Demystifying the Cloud

by Gary Spivak, Investment U Contributing Editor
Tuesday, July 31, 2012

When I started in IT in the mid-1980s, all computer applications ran on the mainframe – a large computer that was efficient and well-managed.

I recall watching “in horror” in the late 1980s and early 1990s as individual departments began to embrace “client-server” computing, where a “server,” which was equivalent to a large PC, began to run critical applications.

There were some benefits – better graphical user interfaces and greater control – but distributing the computing power to hundreds of locations was destined to be a maintenance nightmare.

As individual devices became more powerful, the computing power got pushed further down to the end-user – PCs, laptops, and now smartphones and tablets.

But put everyone on the same network and it seems destined that the pendulum would have swung back to the centralized environment.

From the perspective of a former IT guy with plenty of gray hair, cloud computing is a natural progression…

What Cloud Computing Really Means

Cloud computing is simply any technology service, such as an application, infrastructure, or platform that’s offered to customers over the internet.

With the proliferation of devices connected to the internet, why not keep key resources in a centralized location? This centralization allows everyone to use the “public utility” called the internet to access these resources. There are certain benefits to centralized resources – such as cost efficiencies and a better customer experience.

But what does that mean to me?

The typical internet-savvy consumer has been using services in the cloud for years. If you’ve ever bought anything from Amazon.com, you used your browser and the internet to get on the site and order your goods. That was a transaction occurring in the cloud.

So, it’s easy to see how consumer-facing businesses have already adopted cloud computing for their own purposes.

But what’s now changing is a migration of business-to-business (B2B) transactions also occurring in the cloud. Also, greater trust in the cloud leads to more activity.

The question is – if a company sells products over the cloud, are they a cloud company? The answer is, in this writer’s opinion, no.

When a mining company loaded coal onto a railroad car, were they a railroad company? No! When Pets.com – now part of PetSmart (Nasdaq: PETM) – began selling pet supplies over the internet, were they an internet company? No! They were a pet supply company.

Finding the “Arms Suppliers”

Investors typically want to find the winner in “the war.” Will Amazon (Nasdaq: AMZN) sell more books over the internet than Barnes & Noble (NYSE: BKS)? If yes, then Amazon is the winner, right?

The smarter investor will look to the “arms suppliers” in “the war.” Don’t pick a side in the war, pick companies that sell services to all of the war’s participants.

And this is what makes cloud computing so interesting. There are many different levels of “arms suppliers” in these wars.

What are some of the weapons required?

  • Centralized Data Centers – The cloud is perfect for the re-centralization of IT resources. Companies like Rackspace (NYSE: RAX), Amazon Web Services, Equinix (Nasdaq: EQIX), OpSource and SunGard. Others include Dell (Nasdaq: DELL), Hewlett-Packard (NYSE: HPQ), Cisco (Nasdaq: CSCO), Verizon (NYSE: VZ) and AT&T (NYSE: T).
  • Storage – The files you have on your computer are moving to the cloud. Storage, once unthinkable to be moved to the cloud (people want their data near them) is now significantly being used in the cloud. Vendors like Apple (Nasdaq: AAPL), Dropbox, Mozy – owned by EMC (NYSE: EMC) – and Riverbed Technologies (Nasdaq: RVBD) facilitate cloud-based storage solutions.
  • Security – Security remains a concern when accessing resources through the internet. Many companies boast of cloud security solutions. Among them are Qualys, Trend Micro (OTC: TMIC.PK), Webroot and Websense (Nasdaq: WBSN).
  • Applications – Perhaps the best-known services delivered via the cloud are applications, or software as a service (SaaS). Among the best known in this category are Salesforce.com (NYSE: CRM), Taleo (Nasdaq: TLEO) and Keynote Systems (Nasdaq: KEYN).
  • Virtualization Technology – Cloud-based solutions typically deploy some kind of application or desktop virtualization technology. Vendors leading this charge include VMware (NYSE: VMW) and Citrix (Nasdaq: CTXS).

Beware of companies that claim, “We are a cloud company.” Look at what they offer and see if it takes advantage of this secular shift and isn’t just using the latest jargon to inflate its market capitalization.

Good Investing,

Gary

Annunci

A medical laboratory on a disk

By Michael A. Robinson

Dear Reader,

Thanks to the Web and smartphones, we’re used to getting the data we need in the snap of a finger.

In the real world, that means you can be driving through a remote stretch of highway and find out who won the 1960 Olympic gold medal in fencing before the next song starts playing on the radio. You can download a high-def movie, complete with surround sound, in only a few minutes. You can ask a question of a colleague in Australia and hear back in seconds.

But when it comes to medical tests, the scene is still best described as “hurry up and wait.”

Even in our fast-paced, high-tech society, it can take several days to find out if you have the markers for cancer or a stroke. Or a deadly disease, for that matter.

That leaves many patients waiting, worrying, and wondering for days or even weeks. In some cases, lives are lost because of that lag.

That’s why I’m happy to report that a key U.S. research lab has developed a breakthrough medical testing device that can speed up the results of your lab tests. You’ll get results before you leave the doctor’s office.

