In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution.

Information technology has entered a big-data era. Processing power and data storage are virtually free. A hand-held device, the iPhone, has computing power that shames the 1970s-era IBM mainframe. The Internet is evolving into the "cloud"—a network of thousands of data centers any one of which makes a 1990 supercomputer look antediluvian. From social media to medical revolutions anchored in metadata analyses, wherein astronomical feats of data crunching enable heretofore unimaginable services and businesses, we are on the cusp of unimaginable new markets.

The second transformation? Smart manufacturing. This is the first structural shift since Henry Ford launched the economic power of "mass production." While we see evidence already in automation and information systems applied to supply-chain management, we are just entering an era where the very fabrication of physical things is revolutionized by emerging materials science. Engineers will soon design and build from the molecular level, optimizing features and even creating new materials, radically improving quality and reducing waste.

Devices and products are already appearing based on computationally engineered materials that literally did not exist a few years ago: novel metal alloys, graphene instead of silicon transistors (graphene and carbon enable a radically new class of electronic and structural materials), and meta-materials that possess properties not possible in nature; e.g., rendering an object invisible—speculation about which received understandable recent publicity.

This is today's must-read for investors and traders alike.

Source:

The Coming Tech-led Boom (WSJ)

"The data centers that power the cloud and run programs such as Gmail and iTunes employ thousands of servers but only dozens of people."

One of the great paradoxes (paradoxi?) of the Digital Revolution is the sheer amount of wealth and progress that can be created with almost zero net new job growth for the economy.  Those kids running around the Genius Bar in blue shirts are merely replacing the help desk operators (whose jobs were shipped to Bangalore) and the local guy who posts "computer help" flyers on telephone poles around town.

A really stark example of this phenomenon is taking place in a North Carolina "data center town" as we speak...

From the Washington Post:

MAIDEN, N.C. — Here in this once-thriving town of furniture makers and textile mills, where Main Street businesses have vanished, nearby fast-food joints have closed and unemployment is rampant, government officials have lined up behind a flashy digital answer to all the heartache: The cloud.

Just off Startown Road, on the edge of town, Apple recently completed a massive $1 billion data center to help power its cloud computing products.

Total new full-time jobs running the facility: 50.

Apple’s data center has been a disappointing development for many residents, who can’t comprehend how expensive facilities stretching across hundreds of acres can create so few jobs, especially after thousands of positions in the region have been lost to cheaper foreign competition. But in the newer digital economy, capital investments that a generation ago would have created thousands of new positions often equal only a handful today, with computers and software processing the heavy lifting while the key programming is often done by engineers back in Silicon Valley.

Keep Reading:

Cloud centers bring high-tech flash but not many jobs to beaten-down towns (WaPo)

Tags: $AAPL

Source:

New Yorker

Like, say, a startup that offers people a way to throw money at stock market fads, an idea so counter to investment wisdom that I almost thought I was reading this in The Onion.

From TechCrunch:

Motif Investing, a new vehicle that allows you to invest in ideas, has raised $20 million in Series B financing led by Ignition Partners with participation from Norwest Venture Partners and Foundation Capital. This brings the company’s total funding to $26 million.

Motif, which is in private beta, was founded by former Microsoft executive Hardeep Walia and hedge fund analyst Tariq Hilaly to give individuals a new way to invest based on themes. Instead of choosing to buy stock in specific companies, Motif allows investors to invest in different portfolios of stocks, each called a “motif,” that are centered around everyday ideas. For example, motifs can be built around themes and ideas ranging from cloud computing to democracy in the Middle East. In addition, each motif can be customized to meet an individual’s ideas or needs.

Walia gives the example of “cloud computing” or “mobile internet” as growth areas that have seen significant gains over the past few years but he says most people don’t know how to map these ideas into an actual investment.

As America's foremost authority on Investment Trends, Fads and Themes, I can save everyone a bit of trouble and a lot of money here:

DO NOT LAUNCH A FUND TO BUY A FAD AT ITS PEAK.

Why not, you may ask?  Because guys like me will be gladly selling you our holdings, that's why not.  Bernard Baruch famously explained that he got rich in the markets by doing what everyone wanted him to do - selling things to them when they were dying to buy and buying things from them when the same people were desperate to find a buyer.

