jagjit

One thing I am not sure about is how much reluctance foreign holders of US treasuries will have to buy more treasuries. My guess is both foreign government and commercial holdings will edge down quite a bit, even without any reciprocal activity. Just because they will have reduced US reserves, and in effect need for treasuries.

God knows what happens if reciprocal activity starts towards using another currency also for global trade.

This downgrade is just based on Nokia's current performance which is going to continue to be bad for a couple of quarters.

But their balance sheet is solid and looks like the Nokia Lumia 900 phones are getting very good reviews and selling well: http://www.amazon.com/Best-Sellers-Cell-Phones-Accessories-S...

I played with my wife's lumia 710 and it beats iphone in ease of use. If these phones sell well, which they seem to be doing, developers and apps will come too.

An ode to friends in Finland? The logo looks very much like flags of Finland, Sweden etc.

Well, the one thing I am suggesting for sure is that when I buy a stock in a company, I own a part of the company and as a result own a part of the profit.

And I am seriously implying that the managements in tech companies do not necessarily know better how to use the profits. And sharing the profits with stock holders is not to be looked down upon.

Well, a manifestation of the main reason I stay away from owning stocks of tech companies. They do not share profits with the stock holders and pretend to know better how to put cash to use, because their current business generates a lot of money.

Not only does Google not share any profit with the shareholders, it is now taking more debt. Google does not need the cash for its business. The only use this cash may be put to is to make acquisitions. Hubris of the highest order when company managements think they know much better than shareholders, how to best use the profits the company generates.

Of course, in technology business, it is very easy for management to claim that they can become irrelevant very fast if they do not do so and so acquisition - just look at Nokia or Microsoft. Which may be true. But it does not take away from the fact that, shareholders do not share much profit in tech companies.

The idea is scary at first. But really makes sense once you think about it. I agree, it makes the screening process more human.

I know the job market is not good right now for job seekers to be chosers, but if I have to apply with a video, I would feel more up to it if I see the hiring team's or manager's video too.

"If you ask me about barriers to entry, you don't understand the internet."

Asking about barriers to entry does not mean the potential investors don't understand internet. This comment says to me the author does not understand business or investing.

Do something you like. Life is too short not to spend on stuff that makes you happy. I believe chances are stuff you like will also pay you reasonably. 3 years is a long time to waste chasing a million dollars doing something you do not like.

I think more of such stuff is going to come in coming years. It is just a manifestation of changing economic profile of the world. I believe something similar might have happened at climate talks - http://www.upi.com/Science_News/Resource-Wars/2010/05/05/Lea...

How it plays out in the long term is anybody's guess. But right now the EU and US have run very high debts which are only increasing with the deficits. With not very good immediate economic prospects, the developed world is beginning to learn to have new folks at the table. When you are neck deep in debt and those new folks are your creditors, there really is no choice.

It is very heartening to know that many YC winter 2010 startups are already profitable.

Is more information available on profitable YC companies so far? And how they got to cash flow positive.

Now, this is just me imagining.

My guess is that part of the tussle with Chinese authorities which Google does not talk about may be demands made on Google for information on individuals. More than censorship, it may be the surveillance aspect.

It is maybe in this context that Eric Schmidt told users: "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

Maybe the Chinese authorities told Google: "If you have something on users that you don't want us to know, maybe you shouldn't be doing it in the first place." And Google did not want to stop keeping user information for just China....

DHH makes very good points about profit.

But he seems to imply that all other startups or majority of them do not get this basic point. He also thinks that 37 signals would be making the same kind of profits 20yrs later. These points do not fit in with how insightful and bang on he is with his business sense.

Does anybody have experience with scaling their Rails application on Dreamhost or Joyent? I have just started using Dreamhost VPSs with overall a good experience but have not reached the point where I start looking into scaling the app.

I see Linode and Heroku being recommended here a lot - will definitely explore them too.

What got me is switching buzz off does not disable people following you - you have to individually block people. They did a similar thing with searching through emails - there was no option to disable that feature.

It is like Google is saying - "We give you free services, so now we own all your data. And just so you know, we don't do evil - so pls don't judge."

Must be funny in the rich man's world. They are wasting away shareholders' profit share in their hubris or competitive fear.

Hmmmmm. This would explain it - but for the fact that dividends are generally supposed to be paid out of profits not out of cash in the bank. Aren't dividends a way of sharing profits with shareholders, not sharing the net worth of the company. If a company is not making any profits, it should not pay any dividends.

Your hypothetical example though is a very useful way of understanding these things. Infact it just helped me understand clearly why companies should keep as little cash as possible - unless they can generate returns better than atleast govt bonds.

I disagree with the notion that dividends paid lower the share price. Is there a theoretical reason? Or is it observed in practice? I would very much like to learn more about this if you could send pointers.

To me this looks more like a device used by managements to justify their practice of share repurchase. The options should be repriced not when dividends are paid but rather when stock repurchase is done. Like you mention, stock repurchase never affects the strike price of options. There is a very informative comment on stock repurchases by Warren Buffet in this 2005 annual report - http://www.berkshirehathaway.com/2005arn/2005ar.pdf

The tech companies, by not paying out dividends, are in effect telling shareholders that they can invest the profits better than them.

This belief I guess comes out in part due to the meteoric profit growth that successful tech companies witness which leads to hubris in the management. The other reason for this belief is the shareholders themselves who let management invest profits in any project they want in the hope of ever increasing profits and stock price.

