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Apple's Anno Miraculum

By almost any measure, Apple has been on an epic run of late. But it's more than merely epic. What other tech company has, almost 30 years after going public, turned back the growth clock to produce the fastest year-over-year growth since its first year as a public company? This is a  mega-cap company -- ~$288b market cap -- that just turned in almost 80% year-over-year revenue growth.

How unusual is this? Among mega-cap companies, of which Apple is one, there is precisely one company that has averaged 30%+ sales growth over the past five years, and that's Apple. Remarkable stuff.

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The Anthropology of Jerome Kerviel

via Paul Kedrosky's Infectious Greed by pk on 11/22/10

Fascinating Der Speigel interview with alleged SocGen rogue trader Jerome Kerviel. The anthropology of the thing is riveting. An excerpt:

SPIEGEL: Still, no other trader has exercised his or her freedom of action as ruthlessly as you did. You can't escape personal responsibility for this.

Kerviel: I did unreasonable things. But I am also an employee who was encouraged by his superiors for three years to keep on doing things in exactly the same way. I only used the exact techniques that I learned in my bank. Perhaps only the scale was bigger. I have never dodged my responsibility. But I cannot accept the fact that I am being portrayed as the only person who bears any responsibility.

SPIEGEL: Can banks really control people like you?

Kerviel: Of course. But you have to want to. Having more controls and regulations goes against efforts to pursue consistently higher profits at a time when all banks want to maximize their return on equity.

"But you have to want to" may just be the most important six words I have heard in this entire affair.

More here.

Bloomberg Announcement: Keep Calm and Carry On

via Paul Kedrosky's Infectious Greed by pk on 11/22/10

I have signed an agreement, announced today, to partner with Bloomberg across all of its platforms.

Let's get specific: What does this mean? For starters, I'll do a regular Bloomberg opinion column alongside people like Michael Lewis and others, plus there will soon be a new Kedrosky blog at Bloomberg.com. And there will be more later. But -- and this is key -- the current site will continue on as well.

This is the part of these notes where people prattle on endlessly about how delighted they are. Well, I am. Delighted, that is. This promises to be a fun scaling up of what goes on around here ... without stopping what I'm doing around here.

Further, it is a multi-platform deal, across web, television (which Bloomberg is rethinking in some creative and interesting ways), radio, and Bloomberg's terminal product. The days when financial information was just about television (or print, or radio), etc., are long over, and so, in the age of Google/Twitter/blogs/etc. being multiplatform is everything.

Bloomberg and I see things in similar ways: we love data, visuals, and synthesizing across economics, markets, sports, science, technology and current affairs. And meteorology. It also helps that Bloomberg doesn't shout that much, that politics bores them almost as much as it bores me, and that I'll keep right on doing my usual eclectic stuff, including speaking, this damn book project thing, investing in early-stage private companies and so on.

If you have any more questions, here is a FAQ. This is the interweb, after all.

 

FAQ

So, you're selling out?

Yes. I mean, it would be stupid to pretend that there isn't money involved. There is. (All upfront, and all in renminbi, of course. I have ace counsel.) But doing it just for the money would be boring. This simply seems like fun, and I'm interested in partnering with someone who can help grow a bigger audience for the sorts of things I like to do. And it helps that Bloomberg has more data than I do. A lot more.

What's going to happen to this site?

Nothing. I'll still be putting the usual sort of things here. Science, technology, economics, book stuff, academic papers, worrying over Wimbledon grass wear patterns, musing about what kind of tree Yahoo would be if it was a tree, wondering why Chinese cars don't use gasoline, and so on. You know, that sort of thing.

So, you're selling out?

It's about audience, scale, data and resources. It's about growing something and making it bigger, while giving me access to more people, a global audience, and so on. It's also about having fun. And if it's not fun, why do it?

What's going to be different?

I hope that more data, a larger audience and more resources will make the sorts of things I like to do more accessible to more people. Having said that, one of my goals in making the change -- and the Bloomberg people have been hugely supportive of me in this -- is to make the changes as seamless and transparent as possible.

To be specific:

1. This site stays the same.
2. There will soon be a new Kedrosky site at Bloomberg.
3. I will do things on other Bloomberg media (and I won't do anything on CNBC or TheStreet).

This is a good time to thank the latter two organizations. Both CNBC and TheStreet have been fantastic with me lo these many years. They have been patient, supportive, generous, and huge fun to hang with. I can't thank them enough. I really can't.

So, you're selling out?

You won't give up on that, will you? Yeesh.

No, No Trade Theorem

via Marginal Revolution by Alex Tabarrok on 11/16/10

One of my favorite scenes from Michael Lewis's The Big Short is a great illustration of how adverse selection or fear of adverse selection can prevent a market from operating and how noise traders open the market.

Steve Eisman wants to bet against subprime.  Greg Lippmann wants to sell him that bet. But Eisman and his partners hold back. They keep asking what does this guy know that we don't? Why is he selling us this great deal? Could it really be this obvious?  Could it really be this simple? Over and over again they questions Lippmann and themselves. "Greg," says Eisman's partner, "Don't take this the wrong way.  But I'm just trying to figure out how you're going to fuck me."

Everything is telling Eisman that this is the bet of the century but fear that he is missing something, that the other guy is smarter than he is, still holds him back.  Finally, Lippmann hits on an unusual idea, he invites Eisman, who wants to short subprime, to meet with the buyers of subprime.

The teppanyaki room inside the Okada restaurant consisted of four islands, each with a large, cast-iron hibachi and dedicated chef.  Around each island Lippmann seated a single hedge fund manager whom he had persuaded to short subprime bonds, along with investors who were long those same bonds.  The hedge fund people, he hoped, would see just how stupid the investors on the other side of those bets were and cease to worry that the investors knew something they did not. 

Lippmann's plan works.  Eisman meets the buyers and for the first time groks the stupidity that is ruling the market and he makes the trades that will make him and his partners rich.

We have not delayed iOS 4.2, and there is no WiFi problem with 4.2 on iPads

via The Secret Diary of Steve Jobs » Steve by Steve on 11/12/10

Despite what you may have read on idiot blogs like Engadget, we have not “delayed” the release of iOS 4.2. What we have done is reset our ship date to a future date that has not yet been determined. That’s not a delay. It’s a date change. Also, contra Engadget, the new software is not having “issues” or suffering any “serious looking connectivity bug.” What Engadget seems to have stumbled upon is a new feature that enables the iPad to rapidly connect and disconnect to a wireless network, thus saving battery life. The switching takes place at a speed that is actually faster than the speed at which neurons fire in your brain, so that to the end user the rapid connecting and disconnecting is not detectable. We call it Neuron Switch and we’re actually super proud of how amazingly awesome and mind-blowing it is, and we’ll be shipping it when we feel the world is ready for it, which might be today or might be some other day. So, Engadget? Get your facts straight. And next time, maybe call us before you just print something. Peace.

Related posts:

1. WiFi issues? iPad? You’re kidding?
2. $100 laptop: Now $200, and delayed again
3. We will be extracting a retraction and apology from sweaty weasel Mark Zuckerberg

Nasdaq 100 Nears Prior Bull Market Highs

via Think BIG by Bespoke on 11/8/10

While the S&P 500 is still struggling to break above its 'pre-Lehman' levels, the Nasdaq 100 is already working towards the level it was at when the index peaked in October 2007.  As of this morning, the index is only 2.2% below its pre-Collap$e closing high a little more than three years ago (10/31/07).  It sure helps when a stock like $AAPL makes up 20% of your index.