Media Diversity

I'm watching Glenn Beck's show on Fox right now... I have to chuckle a bit about Beck's freak out over moves by the FCC to diversify media. He views having more owners of media outlets as a consolidation of media by Obama and other "minorities."

Personally, I have felt that corporate media is generally a bad thing. GE, Turner, and Murdoch control virtually the entire media apparatus in our nation. The FCC proposes to breakup the ownership of media in America so that you cannot have one man or company own multiple media outlets in multiple markets.

The FCC would also like to restore journalism to the broadcasting standards prior to the 1980's. In the past, news programs required a balanced discussion so that the viewer was presented with both sides of an issue. News programs were also hosted by journalists - not the glitzy commentators that feed modern day propaganda.

Imagine watching MSNBC and instead of lopsided segments run by Keith Olberman, you'd have a real news anchor in the mold of Chronkite presenting facts without bias or spin.

But I guess that wouldn't be as entertaining as watching Glenn Beck. And I guess that's the point. Media has become a product and is rewarded by appealing to our worst characteristics.

Ted Turner owns CNN, Headline News, Time Magazine, AOL, TBS, etc etc. Rupert Murdoch owns Fox News, Fox, Wall Street Journal, Dow Jones, New York Post, etc etc. I would love to see GE break up it's NBC, MSNBC, and CNBC units away from each other and away from the parent conglomerate.

A healthy Republic demands a free media. When I say free media, I do not mean a media owned by three people who can craft the message for 300 million.

The day that media is free from control by a corporate oligopoly will be a great day for America.

The Devolution of the Republican Party

It saddens me to see a mighty elephant flailing around. While there are many issues in which I completely disagree with the GOP, I can always say the same for the Dems.

My view of a vibrant Republic depends on strong, intelligent factions working to balance the power of competing interests in a constructive way. Unfortunately what we have with the modern day GOP is a unified mouthpiece of downright crazy distortions and dangerous ideas.

This is the party that arrogantly waved the "Country First" banner just last year, but has stopped at nothing to derail policies and destroy individuals for pure politics - the country be damned.

This is the same party that flooded evangelical churches with flag pins and yellow ribbons and other token trinkets of disengenious patriotism. "Only 'good white Christians' love America", they said with a smirk and wink. All while driving SUVs as they send someone else's kids off to die for oil and war profits.

This is the same party that is now so transparently concerned with deficits and expansion of government power with the recent memory of a rubber stamped USA Patriot Act, creation of the Dept of Homeland Security, the nationalization of airport security, and the whole sale bailouts of insurance and airline companies following 9/11.

Let's not soon forget their grossly perverted interpretations of the Constitution to justify domestic spying, death squads, mercenary forces patroling US cities, indefinate dentention facilities, torture of Americans and POWs alike, naked war profiteering for companies once run by the Bush family, Cheney, or Rumsfeld, and countless other atrocities that I pray history will soon lay bare.

This is the same party that dismantled financial regulations that were installed to keep the country safe from another Great Depression, only to put this country on the brink of financial collapse before the term of their president was even through.

This is the same party that rails on about the need to reverse the deficit as they pass glutonous tax breaks that go almost exclusively to the very rich. These tax breaks are passed even as we engage in two wars. The result was a doubling of the national debt.



So to the GOP, stop this complete nonsense about "not seeing a birth certificate." You're friggin retarded if you simply refuse to look at the stamped/signed copies provided by the state of Hawaii for distribution to the media. Stop trying to destory the president personally to score political points. What about trying to help this country? What about trying to bring new ideas to the table? What about appealing to our better angels?

Tech Stocks to Watch

To continue with my series on tech stocks, I'd like to include some larger companies that - in my opinion - belong in the tech portfolio of any good investor.

I'm providing this analysis as a general summary of each company and I do not give advice on the exact timing and pps for an entry point. This is part of my DD for the investors in my own company - you must do your own due diligence. As always, read the stock disclaimer before anything else.

Amazon - Buy
Google - Buy
AMD - Buy
eBay - Buy
HP - Buy
Dell - Buy
Apple - Neutral
IBM - Neutral
Oracle - Neutral
Cisco - Neutral
Yahoo - Hold (short), Sell (long)
Microsoft - Hold (short), Sell (long)
Sun - Sell

Next: Amazon »

Google (GOOG)

(No Surprise Here)

As I blog on the Google Blogspot service, using a Google Gmail account as my moniker, and search for research material on Google Search and Google Finance, I find it easy to recommend GOOG to investors.

Google hosts my company's email service (Google apps) and I highly recommend it to the organizations that I work with. I've largely abandoned the desktop driven MS Office application suite in favor of the web based and highly interactive Google Docs. We use Google Analytics for web traffic analysis, and spend some cash on Google Ad Words. I'm also looking into Google's cloud features for possible future deployments.

