Joe Kernen (CNBC) and his Private Sector Dreamland

This morning I was watching one of CNBC’s Squawk Box episodes where Joe Kernen (a co-host, nicknamed "The Kahuna" or such) was trying to debate with Mohamed El-Erian the merits of private sector vs. public sector when it came to capital investment effectiveness. This particular episode has to do with Mohamed El-Erian's view that the US had better take 3 actions soon to avoid recession, of which one such action includes embarking on large-scale infrastructure fixes to the nation's roads, bridges and transportation systems, especially since the government borrowing cost for any required capital is near zero now. El-Erian's other ideas include tax-reform and over-indebtedness (especially in things like student loans now), but that's another issue.

I want to focus on the infrastructure investment topic and some of what Joe Kernan said during this episode that I take some issue with, specifically his statements about how wonderful and efficient the private sector is at deploying capital, as opposed to the government (aka, public) sector.  Readers remember: don't confuse public-sector with publicly-traded private companies in this upcoming discussion.

Joe said [as closely as I could type it while watching the video] the following:

If you have a [private sector] business, ... whether you exist depends on you watching your P's and Q's and watching every penny, and not overpaying for things, ... you go out of business if you don't do that.... [a private sector business] treats capital frugally like it should be treated.  

Joe was telling Mr. El-Erian something along the lines of "... I'm just talking about a theoretical argument about whether government is as effective at deploying capital as much a the private sector.", and the fact that Joe clearly believes that the private sector is fantastically effective at deploying capital.

Private-Sector Capital Deployment Efficiency and Effectiveness? Sure...

Joe, you must be joking!
What world are you living in?  Surely you are not referring to the private businesses whose stocks adorn the Dow Jones, S&P or Nasdaq indices.  You need only look to any of your guests, El-Erian included, to quickly see how insane your bit about "treating capital frugally" is in this modern private-sector world, especially among the publicly-traded private sector businesses.   You are simply living in a dream land.

For starters, IF private sector firms were at all concerned about the effective or efficient deployment of capital, you wouldn't see them issuing pay packages worth tens or even hundreds of millions of dollars to senior executives (like, e.g., Mr. El-Erian reportedly received at Pimco, a subsidiary of Allianz).  And, I am waiting for someone to tell me how it is effective deployment of capital to secure such awesome talent that can only be had for these enormous sums, and how their superhuman management abilities deserve such pay — you know, their super-human ability to pay the average person in the organization one-three-hundredth of what they make, while laying off masses of those average persons because employees are just a terrible waste of capital when that money can go to their pay instead.  But, this insane executive-pay is just the starting point in a long list of inefficient deployment of capital in private firms.

How about all the cash parked overseas now by major companies?  Trillions!  And, even if it is sitting in negative-yielding government bonds, or otherwise near-zero-yield instruments, somehow that is effective or efficient use of all that capital?  Go ahead... make the obvious arguments over how it is more effective to park such massive sums overseas than to pay taxes on it in the USA, yada, yada...  well, the tax-code is certainly partially to blame, but then again, it ended up this way because these same corporations lobbied elected officials in order to write the tax law as it stands.  This needs to end.  Total ineffective deployment of capital on a grand scale.

Then come all the share buybacks that are being done to further enrich top insiders that have incredible pay deals tied to stock price.  Share buybacks are truly saying that a company has nothing better to do with excess funds than buy back their own shares, if you believe they really have nothing better to do with it.

But, therein lies the problem, the stats clearly show that corporations DO have better things to do with their capital and they are obviously not treating it frugally, as they should per Joe K's commentary. Stock prices are soaring, yet they do stock buybacks while their stocks are already at very high values (hmmm.... that sounds a bit like "overpaying" to me), but the internal core business capital investment is now at an astonishing low — things like investments in machinery and equipment  — the lack of which is contributing to overall productivity slowdowns in the USA economy.  As this article on SeekingAlpha pointed out, courtesy of the National Bank of Canada's Economics and Strategy economist:

"Borrowing by corporations for the purposes of stock buybacks instead of investment in machinery and equipment does little to enhance an economy's capacity for growth. We're getting more evidence of that in the US where the average age of fixed assets is the highest in half a century and productivity growth is the weakest on records."

Gee, that sure sounds like truly effective use of capital, Joe!  I think otherwise. Surely we can do better.

Corporations are sitting on mounds of cash, but yet instead of investing in core business assets (CAPEX), they waste their cash on stock buybacks, over-inflated executive compensation packages, and other unconscionably conspicuous deployment of their capital in ways aimed at self-enrichment and short-term stock price over long-term productivity and sustainable long-term returns to the average shareholder.

