Tech

Here's proof that newspapers will never be dead, despite threats posed by the internet. They'll just take different forms and be consumed for different reasons than today.

An Amish newspaper "The Budget" has stayed in business by focusing on a loyal audience of 20,000 Amish readers, and has actually shunned the internet in order to create a sense of exclusivity.

AP: As other newspapers increasingly shed staff and reduce the frequency of their print editions in the face of growing competition from the Internet, The Budget is plodding along comfortably in the recession.

Subscriptions, which cost $42 a year and account for most of the newspaper's revenue, have dropped by just a few hundred in the past year. Advertisers — who are mostly Amish — are not fleeing to the Internet. And plans are in the works to add a couple of reporters to The Budget's editorial staff of about a dozen people.

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Amish newspapers provide a sort of social glue for the community, says Don Kraybill, a leading expert on the Amish. "They may not be able to worship together or collaborate together, but they can learn about each other through these newspapers," Kraybill explains.

The Budget has upside potential as well, given there are 227,000 people in their target Amish market.

There must be thousands of niche audiences across the US who would pay to receive a newspaper-style product. At the very leasr, "Classic" usually has a market within most product types. Also, there is an experience to be sold on top of the information you provide.

Hopefully struggling newspapers companies get their act together. Or at least learn how to get a decent-looking website running.

 Sometimes "professional" investment research resembles little more than a day trader rag with nicer charts and fancier wording to make the reader feel less guilty and more professional about the kind of "investing" he or she is actually performing. Thus we point to Goldman's recent China "Portfolio Strategy" dated July 31st where they tell us to basically keep buying the Chinese market based on government support for the economy and a "favorable liquidity setup". We're told to buy on dips, "stay engaged" (ie. keep generating commissions), and trade earnings suprises. Is this professional investing or what your college roommate was doing during the dotcom bubble? It's hard to tell the difference.

Market view: Stay invested; buy on dips for new money A-share market gained 12.4% in July despite a 5.3% correction, which was provoked by concerns regarding credit tightening, on July 29. We maintain our positive market view on A shares and think the government’s pro-growth policy stance, which should ultimately lead to macro/earnings recovery and a favorable liquidity setup, will continue to bode well for equities.That said, we see price volatility nudging higher as uncertainties revolving around interim earnings and the government’s monetary policy stance intersect with an above-mid-cycle multiple (24x). We would stay engaged in the market and look for opportunities to accumulate positions on dips.

Strategies: Domestic demand exposure; Trade earnings surprises We recommend investors to focus on the following themes to gain exposure to the A-share market: (1) Laggards with valuation buffers and reasonable EPS growth; (2) Pro-cyclical domestic demand, which includes banks, insurance, property, and selected consumer and materials names; (3) Stocks that are potentially subject to positive earnings surprises.

That's the front page: trust the government to support the market, trust dumber investors to follow you (liquidity) and try to make little earnings trades hoping for pops. Oh wait. What about valuations?

Valuations: Above mid-cycle, but may persist CSI300 is now trading at around 23.9x I/B/E/S consensus P/E and 3.2X P/B on a 12-month forward basis against an average of 18.9x and 2.0x since April 2005, respectively (see Exhibits 1 and 2). On the basis that FY09 EPS growth for the aggregate market could be lower than the 15% that I/B/E/S consensus is currently forecasting, the forward P/E for CSI300 would be even higher at around 26.6x using our FY09 EPS growth assumption of - 5%. July 31, 2009

So valuations are sky high and earnings estimates might be missed. But we should hang on, because high valuations may persist. That's our upside investment case. High valuations may persist... and actually need to go higher or have upside earnings surprises to really give us upside on stock prices since they are already stretched as it is. Also, note that they compare recent valuation multiples to the average since... only 2005.. which was still a pretty bullish period for Chinese equities. So valuations are stretched even above what we saw during a pretty bullish time for China, but we should just have confidence in the government and liquidity to keep pushing things higher. This is what we are made to believe is "professional investing" rather than a gambler's punting.

I'm sure most who follow business news have heard that the FCC is probing Apple's decision to reject Google's internet-calling software and remove certain Google applications from it's app store... 

The Federal Communications Commission has launched an inquiry into why Apple Inc. rejected Google Inc.'s Internet-telephony software for the popular iPhone, another sign of the Obama administration's stepped-up scrutiny of competitive practices in the technology industry.

In letters sent late Friday to the two companies and AT&T Inc., the FCC asked why Apple rejected the Google Voice application for the iPhone and removed related applications from its App Store.

This will be ridiculous if it moves forward. Apple just entered the phone space, it might be a little early to say that their iPhone has some sort of insurmountable competitive barrier. Furthermore, I like how the FCC is studying whether it was wrong for Apple to chose which products should be sold in it's own shop. I mean, it's pretty normal that if someone owned their own store, they wouldn't want to place threatening products from their competitors in it. I don't thinks Starbucks would want to have Dunkin Donuts coffee as an option in its own shops.

Yahoo and Microsoft are very close — a year and a half after Microsoft went public with its buyout offer for the beleaguered web giant — to inking a search deal. AdAge’s Michael Learmonth reports that an agreement is likely to be announced this week, and would solidify Bing’s No. 2 position behind Google. The deal, as it’s understood now, would allow Yahoo to dump it’s OK-but-not-great search engine in favor of Bing’s, saving on infrastructure and R&D costs. Searches on Yahoo.com would remain Yahoo branded (though perhaps with a “powered by Bing” notation).