I am taking a training course for SQL Server 2000 this week and after the first day I decided I should go home and install a SQL server at home. I’ve got the Win 2k3 box set up, but I’m still working on getting the SQL Server up.

Overkill? Definately. But it’s going to be sweet.

Google’s got the beta version of their “print” site up. They’ve scanned in a bunch of books and allow users to search the full text of the book. I’m not exactly sure what to make of this, but it’s kind of cool. I’m still a bigger fan of Project Gutenberg because it allows me to download the files for use in my PocketPC but the Google print at least looks interesting.

For a comparison click here (Google) and here (Project Gutenberg) for two examples of The Wealth of Nations.

Google’s is pretty.

I finished the Secrets of Economic Indicators and enjoyed it. It’s a very good resource if you want to take a look at the raw numbers when they’re released and know what they mean. I’m planning on keeping the book near my computer so I can grab it when the big indicators come out.

I’ve now switched to a book by Jeremy Siegel, a professor at the Wharton school, called The Future for Investors: Why the Tried and True Triumph over the Bold and the New. I’m only on the 4th chapter but so far I agree with most of what he has to say.

His basic premise is that instead of investing in indexes, playing the market or investing in new companies (like technology stocks), the best stocks are those which are undervalued but have consistent quality. He argues that because “growth” stocks are perceived to be a better investment, the returns on those stocks will not be as good as those stocks which are of equal quality, but not considered high growth.

In the book he gives the following example:

If you were to pick one of two stocks in 1950, IBM or Standard Oil of New Jersey, and the goal was to maximize a $1,000 investment – which stock would you pick? If you look at growth numbers, IBM outperforms Standard Oil in all of the categories: Revenue Per Share, Dividends Per Share, Earnings Growth and Sector Growth. It seems like IBM is a much better investment. But that, Siegel says, is the “growth trap”. In fact, your $1,000 investment in 1950, with all dividends reinvested (a key part of the argument), would have been worth $961,000 in 2003 with IBM – but it would be worth $1,260,000 if you had chosen Standard Oil of New Jersey (now Exxon Mobil).

The reason is that investors expected IBM to grow more, and it was priced accordingly. With the dividends that Standard Oil paid you would be able to buy more Standard Oil shares (and accumulate more wealth) than with the dividends that IBM paid.

It’s not just a fluke of the Oil industry either. With a $1,000 investment in National Dairy Products (now Kraft/Altria), your final accumulation would be $2,042,605. R.J. Reynolds Tobacco would have netted $1,774,384 and Coca-Cola would have appreciated to $1,211,456.

Investing $1,000 each in the four top firms in 1950 would have gained you a total of $6,291,510 while investing the same $4,000 in the S&P 500 would have gotten only $1,118,936.

So far, it’s a fascinating theory and a pretty good read. I’ve got some additional theories on what stocks would be most suited to this theory today (because I think the paradigm has shifted a bit) but I’ll wait until the end of the book to spell them out.

If anyone is interested in taking a look at the book, the link on the left will take you to the amazon.com page. I’m hoping I can get Prof. Siegel to sign mine at some point.

I had the priviledge of taking a tour of the New York Stock Exchange on Friday. Because I work in the Learning Labs group of Wharton Computing, we work closely with professors to build software for the classroom. One of these professors has a class that gets the chance to tour the NYSE once during the semester and because of my affiliation with the Learning Labs group I got to tag along.

Our day started on the floor of the NYSE. We were paired up and each assigned a specialist for a couple of hours. There are 7 specialist firms on the NYSE. Each firm is in charge of the stocks that are traded. My specialist had Freddie Mac (FRE), Schlumberger (SLB), Nucor (NUE) and another small stock. The specialist works for a firm (one of the 7), but has a relationship with the companies whose stock he/she is in charge of. We got to see the person in charge of Berkshire Hathaway’s (BRK) stock and found out that he talks to Warren Buffet every day at noon. Pretty cool job.

On the floor there are hundreds of actual traders on the phone with their clients making trades with the specialists in addition to thousands of orders coming in electronically. The specialist is really in charge of setting the price of a stock. He has a list of all the bids coming in at specific prices and all of the asking orders at specific prices. When there is a significant match, he “crosses” the transaction and that’s the new price of the stock. He also works with the floor traders doing the big orders to fill their orders at different stages. It was really cool to see the stock changing price before my eyes and knowing that a LOT of money was on the line.

The atmosphere on the floor was a crazy mix of people all yelling, joking, trading and talking. It seemed very low key to me; much more informal than I thought it would be.

