Wednesday, June 27, 2012

The Stupidest Thing Microsoft Has Done…This Year


 I have written more than once about various Microsoft follies over the years.  You can read my personal favorites here, here and especially here.
 The central problem at Microsoft is—as with most companies, sports teams and even hedge fund managers—also its greatest strength: to whit, the Windows Operating System.
 By this I mean that Microsoft makes so much money from the Windows OS that everything it does—and I mean everything—is driven by the OS folks, whose mission it is to put Windows everywhere.
 That’s why Microsoft’s hardware customers end up making lousy cell phones, lousy netbooks, lousy notebooks, and, pretty soon, lousy tablets: because all those products have to run, support and promulgate the Windows OS.
 (For a really great video spoofing this topic, watch this “Microsoft Glasses Project,” based on the futuristic Google eyeglass caper.)
 And in case you’re wondering about X-box, which is an undeniably good product—well, that just proves the point: X-box is not Windows-based.
 As a result of its Windows-Everywhere mania, Microsoft has done many stupid things, like holding an “iPhone funeral” way back in 2010, when Windows Phone 7 was touted as the greatest cell phone software since…Windows Phone 6, I guess.
 Now, you would have thought Microsoft might have learned its lesson about doing stupid things like that dopey “iPhone funeral”—or at least Steve Ballmer would have learned to steal a page or two from the Steve Jobs playbook and a) stop with the stupid gimmicks, b) keep his mouth shut until he had a great new product, and c) release the product when it was ready.
 But no, he has not, if the “Surface” tablet announcement is any indication.
 Still, I didn’t realize how badly Microsoft blew the “Surface” announcement until I was talking to what we 50+ year olds call “young people”—i.e. anyone under 30—at a family gathering this weekend.
 They all said the “Surface” looked pretty slick, what with the keyboard-cover and all, and they all said how the Twitter chatter was going great guns until the thing ended with no discussion of price or availability.
 Why, they asked me, the old man, didn’t Microsoft announce a price for the “Surface”?  And why no release date?
 I explained to these Apple-centric youngsters how, back in the day, when Microsoft saw a new thing coming that threatened their monopoly, they simply announced a new product, immediately freezing their customers from using whatever was threatening their monopoly until whenever it was that Microsoft got around to making the new product and releasing it.
 So Microsoft’s seemingly illogical behavior with the “Surface”—i.e. announcing a product without a price or a ship date—was perfectly logical in the Microsoftian World, even though it totally blew the free publicity of the announcement itself and doomed the “Surface” to the inevitable irrelevance of, say, “Windows Phone 7,” about which I will bet dollars to donuts you have not heard since the “iPhone funeral.”
 And that, it seems to me, is the stupidest thing Microsoft has done.
 This year, at least.

Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2012)    Available now at Amazon.com

© 2012 NotMakingThisUp, LLC
                                   
The content contained in this blog represents only the opinions of Mr. Matthews.   Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.  This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever.  Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored.  And if you think Mr. Matthews is kidding about that, he is not.  The content herein is intended solely for the entertainment of the reader, and the author.

Tuesday, June 12, 2012

Nasdaq CEO Goes AWOP (Absent Without Phone)...Has He Never Heard of Radio Shack?

 Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast.
 So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him.
—“Nasdaq CEO Loses Touch Amid Facebook Chaos,” Wall Street Journal, June 11, 2012
 Yesterday’s Wall Street Journal piece on the CEO at the center of the Facebook debacle—Robert Greifeld, of Nasdaq—which you can read with a subscription here or find elsewhere floating around the Internet, is remarkable in at least three ways.
 The first is the image of Greifeld, who had flown out to Silicon Valley for the opening hoopla, “listening on his private company line” for crucial updates to the faltering IPO while “hoping his cellphone battery would hold.”
 Did he never hear of Radio Shack?
 The second head-scratcher, which surely jumped off the screen for anybody under the age of 30, or 40, or even 50, is Greifeld’s excuse that, after he “decided to make a run for the airport to get back to the East Coast by late afternoon,” he found he couldn’t monitor the unfolding disaster or speak with the SEC Chairman who was trying to find him because the “armrest phone” in his United Airlines business class seat on the flight back to JFK didn’t work.
 Did he never hear of Virgin America? You can put in a full day’s work flying across the country on Virgin—and you don’t need a business class ticket to do it—thanks to their ubiquitous, and excellent, WiFi network.
 And what CEO of any company—let alone a company that depends on computers, networks and all manner of high technology to earn a living—would get on a plane equipped with nothing better than decades-old, germ-festering armrest phones to stay in contact on the biggest day in his company’s history?
 The third, most egregious, and least defensible howler was Greifeld’s twice-used college sophomore-level excuse to explain unexplainable behavior: he passed the buck to NASDAQ’s techies.
 “When they say yes, we say go,” he tells the Journal, which also wrote:
 During the IPO, he says he went with the best information he had from technology officials in Nasdaq’s headquarters…they expected to fix remaining problems promptly.
 If Jamie Dimon had used that excuse to explain his London Whale problem, he’d have been out the door at JP Morgan so fast it would make your head spin.
 Unlike the CEO of JP Morgan—who admitted to a problem, took the blame, and is prepared to go to Congress to take the heat from the uninformed weasels of Capital Hill—the CEO of Nasdaq seems to be doing his best to explain his Absent-Without-Phone behavior by blaming everybody but himself.
 Let’s see how long that lasts.  And how long he lasts, come to think of it...

Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2012)    Available now at Amazon.com

© 2012 NotMakingThisUp, LLC
                                   
The content contained in this blog represents only the opinions of Mr. Matthews.   Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.  This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever.  Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored.  And if you think Mr. Matthews is kidding about that, he is not.  The content herein is intended solely for the entertainment of the reader, and the author.

Tuesday, June 05, 2012

Mangled Spoons to Grill Jamie Dimon: Lights! Cameras! Gotcha!

 Jamie Dimon’s trip to Capitol Hill next week to explain his bank’s multibillion-dollar trading debacle could quickly devolve into Washington Gotcha Theater.
 But it shouldn’t. It should be used to draw out some real answers that will help inform the public and lawmakers about the risks of our banking system…

 So begins Andrew Ross Sorkin’s quite reasonable, and well-written, DealBook Column, "Some Questions to Ask Mr. Dimon," which you can read here.
 The questions Sorkin fantasizes Congresspersons asking are all good, and it would be great fun and most interesting to hear them asked as written, without histrionics, so that Jamie can answer them, without histrionics.
 But they won’t be asked—at least the way they’re written.
 That’s because the Congresspersons asking the questions generally have the intelligence of spoons—and not just your basic cereal spoon, but spoons that have gotten caught in the garbage disposal and are mangled beyond recognition.
 Of course, mangled-spoon-intelligent though they might be, Congresspersons have one instinct that preserves their electability and drives their behavior: to get on TV.
 I know, because I testified before Barney Frank’s finance committee just prior to the 2008-9 financial meltdown.  The hearing was about whether hedge funds could cause a market collapse.  They didn’t ask about Lehman Brothers.
 In fact, they didn’t ask much that they didn’t want to hear.
 They came in (they never stayed for anything but their own turn in the spotlight); they made a statement; then asked something rhetorical; then made a pretense of listening to the answer; then left.
 It was all about theater, and not a bit about substance—except one guy, who I’ll get to.
 The most intellectually dishonest as I remember it was a New York rep, Caroline Maloney, but they were all pretty bad, Republicans playing Republicans and Democrats playing Democrats.
 The only exception was a guy from Mississippi who sat there the entire session—he was the only one who stayed from start to finish—and asked very straight, non-TV-camera-oriented questions about what would happen, for example, to the retiree from “the pipefitters union” if a hedge fund they’d invested in went down.  He didn’t know much but, unlike Maloney and the rest, he didn’t pretend to know.  And he listened to your answers and then asked another question.
 I wasn’t completely surprised at the mangled-spoon quality of the I.Q. quotient in the room—I once got a call from a Congressperson-friend on a financial sub-committee before the crisis when they were debating something to do with Wall Street.  The conversation literally—literally—went like this:
“I'm going into a session...now, remind me, ‘fixed income’ is what?”  “Debt.”  “Okay.  And equity is...” “Stocks.”  “Right, okay, thanks.”  I am not making that up.

 If the guy from Mississippi is still there, Jamie Dimon will get some good questions.  Otherwise, the Maloney types will do their best to bring out the worst.


Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2012)    Available now at Amazon.com

© 2012 NotMakingThisUp, LLC
                                   
The content contained in this blog represents only the opinions of Mr. Matthews.   Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.  This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever.  Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored.  And if you think Mr. Matthews is kidding about that, he is not.  The content herein is intended solely for the entertainment of the reader, and the author.