tag:blogger.com,1999:blog-6798074091942701235.post5355727218319745149..comments2024-03-29T01:35:09.550-04:00Comments on Can Turtles Fly?: Gary Shilling maintains his viewsSivaram Vhttp://www.blogger.com/profile/06361276466660862882noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6798074091942701235.post-49493168931479700972009-12-03T16:05:25.000-05:002009-12-03T16:05:25.000-05:00This is the first time I have encountered Peter Th...This is the first time I have encountered Peter Thiel (I may be run across some news story or article in the past but haven't read anything detailed by him until you linked to those stories.)<br /><br />I don't necessarily share his thinking. I also think he is incorrect in suggesting that Microsoft, Google, et al are a short position against innovation. Let me address this in a standalone post.Sivaram Velauthapillainoreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-79131886845252381192009-12-03T15:56:47.000-05:002009-12-03T15:56:47.000-05:00Aki: "<span>Regarding nine... what inve...<strong>Aki: "</strong><span>Regarding nine... what investments have Japanese companies made in their deflationary environment to cut costs? Have these measures of cost cutting made them more efficient over other competitor economies? Cost-cutting of labor seems to be self-defeating as it stifles a major source of aggregate demand contributing to deflation."</span><br /><span></span><br /><span></span><br /><span>Are you Japanese? Do you live in Japan? If you do, I'm curious on you perceptions about what has been happening over the last decade. Anyway...</span><br /><span></span><br /><span>My impression is that Japanese companies have been spending money on technology and processes over the decade to improve efficiency. For instance, Japanese car companies seem to be far more automated than anyone else. </span><br /><span></span><br /><span>However, as you mentioned, such moves hurt consumer demand. You either end up with layoffs (Japan has chosen not to pursue this) or flat to negative employee earnings.</span><br /><span></span><br /><span></span><br /><span><strong>Aki: "Maybe capital saving (not labor saving) cost cutting might be a benefit in this deflationary environment."</strong></span><br /><span></span><br /><span>I would argue that there is no such thing as "capital saving." Or even if there, I suspect that is the least of the worries during deflation. Although deflation destroys a lot of capital, my impression is that there is always excess capital--a capital glut if you will. For instance, returns on capital or cost of financing in Japan is really low. Some might argue this is because of the central bank but it really isn't. The free market is setting rates really low (the P/Es are so high and companies are sitting on huge piles of cash on their balance sheet.)</span>Sivaram Velauthapillainoreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-3348022774179039802009-12-01T19:09:36.000-05:002009-12-01T19:09:36.000-05:00I meant to say...
"Would this deflationary e...I meant to say...<br /><br />"Would this deflationary environment have the salutary effect of encouraging innovation?"<br /><br />I am very impressed with Thiel... he is a libertarian, but he doesn't seem to be an avid gold bug. He is a true contrarian. Instead of the circle jerk of gold bugs on Seeking Alpha, and Market Watch, he promotes a true contrarian investment. Long technology... long innovation. It is the bet we have to make!! Longing gold does not produce wealth, but technology does. If technology doesn't work, nothing will.<br /><br />"<span>Peter recently talked to an LP (endowment) who was thinking of re-allocating its portfolio to hold less than 5% in venture capital as its recent returns had not matched expectations. Peter told the LP that they’re thinking is flawed: if their 5% allocated to vc eventually does not return a mega profit, the remaining 95% allocation is going to be worthless anyway. ”Investing in technology as a VC is like Pascal’s bet: if that isn’t going to work, nothing will.”</span>"<br /><br />"<span>Peter slams the NASDAQ explaining that most listed companies are actually not technology companies, rather, they are zero-sum bets against technology (ex: investing in Google is feeding a monopoly on search, Microsoft doing well means linux suffers, etc). NASDAQ companies are more like banks than they are true innovators (Sun may be an exception).</span>"<br /><br /><a href="http://www.leveragingideas.com/2009/10/04/notes-peter-thiel-singularity-summit-talk/" rel="nofollow">http://www.leveragingideas.com/2009/10/04/notes-peter-thiel-singularity-summit-talk/</a>Aki_Izayoinoreply@blogger.comtag:blogger.com,1999:blog-6798074091942701235.post-73424722237043971702009-12-01T19:02:36.000-05:002009-12-01T19:02:36.000-05:00Regarding nine... what investments have Japanese c...Regarding nine... what investments have Japanese companies made in their deflationary environment to cut costs? Have these measures of cost cutting made them more efficient over other competitor economies? Cost-cutting of labor seems to be self-defeating as it stifles a major source of aggregate demand contributing to deflation. Maybe capital saving (not labor saving) cost cutting might be a benefit in this deflationary environment. Would this deflationary environment<br /><br />As for myself... many good investments are investments that people HAVE TO make. In order to get out of the economic crisis, we NEED more growth in science and technology (I see it as the only hope.). We HAVE to invest in science and technology so we can have a brighter future. What investments are essentially long innovation. Peter Thiel says large caps such as Cisco and Microsoft are implict short positions on innovation. Read the link below, Peter Thiel has influenced my views on innovation and science and technology. To me, this crisis is a crisis of science and innovation.<br /><br /><a href="http://thedealsleuth.wordpress.com/2009/10/19/clariums-peter-thiel-bearish-on-innovation/" rel="nofollow">http://thedealsleuth.wordpress.com/2009/10/19/clariums-peter-thiel-bearish-on-innovation/</a>Aki_Izayoinoreply@blogger.com