I believe countries are more predictable than individual companies. For that reason, I think investing in ETFs by country makes more sense than buying individual stocks. Allow me to explain.
A company is subject to its own risks plus the risks of the world. If the entire global economy crashes, so goes the individual company. But an ETF carries only the global risk plus the risk that the government will make an unexpected dumb move. I would argue that governments make important moves far less often than companies, and unlike companies, most modern governments signal their moves well in advance. Compare that to Apple who may or may not introduce a TV product in the next year. Companies have the right to secrecy. Governments do a poor job of keeping secrets. Government predictability comes from the fact that they move slowly and they have an obligation to transparency.
In a company, the CEO and the CFO can fudge numbers and keep it a secret. A modern democratic government would have a hard time fudging national employment numbers or anything else of that magnitude. So while government has as many or more liars as private industry, a democratic government is less likely to get away with fudging a major economic statistic.
If you made a list of the nations with the most effective governments, you'd see they also have the best economies. There are exceptions, of course, but overall, effective governments create good economies. The correlation between management skill and company profits is less direct. It doesn't matter how good a CEO you are if your competition invents a killer product or your supplier can't deliver enough components.
If you ask me to predict ten years out, I'd say with some confidence that countries such as Denmark, Sweden, and Switzerland will be doing just fine. But a company as strong as RIM can be eviscerated by strong competitors in just a few years. And a company such as Enron might be nothing but a fraud. In five or ten years, Denmark will still be Denmark.
Full disclosure: I have investments in ETFs for both Israel and Turkey. Those countries have plenty of regional drama, but both countries are governed effectively. In the long run, I expect both countries to do well unless the entire world goes into the crapper.
So I put the question to you: Which is more predictable over a three year horizon, a company or a country?
Fast-forward to today, Iran is sending drones to Hezbollah, and Hezbollah has training camps right next to Syrian chemical weapons stockpiles. Meanwhile, Hamas has its own drone production facility, or did, until Israel found it. One presumes Hamas will build more. How long will it be before Israel is facing suicide drones that only cost its enemies $100 apiece, fit in the trunk of a car, and can guide themselves to within 20 feet of any target? I'd say five years.
So what happens when the drone attacks start happening in volume? Let's game this out. My assumption is that the coming inevitable wave of hobby-sized suicide drones will be unstoppable because they will fly low to their target and be so numerous that no defense will be effective. I predict it will be too dangerous to live above ground in Israel within ten years unless the trend is reversed. But what could stop the trend?
Surely the terrorists won't give up. Surely Iran and others will keep the terrorists well-supplied. Surely Israel can't conquer every pocket of terrorism in the region. And surely Israel won't surrender and walk away.
It's your turn to be a futurist. Please describe in the comments any scenario you can imagine in which Israeli cities are still habitable in ten years. And be sure to give your best guess on the odds of your scenario playing out.
The only problem, as I soon realized, is that windows don't have a rewind feature. It was frustrating. It's not the first time I have reflexively reached for the rewind button. Sometimes I miss bits of conversation and I think for a brief moment I'll rewind and listen to that again. If you have a DVR at home, you might be having the same frustration.
Watching television still isn't as good as real life, at least on average, but that gap is narrowing from both sides. Real life is getting worse while the quality of television continues to improve. Case in point, have you taken your car to the dealer for servicing during the current economic downturn? If so, I pity you. You already found out that the dealership is struggling on the sales side and they are trying to make up the difference on the service side. These days the sales staff has no function other than to hold your arms and legs while the service staff screws you.
Try taking your car in for some minor service, such as an oil change. You'll end up paying for fixes that never actually happened, on car components that don't actually exist. For example, your service agent might tell you that if you don't get your flumerjib aligned, your kragwalter will oomulated and corrode the maxinflap. In a situation such as that, you know exactly two things:
1. If you take it somewhere for a second opinion, the second guy will screw you too, albeit in a new way.
2. If you try to service your car yourself, you will die in a fireball that will be visible from the International Space Station.
So you loosen your sphincter muscles, take a deep breath, and agree to let the suspicious stranger service your brains out. Your only solace comes from the knowledge that sooner or later an investigative reporter will bust your dealership.
I consider this to be one of the downsides of understanding economics. I know in advance, almost like ESP, that none of you have heard this from a car dealership's service department in the past two months:
Service Guy: "I fixed your ping by removing a twig that was caught under the fender. There's no charge of course, and your car is otherwise perfect. So I will just default on my mortgage and kill stray dogs to feed my family this week. Have a nice weekend!"
www.dilbert.com
Let me get this out of the way: I realize the Beta version of the web site has lots of issues. It’s overloaded with Flash, slower than it needs to be, and the navigation is confusing. We’re fixing most of that over the next few weeks. I apologize for the inconvenience.
The fascinating thing about the responses is that it revealed three distinct types of Dilbert readers:
The first group is the ultra-techies who have an almost romantic relationship with technology. For them, the new site felt like getting dumped by a lover. Their high-end technology (generally Linux) and security settings made much of the site inconvenient. Moreover, the use of Flash offended them on some deep emotional level.