About microsoft's dividends, one thing the article misses is that msft's payout is very high but most of it is via stock repurchases. The reality is that managements of all companies - tech or otherwise - concentrate on their own interests. That is why you see companies spending so much on stock repurchases rather than pure dividends. In theory it reduces the number of shares - but in practice it is a device to prop up the stock price so stock options or stock price linked benefits for employees and management are profitable. Microsoft spends disproportionately higher on stock repurchases compared to dividends. If they paid all that money as dividends, it would be a very decent dividend paying company.

Entrepreneurship is not limited to doing a tech startup. Also, going on your own is not worthwhile only for people with other comfortable options.

It is a pity that a PhD with such high credentials has such a narrow world view.

Edit: This article seems to be saying startups make sense when one has these desirable skills. In other words only start on your own if you are in a field where you need a difficult or highly prized degree. Well we all know where the highly desired financial engineering skills have led the economy.

The author is just risk averse. Which is OK. So a degree and other options - which are a hedge against startup failure - seem to him to be pre-requisites for going on your own.

There is nothing to be lost in calling something stupid if you believe something to be stupid. The article gives a good illustration of why the author believes it is stupid.

Calling something stupid does not mean the author is saying there is no money to be made in such things.

I totally agree. Being frugal and financially responsible is the right way to live life anyways for so many reasons.

Just think you might find this useful (I have a feeling already that you are a value investor but still feel compelled to add this) I would add intelligent investing also to your plan and I feel you will reach your goals sooner. I have benefited a lot from Benjamin Graham's formalization of value investing - he wrote the classic "Intelligent Investor".

I hear this very often - I am working at a job which I dont want to do till I achieve a financial goal. For folks who know what they are passionate about, I wonder if it is worth it in the long term to postpone following their dream. Especially in a country like US or Uk, where standards of living are pretty reasonable for most professions.

I for the most of my life did not even know what I really like - by the time I figured out I was already 33. And it becomes very tough.

I know very few people who are convinced about what they want to do in life. Such conviction almost seems like a privilege which comes with a duty to follow your dream. Best of luck with your plans.

Yeah, the five year plans have been rather a bane for the Indian economy. In fact, central control and planning in all spheres are generally looked up to in India. We even used to have joint families which were very common till very recently - a joint family is where many generations of a family tree under a patriarch live together. Even businesses till recently were more likely to be family owned.

Entrepreneurship in India is on the rise now though. But my problem with the article is that the author is talking about taking on Silicon Valley, but he does not have a region or even a city to compare. He is just taking a whole country - India - and talking it up. Silicon valley is what it is not just because there is a secret formula which you can use to replicate. I am not even sure if there are places in other parts of US which are comparable to the ecosystem here.

These kind of articles probably make for good copy. But without first trying to understand what makes Silicon Valley unique even in US - they are nothing but misleading.

I agree choice can be confusing. And that is why Apple products standout.

Maybe I should have clarified what I like about choice in phones that Nokia or others provide. One aspect of choice which I like is the different pricing options. The mobile phones are needed by people all over the world with varying purchasing powers. Everybody cannot or does not want to afford the total cost of ownership of iPhone or even Nokia N97 or Droid. But there are billions who want to make phone calls.

Are you complaining about choice? I just checked out their US site and it is pretty straight forward to search based on features etc.

I can understand finding faults with Nokia for not being able to compete effectively against iPhone. But then which other mobile maker is right now able to do that. iPhone is pretty much a new product category. And Apple gets consumers and software like few others.

But I cannot understand finding faults with the choice of phones Nokia provides.

The article seems to be just generalizations and hearsay.

It looks like the results are actually good. If you are searching for dentists in a particular area, chances are you would also like to see them on a map.

To me it is a case of Google trying to give a good search result - but using another Google app. And in the bargain raising eyebrows. But if you compare it with Bing, the difference between ads and results on Bing is even harder to make out.

I am sure this will draw antitrust eyebrows too. Here Google of course is promoting their map application with local listings and reviews. They might actually believe that it is the best way out there to give local listings with reviews etc. But it kind of forces everyone to add reviews in Google map which in turn will actually become the best even it is not right now. And apps like yelp will slowly be forced out of reckoning.

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my brain too

Very interesting to note how a top value investor differs from VCs. When Buffet goes all-in for future of American economy, he goes for a company/industry which has been around for a century or more with stable cash flows. In effect though, future of American economy wont matter much to him unless the economy goes into a severe long depression - which he is betting against. When VCs go all-in for future of something - they go for companies/industries with no history of profits. That is why they have to use crutches of hype and ipos using the hype. I think the hype machinery is working right now to create value - out of thin air - in clean/green energy tech. I am not questioning the utility of VC - just questioning its characterization as investment. I think it is just speculation. Calculated at best, done by the smartest people. But still speculation. Just like most of Wall Street.

The page gives all the information they want to share. Adding fancy stuff or Warren's pictures do not add any value. They follow similar philosophy at Berkshire's world headquarters where they have just about 20 odd people and Warren doesn't use a computer or even a calculator. World would be so different if we all could get by with only stuff that adds value to our lives.

I have heard this from a lot of H1 engineers - especially ones with a couple of years of experience. I myself was one but never bought this reasoning - though cannot deny there may be some truth in it. My own understanding is that mostly this applies to startup companies: 1) They generally have a harder time recruiting so supply/demand forces them to pay higher generally. 2) Their spending extra on the work visa or residency processing is a way to buy insurance against the employee leaving any time soon(till the green-card is processed which is a period of 2yrs-infinity) 3) They generally prefer hiring recent graduates (and there are only so many US citizen graduates every year). Why they do so? Again I think because of a few reasons (though cannot deny there may not be any truth in these): a) Recent graduates are cheaper and are hungrier and a lot of the work does not need specialized phds but good computer science fundamentals. b) Freshly minted MS may not necessarily be better engineers/programmers but are more in tune with the latest tools in fashion which startups tend to use.