Google's revenue stream is heavily advertising driven, so one would expect their profits to suffer greatly in a recession. However, Google has capitalized on a great new market and is siphoning revenue from traditional media outlets (newspaper, TV, radio, etc) and competitors (Yahoo, Ask, Microsoft, etc) alike.

Google also gets a handsome amount of revenue for their enterprise applications like Google Earth, Google Apps, and Google Enterprise Search.


Google Chrome OS
Google's recent foray into the Operating System marks an important shift in computing. To many glossy eyed pundits, the announcement is dismissed as Google getting involved in what it knows nothing about.

Other pundits (including yours truly) see much more depth to this move than meets the eye. Forget for a moment that Google has essentially maintained its own operating system for years - what highly customized systems do you think run the worldwide Google farm? Forget for a moment that some very powerful open source operating systems have already found modest success on their own (Ubuntu, Red Hat). And do your best to forget that Apple's OS X is merely a pretty face on an open source operating system (BSD).

Google is simply going to apply a clean, user friendly face to the Linux kernel - much like Ubuntu and Apple have done with some success.

But the real secret to releasing an operating system is the recognition that the "Operating System" as we know it is over. The OS is a commodity in Google's world vision. There is no more room for a monopolistic company to keep the masses bound to one platform for all PCs.

For this world view to survive, two critical things must happen. (1) Companies must be willing to change their operating system, and (2) applications must be willing to go from the desktop and on to the web.

I think that since 2006 or so, many companies have been holding off on new IT investments. When hardware has reached a temporary plateau and Vista did not provide enough to convince folks to move, companies held tight to WinXP. Application vendors held off and many new services are at least partially offered online. Most importantly, the next crop of workers were raised in the Internet Age. They expect to do their work on the web.

The trend is moving overwhelming in support of Google's world view. The big question is how well Google is equipped to handle stewardship for the next great technology boom? Since they also have a lock on Silicon Valley brain power, I'd say their chances look good.

Just remember, Google: Don't be Evil.

Amazon (AMZN)

Amazon is truly a hidden gem of the modern technology age. I doubt that few investors fully understand the cloud technology that Amazon has developed and made into such a vital part of the company.

Aside from being one of the largest online retailers (focus on books), Amazon has drop ship services for merchants and sells a digital book reader called Kindle.

Below the surface of Amazon.com lives a hive of hundreds of thousands of machines at dozens of locations around the world. It is this massively scalable compute farm that gave engineers at Amazon a brilliant idea - rent out their unused horsepower to smaller organizations that could benefit from a massively scalable farm of their own.

Several years later, companies like Nasdaq, the New York Times, and countless unnamed government and Fortune 100 organizations now rely on the computing power in Amazon's cloud.

I'd love to go on and on about Amazon Web Services (AWS), but that's really a topic for a separate and highly technical discussion. The bottom line is that companies looking for short term horsepower or an outsourced core network can choose from a menu of services offered by Amazon.

For those needing to store large amounts of files (pictures, video, news content, backup files, etc), Amazon S3 charges a few cents per month per GB to hold the data. And it will also charge a few cents per GB transferred to host the data for the world.

For those needing 10 machines or 1000 machines, Amazon EC2 will provide this to you within minutes of issuing a command. There are no contracts or startup fees - you simply pay a few cents for each hour you use a machine. You can choose from a variety of hardware sizes, and you have the option to use Windows or Linux. This is a favorite of researchers, academics, and web startups looking for temporary or highly burstable traffic.

If you need a database, you can also rent this functionality by the transaction. Amazon's SimpleDB is internally scalable, so there's no need to worry about clusters or mundane maintenance.


Bottom Line
Amazon has positioned itself as a leader and early favorite in the cloud computing market. This, combined with a strong online retailer position should push Amazon into a highly profitable future.

Disclaimer: My company runs its services entirely through the Amazon EC2 farm. We also take advantage of S3 for file storage and are looking at modifying some apps to take advantage of SimpleDB.

AMD

I should start by saying that I've always been partial to AMD's processors. When I used to build my own PCs, I used AMD exclusively.

I believe that the EU's recent anti-trust rulings against Intel will favor AMD attempts to compete on a level playing field.

I also think that AMD should - in theory - have the sales advantage during a recession because their products consistently provide more horsepower for the dollar.

Combine this now with Google's efforts to release an operating system, and I think we're going to see a reemergence of the PCs wars. Such a burst in spending will greatly improve the AMD bottom line.

In the 90's, our choice was simply Apple OS on Apple hardware or Windows OS on a variety of PC hardware choices. Today, Windows can run on either AMD or Intel, as will Google Chrome and other Linux systems. In fact, Apple is now running on x86 architecture and could easily run their systems on AMD.

Barring some unforeseen revelation, there is nowhere to go but up for AMD.

Delta Smelt or Delta Sharks?

Why Are California's West Side Farmers Getting Squeezed?

