Holiday potpourri

Tech bounce

About a month ago, I described in this column my thoughts on the prospects for leading online retailers in the West. I bet that retail purchases online would be fairly strong for these leading players. Well, both Amazon and Ebay have proven me correct. Amazon’s performance has been such that analysts and company insiders are cautiously optimistic Amazon may finally show quarter results in the black. Since Sept. 11, Amazon stock has increased by more than 100 percent, from a low in the 5’s to where it is today in the $10-11 range. Part of this recent success has to be Amazon’s tie-ups with strong brick-and-mortar retailers like Toys R Us. A few days ago, I tried buying some Christmas presents for my sons at Amazon. When I clicked on a particularly interesting toy item, I was ushered into a co-branded page for Amazon and Toys R Us since this item happened to be in the toy store’s stock. In fact, when you now type toysrus.com, you are ushered into this co-branded Amazon store page. Too bad for me (or rather, my son) that Spy Tool Kit he wanted was only shipped within the U.S. Oh well, I’ll find something else.

Ebay continues to astonish. Its share price has also risen as analysts predict a strong holiday quarter. It seems many global Christmas shoppers are bidding (no, make that "shopping") for presents at this most successful of all Internet companies. In fact, I read somewhere that out of the 200 or so "listed Internet promises" that have been spawned through the last four or five years, only one of these promises has lived up to expectations. You guessed it. I’ve done my share of "shopping" at Ebay too. In fact, I’ve won maybe 12-15 separate auctions for various items, mainly rare first edition holographic Pokemon cards for my kids. The only problem is that the credit card payment system employed by Ebay (Paypal) only works for U.S.-based card holders. It’s a good thing I’ve still got my U.S. dollar account.

Now as all of us stock watchers know, the U.S. markets have recovered beyond their September lows, with the Dow pushing over the 10,000 mark and the Nasdaq over the 2,000 as of this writing. This mini-bull run has been led to a large degree by tech stocks. In particular, semiconductor players (referred to as chipmakers by numerous analysts) have done their share in pushing the various indexes. Analysts, in fact, believe the bottom has been reached in this sector, with the sales effects of this bottoming to be reflected in the February 2001 numbers. If I recall correctly, some big players like Taiwan Semiconductors are already showing slight upticks in their monthly sales levels. Looking at the Philadelphia Semiconductor Index, which is a price-weighted index composed of 16 U.S. semiconductor companies primarily involved in the design, distribution, manufacture and sale of semiconductors, the index is up almost 200 points from its September lows, to around 570 as of this writing. In our local bourse, the two listed semiconductor companies are Ionics and Music. For both, the U.S. recovery is the critical driver. As of this writing, Ionics last traded at P7.10, above its P5.60 52-week low but off its one-year high of P17.25. For Music, it’s now trading at 45 centavos, above its 30-centavo low a few weeks ago but not even 10 percent of its P5.50 one-year high.

Based on the latest reports, the U.S. Economy has been in recession since March of this year. So by the second half of 2002, when most analysts are expecting a full recovery, the U.S. Economy would have been in recession for almost a year-and-a-half. The big question is will the upswing by second half of next year materialize or not. Some analysts are getting very nervous. Morgan Stanley’s stock guru Barton Biggs is one of them. Biggs lashed out on the Markets’ recent euphoria, indicating that it is "pure madness that the tech bubble is being inflated again." While Biggs believes this current bear market’s lows were hit during the panic selling after Sept. 11, he said that the "celebration" taking place is "excessive and premature." I’m just wondering, "Aren’t we smarter now?" I sure hope the Markets have learned from the past excesses.

On a sad note, ExciteAtHome (ATHMQ), the high-speed Internet service provider and portal, is shutting down in 90 days. This is a company which once held a mighty market cap of $40 billion. In my last trip to Silicon Valley, I remember passing their beautiful office along the stretch toward San Jose. That prime office space is going to be up for lease very shortly – a very sobering reminder for all of us to move with caution in these trying times.

A global influential

I recently read Time/CNN’s list of the 25 most influential global business people who have exerted a lasting influence creating new industries and reshaping markets. In the list dominated by Western businessmen like Bill Gates and Warren Buffet, I counted six Asians, including Prince Alwaheed of Saudi Arabia. Out of the six, I am pleased to say I have personally had some contact with one of them – N. R. Murthy, the Infosys co-founder, who came here last year and gave us an inspirational talk about his company and prospects for the future. I wrote about my memorable encounter with Mr. Murthy last year. I recall a small man, physically, with a most humble disposition, but with the vision and fervor of a global Giant. Murthy, now 55, a former socialist who once gave away all his money in the 70’s, is now one of India’s (and this world’s) richest and most admired men, creating an e-commerce software powerhouse which was the first Indian company listed in the Nasdaq. But it is in his nature and values, his care for his employees’ well-being, that has distinguished his leadership among others. I was truly fortunate to have met Mr. Murthy, even if it was just for a moment.

The real joys of life

Finally, I’d like to end this piece with a story about my son Ethan. During the winter and early spring of 1991 while still living in Chicago, my pregnant wife Rose Anne took a real liking to George Winston’s rendition of "Variations on the Kanon by Johann Pachelbel." She would play the CD over and over. She once mentioned that certain studies showed that the unborn child could hear the music around it. Of course, I did not give this a second thought myself. It’s been 10 years since Ethan was born. He is now a fairly accomplished violin and flute player. One of the pieces he is mastering is the Kanon by Johann Pachelbel. To see our son playing this song which we played to him while he was in his mother’s womb really blows me away. Life is so amazing – even through the numerous ups and downs, it’s these simple joyous moments which make life worth living, worth fighting for. I’d like to wish everyone a joyful and meaningful Christmas and a prosperous 2002.