Somewhere along the line it has even become an accepted norm, apparently, that a full 10% (or more) of all corporate profits will go to just the few top C-level employees.  Seriously. Just pull up Google Finance and look at a few companies' total net profit values and compare it with what the top insiders are taking in compensation.  It is truly appalling.  Need some examples?  You can choose nearly any company... they all look similar (thus, I am not saying any of these companies are worse than any others... most all are terrible these days in this sense):

• Try Lifeway Foods on Google Finance, which shows 16.16 million shares outstanding, EPS of 12 cents per share (thus making total earnings of just under $2 million USD).  Now, go to Reuters and look at some of the top player's pay packages and share sales... a mere 3 individuals took home $3.3 million in basic compensation according to Reuters.  Wow!  Great use of capital guys!  Ever heard of the average shareholder?  If you directed two thirds of your inflated executive pay towards the corporate bottom line, your entire business would be in the black! And, presumably the share-price would go up quickly if a profit was attributed to shareholders and not just the entitled few insiders. And, you all own shares, which makes it even more crazy that you are unwilling to risk your cash pay for just share appreciation. What makes you all worth such great pay when your average shareholder has lost 50% in the past year?  If you have so much capital that paying such salaries is the only efficient thing to do, perhaps you should consider the average shareholder first, or maybe some capital improvements for expansion or productivity improvements?
  
• Gee, let's look at Capstone Turbine on Google Finance,... wow... Reuters shows 4 guys pulling $2.2 million in basic compensation from a firm that loses money in a big way (net income: -$25 million annual).  Unreal.  Again, don't any of you overpaid self-rewarding insiders see anything even slightly wrong with this situation?  Don't worry: Joe K. thinks you private sector guys are doing wonderful with your precious capital, if he truly includes you in his statement today.
  
• And, as to not leave out some big players, how about the likes of Chevron (G-finance site),... Google shows them losing 40 cents/share over past 4 quarters, or roughly $760 million dollars.  But, as you might now expect, the top insiders are doing wonders with that precious capital: there is a nice $50 million dollars in otherwise useless capital that just had to be handed out to the five people that Reuters lists Chevron executive compensation for.  Couldn't $50 million do anything at all to otherwise improve efficiency, even if it were R&D looking into efficiency gains?

There are so many examples of poor use of capital in private organizations, and their "overpaying for things" (something Joe claimed they can't do and survive), that I could go on for weeks (and not only regarding excessive pay packages).  But, clearly Joe Kernen's appreciation of the private sector, and it's alleged ability to so effectively deploy capital, is due to some fantasy view he holds of modern corporate America versus a completely different reality.  Is the public sector really so terrible at capital deployment compared to all this? Maybe. But the bar set by the private sector doesn't really seem terribly high.

Guaranteed 3.6% Savings Yield - Simple, Safe, Long-Term with EE Bonds

Guaranteed 3.6% Compounded Interest? Where!?
Look to EE Bonds

[Note that as of January 1, 2012 banks and other financial institutions terminated their sales of bonds, in case you were only familiar with the old way of buying them at a Bank.  Go to Treasury Direct instead.]

Seriously, consider EE Savings Bonds!

Yes, savings bonds... those "old fashioned" instruments for putting money away for the future. Why is it you never hear "investment advisers" or "financial advisers" talking about how USA Government Savings Bonds are still a damn-good option for long-term saving, especially for people that are not otherwise financially savvy or blessed with "extra" time to manage their investments? Simply put: there is no money in it for the advisers!

I argue that savings bonds should make up a portion of almost every investor's financial portfolio.  You should never have to worry about them... just put your money in and wait.  For anyone that wants to argue about hypothetical situations like "what if the US Government goes under",... well, if it does, do you really think ANY investment is going to be worth squat? (and that includes gold; chaos will make that useless too... you would be better off having stockpiles of food and oil)

So, read on, and give EEs some consideration...

3.6% Annual Interest Rate? That sure beats the bank!

Not only does the 3.6% EE yield potential beat anything (of recent) you could get in the bank — and that includes long-term products like 5-year CDs — it nearly matches the current 30-year US Treasury Bills rate (3.86% as quoted currently on Bloomberg US Government Bonds rates).  So, what is the catch?

Patience is required to obtain this yield!

If you visit the Treasury Direct website page on EE Bond Rates, you may first be scared by the currently posted quoted rate of 0.2% (as stated in the paragraph titled "What interest will I get if I buy an EE Bond now?").  But, have no fear and keep reading... you can get the 3.6% rate I am referring to if you are patient and buy these EE-bonds with a 20-year investment horizon in mind.

Now, look further down the page for the section / paragraphs with a heading of "When will my paper bond be worth its full value?".  This is where the IMPORTANT INFORMATION is contained that leads to the 3.6% minimum guaranteed annual compounded interest rate if you hold the bonds for 20 years.  Quoted from that section:

"Electronic bonds are sold at face value (not half of face value). They start to earn interest right away on the full face value. Treasury guarantees that for an electronic EE Bond with a June 2003 or later issue date, after 20 years, the redemption (cash-in) value will be at least twice the purchase price of the bond. If the redemption (cash-in) value is not at least twice the purchase price of the electronic bond as a result of applying the fixed rate of interest for those 20 years, Treasury will make a one-time adjustment at the 20 year anniversary of the bond's issue date to make up the difference."

