July 2, OUTSIDE THE BOX: Is There a Shift in Online Music Technology? , Shelley Souza, Optionetics.com
Is there anything to write about that doesn't reiterate the overwhelming domino effect occurring in publicly traded companies as one after another once high-flying companies are falling, as a result of accounting irregularities.? To be honest, not much, especially now that Martha's investment friends and strategies are beginning to reveal tarnish beneath the golden halo that has buoyed the doyenne of gracious living for the average householder for so many years. The latest suspect in the eye of the investor is Vivendi Universal (V), the French corporation that tried to buy Lucent Technologies (LU) last year… However, there is an article I personally found interesting, in the New York Times online, which describes how the Bush administration replaced Arthur Levitt as S.E.C. chairman with Harvey Pitt, who promised to be a “gentler” and “kinder” oversight body. And look where that's led us so far. I've never liked the proverb “spare the rod and spoil the child,” but in the case of the S.E.C. it seems apt (although unfortunately too late for many children; who have grown up to spoil not only themselves but many investors' accounts as well).
The most heartening event I could find in the news today was information (again in the Times) that major recording labels are beginning to realize that file swapping is not going to end, just because they brought about the demise of Napster. So, grudgingly, they are beginning to cut deals with online resources that allow users to download files and even write them to CDs for a small monthly fee.
What does that mean for investors? I think it means that there's a shift happening in online music that could be a section worth putting on the radar screen. There are still several m not sure that is it clear yet who the players (meaning companies, not CD players) will be. So, if I were an investor who was interested in entering this particular technology, I would read the Times article (because it has lots of good information and will save reinventing the wheel). Then I would look at companies like Bertelsmann AG, which recently bought Napster and Zomba, and publicly traded record labels. I would check into companies like Listen.com, which received the first major rights from a major record label to offer users downloadable files for less than $10 a month. I would generally watch the trend and see if there's any fire beneath this initial puff of smoke.
The other sector I would check out would be security technology companies working on digital management rights, like InterTrust (ITRU) for example. Then, when I had all my researched lined up in a row, I would do some nifty trend analysis on any publicly traded companies (using my trusty Optionetics Platinum software) and Bob's your uncle (although I never had an uncle named Bob). But at any rate, you get my drift? Basically, in this highly challenged market, the way to move forward is to use any time that you're on the sidelines as an opportunity to do research into what is likely to be the next wave, at least in the technology section. Let's face it: no matter how many corporate scandals hit the news, there will always be a few good men and women left in the world, and some of them have to be running good, public companies; it's simply the law of averages. It's your mission impossible to find them. Good luck!
As always, trade carefully.
Shelley Souza
Senior Writer & Trading Strategist
Optionetics.com ~ Your Options Education Site
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