Archive for the A word from the author Category

How International is the Internet?

Posted in A word from the author with tags , , on March 26, 2009 by evd101

By Erik L. van Dijk

How international is the internet? One of the better Dutch international news reporters, Bert van Dijk (same name, but no family as far as I know) who is based in Shanghai, China, wrote a nice column for our local financial newspaper. He showed quite convincingly that internet is actually not international at all. In every country, especially so when language is still a barrier, people seem to concentrate on home-made providers that bring them internet services or products. This is actually strange, because if there is one area in the world where location should be less of a factor, it should be the internet world of course.

After adding a flagcounter to our site some 10 days ago, we do of course have the opportunity now to do similar type of research with our website. Where do people come from and to what extent is this is inline with expectation?

Well, the bulk of our readers come from the US. Still the biggest market for finance-related blogs. Also the market with the largest amount of online people. The percentage of 59.7 percent is not strange either. We can imagine that size of the country is a factor when writing a financial blog. However, relative size of the exchange and interest of people in the stock market, is somewhat above average too here in the US.

If we use the US market weight as a proxy for its importance, there is still an overweight because the US is in terms of marketweight not more than 40-45 percent. That the Netherlands are in a good second place is less remarkable than it might seem to some outside observers. We are Netherlands-based and have our big network here. With a percentage of 16.1 percent Holland is a clear number 2. Great Britain 4.8 percent, Canada 4.8 percent and France 3.2 percent did also score noticeable sores.

There were 12 nations in total interested in what we do. New Zealand, Trinidad and Tobago and India represent the English-language market that has a total weight of around 75 percent. In other words: writing in English is indeed international. But for three quarters of your effort the crowd will be local, AngloSaxon.

 

Of course, our blog is highly technical and it could be that the country factor is less important when dealing with other topics. But it does remain true that  – when markekts are somewhat stressed and weird – a blog like ours still triggers first and foremest the interested readers in UK-US related markets. It will be interesting to see how that percentage will develop now that we also added Twigger to our repertoire of instruments.

 

Talk to you tomorrow after finishing my next contribution to this blog.

 

Tomorrow a big story again. Today I wanted to just confirm Bert van Dijk’s story. The INTERnet is more of a LOCALnet. International providers that feel that they have to send their clients something, are better advised to think globally but provide reports etc locally.

 

All the best, with tomorrow a big story again. English is a lingua franca for sure, but it is not yet so that the internet crowd reads heavy stuff like our stories full-fledge online.

That might be the case with one-liner stuff like at the Twitter. but that is not what we are doing here.

Twitter

Posted in A word from the author, Twitter with tags , , , , , , , on March 21, 2009 by evd101

By Erik L. van Dijk

Whoever pretends to be something of a modern cosmopolitan will have to add Twitter to his online presence. Well, so be it. Today I linked my Twitter page to this blog (see also the widget in the right hand column of this page).

Whenever online and doing or hearing something that might be of interest to you, I will share my views. Would be great to hear yours as well, albeit that I hope to be able to limit the topics to those that are either directly or indirectly related to the tags in this Blog!

Well, looks like fun, and I chose a good first Twitter hour, because I immediately was informed that the Hungarian prime minister has resigned. I consider this – in combination with the French move to provide funding to Renault for increased production of the Clio in France, instead of Slovakia – the first signs that Europe is probably heading for a period of increased protectionism.

With the US at the same time gradually but slowly starting serious talking to Iran. Although the clash of two Navy vessels (one a nuclear submarine) in the Street of Hormuz close to Iranian territorial waters wasn’t helping that much. The more so because it led to the waste of 90,000 liters of diesel fuel. I am sure that the Iranians aren’t amused. The more so because it was the time of the Persian New Year, Nowruz.

With Mir Hussein Mousavi, the popular former Prime Minister who led Iran in the period of the Iran-Iraq war now being the candidate in the so-called reformist camp – with Khatami withdrawing earlier this week – the outcome of the Iranian elections mid-June 2009 is very important and directly of influence to a potential new spring in the Iran-US relationships.

That is the kind of news we need in the world. Not the negative stories related to bankruptcy, unemployment, prime ministers stepping down et cetera. I do believe that we will still get our share of the negative stuff in the coming months, but somehow I have the impression that the balance of power is shifting towards at least some positive surprises. Initially the positive surprises will be more of the type implying that negative results are a bit less negative than expected, but around the summer this might be replaced with the first signs of good news. I wouldn’t be surprised if talks between Iran and the US will be the first real good news stories. I belief that the Iranians are ready for it, so let’s see what Obama and his assistants Clinton and Mitchell will come up with.

Let’s sit and wait, and in the mean time enjoy a nice weekend (at least here in the Netherlands, with for our standards spring-like temperatures).

Word from the author (belonging to the entry below about Fund Manager Selection by Institutional Investors)

Posted in A word from the author with tags , , , , on March 15, 2009 by evd101

Our entry about the activities of Institutional Investors and their investment styles – see below – is rather long. I am aware of the fact that readers don’t like blog entries to become too long. Normally we will limit our entries to some 1000-2000 words, like we did up until now.

However, because of the important link between actions by institutional parties and the current crisis, we did believe that it would be wrong to oversimplify things. We therefore decided to use 3000 words to explain things more rigorously.

I hope that the reader will appreciate this. By distinguishing between types of institutions, we learn a few things. First, some of the institutions invest like private investors, but with the an added knowledge base, whereas others are actually working in such a structure that the true specialists have insufficient power compared to non-specialists taking the main decisions. Result: awful mistakes, excess middle-of-the-road strategies, overconfidence in allegedly big names and not enough focus on performance and risk management.

To some extent we can therefore conclude that – whereas the system was supposed to rely on institutional investors being true specialists advising the non-specialists – institutions were instrumental in explaining the credit crisis and not in helping to avoid it.

On the other hand, the bravest of these institutions will probably also help us out of the crisis, together with Sovereign Wealth Funds. The Wealth Funds are a new category of investor that became important during the last 10 years. We will study them separately in a future blog entry.

For individual investors and their advisors reading the entry on Institutional Investors: we hope that our critical notes will help you in your decision process. Some are good in one thing, others in another and as a group they were disappointing. That is not to say that there aren’t true best-of-breed champions out there. There are, and we are of course pleased to help you finding them, when you come to the conclusion that it is too complicated to distinguish the good from the bad.

And of course, non-specialist institutional investors that have to invest: use a good consultant. Investing is complicated in and of itself, and knowing how complicated it becomes to take investment decisions in a decision structure in which you also have to incorporate the desires and demands of non-investors and/or take into account non-investment-related aspects (e.g. very important in family offices or endowments!), it is good to know who is good or bad in what.

That is what we try to achieve with or long piece. If instead of making you fall asleep, it will trigger discussion or comments, we will feel that our decision to write something too long for blog entry standards has actually worked!

Enjoy our next entry,

Erik L. van Dijk