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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 665.67-0.9%4:00 PM EST
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To: E_K_S who wrote (53236)10/11/2020 9:53:53 PM
From: Johnny Canuck2 Recommendations

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E_K_S
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IBM has the cashflow to re-invent itself. It is a matter of whether they have the vision and the buy in from staff to do so.

There are many parallels to when the current CEO of MSFT took over. MSFT was almost relegated to the status of a former high flyer that was now an "also ran" though they were still generated decent cashflow. Now they are competing with AMZN and to a certain extent NVDA head to head in some of the faster growing segments.

Like MSFT, IBM has been cutting a lot of the senior staff in order to get younger and more nimble. Agism in tech is a real thing. Unfortunately you also lose a lot of experience and the younger staff make the same mistakes from decades ago. I see a lot of startups re-inventing the wheel from 20 years ago, just re-packaged themes with a new coat of paint. The fundamental flaws the first time often exist the second time around.

Keep in mind researchers in AI are already sounding the alarm that it is overhyped and often applied to problems where it adds no value except marketing hype.

Speech recognition, brain computer interface, neural networks, even thin clients (now called the cloud) all already had a life the first time around in the 80's and 90's. In some cases the technology is better so the performance justifies the use case or culturally the use case is now justified due to change in consumer behaviour. In other use cases same underlying flaws and that segments will fail again the second time around.

Even cloud has some serious underlying cost issues that will emerge when the companies stop subsidizing the initiative with a focus on growth to get more profitable. The thing that killed thin client (cloud) the first time around was the cost savings were over exaggerated (there is fixed cost of storage and upgrading computing power no matter who owns it) and the performance was not quite there (not an issue this time around unless 5G traffic from new Apps kill that golden egg).

In between that the nuclear winter that affect each of these areas of research every 20 year or so there should be a way to make money. Just be carefully not overstay your welcome in any one sector and look for the turn in sentiment. Aggressive hard sell ads is usually an indication especially if they are trying to market to the man on the street as opposed to designers and developers. I have been around long enough to see a few nuclear winters in some key areas of research.
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