Reef Chiu and Rafn Benediktsson both wrote about Warren Buffet, and I found his investment strategies in different situations very interesting. Reef wrote about his $11 Billion purchase in IBM stocks, an investment unusual as he had previously always avoided tech companies. Reef has mentioned how he believes Buffet is mainly in it for the company’s well-known services business, and that although it is a tech company, it represents one of long term stability. It is not the most talked about tech company, but it is the 7th most profitable firm in the US, a very surprising fact for me personally.

While Reef wrote about Buffet’s strategy of investing in stable companies for long term gains, Rafn wrote about some of his risky investments, investing in disasters. Buffet recently bought European retail giant Tesco, amidst the Euro Crisis, a crisis in which Buffet does not exactly seem optimistic about. This fear however, has lead to a huge drop in prices. In a similar manner, Buffet has travelled near the Fukushima power plant to buy a 71.5% share in Tungaloy, a company that makes manufacturing tools for car production.

These seemingly opposing strategies, of seeking long term stability, while also putting huge amounts of money into a situation most are panicking about show Buffet’s bold yet insightful ways of investment. As Rafn said, he is also keeping the market going and aiding in it overcoming the crisis it is in.

Adrian Fung made a post entitled “Are they lack of business ethics or just acting slowly?” in which he criticised Toyota’s response to its acceleration problems in changing the design of its new cars and possible lack of care for its users.

I have personally heard many people say they would never buy a Toyota again, and I think it is unfair to the company, especially considering Federal highway safety officials have “absolved Toyota, and said driver error was to blame for most of the incidents”. Initial news travels much more than clarifications of it afterwards however. Many more people heard Transportation Secretary Ray LaHood suggest that consumers should stop driving their Toyotas than when he said “We feel that Toyotas are safe to drive”. The impact on Toyota’s reputation was enough for profit to fall 39% in the December-ended quarter.

Even after this hit to their reputation and having to deal with the earthquakes and tsunami however, Toyota is coming back and ready to handle the competition with 20 new or heavily updated Toyota/Lexus products coming over the next 18 months.

Bryant Hsiao recently commented on a post by Maddie Erjavec on advertising unhealthy foods to children. Maddie posed the question as to whether it is right for companies to advertise unhealthy foods to an audience who is not yet capable of making good judgements. Bryant said he believed it was not wrong because companies are not doing it with bad intentions, but only as a marketing strategy used to help the business succeed in accomplishing their main priority (ie profit). He further stated that children still have buyer power and that they have the ability to filter information and make good choices.

The incredible influence media can have on adults however, makes me believe children don’t really stand a chance. Insulin resistance doesn’t concern children when they see a magical rabbit showing the wonders of a colourful, sweet cereal. Maddie said among other countries, the Australian Food and Grocery Council “declared that they stopped using promotional characters that advertise unhealthy foods to children under 12”, and I believe Canada should do the same.

Having a little brother myself I see how much of an influence TV has on him everyday. Children aren’t just not smart enough not to know better however, advertising influences us all regardless of whether or not we would like to admit it.

Don’t you want some?

Robert Himler has purchased his fourth Lamborghini now. What makes him exceptional however, is the fact that he isn’t legally old enough to drink alcohol yet. A 20 year old self taught programmer, Robert is a true entrepreneur.

His latest project is razzi.me, a photo sharing website similar to flickr. Robert thought it was wrong that he was getting thousands of views on his photos, and yet was making no profit from it. He saw an opportunity. In a similar way youtube pays members, razzi.me uses Google adsense in order for members to receive payment.

It wasn’t so simple however. Robert spent 12 months of hard work to create it. He uses his youtube videos of his Lamborghinis to attract attention to his site, and has a “10 second signup” allowing him to gain users quickly. His business can scale to any size, has very low maintenance and overhead costs, very little risk, and his year of hard work contains the side effect of a high barrier of entry. Someone cannot just recreate his work overnight, or simply copy and past some code. The only risk is in relying on Google not changing their payment policy for his model.

read more: http://razzi.me/about, http://www.secretentourage.com/success-stories/robert-himler/

When I thought of an entrepreneurial company, Evernote was the first that came to mind. Evernote is a web service that allows users to store notes and data online and across almost all devices.

It is innovative because of its compatibility, ease of access, and especially because of its text recognition within images (allows you to search for text that appears in your pictures) that gives it its competitive advantage. Evernote has also been the first app on the iPad 2 that used the new smart cover as a tool in its program to ‘peek’ at notes or flashcards.

The main reason it is entrepreneurial however, is because of its initial risk and the speed and amount of wealth creation is has involved. Evernote initially started 4 years ago with 9 million dollars in angel investments. As of this date Evernote has now raised 95.5 million dollars in funding, and is only continuing to grow and become more well known, showing a very successful example of what an entrepreneurial company is capable of.

Read more at: http://www.crunchbase.com/company/evernote#src3

While Blackberry, Samsung, and Sony have for the most part been unsuccessful in selling their tablet devices, Apple continues to enjoy incredible profits with another 15 million units estimated to sell within the second half of this year. So what makes Amazon’s attempt to compete any different?

