The bailout plan

So they finally passed a bailout package and one of the powers it grants the administration is the power to take an equity stake in the banks being bailed out.  So basically the taxpayers would become stockholders of the banks instead of owners of the banks’ failed debt.  As stockholders, the taxpayers would own both the bad debt but also part of the productive areas of the banks’ business.  I know some conservatives who oppose that idea because it simply smells too much like socialism…the government owning companies.  I say just the opposite is true.

I feel a prediction coming on

Gather ’round everyone because I feel a moment of clairvoyance coming on. That’s right, my eyes are starting to roll back up in their sockets and my voice sounds like 7 different people speaking at one time. So take your seats around the table, join hands, and try not to scream when the lights suddenly cut out. It’s a *Digital Seer Prediction*

Are video game stocks oversold?

We’ve seen two upgrades from analysts in the last two days for Activision Blizzard.  It is now trading below the price Vivendi paid to acquire majority control of the merged entity.  As I’ve mentioned before, cash flow analysis pegged ATVI at about $12.50.  Clearly the run up in share price after the merger was at least in part due to a healthy dose of unrestrained euphoria, and I wouldn’t bank on it getting back to the high teens any time soon.  The assumptions behind the cash flow analysis (or any analysis, for that matter) must necessarily change to reflect the credit crisis and general state of the economy.  Having said that, this thing is now a much more reasonable value and if you believe in the expansion possibilities of video games, this could well be a good entry point. 

MMO’s demonstrate the power of digital convergence

Massively Multiplayer Online (MMO) games are a key part of digital convergence because they demonstrate how the digital world melds entertainment and social activity on an enormous scale.  MMO’s have been around for a while now–ten years anyway by most measuring sticks–but it has really been in the last 4 years or so where the true potential of MMO’s has come to light.

Fire sale on digital companies?

What a bloodbath. Apple fell through its February ’08 low a little while back and the stock is now “broken” as the chart-meisters would say. Right now it’s flirting with the magic century-mark, which is always a psycological watershed. Where will it bottom?

The envy trap

As a professional investor, I have been repeatedly asked my opinion of the credit crisis and what will come of it all. My first answer is that we’ll get through it, so just sit tight.  My second point is that it’s vital that people understand what led to the crisis so that we can learn from our mistakes.  And yes, they are our mistakes, as in all of us as people with money invested in the market, not their mistakes. 

Youth lead the charge, pt. 2

In my last post I brashly predicted that gaming will be at the forefront of digital convergence.  Why? Because the youth of the world are spending billions of dollars each year to play in the digital world. This means that it’s the gaming companies that have the current revenue streams and profit margins that enable them to push the technological envelope.  They will develop (and own) the technologies that businesses and non-gaming inviduals will later use to operate in the digital world (when they finally get with the program).

The young will lead the charge

Everyone knows that the youth of the world are nearly always the early adapters of change. In music, the youth of the day were the first to take to the revolutions called jazz and later, rock ‘n roll. Not long into the 1980s, young people took up the technology revolution with a vengance. It wasn’t long before they had outpaced their seniors in terms of figuring out such gizmos as VCR’s, walkmans, and PC’s.

Looking at today’s youth, they are far more internet savvy than their parents. They are leading the digital revolution, and really don’t even see it is a “revolution”, but just their preferred way of doing things.

So the young folks will lead this charge. And what are youth into?

Games.

Gaming will be at the forefront of digital convergence. That’s prediction number one. More later…

Hello world!

Digital convergence is the human journey from the physical world into the digital world.  This journey will encompass not just games and other forms of entertainment, but also business, finance, communication, religion, politics, investments, social interaction, miliarty conflict, and more. Nearly every facet of human existance will be duplicated in the digital world, where they will rearrange themselves far, far more rapidly than what is possible in the physical world. In fact, this journey is already well on its way….

This blog focusses on the business, investment and finance aspects of digital convergence, translating the technical morass and other bits of nonsense into plain talk and common sense predictions.

So where will this journey bring us? Keep reading….