The second group objected to the new level of color and complexity, and the associated slowness. They like their Dilbert comics simple, fast, and in two colors. Anything more is like putting pants on a cat.
The third group uses technology as nothing more than a tool, and subscribes to the philosophy that more free stuff is better than less free stuff. That group has embraced the new features on the site and spiked the traffic stats.
For you first two groups, if you promise to keep it to yourselves, we created a stripped-down Dilbert page with just the comic, some text navigation, and the archive: www.dilbert.com/fast. This alternate site is a minor secret, mentioned only here and in the text footnote to the regular site as “Linux/Unix.”
The main site will be getting a Flash diet that will make it speedier soon, so check back in a few weeks. That’s where all the fun will be.
Enjoy.
We weren't nearly that clever with our web site redesign, but something like the purple restaurant happened by accident. The majority of people who left a comment had bitter (and totally valid) complaints. We used way too much Flash, the servers slowed to a crawl, the navigation of strips was klunky, and so on. We plan to fix all of that in the next week or two. The developers won't be getting much sleep. We've already made the site much quicker.
Meanwhile, traffic on Dilbert.com doubled. And the new features, particular the Mash Ups and the archive search functions are a big hit. People either loved that the strips are now in color or hated it, but everyone had a strong opinion. That's what I love about Dilbert readers. It makes my job a lot more interesting.
Linux users were the most vocal in their complaints. (Who saw that coming?) Your numbers are small but your power is mighty. Just for you, we're working on a bare bones page with only the strips, text navigation, and not much else. Look for that in a week or so. You'll be able to jump from there to the main page if you want to experience the new features like regular folk.
In the meantime, you can always use the new (legal) Dilbert RSS feed. It's just the strips, the way you like it. Click here:
http://feeds.feedburner.com/DilbertDailyStrip
We appreciate all the comments. We're looking at them carefully and making changes. Some will say we shouldn't have inflicted this messy Beta version on the public. There's merit to that argument, but if I was worried about embarrassing myself in front of millions of people, I would need a new job.
Thanks for working with me through this upgrade. I apologize for the messy start.
P.S. My blog hasn't officially moved to this page yet. You can read the regular posts at the old site:
http://dilbertblog.typepad.com/the_dilbert_blog/
From Salon.com: Dilbert's new mash-up site lets you add your own punch line
Author: Farhad Manjoo, 4/21/08
Scott Adams, the cartoonist behind the middle management-mocking comic strip "Dilbert," says that his work has always been "interactive": "People e-mail me with ideas, I draw the comic, they hang the comic on a wall," he told me in an e-mail.
But late last week Adams and his syndicate, United Media, unveiled a new model in cartoon interactivity -- Dilbert.com now lets fans rewrite Adams' punch lines, and soon it'll let you write the entire strip, too. (Click for full article.)
From TheNewYorkTimes.com: Scott Adams Hands Dilbert Pen to Fans
Author: Brad Stone, 4/18/08
For almost two decades, fans have written to “Dilbert’s” creator, Scott Adams, with ideas for strips, gags and punch lines.
Now they can bring their notions right to the panels of “Dilbert” itself.
In a good illustration of how media is becoming ever more conversational and interactive, United Media, “Dilbert’s” syndicate, is revamping Dilbert.com, letting the fans take up the cartoonist’s pen and tinker with, and then widely distribute, each strip. (Click for full article.)
From TheNewYorkTimes.com: Dilbert the Inquisitor
Author: Lisa Belkin, 4/3/08
ONE afternoon last week I found myself sitting at a desk that was not mine, answering to a name that was not mine, and fielding phone calls and e-mail messages from colleagues who don’t exist. I held a “meeting” with an actor pretending to be a passive-aggressive employee who was sabotaging a new sales plan with his vocal disapproval. I had a “conference call” with an actress who was convincingly frosty as she refused to share key research and manpower that her department had and mine needed. In other words, I spent that day doing what a growing number of employees will do if they are to reach a position of power or potential: I was being “assessed.”" (Click for full article.)
From TheNewYorkTimes.com: The Dilbert Strategy
Author: Paul Krugman, 3/31/08
Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom." (Click for full article.)
Favorite Office Antics from Dilbert's Cubicle Chaos Now Available on Mobile Phones
From: Namco Networks, 3/18/08
Namco Networks brings fun, Dilbert-inspired game play, downloadable comics, and sweepstakes on AT&T to consumers nationwide
SAN JOSE, Calif. – (March 18, 2008) – Namco Networks, the leading publisher and developer of mobile games and entertainment for mass-market casual gamers, today announced the availability of its much anticipated mobile game, Dilbert Cubicle Chaos. Another original game through its partnership with United Media, a leading independent licensing and syndication company which licenses Dilbert, Namco Networks continues to bring popular brands to consumers for the mobile platform. Dilbert Cubicle Chaos contains rich features such as downloadable Dilbert comic strips* and bonus game levels...." (Click for full press release.)