So, if you HOLD the EE Bonds for full 20yrs, you can forget that "0.2%" stated current rate, as you are guaranteed a minimum of 3.6%-annual-compounded-interest (using rule of 72), since your money has been guaranteed to double in that 20yrs.

Briefly, the "rule of 72" helps us compute the approximate annual interest-rate over a period of time by dividing the interest-rate into 72 in order to obtain the term (length in years) in which that interest rate will cause an investment to double.  So, in this case: 72 / 3.6 (rate) = 20 (year term).  I.e., basically 3.6% annual interest has been guaranteed in one of the most historically safe investment options ever, so long as you can think long-term!

You think you can do better elsewhere?

Sure, you may obtain higher (historical) yields elsewhere — perhaps in the stock markets, commodities, or corporate bonds.  But, you had best know what you are doing and have 1) the time to actively manage such investments, and/or 2) the nerve to ride out massive downturns like what we saw occur during the Financial Crisis that really shredded most investments in 2008 (to the point it took years to get back to pre-crash levels).

And, if you consider putting money in "the bank" as a savings strategy, consider the fact that for over 5 years now, interest rates in the bank have been terrible!  And, think about it,... 5 years is a full quarter of the duration you would have have to leave your money in the EE Bonds (toward that 20-year term to get the doubling of EE funds).  In the current preceding 5 years, banks have paid essentially ZERO interest while you could have been getting 3.6% in your EEs.

Bank rates may ultimately rise, but I would not count on it changing quickly or holding higher rates for any length of time.  And, keep in mind: interest on savings accounts and CDs is taxed every year whereas savings-bond interest compounds pre-tax (i.e., you are only taxed on the interest when you redeem the bonds).  This can make a substantial difference in compounded returns.

The bottom line is this: If you think you can maintain a higher-average-annual-return elsewhere, go for it. I simply look at EE's as just a very simple "no brainer" hands-off way to save some money for retirement in about as safe of way as possible.  And, you do not need to hold paper bonds anymore: use the TreasuryDirect electronic bond-buying system (in fact, paper bonds have nearly gone extinct and I have no idea why anyone would want paper to have to place in a safe deposit box or whatever).  Signing up at TreasuryDirect is super-simple and can be done in just a few minutes.

There is perhaps the issue of what happens if you die within the 20-year term (I'd rather not think about that), but even that is covered by way of beneficiary-designations and survivorship terms.  A survivor beneficiary does not have to cash in the bond right away, so they can continue to hold the bond until that 20-year term is met if they choose (and, income taxes on the interest remain deferred until redemption just like they would have been for the original holder).

Give those EE bonds a look.  You never know, it may turn out to be a very wise long-term investment to hold.  FYI: also note that the government currently limits annual savings bonds purchases to $10,000 per individual, so it is not like you are going to be able to take the proceeds from selling a house and put them into savings bonds all at once. Feel free to consult with your "adviser" or accountant on any of this, as I am NOT acting in either capacity here... I am just putting forth an opinion for you to consider.

Continue to read this Software Development and Technology Blog for computer programming articles (including useful free / OSS source-code and algorithms), software development insights, and technology Techniques, How-To's, Fixes, Reviews, and News — focused on Dart Language, SQL Server, Delphi, Nvidia CUDA, VMware, TypeScript, SVG, other technology tips and how-to's, plus my varied political and economic opinions.

SQL-Server Algorithms : Set-Based Running Subtotals, Moving Averages, and more.

Being an avid Microsoft SQL-Server developer, I love creating interesting algorithms for solving common business requirements — especially stored procedures and user-defined-functions that exploit the relational database strengths of set-based operations.

[UPDATE: JAN-2017] I moved all the free source code for SQL-Server, that I had previously published on another website of mine, onto this blog, and here is a link that searches this blog for all SQL postings.

Set-Based SQL Procedures Overview

I have implemented, using only set-based algorithms (i.e., no database cursors), functionality that many would consider "impossible" without cursors and without dynamic SQL; as such, these techniques may be intriguing and/or useful to other SQL-Server developers, especially web-based applications that need to be secure from SQL-injection attacks.  There is no dynamic-SQL used and no cursors used to implement these algorithms — seriously. 

The following table provides links to the various free source code for the stored procedures I have published under the terms of the MIT License (for freeware) on my company website's free source code library.  All of these techniques have been tested and developed using Microsoft SQL-Server versions: SQL Server 2005, SQL Server 2008, and SQL Server 2008r2.

SQL Server Set-Based Running Subtotals (i.e., Row-Level Accumulators)

SQL Server Set-Based Running Subtotals (i.e., Row-Level Accumulators) for Delimited-list Accumulator Functionality

SQL Server Parameterized GROUP BY Without Using Dynamic-SQL : The "impossible" is possible.