Price. At only $199, the Fire is less than half the price of its competitors, making it an extremely attractive alternative considering its software is even based on Android. But how is it possible for Amazon to profit from this? User content is even saved on Amazon Cloud Storage for free. The answer lies in Amazon’s overall business. Unlike Blackberry, Samsung, and Sony, Amazon is an online retailer. As long as users purchase ebooks, magazines, music, movies, tv shows, etc. from their Kindles, then it does not matter if Amazon makes any profit on the device itself. This simple difference may be the answer to competing with the much more expensive iPad 2. As Blackberry is struggling to get rid of their Playbooks, 95 000 people have ordered the Fire on just the very first day it was announced.

Amazon, together with Google, may stand a chance against Apple. Which would be especially nice for Amazon CEO Jeff Bezos, considering he also owns €1.5 Billion worth in stocks of Google.

Read more at: http://www.independent.ie/business/jeff-bezos-the-battle-of-the-tablets-2893086.html

Research in Motion is in trouble. Since 2008, Research in Motion has lost “almost 84 percent of its value” dropping in worth from $80 Billion to less than $13 Billion in just a few short years.

What was once know as “the business phone” is now fading into the background behind the iPhone and mass of Android phones. Known mostly for its security and reliability, RIM has taken major damage to its reputation with not a first connection failure, but second in recent succession. For personal use, BBM had been Blackberry’s main exclusive feature. 4 days without the instant messaging however, has caused many to lose faith in the product and make the switch (which might have happened anyways since Apple’s iMessage is now essentially taking away one of Blackberry’s strongest selling points).

Things need to change. Financial analysts and shareholders are in the process of trying to get executives Lazaridis and Balsillie to leave their positions, and are hoping for some transformational chief executive to appear and turn around the company. With innovative leadership and more technology expertise on board, many believe RIM can turn around and come back. Being acquired by Oracle is another option. But something needs to be done quickly.

More at: http://www.taipeitimes.com/News/biz/archives/2011/10/17/2003515934/3

With Google’s $12.5 Billion acquisition of Motorola Mobility, they not only gain an advantage Apple previously had, but they gain significant intellectual property as well.

The added capability of developing the physical hardware of the phones produced, as well as the android software, gives Google the complete control over the final product just as Apple has. Google can do exactly what they want with their devices, which will be quite interesting considering the innovation the company possesses. Whether it be new features or better integration of software however, Google must ensure that its other users (mostly HTC and Samsung) are not left behind. Google has promised for this deal not to affect the other companies and ensures quality in treatment, but they must make sure they believe it and do not turn to Microsoft for their software.

The second advantage Google gains, and perhaps their main motivation for the deal, is in the patents the company has. Right now Motorola has over 17000 patents (with another 7500 waiting to be approved) which David Drummond, Google’ chief legal officer, says puts Google “in a very good position to protect the Android ecosystem for all of our partners”. This large scale acquisition of patents however, is one in which both Google and Microsoft are aggressively pursuing.

Read more at: http://news.cnet.com/8301-1035_3-20092362-94/google-to-buy-motorola-mobility-for-$12.5b/

Microsoft has finally closed the 8.5 Billion dollar deal to acquire the largest video calling software, Skype. What does this mean for Microsoft?

Users

With Google’s G+ user base quickly rising to 40 million users in competition with Facebook, Microsoft is also rapidly expanding its user base. Microsoft’s purchase of Hotmail in 1997 has allowed them to build up to their incredible 500 million active users a month. With the addition of Skype however, Microsoft instantly gains access to 145 million more active users.

Patents

With the acquisition of Skype Microsoft has gained 50 patents to its collection, including patents in “networking, speech recognition, and user interface”. The fact that Microsoft is also trying to purchase 6000 patents from Norton shows their aggressive competition against Google and their gains in patents from Motorola.

Integration

Skype’s video calling capabilities make deeply integrating the software into Window’s smart phones and positioned as a competitor to Apple’s iPhone Face Time very likely. Skype will also probably be found as part of the Window Live Messenger instant messaging program, adding features to their existing video chats. Finally, Skype has potential to be found incorporated into Outlook’s contacts and into the Xbox Live experience.

Read more at: http://www.networkworld.com/community/node/78945

(http://graphics8.nytimes.com/images/2011/07/25/world/25china-span/25china-span-articleLarge.jpg)

On July 23, one train in eastern China stalled due to lightning. Shortly after, a second train arrived and failed to stop before colliding into the first, sending it on 20-30 meter drop off the tracks. 43 died and about 210 were injured.

What was the response? The media was demanded not to “investigate the cause of the accident”, and the Railway Ministry immediately started “burying parts of the wrecked trains near the site”.

Although China had been previously “warned against the rush to build the world’s longest and fastest high-speed rail network in record time amid safety concerns”, and had apparently even been warned about lightning risks a few days earlier, expansion plans have gone through rapidly nonetheless.

This is an example of an ethics issue, because the priority of expanding as quickly and as efficiently as possible is being set above the wellbeing of its customers. Not only are there severe issues in the accusations that safety was being compromised to reduce costs, but there are also huge ethical issues in the lack of transparency. In order to save face, they are literally burying away the situation, rather than investigating causes and potentially preventing future accidents.

Sources:

http://www.bbc.co.uk/news/world-asia-pacific-14321060

http://www.nytimes.com/2011/07/25/world/asia/25train.html

http://www.cbc.ca/news/world/story/2011/07/28/china-train-crash-design-flaws.html

http://www.nytimes.com/2011/07/25/world/asia/25train.html