Kodak, Bill Gates and efficient markets(brontecapital.blogspot.com)
brontecapital.blogspot.com
Kodak, Bill Gates and efficient markets
http://brontecapital.blogspot.com/2009/12/kodak-bill-gates-and-efficient-markets.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BronteCapital+%28Bronte+Capital%29
5 comments
Who believes in the strong version of efficient market hypothesis anyways? One of the most interesting paradoxes of efficient markets is that to have efficient market, you must have people in the market who doesn't believe in efficient markets. There are a lot of them (the entire field of arbitrage is based on the hypothesis that market is not efficient)
Alternatively, you can have a market where the prices fluctuates but no one ever trades. See http://en.wikipedia.org/wiki/No-trade_theorem .
Or, as John Maynard Keynes famously said, "The market can stay irrational longer than you can stay solvent." Stop trying to predict, let the price tell you what to do and follow the trend.
There is big picture. And then there are details.
There is trending. And then there is individual timing.
Bill Gates pointed out a trend. Before most others. Finding trends and patterns before others = you will usually not lose money.
But not being right on time = you may not make a lot of money either.
To do awesome in the stock market, a finger on both the pulses is necessary: trending as well as timing.
But it starts with the trends.
(Imho - candlestick is a good method for finding the right time - but only after you've analyzed the trends.)
There is trending. And then there is individual timing.
Bill Gates pointed out a trend. Before most others. Finding trends and patterns before others = you will usually not lose money.
But not being right on time = you may not make a lot of money either.
To do awesome in the stock market, a finger on both the pulses is necessary: trending as well as timing.
But it starts with the trends.
(Imho - candlestick is a good method for finding the right time - but only after you've analyzed the trends.)
Considering the long term perspective of Buffett's investments, I'd say Bill was spot on. I could say oil companies are equally doomed and in a 10 year perspective I know I am right. That doesn't mean they won't make loads of money the coming few years.
Doesn't Kodak make digital cameras, photo printers, and photo printing paper now? Sounds like their stock price is low because the company is not a good buy, not because they are in the wrong market.
I don't think it's been able to make up for the revenue they've lost in film for still cameras.
Not only that, but the revenue from printing (paper, chemicals, services) as most photos now never make it into prints.
Having said that, the only proven way to store digital photos long-term is presently archival paper, so...
Having said that, the only proven way to store digital photos long-term is presently archival paper, so...
Interesting. Does Kodak have the best archival paper (and the tint) on the market?
Kodak and Fuji are about equivalent. You can print a digital image onto photo paper with a Frontier printer, and if you can keep it dry and out of direct sunlight it'll last a hundred years with no additional effort on your part. There's not yet a digital consumer media format that comes close to that.