SQL Server Parameterized ORDER BY without Dynamic-SQL - Example 1

SQL Server Parameterized ORDER BY without Dynamic-SQL - Example 2 - With ASC/DESC by Column abilities

SQL Server Set-Based Moving Averages (without Cursors, self-joins, or sub-selects) - Example 1

SQL Server Set-Based Moving Averages (without Cursors, self-joins, or sub-selects) - with Break-Level Resets

SQL Server Set-Based Running String Accumulator with Break-Level Reset

There are also some related MS SQL-Server stored procedures and functions on the main-page of the "library" including routines and functions for splitting and parsing strings, padding numbers to fixed-width, accumulating totals of values within comma-delimited strings, comparing nullable columns, and more.  I also posted a series about tuning very large SQL-Server databases for anyone dealing with massive database performance-tuning issues.

I hope you find SQL-Server set-based algorithms, stored-procedures, and functions helpful when tackling common business-requirements.  I have used the SQL running-subtotals and moving-averages to implement some neat financial data modeling and analysis software (everyone is used to moving-average stock-prices and such, right?), and the order-by operations without dynamic-SQL have been quite handy on websites (preventing potential security issues associated with dynamic-SQL and SQL-Injection attacks).


Continue to read this Software Development and Technology Blog for computer programming articles (including useful free / OSS source-code and algorithms), software development insights, and technology Techniques, How-To's, Fixes, Reviews, and News — focused on Dart Language, SQL Server, Delphi, Nvidia CUDA, VMware, TypeScript, SVG, other technology tips and how-to's, plus my varied political and economic opinions.

Nvidia CUDA Toolkit 3.2 - more Fermi optimizations

The latest Nvidia "Fermi" GPUs (Graphical Processing Units) are available in a wide range of powerful new Nvidia Graphics Cards. If you have been waiting for a good reason to upgrade your graphics card, Nvidia has certainly provided some great reasons to upgrade with their latest CUDA-capable Nvidia cards that are just amazing!

For over a year, I was patiently waiting for the new Fermi architecture to hit the shelves so that I could get the latest CUDA parallel processing power at an incredible performance-per-watt and price-per-performance level. I have been looking forward to writing some parallel-processing-optimized code, and these cards were exactly what I needed. I ended up buying a Quadro 600 to start with, since it has 96 processing cores and only uses 40 watts of power! So far, I have been quite impressed by this card's abilities, quiet operation, and price (well under $200). I can now perform "real time" graphical operations that were impossible before. It is like having a 5 or 10 year old multi-million-dollar supercomputer on my desktop for under $200.


Personal supercomputing for the masses!
Nvidia (NASDAQ:NVDA) has moved to a modern 40nm architecture for these new GPUs, which has allowed them to be much more power-efficient while cranking out tons of graphics horsepower for gaming and/or professional applications that make use of their stream-processors (aka, "CUDA cores") on the graphics card for high-performance computing (HPC) via massively-parallel-processed algorithms.

CUDA is NVIDIA’s parallel computing architecture that enables dramatic increases in computing performance by harnessing the power of the GPU (graphics processing unit) for applications including image and video processing, computational biology and chemistry, fluid dynamics simulation, CT image reconstruction, seismic analysis, ray tracing, and much more.

Get an NVidia Fermi-based Graphics Card
First, get hold of a new Fermi-based Nvidia CUDA Graphics card  to develop and run your new CUDA applications on.

Now you can start putting some new CUDA abilities to work using the latest Nvidia CUDA Toolkit 3.2 release that has some features specific to the new Fermi cards and architecture that you may want to check into...


Nvidia CUDA Toolkit 3.2 Release Highlights

New and Improved CUDA Libraries

• CUBLAS performance improved 50% to 300% on Fermi architecture GPUs, for matrix multiplication of all datatypes and transpose variations
• CUFFT performance tuned for radix-3, -5, and -7 transform sizes on Fermi architecture GPUs, now 2x to 10x faster than MKL
• New CUSPARSE library of GPU-accelerated sparse matrix routines for sparse/sparse and dense/sparse operations delivers 5x to 30x faster performance than MKL
• New CURAND library of GPU-accelerated random number generation (RNG) routines, supporting Sobol quasi-random and XORWOW pseudo-random routines at 10x to 20x faster than similar routines in MKL
• H.264 encode/decode libraries now included in the CUDA Toolkit

CUDA Driver & CUDA C Runtime

• Support for new 6GB Quadro and Tesla products 
• New support for enabling high performance Tesla Compute Cluster (TCC) mode on Tesla GPUs in Windows desktop workstations

Development Tools

• Multi-GPU debugging support for both cuda-gdb and Parallel Nsight 
• Expanded cuda-memcheck support for all Fermi architecture GPUs 
• NVCC support for Intel C Compiler (ICC) v11.1 on 64-bit Linux distros 
• Support for debugging GPUs with more than 4GB device memory 

