Enodare et Illustrare
Introduction:
The Interactive
Investor presents research describing "How the U.S.
What's New:
“Globalization
and the U.S."
“Financial
Engineering and the Banks” (additional facts)
“How
the U.S. Stock Market Works" (rev.)
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Investors: click here for additional 2/1/12
comments.
|
Book
Reviews:
In Dealing
with Darwin (2005), Geoffrey Moore describes how businesses produce
innovative products and services. The reader may think of new products and new
markets. The fact is that companies must innovate in all markets: new, growing,
or developed, to fend off increasing commoditization and therefore decreased
profitability. During an era of globalization, a continuing cycle of innovation
and deployment is necessary for the U.S. economy.
This book is particularly relevant to value investors, as
it also investigates the process of innovation at companies operating in more
developed markets. The author makes a crucial distinction between companies
whose core expertise is designing complex systems, such as Nucor, and those
whose expertise is efficiency in volume operations, such as American Express.
The key to innovation in complex systems enterprises (or investing as a matter
of fact) is insight. Since each customer’s situation is unique and evolving, implementation
requires alignment around essential principles rather than rules. For volume
operations, on the other hand, implementation requires alignment around exact
rules.
Although it contains some confusing tables, this book
covers a lot of ground. Companies grow their sales for reasons; this book
discusses these reasons in very useful detail.
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The United States, Thomas Friedman and Michael Mandelbaum write, secured the future of the country by adopting, "...a set of practices for prosperity that began with our founding and has been upated and applied again and again."
That Used to Be Us (2011) recounts, with the fall of the Berlin Wall in 1989, the U.S. was about to make, "...the most dangerous mistake a country can make: We were about to misread the environment." The U.S. was thus unprepared for globalization and technological change, in a world of its own making...
This Review
Continuing
Discussions:
These
discussions focus upon three major investment issues: valuation,
that is the profit potential of the stock market, company selection, and
the macro environment. By considering valuation, investors will be able to
determine whether the stock market has a sufficient profit potential to warrant
the purchase of additional stocks. By considering company selection, investors
will be able to identify companies that are likely to grow. These discussions
also emphasize the importance of the institutional environment, the context
that enables business planning for the future.
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Copyright © 2012 Horizon Capital Research, Inc.
topic: stock market valuation, market equilibrium, financial market behavior
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