This Motif nonsense would mean that the smartest guys in the room will have plenty of terrific counter-parties to trade with.

I don't mean to be overly harsh, but please re-read the above and I think you'll understand my tone.

And having Microsoft ($MSFT) money behind this is just the cherry on top

Source:

Former Microsoft Exec Raises $20 Million For Motif, An Investment Vehicle For Ideas (TechCrunch)

hat tip reader Ken S

Those of us watching HBO's Deadwood may not have heard the term Hoopleheads before, but we immediately understood whom he was referring to - a town full of desperate losers who had chased the dream of striking it rich into the wastelands of the Dakota Territory.

And the Hoopleheads of the stock market never fail to show up at the exact most inopportune time.  It's as though they are waiting for it.  When max hysteria is finally achieved - aided and abetted by the press as usual - they grab fistfuls of cash and fling it at the sexiest vehicle in the lot.  Usually the highest beta one.

It's not the Hoopleheads' fault and I don't mean to pick on anyone; many of them are brilliant at what they do in real life but just cannot help themselves when walking by the casino.

Anyway, I have a fun activity for you guys.  I've taken out all the references to "Silver" from the below WSJ article and given you blanks instead.  Feel free to mentally write in "Cloud Computing" or "B2B Internet" or "Vegas Real Estate" or "Optical Networking" or whatever mania buzzwords you'd like, the article will still work perfectly.  It's like reckless investing Mad Libs, go ahead - knock yourselves out...

From Silver's Brutal Collapse (WSJ):

When _____  hit a three-decade high last week, David Zornetsky decided to do some buying. Searching for a job, the 31-year old in Beacon, N.Y., hoped to use gains from _____ to finance a move to New York City and to pay down student loans. "I had been hearing that ____ could go up to $150 a _____ this year," says Mr. Zornetsky.

Instead, _____ has suffered its worst one-week drubbing since ___, when _____________ and the _____ market came undone. This week's brutal tumble sent ______ prices down to $______ from nearly $______ in just five trading days, and has left Wall Street pros and individual investors dazed, some dealing with sudden losses.

"I don't understand," says Mr. Zornetsky, whose _____ investment fell about 25%. "_____ is supposed to do very well this year."

Behind _____'s historic collapse is a market that came loose of its moorings, fueled by speculative traders, many of them small investors who may have jumped in at just the wrong moment.

***

....and Scene.  You guys see what I mean?  The Song Remains not a little bit the Same, but exactly the Same.  It never changes.

I allow for the possibility that it is still early in a much larger game and that the recent margin hikes at the CME and brokerages are merely a speed bump for the silver rally.  But it is a possibility I have no interest in betting on right now.  A bounce is imminent but should the metal fail to attain its recent highs, the longs may be disappointed.  This type of lower-high price action often leads to a lower low very quickly as those who missed the chance to sell the first time throw in the towel.

My friend TA Trader points out that there may be a bubble in silver bubble talk, a top in top-calling. He is not a Hooplehead, he is a real-deal trader who has been vocally bullish on silver from the teens.  If you want to hear that argument out, he's your man, a good blogger and one with real skin in the game:

Late start this morning, sorry for the delay.  I got a few hot ones for ya...

Martin Sosnoff on how he stays in sync with sector rotation.  (Forbes)

The Fly on why he has no interest in teaching anyone how to master the markets.  (iBankCoin)

Young punk learns the Chinese SPAC lesson...the hard way.  (Bloomberg)

What does Amazon's stumble mean for cloud computing in general?  (PhilPearlman)

Yesterday I told America not to bother with copper on CNBC.  Here's some info on the hidden supply overhang.  (FTAlphaville)

Greg looks at some beer stocks like HOOK, BUD and TAP.  (DragonflyCapital)

Andy Samberg: Viral Video King.  (Wired)

Fightin' Joe Donahue's first (and only) How-To post for traders.  (UpsideTrader)

The city of Pittsburgh is having a serious Ninja Problem.  Not a typo.  (Gawker)

With the leader taken out, Pizarro was able to conquer the entire Inca Empire with just 169 soldiers.

Like the once-mighty Incas, we have lost our market leaders this spring one by one.  In like fashion, we've seen the indexes fall into a listless submission as the stocks we once looked to for higher highs can no longer rally their brethren...