Miscellaneous

• Support for memory management using malloc() and free() in CUDA C compute kernels 
• New NVIDIA System Management Interface (nvidia-smi) support for reporting % GPU busy, and several GPU performance counters

New GPU Computing SDK Code Samples

• Several code samples demonstrating how to use the new CURAND library, including MonteCarloCURAND, EstimatePiInlineP, EstimatePiInlineQ, EstimatePiP, EstimatePiQ, SingleAsianOptionP, and randomFog 
• Conjugate Gradient Solver, demonstrating the use of CUBLAS and CUSPARSE in the same application 
• Function Pointers, a sample that shows how to use function pointers to implement the Sobel Edge Detection filter for 8-bit monochrome images 
• Interval Computing, demonstrating the use of interval arithmetic operators using C++ templates and recursion 
• Simple Printf, demonstrating best practices for using both printf and cuprintf in compute kernels 
• Bilateral Filter, an edge-preserving non-linear smoothing filter for image recovery and denoising implemented in CUDA C with OpenGL rendering 
• SLI with Direct3D Texture, a simple example demonstrating the use of SLI and Direct3D interoperability with CUDA C 
• cudaEncode, showing how to use the NVIDIA H.264 Encoding Library using YUV frames as input 
• Vflocking Direct3D/CUDA, which simulates and visualizes the flocking behavior of birds in flight 
• simpleSurfaceWrite, demonstrating how CUDA kernels can write to 2D surfaces on Fermi GPUs

Financial Opportunities :
Nvidia (NASDAQ:NVDA) stock?

Since this blog also focuses on stock-market and investing opportunities, I have to point out that in my August 13th, 2010 blog entry about Nvidia Toolkit 3.1 news, I contemplated whether the new Nvidia Fermi cards were going to drive substantial sales/revenue-gains and associated profit-gains for Nvidia corporation.

When I wrote that blog entry in August, Nvidia stock was $9.39, and today it is $14.77 as I write this article. If you jumped in on this one, you have already made 57% in a mere 4 months! (update: May-2011; NVDA at $19.00+) The current trend-lines on the stock look good, as it is staying ahead of its moving-average trend-lines on a technical basis, so it may well have some decent upside remaining. Plus, we are rather early in the Fermi-chip-based GPU series from Nvidia. 50+% return on your NVDA stock may have you wanting to take some profits. The choice is yours... this stock has a long-history of being rather volatile, and it will likely have some up/down cycles during its future. I plan to maintain at least some of my position in NVDA as I still think they have the technology to beat when it comes to GPU-computing and supercomputing. Intel's "Sandy Bridge" products coming out in Q1-2011 may have a slight impact on Nvidia (since the new Intel CPUs will include an integrated and allegedly rather capable GPU onboard, which will perhaps suffice for mainstream users).


WHO is going to use these cards?
The thing that I see happening with these discrete graphics cards like the Fermi-based CUDA-capable Nvidia cards is simple: if you are a business and you want to compete, you best learn how to leverage the power of these cards. Period.

Wall Street already knows this (and, I do not mean in the price of NVDA stock),... they are using this technology to perform lightning-fast calculations for algorithmic trading, options pricing, and much more. ANY application that can be significantly enhanced (i.e., made faster and more robust) through parallel processing will be made so by the companies that are leading in any field. They WILL use these GPUs from Nvidia to accomplish that feat.

I am not investing in Nvidia for the fact that home "gamers" and the like enjoy their super-potent "GeForce" cards... I am in this because businesses are going to use TONS of these cards/GPUs in their "desktop supercomputers" for analyzing all sorts of things throughout their domain. Mark my words: companies that miss this opportunity (to leverage CUDA and parallel processing) are going to find themselves looking like Blockbuster as compared to Netflix now.

The margins on Nvidia's "Quadro" business-oriented line of cards is likely higher than that on the consumer "GeForce" line, and certainly their Tesla dedicated supercomputing-desktop devices are going to be money makers as businesses figure out how to use these (i.e., find talented developers to help them write some seriously cool parallel-enabled algorithms and applications software). This may take a while yet, but I would say that within 3-5 years, MOST serious business applications will make some use of CUDA and/or GPUs for heavy analytical processing.

Bottom line: NVIDIA HAS SOME AWESOME GRAPHICS CARDS TO CONSIDER, and some nicely updated tools to go with them!

Nvidia CUDA Toolkit 3.1 - with Fermi card optimizations

The latest Nvidia "Fermi" GPUs (Graphical Processing Units) are making their way to the stores now by way of the latest Nvidia Graphics Cards that are definitely worth a look if it has been over a year since you upgraded your graphics card - the processing power per watt now is just unbelievable!  And, the latest Nvidia CUDA Toolkit 3.1 release has some features specific to the new Fermi cards and architecture that you may want to check into; just in case you are into GPU programming for fun.

