Feb 23, 2011

Seeking Alpha of Financial Literature

 There is a big problem with many writers in Finance / Economics.. Most of them are stuck with one philosophy & keep on repeating that in every book that they dole out..  Few months back i picked up "The Big Short" by Michael Lewis.. I have to say that till now I havnt been able to complete it because in one way or other most of the ideas / stories that he describe are present in one way or other in his earlier book - "Liar's Poker" ..  Individually these books aren't bad.. However, collectively these two are repetitive..

   Another prominent writer who falls into this category in George Soros who keeps on harping about his concept of reflexivity in every book that he writes.. Same case with Tim Hartford ... Buying Logic of Life turned out to be a waste after reading Undercover Economist

   Infact, I'd bet these writers are diluting their brand value by doling out similar ones .. Even though I liked Taleb's both books  - Fooled By Randomness & The Black Swan , I won't probably buy anything that he writes again for the same reason.

Feb 16, 2011

Dear Nokia Share-Holders

Dear Nokia Share Holders,

Over the last few days, you would have read & re-read the so-called open-letters (letter 1, letter 2, & the revolting letter -3 ) many times.. If you were an institutional investor, you would have made handsome profits by shorting your dear 'NOK' if you knew what was coming. If you were a retail long term investor you would have been puzzled with the enduring hold/sell question seeing the wild market fluctuations that were coming minutes after each of those letters.

One cannot collectively put blame on all share-holders for the mis-management happening. If your holding is/was small, you would have had absolutely no chance in influencing the decision to pick someone  - who has literally no big background in smart phone business - into the most important position in your dear 'NOK' . However, I cannot selectively address the audience. Hence I've to hold you responsible.

What your CEO has done is to make your dear 'NOK', a factory for making pure-plain-dumb-hardware. I would urge you to double check on any holdings that he has in his erst-while company - MSFT . If there is any winner in the deal spelled out here,it is  MSFT. Regardless of the merits & demerits of Windows Mobile OS, what Steve Balmer has got is a back-door access to your mass customer-base for selling ads , apps & content.  If your CEO was least concerned with your dear 'NOK' , he would have done atleast one among this  in the proposed deal

 * Should have eked out an exclusivity agreement with MSFT
 * Should have preserved the OVI Store & Maps instead of integrating it with MSFT Market Place
 * Should have eked out a revenue sharing agreement for the e-commerce & search revenue coming out of the phones
 * Should have atleast had one solid point in this deal which would result in cash-flows coming to your dear 'NOK'

   In the absence of any of the points described above in the deal, what your CEO has done is tantamount to selling your dear 'NOK' to MSFT . I believe it is too late to bring in another CEO into this exciting space where innovations like these are happening.

Hence  I would suggest three options to you

* Force your dear CEO to sell your dear 'NOK' to MSFT. Appoint competent iBankers for this deal. I would say, you will definitely get better value for your shares out of this deal even after paying the hefty iBanking M&A fees

* Liquidate ! Sell at the next most appropriate moment during a decent market rally

* Resign to your fate. "Remember Red, Hope is a good thing to have"


- A Nokia ExpressMusic ( 5800 ) owner looking for an alternate phone as my cash-flows improve :)