Enodare et Illustrare
Introduction:
The Interactive Investor presents research describing "How the U.S.
What's New:
“Is
the Fed Model Useful?"
“The Nature of Markets” (de novo)
“The U.S. Balance of Trade, China, and the Olympics”
Investors: click here for the latest 9/01/08 comment on the market.
Book Reviews:
In Dealing
with Darwin (2005), Geoffrey Moore describes how businesses produce
innovative products and services. The reader may think of new products and new
markets. The fact is that companies must innovate in all markets: new, growing,
or developed, to fend off increasing commoditization and therefore decreased
profitability. During an era of globalization, a continuing cycle of innovation
and deployment is necessary for the U.S. economy.
This book is particularly relevant to value investors, as
it also investigates the process of innovation at companies operating in more
developed markets. The author makes a crucial distinction between companies
whose core expertise is designing complex systems, such as BP and Nucor, and
those whose expertise is efficiency in volume operations, such as Dell Computer
and American Express. The key to innovation in complex systems enterprises (or
investing as a matter of fact) is insight. Since each customer’s situation is
unique and evolving, implementation requires alignment around essential
principles rather than rules. For volume operations, on the other hand,
implementation requires alignment around exact rules.
Although it contains some confusing tables, this book
covers a lot of ground. Companies grow their sales for reasons; this book
discusses these reasons in very useful detail.
____
George Soros and Farred Zakaria bring their respective
perspectives to the challenges that the United States will soon face. Both were
born abroad and are very concerned with what is happening.
George Soros was born in Hungary and is now a well-known
fund manager. In The New Paradigm for the Financial Markets (2008), he relates
how the implosion of the Soviet Union in 1989 resulted in the victory of market
fundamentalism, the idea that the markets are always self-correcting to an
equilibrium.
Soros distinguishes between “everyday events, which are
repetitive and lend themselves pretty well to (Gaussian) statistical
generalization and unique, historical events whose outcome is genuinely
uncertain.”…
Continuing Discussions:
These discussions focus upon three major investment issues: valuation, that is the profit potential of the stock market, company selection, and the macro environment. By considering valuation, investors will be able to determine whether the stock market has a sufficient profit potential to warrant the purchase of additional stocks. By considering company selection, investors will be able to identify companies that are likely to grow. These discussions also emphasize the importance of the institutional environment, the context that enables business planning for the future.
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Copyright © 2008 Horizon Capital Research, Inc.
index: Ronald Soong, stock market valuation, market equilibrium, financial market behavior
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