Nvidia (NASDAQ:NVDA) has moved to a modern 40nm architecture for these new GPUs, which has allowed them to be much more power-efficient while cranking out tons of graphics horsepower for gaming and/or professional applications that make use of their stream-processors (aka, "CUDA cores") on the graphics card for high-performance computing (HPC) via massively-parallel-processed algorithms.  CUDA is NVIDIA’s parallel computing architecture that enables dramatic increases in computing performance by harnessing the power of the GPU (graphics processing unit) for applications including image and video processing, computational biology and chemistry, fluid dynamics simulation, CT image reconstruction, seismic analysis, ray tracing, and much more.

Get your NVidia Fermi Graphics Card
First, get hold of a new Fermi-based Nvidia CUDA Graphics card to develop and run your new CUDA applications on.  There are some really great cards out now that offer some really nice punch for the buck (aka, "price-to-performance ratio"), including these:

• Nvidia Geforce GTX 460 - a very reasonably priced (~ $200.00) super-powerful mainstream / desktop graphics card (targets gamers mainly) that smokes every other card on the market in this price range.  This card offers 336 CUDA processing cores and a Gigabyte of RAM to run your new Nvidia CUDA Toolkit 3.1 applications on.
• The brand new professional-class NVidia Quadro 4000 (NOT to be confused with the old Quadro FX 4000!) -- this ~$1000 card has 256 CUDA cores coupled to 2GB of GDDR5 RAM and is well suited to apps like CAD, Photoshop CS4 / CS5, and other CUDA-enabled professional apps. The card is quite power-efficient at only 142 watts max.

Now you can start putting some new CUDA abilities to work...

Nvidia CUDA Toolkit 3.1 Release Highlights

• GPUDirect(tm) gives 3rd party devices direct access to CUDA Memory
• Support for 16-way concurrency allows up to 16 different kernels to run at the same time on Fermi architecture GPUs
• Runtime / Driver interoperability enables applications to mix-n-match use of the CUDA Driver API with CUDA C Runtim and math libraries via buffer sharing and context migration
• New language features added to CUDA C / C++ include:
• Support for printf() in device code
• Support for function pointers and recursion make it easier to port many existing algorithms to Fermi GPUs
• Unified Visual Profiler now supports both CUDA C/C++ and OpenCL, and now includes support for CUDA Driver API tracing
• Math Libraries Performance Improvements, including:
• Improved performance of selected transcendental functions from the log, pow, erf, and gamma families
• Significant improvements in double-precision FFT performance on Fermi-architecture GPUs for 2^n transform sizes
• Streaming API now supported in CUBLAS for overlapping copy and compute operations
• CUFFT Real-to-complex (R2C) and complex-to-real (C2R) optimizations for 2^n data sizes
• Improved performance for GEMV and SYMV subroutines in CUBLAS
• Optimized double-precision implementations of divide and reciprocal routines for the Fermi architecture
• New and updated SDK code samples demonstrating how to use:
• Function pointers in CUDA C/C++ kernels
• OpenCL / Direct3D buffer sharing
• Hidden Markov Model in OpenCL
• Microsoft Excel GPGPU example showing how to run an Excel function on the GPU

Financial Opportunities - Nvidia (NASDAQ:NVDA) stock?
Since this blog also focuses on stock-market and investing opportunities, I have to contemplate whether the new Nvidia Fermi cards are going to drive substantial sales/revenue-gains and associated profit-gains for Nvidia corporation.  I can not help thinking that it is inevitable, especially when so many of the online retailers I went to in search of a new Nvidia GTX 460 card from were out of stock, backordered, and so forth.

And, these cards are out there already... people lucky enough to have gotten hold of them already are essentially uniformly impressed and satisfied with the performance of the GTX 460 card.  I have read all sorts of reviews from buyers saying how these cards have set a new standard in desktop gaming performance (frame-rates, etc) while also being rather reasonable in their power consumption.  Nvidia allows for running two cards together (in SLI-mode) for even higher performance, and from all the tests and reviews I have read: wow... these are FAST!

So, it seems to be nearly a guarantee that Nvidia is going to move a LOT of these cards.  The question is: at what margin?  They are being VERY competitive and aggressive with their pricing model, which suggests that margins may not be TOO large, but I do not know.  I will assume they are being sold for a profit, and that with enough volume, their margins will also be pretty decent.

And, then there is the super-computing and professional market: THAT is what I am more interested in from an investing standpoint.  These cards are being used in the top of the line supercomputers and high-performance computing systems and clusters, where a single super-computer may use 100s or 1000s of these cards in it.  And, Nvidia's top Quadro 6000 graphics card lists for $6,000 -- targetting digital production firms (think: Adobe Photoshop and Premier e.g.) and engineering firms doing real-time 3D work and the like.  These firms WILL buy the new Fermi-based cards in order to gain efficiencies at their firms (since these cards are up to 8-times faster than the prior generation; meaning: much time saved when rendering, etc).

