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Daily Speculations The Web Site of Victor Niederhoffer & Laurel Kenner Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter; a forum for us to use our meager abilities to make the world of specinvestments a better place. |
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Sunday, 03/28/04
Reflections on an Auto
Most would agree that the modern automobile performs much better and give much more satisfaction to the consumer per adjusted data than ever before. I saw the fruits of this at the Geneva Auto Show in March where hundreds of manufacturers displayed thousands of competitive models, each incorporating the fruits of a selection from more than 100,000 patents and key developments that had come before.
Key developments in the auto start with the wheel and the internal combustion engine in 1885 and then continue with the carburetor, transmission systems, spark plug, body enclosures, brakes. As of 1915, more electric cars were produced than gas-powered cars, but the discovery of oil and the extension of roads changed that. Some key numbers that organize the developments are the number of wheels, number of passengers, and number of stokes in the engine.
What are the comparable stages in the development of modern corporate performance? Presumably everything dates back to the markets, which have existed since time immemorial, with a key branch being the development of stock ownership with the merchant ships of the 15th century and the Dutch and English joint stock companies of the 17th century. We evolved from mainly single-family businesses to conglomerates like GE with millions of shareholders, from one financial report a year to four key ones with infinitely more information than appeared 100 years ago.
Are there any concomitants of present
business practice that are superior to others vis-a-vis
future profits in the same way a Lexus is considered more value
per cost than such cars as the Pacer, Vega or Strada.
--Vic
Laurel comments: Orson Welles' 1942 classic film The Magnificent Ambersons asks if the automobile really made life better for anybody. Cheerful sleigh rides at the beginning of the film give way to gloomy urban scenes; the hysterical maiden aunt loses her life savings on headlight stocks; the hero has both legs broken in a truck accident. The debate continues:
Jeremy Lyter
comments:
Complexity makes mechanics and accountants
extremely happy, but what about the common man?
George Zachar replies:
Complexity and specialization long ago rendered outmoded
one-man shops in health care and medicine. This was concurrent
with both the extension of lifespans and enhanced quality
thereof.
Jeremy Lyter
comments:
Do we really need XXL coffee cup holders and
TVs in every seat?
George
Zachar replies:
Dissing mass taste has been a
pastime of nanny-staters since Rousseau.
Jeremy Lyter
comments:
Great businesses, like great autos, have not
strayed far from their humble beginnings. These are the true
classics of our day and should be sought after with reverence.
George
Zachar comments:
Wal-Mart? Microsoft? GE?