I am not going to say that you should not buy companies with strong balance sheets. What I am going to talk about is that strong balance sheets are just another indicator and by themselves are not something to go after.

The big boys of tech have reported earnings and let’s look at the results.

  • Amazon: Not so great a bit lack luster.
  • Apple: Great earnings.
  • EBay: Great earnings.
  • Google: Great earnings, but poor revenue.
  • IBM: Pretty good earnings.
  • Intel: Pretty good.
  • Microsoft: Fell off the cliff.


These earnings are telling me something that I have been talking about for a while. Namely that there is a gyration in the market. The market is fundamentally changing.

If you study history recessions and depressions are moments of change. Of course many will say, “gee Christian tell me something new.” No, I mean recessions and depressions are moments when we fundamentally change our habits. Let’s start with the recent 2000 recession. When it ended we changed our habits and made the Internet what it is today.

Go back to 1999 and look at what was happening. Sure there was Google, Amazon and EBay. But there were a whole host of other companies like Alta-Vista, and the sock that looked like a Pet Dog. Those have all disappeared and what remained is the tech of today. And when those other companies disappeared we developed certain habits, namely like putting Google into the dictionary as a word implying search.

With this recession I am witnessing a real shift in how we do things, and that shift is mobile. Up to now we are talking about smart phone, and net books, and the likes. But I predict after this recession mobile will be the story for the next ten years. Again many of you will say “duh Christian tell me something new”. No I mean mobile will be THE story for the next decade.

Let me illustrate with the following case study. The link is a mobile web server and you think, “ok why is this revolutionary?” Think hard about this. Remember how people say that in the future your entire life will be stored on a chip? What if I told you that the future of your life will be stored of 4 gigabyte SD memory card?

Imagine for the moment that you have a smart phone and on it you run a piece of software like what I was referencing, namely a mobile web server. Because your smart phone is a walking server you can update and be referenced anywhere in the world. Some of you will say, “but is this not what the cloud is all about?” Yes, and no.

The problem with the cloud is that you have ask, “ok which cloud?” Not all clouds are equal. Thus there will be different clouds. But with a mobile web server and your life on your smart phone you have the ability to create a social network that moves with you. Just imagine two mobile web servers that dynamically set up links with each other as you walk and approach each other. They could exchange information and inform you that maybe the person beside you likes the same food.

You can only do such operations if the data is held locally. And lets not even talk about privacy concerns regarding the cloud. I personally think that this in itself is a major concern.  But continuing with the smart phone web server. I could store my work, read my emails, and I could even run it as an access point. Think about this power. Your smart phone is a walking talking server that stores your life!

So who benefits from this? The obvious is Nokia since they have all of the pieces in place even though Nokia is too stupid to realize what they have. Another choice is Google since they have android and they thinking about Chrome OS. Another choice is Ebay since they offer services like Paypal, and Skype which will become even more important in the future. Amazon will increase its clout. Apple will continue, but Apple is a bit behind in this philosophy. RIM is definitely behind in this strategy. Let’s not even talk about Microsoft since they are not even close to getting this philosophy and this will be the decade that will ressemble’s IBM 1980’s debacle. IBM will definitely benefit because mobile servers mean more sophisticated hardware and services that will talk to the mobile servers to exchange information. I also add Oracle to this list.

And I want to add to the list all of those companies that have not yet been created, but will be created when this paradigm gets in full gear…