Trends I'm Watching

The Wilshire 5000 moved down for the week ending 5/25/2007

Trend: The Wilshire 5000* lost 36 points (-0.2%) for the week. The daily line was at an all-time high on Tuesday. Thursday saw a significant drop.

The 10-day SMA is now above the 30, 60, and 90-day SMAs. Between July 31, 2006 and March 2, 2007, the 10-day SMA had been above the 30-day SMA, tracking the significant bull run.

We track the the movement of the Wilshire 5000 because the market as a whole has a significant influence of the movement of individual stock prices.

The Wilshire 5000 one-year chart below includes the 10, 30, 60, and 90-day simple moving averages.

*The Wilshire 5000 is sometimes called the "total stock market index" or "total market index" because it includes more than 7,000 of the 10,000-plus securities that are publicly traded in the United States. All publicly-traded companies with headquarters in the U.S. that have readily available price data are included in the Wilshire 5000. Finalized in 1974, this index is extremely diverse, including stocks from every industry. Although it's a near-perfect measure of the entire U.S. market, the Wilshire 5000 is referred to less often than the less comprehensive S&P 500 when people talk about the entire market.

Subscriptions on Cell Phones to challenge Web Search?

Trend: Subscriptions to web sites and alerts allow cell phone users to track events and receive incremental information immediately.

Rajesh Jain at Emergic.org descrbes why mobile users with subscriptions will be the next big trend on the Web, especially in places where mobiles are the primary means of accessing the web. Excerpts below.

Link: Emergic: May 16, 2007 Archives.

Search engines are the primary way to navigate the Reference Web. We no longer bookmark sites or even try and remember their URLs; we Google everything. This becomes possible because we trust Google to have made a copy of everything that has been created and appropriately ingested it with its algorithms. Search works very well with the PC screen -- most of the space is taken up by the results with some relevant ads thrown around. This works great for us, the search engines and the advertisers.

As the Live Web starts to occupy a greater importance in our lives, Search on a PC will no longer be the dominant form of interaction. Instead, I believe it will be Subscriptions delivered to a mobile screen. Let me explain.

The Live Web is about events and incremental information. There are a number of things we would like to know as soon as they happen. In this context, the best way to be alerted is to set up an alert. So, when we want to track something, we can set up a Subscription to that site.... The mobile is the perfect device to send out an alert to since we can be pretty sure that the user will see the message almost immediately.

In emerging markets like India, access to the PC is still limited, but mobiles (and SMS for now) can reach over 150 million users.... The mobile thus becomes the ideal device to send people information about the Live Web.

Search does not become irrelevant for the Live Web. In fact, we will still use Search for things we cannot Subscribe to in advance. My point is that Subscription will be the dominant way we interact with the Live Web ? just like Search is the primary way we interface with the Reference Web.

With this change in behaviour and device, the business model will also morph.

The Wilshire 5000 moved up for the week ending 5/18/2007

Trend: The Wilshire 5000* gained 110 points (+.7%) for the week. The daily line was at an all-time high on Friday.

The 10-day SMA is now above the 30, 60, and 90-day SMAs. Between July 31, 2006 and March 2, 2007, the 10-day SMA had been above the 30-day SMA, tracking the significant bull run.

We track the the movement of the Wilshire 5000 because the market as a whole has a significant influence of the movement of individual stock prices.

The Wilshire 5000 one-year chart below includes the 10, 30, 60, and 90-day simple moving averages.

*The Wilshire 5000 is sometimes called the "total stock market index" or "total market index" because it includes more than 7,000 of the 10,000-plus securities that are publicly traded in the United States. All publicly-traded companies with headquarters in the U.S. that have readily available price data are included in the Wilshire 5000. Finalized in 1974, this index is extremely diverse, including stocks from every industry. Although it's a near-perfect measure of the entire U.S. market, the Wilshire 5000 is referred to less often than the less comprehensive S&P 500 when people talk about the entire market.

Five reasons for the eco-tech boom

Trend: Clean technology could be a major business opportunity.

GigaOM picks five reasons why the mix of tech, business and green is going to be on massive opportunity for innovators. Excerpts below.

My dream: significant breakthroughs will help us achieve energy independence from OPEC in the near future.

Link: GigaOM » 5 reasons for the eco-tech boom.

1). Bigger business revolution than the Internet: Some analysts and investors are starting to call the business of clean technology a bigger opportunity than the Internet.

2). Web as the green organizer: Green is the latest fodder for social networks, web 2.0 services, blogging (us) and videoblogging. Learning about and collaborating on eco-friendly practices is easier now than its ever been with grass roots web tools, a broadband connection and a passionate community. Today Business Objects and nonprofit Zerofootprint Toronto launched an online footprint calculator and social network. Yahoo launched its green site yesterday. And if you’ve never read Hugg, the green Digg, then seriously, go check it out.

3). IT needs earth-friendly: The costs of powering computing is reaching close to the cost of the data centers themselves. Companies like Google that need massive data centers don’t like the sound of that.

4). Gore’s gang — business leaders join in: Gore used to be the quintessential symbol of the intersection of business (savvy investor), tech (he, uh, invented the Internet right?) and green (need we say An Inconvenient Truth). Now all the big business leaders are joining the eco club.

5). Decentralized: In some ways the distribution of digital content driven by the Internet, is going the same way as the distribution of energy - decentralizing.

New Global Water ETF

Trend: Another ETF for investing in water becomes available.

Link: New Global Water ETF Available - Seeking Alpha

... the Claymore S&P Global Water Index (CGW) ... includes both water utilities and infrastructure, and water equipment and materials companies. The ETF consists of 50 stocks in developed markets around the world, as research points to a global need for clean water.