Apple is some $30 off its high (10%) for the first time in, well, I can hardly remember.  The usual concerns about Steve Jobs' health have been compounded with the sense that Google's Android is going to give iPhone a serious run for its money.

Speaking of Google, the company is now in the throes of a mid-life crisis way earlier than anyone expected...and it's ugly to watch.  While the company continues kicking ass in search and ads, the unstoppableness and swagger are gone, too much inertia for too long.

We've lost the silver miners too, even as the price of the metal itself continues to climb.  Psychologically speaking, this is a tough loss for the bulls - the silver names were the real firepower in the commodity-related equity patch.  First we got the surprise resignation of Silver Wheaton's CEO then we got news out of Bolivia that the government was going to start nationalizing mines to appease the envious unions.  Silver names Coeur D'Alene and Pan American Silver were slammed even as they had just broken out after months of grinding toward their '08 highs.

Brazil and China are now quietly beginning their own inflation battles.  The related ADRs are nowhere in terms of year-to-date performance.  Monetary and fiscal tightening in the BRIC countries has taken an entire swathe of leadership names out of the race.

The Cloud Computing sector has gone from momentum nirvana to mass grave in less than two months.  The hottest of the hot have succumbed to diminished expectations since the Akamai shock in mid-February.  F5 Networks, Riverbed and other Cloud leaders have now undergone substantial corrections.  Inspiration for the other techs will not soon come from this group in its current condition.

Finally, as tensions appear to be subsiding in the Middle East, we lose the most important leadership group of all: Energy and Oil Services, the best performers of 2011 so far.  The XLE has undergone a quick-n-dirty retracement this week along with the entire nat gas, solar, oil sands and coal complex.  As always, the gains are erased much more quickly than they were created as crude pulls back from 111 to the low 100's.  Even stalwart commodity lover Goldman Sachs is getting off the horse.  They've put out a series of negative notes on the hard assets trade this week with the warning that commodities will underperform for the next 3 to 6 months.

The bears have been tearing down the leaders of this tape in a systematic and unmerciful fashion for the last few weeks.  Even Netflix, OpenTable and Ford could see their influence wane should the assassinations continue.  In the absence of new leadership or a resumption of fortitude in the Apples and Oils, it's tough to expect much progress going forward for the broader market.

Doug McIntyre: The cooling off of Apple stock.  (DailyFinance)

Jeff Saut: 5 Reasons to be Bullish About America in the Long Run.  (PragCap)

Two methods to uncover a liar.  (FarnamStreet)

Sudden Death Syndrome - Why are all the soybeans suddenly dying?  (BigPictureAgriculture)

How dare those nuns tell Goldman what it can pay Lloyd?  (MoneyIsTheWay)

Pay no attention to 80's advertising gurus, they are as lost as you think they are in the new media jungle.  (GigaOM)

Five somewhat controversial investing rules from Timothy Siegel.  (Forbes)

Green Shoots: Bankruptcy filings fall 6% in Q1.  (CNNMoney)

Five reasons to fire a money manager.  (TBP)

I did Yahoo's new show Breakout yesterday, video here:  (TRB)

My daily linkfest for financial advisors is jammin' today.  (WSJFA)

Here we talk about Cloud Computing and what investors should know about the theme right now:

Source:

Cloud Computing: Why It Matters and How to Find the Leaders (Yahoo Finance)

Any honest internet historian will tell you that if not for pornography and sexually-charged chatrooms, none of the earliest web companies would've survived.  Lonely men drove the only revenue the internet had at the very beginning, AOL was a de facto digital nudie mag.

So it should come as no surprise then that this grand tradition is carrying on into the next stage of the web's evolution - Cloud Computing.  Enter new service Cloud Girlfriend.

In many ways this is brilliant.  The much-coveted Sad Bastard demographic is a large and growing one.  Don't take my word for it, scan the crowd at any Rush concert and you'll see tens of thousands of potential customers for a service that invents a cloud-based girlfriend to keep them company.

My only surprise here is that this hasn't happened sooner.

Now if you'll excuse me, I need to spend an hour working on something completely unrelated to this post.

Check out Cloud Girlfriend (I won't tell anyone)

hat tip Ken S