After hanging out with the specialist, we went and followed around a floor trader. My floor trader was having issues with his client and he had to watch one specific stock while we were there so we didn’t really get to move around and see much. Luckily he had one of his other guys take us on a quick tour. We got to see where they trade General Electric, General Motors and Exxon Mobile.

The floor is technologically awesome. Everyone’s got Wi-fi PDA’s that transmit order info and let them see everything they need to about a stock. The exchange building itself is 250 years old, so seeing the contrast of high technology in this beautiful old marble building is quite impressive.

We then got to talk to a person who is in charge of some of the regulation of the NYSE. He gets alerted every time a stock moves significantly. He then checks on the reason it moved (news info, company announcement) and if it seems to be moving for no reason at all, can track the news to see if someone is taking advantage of inside information.

It was a really, really great time. Seeing the way the whole process works gave new meaning to the ticker symbols and prices that flash across the screen. It seems really chaotic down on the floor, but it?s a very precise chaos. The traders and specialists have usually been in the business for a long time and move through things pretty quickly. The people I talked to said the whole thing is based on intuition and guts.

I think that they need a stock exchange in Seattle so I can be a specialist. It could trade Asian ADRs and technology companies. Seems like a good idea to me.

I’m usually a pretty avid Microsoft supporter. Partly it’s because I admire big business, but also partly because I think that the company gets unfair treatment from the “Indy” sector of the internet. As a result, I still use Internet Explorer. I have Firefox and Opera installed on my computer because I appreciate that my websites should be usable on all browsers, but I hardly ever use anything other than IE except when I’m doing web work.

Therefore, the news that Microsoft won’t be supporting CSS2 in IE7 was very, very unwelcome. I usually stand behind Microsoft for most things, but their support of the internet standards has been very sub par. As the article touches on, they’ve been able to get away with it for so long because there were no other competitors. But now with Firefox, the chink in the armor has been discovered and Microsoft no longer has the luxury of being able to ignore the standards of the internet.

I think that standards are the essence of usability on the web and that without them, developers are at a disadvantage and end users end up paying the price in websites not displaying correctly and information not being available in a readable format.

Maybe Microsoft thinks that if users and developers are forced to choose, they’ll choose Microsoft. I think that’s an unnecessary gamble to make. Despite slashdot-mongerers everywhere, I think Microsoft is an innovative company. They should be able to get ahead by making their new browser better, not by trying to conform the web to their will.

I listened to the presentation today of Steven Elop, CEO of Macromedia at the Lehman Brothers 2005 Global Software, IT Services and Internet Conference.

Because Wharton uses a lot of Macromedia’s products, it’s their technologies that I’ve found myself learning and I think I’ve staked a bit of my fledgling career on the success of the company. I’ve also staked a bit of my fledgling savings with them in the form of stock.

I think Macromedia’s strongest asset is its Flash Player. If you look at the chart you can see that the number of internet users who had the newest version of Flash went from 66.7% in June of 2004 to 82.8% in December. The Flash player is essentially ubiquitous to the internet and because it is cross platform allows developers a well defined, universal standard.

I’ve known for a while that Macromedia is headed in the Mobile direction. They’ve signed a deal with Nokia and they have deals with NTT DoCoMo and Samsung to provide Flash on the actual cell phone and also Flash content that can be downloaded and viewed.

For developers this has created a huge market in Asia and Europe. If you listen to the presentation you’ll be impressed with the numbers.

I’m not entirely sure of the best way to capitalize on this here in the states however. Obviously the Mobile market isn’t as developed as it is in Asia and there’s still a frontier out there for both developers and businesspeople.

Cellular phones haven’t matured as fast as they could have, and while some people think the PDA is dead, I don’t agree with that statement. But if Flash player can come along and open up the US market to a wide range of developers as it has in Asia, I think that the mass adoption of cell phones as an information tool will explode. As screens get bigger and keys get smaller we’ll be able to play games, watch television, and download news that is both rich in content and nicely delivered. We could watch a snippet of CNBC or take a look at a memo in FlashPaper format using the same device that we use to call home.

It will be very cool to see what happens in the next few years.

Over the weekend I added a piece to the right sidebar called “What I’m Reading”. I’m not a particularly avid reader, but I am always reading something. The last book was Riding the Iron Rooster: By Train Through China which my in-laws gave me and turned out to be a fascinating look at China. It took place in the 80s and a lot of things have changed in China since then but it gave a good look at parts of China that most people don’t see. I was impressed with Paul Theroux.

Despite the heart-stopping title of my current read, it’s actually a very good book. Not something I’d suggest as “entertainment” reading but good nonetheless. I’ve even started to add all of the economic indicators in the book to my Outlook calendar with links so I can check them when they’re released. Reading about what data is available and what that data means to the various markets has been interesting.