California is the nation's top agricultural exporter and home to nine of the top ten farming counties in the entire nation (1). Much of the San Joaquin Valley (roughly the area between Sacramento to Bakersfield) is devoted to farming operations. This region was once one of the largest in-land lakes, but it was extremely shallow and irrigation projects allowed the region to be settled and farmed.

Fast forward to 2009. The hot button issue with farmers is a decision to cut off irrigation to many west side farmers out of "respect" for a variety of fish called delta smelt. These are not native fish, but they thrive in one of the key reservoirs that delivers mountain water to west side farmers. When the irrigation gates are opened, the small fish tend to clog up the machinery of the gates - killing many fish and costing money for clean up.

To fix the problem, the state says it will need as much as $25M to install fish screened gates. I'm sure they could have picked a more ridiculous number out of their hat, but $25M seemed credible enough. In the meantime, water deliveries to thousands of farmers are simply cancelled - a move that will likely cost 60,000 jobs in the farming sector in this season alone.

Sounds horrible, doesn't it? It's almost enough to get one hating all environmentalists and moving even further to the right...

Unfortunately, this story has many strange bedfellows.


It's like déjà vu all over again
As the Los Angeles basin was developing beyond its means last century, developers sought to get further out into the basin where land was cheaper and rules were loose. The problem was finding sources of water to support new residential and commercial developments.

Some of the very successful developers worked out deals with water commissioners that inexplicably led to water supplies getting cut off to small, rural farmers. The resulting season brought that farmer bankruptcy - without water, he can't produce and earn money to pay his debts. And without water rights for the farm land, the dirt was nothing more than a worthless desert.

At this point, developers would head out to that poor farmer and offer him a 'generous' deal on his land - walk away for pennies on the dollar and we'll assume your debts. Once all of the farmers in an area were out of the way, water rights would be restored and a city would spring up. All of this was massively profitable for the developer.

To see this scenario in action, go watch the classic movie called "Chinatown" (Jack Nicholson).


How does this relate to Delta Smelt?
Today's "Delta Smelt" water crisis is just cover for a more straightforward scenario.

California has long planned to develop the west side of the central valley into one large series of "sleeper" towns for LA & the Bay Area. The coastal regions are heavily populated and working class folks have trouble living in the towns that they work in. The plan has been to develop a high speed transit system to shuttle workers from the valley and into the major metro centers of LA and the Bay Area. Voters approved the high speed rail system last November, 2008.

But there is one problem to this plan: Farmers currently own all of the land.

Farming is a profitable business and California farmers have a penchant for strong business acumen and highly efficient operations. Modern farmers in this area are also wise to land prices. When urban development approaches, they know it's time to cash out and they work to transition their land into "entitlement ready" parcels.

And that's where modern farmers run afoul with history. By being smart businessmen, they are cutting out middleman developers who seek to buy farmer land below value by any means possible and sell it to builders. The workload is light and risk is low, but for all of their near zero effort they expect to see 10-20 fold returns.

It looks to me like these modern day developers (sharks) appear to be turning to old dirty tactics and slight of hand.

By convincing a few bureaucrats to cut off the water supply, many farmers will go into default on their land. They'll be forced to sell in a hurry or lose everything in bankruptcy. Speculators will come in and buy the land cheap, hold it for a few years, and then develop it during the next housing boom cycle. Without this fire sale, few developers will work to rapidly buy up and build out the valley. And without irrational development on the scale that we saw from 2003-2007, the state will not be able to fully realize the goal of a giant 300 mile long suburb along the I-5 corridor.


How to solve a phony crises?
I urge you to look at history as your guide as to how this situation was engineered and how it will play out. You'll have a lot less success fighting the delta smelt than you will fighting the true culprits of this phony crises.

You can do a few things.

1. Call a spade a spade. Shine the light on this scenario - but do it carefully and in full view of historical examples. You'll quickly find politicians from both parties aligning to dismiss such claims. Take their names and look into their political donations.
2. Provide training to farmers to arm them with the tools necessary to negotiate their land prices. Show them the basic steps to removing their land from the Williamson Act and work towards basic entitlement steps. Such moves blunt efforts by developers to claim that the land would be worthless without a farm. Farmers must be one step ahead of developers if they hope to stay in control of their land.
   
3. Use "environmentalism" to your advantage. The recent federal energy bill paves the way for small landowners and farmers to use their property for energy production. The west side has decent winds and full sun, so consider adding a few turbines and solar panels along side your crops. Not only would you get access to new federal funds and financing, you would also be protecting your land from urban conversion and generating some passive revenue. Revenue generated from electricity could be enough to float you through a season without water.
   
4. Get connected with Families Protecting the Valley. While they appear to be a decidedly right wing only organization, they are well funded and well directed to meet this challenge.
   

I wish you luck if you are one of the farmers affected.