The Rise of Mobiles

Trend: Mobile communication devices will be the primary connection tool to people and the internet in emerging markets, with different dynamics than PC-based technologies.

Emergic.org describes the rise of hand-held communication devices. Excerpts below.

Link: Emergic: May 14, 2007 Archives

...emerging markets like India and China that will give rise of the next set of global technology companies. These companies will create solutions for a mobile-centric world. Mobiles will be the dominant form of Internet access devices in the developing markets.

...Today, mobiles masquerade as handheld multimedia computers (see the campaign for Nokia's N95). Wireless data networks are near ubiquitous because they are layered on an ever-expanding mobile infrastructure. For consumers in emerging markets, the mobile has rapidly become the centre of their lives, an extension of their body.

...In emerging markets, the mobile is the primary, if not the only, interactive device that people own. This "Mobiles First" and "Only Mobiles" environment and lifestyle is going to very different from that of the developed markets. For example, SMS and not email becomes the dominant form of asynchronous communication. The Contacts on the phone and not the IM Buddy List is at the centre of social interactions.

The Wilshire 5000 moved down for the week ending 5/11/2007

Trend: The Wilshire 5000* lost 62 points (-.4%) for the week. The daily line was at an all-time high on Wednesday.

The 10-day SMA is now above the 30, 60, and 90-day SMAs. Between July 31, 2006 and March 2, 2007, the 10-day SMA had been above the 30-day SMA, tracking the significant bull run.

We track the the movement of the Wilshire 5000 because the market as a whole has a significant influence of the movement of individual stock prices.

The Wilshire 5000 one-year chart below includes the 10, 30, 60, and 90-day simple moving averages.

*The Wilshire 5000 is sometimes called the "total stock market index" or "total market index" because it includes more than 7,000 of the 10,000-plus securities that are publicly traded in the United States. All publicly-traded companies with headquarters in the U.S. that have readily available price data are included in the Wilshire 5000. Finalized in 1974, this index is extremely diverse, including stocks from every industry. Although it's a near-perfect measure of the entire U.S. market, the Wilshire 5000 is referred to less often than the less comprehensive S&P 500 when people talk about the entire market.

Pareto's 80/20 Rule Expands Its Applicability

Trend: The normal curve may not be the best model for predicting market behavior in the future.

John Hagel writes in his blog that our reality is shifting from a "normal curve" (Gaussian) world to an "80/20 rule" (Pareto) world, with profound implications for business. He cites work by McKelvey and Andriani about the need to change our mindsets to adapt. Excerpts below.

Link: Edge Perspectives with John Hagel: The Power of Power Laws.

In a world of power law or Pareto distributions, extreme events become much more prominent.  Extreme events can take many forms.  They can be sudden and severe disturbances like a class 9 earthquake or a financial meltdown like the one that occurred in US stock markets in 1987.  As McKelvey and Andriani observe, “the lesson that we can draw . . . is that extreme events, which in a Gaussian world could be safely ignored, are not only more common than expected but also of vastly larger magnitude and far more consequential.”

Our institutions (not just businesses, but also educational and governmental) are largely designed for a Gaussian world where averages and forecasts are meaningful.  As a result, we have evolved a sophisticated set of push programs that have delivered significant efficiency.  In a world of sudden, severe and difficult to anticipate shifts, push programs become much less viable and we need to become a lot more creative in terms of designing pull platforms.

The Wilshire 5000 moved up almost 1% for the week ending 5/4/2007

Trend: The Wilshire 5000* gained 101 points (+1%) for the week. The daily line was at an all-time high on Friday.

The 10-day SMA is now above the 30, 60, and 90-day SMAs. Between July 31, 2006 and March 2, 2007, the 10-day SMA had been above the 30-day SMA, tracking the significant bull run.

We track the the movement of the Wilshire 5000 because the market as a whole has a significant influence of the movement of individual stock prices.

The Wilshire 5000 one-year chart below includes the 10, 30, 60, and 90-day simple moving averages.

*The Wilshire 5000 is sometimes called the "total stock market index" or "total market index" because it includes more than 7,000 of the 10,000-plus securities that are publicly traded in the United States. All publicly-traded companies with headquarters in the U.S. that have readily available price data are included in the Wilshire 5000. Finalized in 1974, this index is extremely diverse, including stocks from every industry. Although it's a near-perfect measure of the entire U.S. market, the Wilshire 5000 is referred to less often than the less comprehensive S&P 500 when people talk about the entire market.

Geopolitical Events Accelerate Peak Oil

Trend: The oil in the ground will not have an easy and peaceful transport to the consumers who need it most in the future.

Jeff Vail at Energy Intelligence writes that “above-ground factors”, driven by the geological reality,  will accelerate the decline in global oil production beyond that predicted by models derived from logistics curves. Excerpts below.

Link: Jeff Vail: Energy Intelligence

...geopolitical side-effects of peaking global production will accelerate the rate of production decline, as well as increase the impact of that production decline by simultaneously increasing marginal demand pressures. The result: the right side of the global oil production curve will not look like the left…whatever logistics curve is fit to the left side of the curve (where historical production increased), actual declines in the future will be sharper than that curve would predict.

1. Return on Investment: Increased scarcity of energy, as well as increased prices, increase the return on investment for attacks that target energy infrastructure. up the price, which further increases the ROI for such attacks.

2. Mercantilism: To avoid the dawning “bidding cycles” between crude oil price increases and demand destruction, Nation-States are increasingly returning to a mercantilist paradigm on energy. This is the attitude of “there isn’t enough of it to go around, and we can’t afford to pay the market price, so we need to lock up our own supply.”