Sure, the economy is "slow" right now, but what better way for companies to gain efficiency for a reasonable sum?  Move some processing off to new super-powered Nvidia GPUs!  If your employees spend less time waiting for computing operations to complete, perhaps you can get by with less employees (note: none of us like the sound of that, but it IS what helps drive "productivity"'; I'd just prefer seeing and freed-up employee time being redirected toward more creativity and product design and improvement, etc).

Bottom line: NVIDIA HAS SOME AWESOME GRAPHICS CARDS TO CONSIDER, and some updated tools to go with them!

Allstate, American Funds : Misleading Advertising

Even after all the current financial market and investment related issues that have swept the market, I keep encountering advertising and marketing propaganda from investing, insurance, banks, and related financial companies that are nothing short of misleading - if not plainly incorrect or impossible.

Allstate (Allstate Insurance Company - NYSE:ALL)
The first example of misleading advertising I want to point out is from Allstate Insurance Company / Allstate Life Insurance Company. I was reading the February 2008 issue of National Geographic, and noticed the Allstate advertisement that occupied the entire back cover of the magazine.

This advertisement was about women, and how the average woman spends 11 years out of the workforce taking care of family - and, how this left the average woman without enough retirement money, due to missed earnings and corresponding missed 401K contributions during the same time. I am OK with this argument in concept, but where it fails is the specific numbers that Allstate provides in the advertisement. I challenge them to show me some real statistical proof of this following statement they make:

"Unfortunately, those 11 years out of the workforce put a woman even further behind, costing her an average of $659,139 in earnings."

YEAH, RIGHT! What a ridiculous statement or assertion! So, Allstate, you are trying to tell me, and the rest of the population, that the average working woman is making $60,000 per year!? This is impossible. And this utterly false statement follows a sentence (of your own writing) where you state in the same ad: "Fact is, women are still earning less than me do...". So, by that same logic, Allstate is telling us that the average man obviously earns substantially more than $60,000 per year!? ABSOLUTE FABRICATION.

Let me at least cite a source for my own assertion that Allstate is utterly full of it with this misleading ad of theirs. How about information from the US Census Bureau:

In 2007, the median annual household income rose 1.3% to $50,233.00 according to the Census Bureau. The real median earnings of men who worked full time, year-round climbed between 2006 and 2007, from $43,460 to $45,113. For women, the corresponding increase was from $33,437 to $35,102.

Now, could it be that the primary distortion that Allstate is using to inflate their case for whatever product/services they are selling has to do with the use of AVERAGE vs. MEDIAN. Allstate is asserting that women, on average, make nearly twice as much per year as the MEDIAN earnings for women. But, if that is their game (using Average vs. Median), it is just that - a statistical abuse to mislead.

Fact is, if you throw Oprah's earnings, and those of a few other top 1%+ earners, the AVERAGE earnings are skewed substantially. But, the true likelihood that an "average" woman in America is missing out on making $66,000 per year is statistically incorrect. I guess Allstate did not feel that 11 years of missed earnings, times the median of $35,000 (for a total of $385,000) was shocking enough to sell their product. Sure sounds like a lot of money to me, but I guess that it sounds so much better to throw out a number twice that high instead.

This is quite typical of so many financial service advertisements in America. Abuse statistics, or use statistics misleadingly, all in hopes of selling more of your products. And you wonder why people lose faith in your companies and products, especially as of late, financial industry.

American Funds
Next, I was reading over the latest American Funds Investor magazine from Fall/Winter 2008. American Funds is generally a decent mutual fund company from what I can gather, but I take issue with the fact that they, in their attempts to sell people on their products and services and the concept of long-term investing in general, make rather optimistic assumptions to say the least - especially given the current stock market meltdown.

My particular issue with their latest magazine / pamphlet has to do with their little push for College-Savings plans (i.e., 529 college savings plans) and how to build up funds for your childrens' college education. They show a graph of how, if you contribute $100/month for 18 years during your kid's childhood, that it can grow to an amount between $39,000 and $48,000 by the end of that period (taxable vs. tax-free savings respectively).

OK, that all sounds great, UNTIL you read the bull @#$! below the graph about how "this example assumes an 8% annual rate of return (compounded monthly) for both investments". EIGHT PERCENT AVERAGE RETURN PER YEAR OVER 18 YEARS - GEE, THAT IS JUST A BIT AGGRESSIVE! Wake up American Funds! The stock market is FLAT over the past decade now. Where are you making an average of 8%? If you can GUARANTEE me such returns, I will have you manage all of my money.

This is not an OLD issue of the magazine... it is current... and yet it ignores that simple fact that there will not be such huge returns available anywhere for years to come, barring massive inflation to go with it, and/or devaluation of our currency embedded in such numbers. It just is not going to happen. And, it has not happened (past tense) either looking at the numbers for the past decade or more. Consider the Nasdaq, that was around 5000 points a decade ago, and now sits around 1500. And, you surely are not making 8% in government bonds, notes, T-Bills, or bank accounts.

