Technology & Finance
Thursday, September 28, 2006
Running Money - Hedge Fund Honchos
Andy Kessler, who went from 20 years on Wall Street to running a high tech hedge fund in Silicon Valley, has written a book that is fascinating on two fronts—hedge funds, and, predictably perhaps, technology. Hedge funds, the hunt for money, then with money coming in the hunt for good investments, is a well-told tale.Even more interesting are his ruminations of the occasional cumulative effect of technology—steam pumps were originally developed to pump water out of English coal mines, but with the addition of power spinning and weaving they completely transformed the manufacture of clothing and cut costs to a fraction of what hand production had been. Kessler and his partner found a few—Inkotomi, the caching service, they bought at $6 and it hit $36 the first day of its IPO. Real Networks went from $6 to $30. “You don’t have to be a so-called player in Silicon Valley to make money, just smart enough to find a few good companies and avoid the fashionable ones.” Elantec, which made a $2 diode that was needed for CD-R drives, went from $3 to $200 as Napster drove the sales of CD drives...a clear example of Kessler’s idea of pile-on technologies, or the waterfall effect.
On a macro level, he raises interesting issues—is the US doing the high-margin intellectual property and benefiting from Japanese and Korean companies selling us hardware at loss-leader prices? Why do economists keep ignoring the stock market, which he calls the 10,000 pound elephant in the room? It’s a smart, funny and provocative book.
.NET for Financial Developers
Practical .NET for Financial Markets (Hardcover)
by Samir Jayaswal, Yogesh Shetty
$54.49 Amazon
Developers who are working with the Microsoft .NET framework in financial services now have a very focused guide – “Practical .NET for Financial Markets,” by Yogesh Shetty and Samir Jayaswal.
“I have read a lot of books, and this is very different and very impressive,” said Stevan Vidich, senior technology specialist for capital markets at Microsoft. “The book is everything I had hoped for and then some. It is intended for experienced .NET developers that want to learn how to use .NET development to solve business problems in the Trading Value Chain.”
Shetty said that he and Jaywawal decided to write the book because they could see that no focused literature existed for financial services developers building applications on .NET.
Books were about .NET, or they were about finance, but nothing addressed .NET in finance.
“In their book,” said Microsoft’s Vidich, “every chapter starts with an overview of the business process followed by technology mapping that includes a lot of detailed C# source code. It is not a book that explains how to learn .NET programming; it assumes decent knowledge of .NET programming. It is truly unique in its approach to focus on Capital Markets business and explain how to apply .NET programming to the business issues.”
Shetty has nine years experience designing solutions for the front and back office operations in financial firms, the last three working at a large investment bank on Wall Street.
He has seen Microsoft’s role in the financial enterprise expand, he said, from providing a good graphical user interface to running the servers are the heart of the financial enterprise such as options market making and algorithmic trading.
“The problem with algorithmic trading is that it is more of a strategy. From the vendor you get a ready-made algorithm so most systems are developed in-house using .NET.”
Older technology managers still prefer Java, but .NET is gaining ground, he said and is meeting the demands of the options marketplace. The book is meant to provide insights into the practical, day-to-day challenges posed by domain-specific issues. The authors integrate problems and solutions including the business and the technology in each chapter. To make the points explicit, they have usually included the code for a small prototype.
“I am a hard core technical guy with nine years designing solutions for front office and back offices,” said Shetty. He spent the last three at a large investment bank on Wall Street, while Jayaswal is, in Shetty’s words, a hard core business guy.
“We know the market, so we prepared the proposal and pitched it.” Writing the 500-page book took them a year, and since they were both working fulltime, it required long weeks of very long days.
“I wish there were banks that could loan time instead of money,” added Shetty.
.NET for Financial Developers
Tuesday, September 26, 2006
Marty Whitman, Famed Value Investor, Buys Microsoft, Fair Isaac
Martin Whitman, whose Third Avenue Fund has been a leader in value investing, has decided Microsoft and one of its key partners in financail Services, Fair Isaac, look like good places to put some money, according to recently released filings. Whitman made his name as a vulture investor, buying assets like the debt of bankrupt companies, becasue he could figure out their value. Buying shares in Microsoft and Fair Isaac certainly don’t fall into vulture investing, but it’s interesting that someone as discerning as Whitman thinks Microsoft is good value. Deep Value in Microsoft Stock
Ray Ozzie Tops in Tech -- Silicon.com
For leading Microsoft into the post-Bill Gates era, Ray Ozzie, chief software architect at the software giant, has been named silicon.com’s number 1 Agenda Setter for 2006.
Ozzie is the first ever winner from Microsoft - the closest Bill Gates came was a number 2 spot in 2003. This is the first year neither Bill Gates nor Steve Ballmer appear in the Agenda Setters top 50, signalling a changing of the guard at Redmond and in the tech industry as founders of tech stalwarts hand over the reigns of their companies.
Along with Gates stepping aside, Sun CEO Jonathan Schwartz (number 46) debuted on the list instead of Sun chairman and founder Scott McNealy; and Dell CEO Kevin Rollins (number 45) takes the spot of Dell founder Michael Dell.
New Kid on the Microsoft Block
Microsoft has been pushing Ozzie as a key player in the company, beginning with a long, somewhat meandering Fortune piece in the early spring. It will be interesting to see what a software architect with a flair for collaboration systems does to a company that often seems stymied at making different divisions play well together.
Won't Anyone Say CRM? The KANA Case
KANA Software refers to its products as multi-channel customer service solutions. Some researchers call them an eService suite, while others class them as service resolution management (SRM) products or industry-specific vertical CRM packages. One magazine calls the software a knowledge management solution, which is also true in its way. The software can also be regarded, in part, as horizontal groupware applied to vertical markets.
I hadn’t realized CRM was such a poisoned term. Still, that’s what KANA does and Bloor Research takes an in-depth look at the company.
CRM Goes By Lots of Other Names