Can Turtles Fly?

One of the biggest bubbles over the last decade was the shipping bubble. Driven by the trade boom with China and other emerging markets, large investments were made in ships. Companies mortgaged their future and purchased a large number of ships, with the assumption of good times continuing forever. Long-time readers may recall when I wondered about the industry (from a contrarian point of view) back in 2009 in this post and this one . Time flies but even then, it seems like the shipping industry is still working through its overcapacity problem. It's interesting to note that they are still having problems—this, without China entering any slump, yet. Marketwatch reports, The warning signs being flashed by the collapsing Baltic Dry Index (BDI), a leading global economic indicator, may reflect the folly of misguided expectations during the prior global economic boom, according to Hong Kong-based shipping analysts. New super-sized ships ordered up during the era of cheap cre...

Warren Buffett Speech at the University of Georgia  Terry College of Business 2001 (source: University of Georgia - Terry College of Business . 2001.  Thanks to Aniruddha "Andy" Kardile's League of Extraordinary Value Investors blog for bringing this to my attention.)

You're using Internet Explorer 7, upgrade to a faster browser. Show me how I'm stuck using IE7, please don't show this again Remind me later The Globe & Mail's Report on Business magazine had a short blurb on the current state of computer trading in Canada . As many readers are likely aware, a huge chunk of the trading that occurs on stock exchanges presently comes from computer trading (such as high-frequency trading and computer-driven arbitrage). I am not a trader and most readers of this blog likely aren't either, but you may be interested to see how the short-term traders act. Trading has always been tough—to make matters worse, many of the markets they operate in are zero-sum markets!—but now they are competing against computers following algorithms. I have never been a trader, and am not familiar with professional traders either, so it's not clear to me if the current environment is harder for the professionals. Instead of relationship...

(Image by boston.com. Downloaded from jamieflinchbaugh.com ) In his latest for The New Yorker , James Surowiecki points out two major flaws with private equity as it currently operates. In particular, he raises the carried interest controversy and the notion that private equity uses debt to extract profits, while, at times, running the company into the ground. Should the government scrutinize how private equity is allowed to operate in America?

Will China Ever be As Rich as USA? China's total GDP will surpass USA within a few decades simply due to its larger population. But will each of its citizens be as rich as USA soon? There is nothing to say China—or some other country—won't ever surpass the wealth of USA on a per capita basis, but it's not as likely as many assume. The Federal Reserve Bank of Dallas examined this question in their June 2011 Economic Letter  (bolds by me): So, is it likely that Chinese living standards will ever match those in the U.S.? To get a handle on this question, it is useful to look at other countries’ experiences over a long period. Many nations underwent development miracles in the latter half of the 20th century. Reviewing data on the evolution of global living standards over the period reveals two interesting facts. First, there are several countries where per capita GDP exceeds that of the U.S., often by significant amounts. Almost all of these nations are oil exporters....

Netflix Headquarters (Image source: Getty Images, via Huffington Post ) I took a look at some of the qualitative aspects Netflix (NFLX) in prior posts ( here and here ) and it's time we look at the financials. I think any success or failure with Netflix's stock will still come down to its business model and competitive dynamics but, nevertheless, the financials provide a valuation guide for an entry point. The stock has run up so much this month that its valuation isn't attractive right now. Most of the shareholders of Netflix—or at least those represent a big chunk of the volume—appear to be growth investors or momentum traders, so you will see more volatility in this stock than a typical company. As I have mentioned before, Netflix is going through a major transformation, from a DVD-by-mail business to an online streaming business, so its financials prior to 2010 aren't reflective of its future. Furthermore, the company has grown so rapidly within an year t...

The Technology Ecosystem Demystified (source: " Startup Ecosystem: Predator vs. Prey " Downloaded from visualizing.org. Original source:  udemy blog )