Summary
I am so sick and tired of these ridiculous advertisements that make, via assumptions, the case that you will essentially realize some fantastic pile of cash after a set period of time by using interest-rates and rates-of-return that are essentially unachievable (certainly not realizable as an AVERAGE of any sort). This is not just an issue with Allstate or American Funds, but nearly ALL financial service companies - I see this abuse of statistics and math constantly.

I guess companies just can not sell their products by making the only clear and honest statement they can, which is: SAVE MONEY, AND YOU WILL BE IN BETTER FINANCIAL SHAPE THAN THOSE WHO DO NOT, BUT WE HAVE NO WAY TO TELL YOU HOW MUCH BETTER. That just doesn't sound good enough... people want that chart showing that, if they save, they will be "rich" or have a huge pile of cash in the future.

Forget that stuff people... just start saving, and once you have established a decent record of saving, then you can start focusing on average-returns and projections if you still feel the need. But, projections are nearly meaningless; it is your ability to save that matters most.

JCPenny (NYSE:JCP) Merchandise Giveaway; Profits Lower

I had a very timely experience with what I call "sales plan insanity" at J.C. Penny recently, where JC Penny was essentially giving inventory away for nearly nothing (almost FREE). And, when I first encountered this sales strategy first hand, I knew for certain that JCPenny's earnings were going to suffer dramatically.

But, I guess the "analysts" that cover J.C. Penny Stock (NYSE:JCP), do not bother actually visiting the department store they are "analyzing". If they had, perhaps they would not so often be incorrect in their "analyst estimates" that seem to always miss the mark, as today's Bloomberg story on JC Penny earnings stated:

Nov. 14 (Bloomberg) -- J.C. Penney Co., the third-largest U.S. department-store company, forecast earnings that trailed analysts' estimates and posted its fifth straight quarterly profit decline as shoppers cut spending on home goods and jewelry.
[...]
Third-quarter net income decreased 52 percent to $124 million, or 56 cents a share, from $261 million, or $1.17 a share, a year earlier, the department-store chain said in a statement. Sales fell 8.7 percent to $4.32 billion from $4.73 billion.

Let me clue all you Wall Street analysts in as to how insane the management at various retailer in the United States is behaving: they are selling products for next to nothing, with obviously zero margin or, quite likely, negative margin.

This is not just conjecture, but rather fact that I will demonstrate with my recent sales receipt from J.C. Penny (click image to view larger size):



This is ridiculous! J.C. Penny has been sending (in the mail) these special Sales-Event Coupons for "$10 off $10 or more". First of all, that is just stupid! Every time they send one, I pick up more free or nearly-free items. Come on management: wake up and make it $10 off $20 at least (50% off is STILL darn good, and you may actually break even on the proposition). I realize you *hope* people will come in and buy much more than $10, but in this current economic environment, that is a bet I would not take.

The last time I got a coupon in the mail, I went looking around Pennys for kicks again, to see what I could perhaps use. I stumbled upon sales for 75% off on a few Polo shirts (and that was off existing markdowns or something). And, it gets better... they had yet another promo going where you could buy one get one (BOGO) too, and none of THESE promotions were excluded on that $10-of-$10 coupon.

Look at that receipt showing the proof of this SALES INSANITY: I purchased a total of 3 shirts that originally retailed for $104.00 for a grand-total, after Sales Tax, of $5.84. Give me a break! What moron management team came up with these incentives? I can not help thinking that they would have done better just to give the inventory to charity and write it off. How can you cover the cost of goods, let alone the cost of labor, advertising, floor-space, and so on by doing this?

Well, the bottom line is that this speaks volumes as to the state of the PANIC IN RETAIL right now. Retail stocks are all beaten down on the stock market, and for good reason -- the management of most retailers has decided that, in order to show any revenue production, they will have to engage in an insane race to the bottom along with all their competitors. As such, do not be TOO surprised if these stock market "analysts" continue to miss obvious indicators that earnings are going to be terrible for a long time to come.

Perhaps some bright spots will emerge in Retail yet (aside form WalMart), but it is a bit early to tell. Even though I am very cautious about investing in retail stocks, I have taken some "Mall walks" the past few weeks on various days of the week to see if any particular retailers seem to "stand out" consistently with regard to foot-traffic and, more importantly, purchases (I look to see what brand's bags are being carried around the Mall by people - if any one brand stands out).

I spotted a couple retailers that have my interest, like New York & Company (NYSE:NWY) being one I noticed decent store / Mall activity in, and a couple others. In the case of NWY, their stock is trading for around $2.00, so for the price I paid for my three uber-discount JC Penny shirts, I could purchase nearly 3 shares (or, at the original retail price of those shirts, I could purchase 50 shares). This puts the retail pricing strategy into perspective even more perhaps.