost free if you were in the market for a Bluray player from the beginning.

I wonder if Microsoft will ever flex its patent rights on direct human interfaces and bring out something truly groundbreaking.

Money in open source hardware

Feb 25, 2008 in Electronics

First they brought you google search, then adsense, now the great guys at Google bring you Android the mobile platform based on Linux.

Why is this so great? Well first it is going to be cheaper to make phones, since they are developing on an open platform with the cooperation of great hardware manufacturers like Arm PLC, Marvell, Samsung, STMicro, Texas Instruments and Broadcom. Second, it gives people like me a chance to make something else out of it.

There is a HUGE community of really smart people finding uses for things that their creators never dreamed of. Whether it is off-label uses for medication, using a external harddrive as a web server or running linux on your router / phone / Xbox. Not only that, but it gives hardware a second chance at living and being useful. To the flexible and creative owner, modifying something cheap and old into something useful is a fulilling learning experience.

Take the iPhone for instance, Apple could keep the hardware closed and not release the API. Sure that would stop some, but look at all the awesome software created by thousands of rogue programmers for the iPhone / itouch. From wifi distribution points, external hard drives, portable servers, cover flow for apps and my personal favorite the wireless touchpad for a PC / Mac.

Now seriously, do you think Steve jobs thought his phone would ever be used for a Wireless touchpad. Or a portable Piano. Most likely not, but people are develeping unique uses for the hardware and it is driving sales.

If it was an impenetrable fortress, that was impossible to hack, do you think there would be this many iPhone / iTouch sales?