It’s called SpinDx and it’s the brain child of Sandia National Laboratories. As the name implies, the system uses a spinning disk inside a portable instrument – much like a CD player – to manipulate blood samples. Researchers say it can measure a patient’s white blood cell count, analyze key protein markers, and process up to 64 tests from a single sample.

And all in a few short minutes…

I predict that by the end of this decade, SpinDx or a device like it will have a profound impact on the way doctors find and treat a wide range of diseases, from cancer to Alzheimer’s.

Not only that, but the new SpinDx could prove a boon to investors, too.

Turns out Sandia, the research lab that made the product, wants to find backers from the private sector who could help get SpinDx to market. In announcing the new milestone platform earlier this month, the Sandia team said it’s looking for a firm to license the rights to it.

This kind of activity is right up Sandia’s alley.

Known as an elite lab, Sandia makes it a steady practice to work with the private sector. It has a huge portfolio of cutting-edge tech that’s ready-made for licensing and technology transfers.
It even posts a long list of these projects on its website. You can browse a wide range of topics from biotech to nanoscience to software by clicking here.

Fact is, Sandia researchers boast a 60-year history of pushing the boundaries of high tech and science. A unit of defense giant Lockheed Martin Corp. (NYSE:LMT) runs the lab under contract for the U.S. Department of Energy.

With SpinDx, the idea is to take the platform to the masses, team members say.
“We envision medical personnel using SpinDx routinely,” said Greg Sommer, a Sandia team leader. “Instead of standard blood panels and costly lab tests, a SpinDx disk would be processed right in the office [while the staff is still] gathering routine data like temperature and blood pressure.”

The team touts the following features of SpinDx:

  • Small sample size: Patients merely have to provide a pinprick sample of blood.
  • Ease of use: Spinning disks will contain antibodies specific to each protein marker that denotes disease.
  • Plug-and-play tech: For patient testing, a doctor can simply choose among a “cardiac disk,” “immune disk,” and other options.
  • Low cost: The disks cost pennies to make.
  • Quick response time: Doctors can have the results on their desktops in just 15 minutes.

But that’s not all…

The Sandia team believes the SpinDx could improve food safety and thwart bioterrorists attacks, too. In both cases, the U.S. wants to safeguard against one of the worst toxins known to man – botulism.

Now, a substance related to botulism is used safely to make Botox. Millions of people have had this substance injected into their faces to fights the effects of wrinkles. And when it comes to food poisoning, only about 145 cases in the U.S. are reported each year.

Yet make no mistake – this is deadly stuff. A small amount of botulism injected into the food supply would send shockwaves through the nation…

And the food-testing capabilities of SpinDx could be the fastest and most accurate method of detecting it.

“Food processing plants are looking for something that can be integrated into their assembly lines,” said Sommer. “Our device will be suitable because it’s fast, inexpensive, and simple to operate.”

Sandia is one of the reasons why I say high tech can save America. This time, I mean it literally. A device like this could save millions of us from threat of a biological attack. That alone makes it a great investment.

Michael Robinson Signature
Michael

Reuters World News Highlights, Jul 31

July 31 (Reuters) –
TOP STORIES
———–
ALEPPO, Syria – The Syrian military has stepped up its campaign to drive rebels out of Aleppo, where fighters said they were holding firm, vowing to turn the country’s largest city intothe “grave of the regime”.

– – – –
FRANKFURT – European Central Bank President Mario Draghi must back up his pledge to do what it takes to protect the euro when the bank’s policymakers meet on Thursday or else face deep disappointment frominvestors hungry for – and expecting – immediate action.

– – – –
LONDON – A crackdown by ‘logo police’ on brands being linked to the Olympics without official sponsorship rights is proving a challenge rather than hindrance for some companieswho are relishing testing the limits.

– – – –
NEW YORK – English soccer team Manchester United set the terms for its U.S. initial public offering on Monday saying it will offer 16.67 million shares at between $16 and $20 each, which valuesthe club at $3.3 billion at the top of the range.

– – – –
MANILA – The Philippines will offer three areas in the South China Sea for oil and gas exploration on Tuesday, two of them in waters also claimed by China.

– – – –
CENTENNIAL- The former graduate student accused of opening fire at a midnight screening of the new “Batman” film in Colorado, killing 12 people, was charged on Monday with 24 counts of first-degree murder, making him eligible for the death penalty if convicted.

– – – –
WASHINGTON – U.S. lawmakers moved a step closer to finalizing new sanctions aimed at further restricting Iran’s oil revenues after negotiators from the Senate and House of Representatives agreed on a compromise bill on Monday.

– – – –
WASHINGTON – U.S. Secretary of State Hillary Clinton departs this week on a trip that will take her both to Africa’s newest nation, South Sudan, and on a visit to the continent’s elder statesman, 94-year-old anti-apartheid icon NelsonMandela.

– – – –
SEOUL – A United Nations team will visit North Korea from Tuesday to assess damage from recent floods with a view to developing an aid plan, a U.N. official said, although the North’s new leadership is yet to make anydetailed response to the disaster.

– – – –
MUMBAI – Over the last decade Aamir Khan has saved villagers from an oppressive tax, led a movement against corruption, educated parents about learning disabilities and fought India’s flawededucation system.

– – – –
WASHINGTON – Republican Mitt Romney’s campaign tried to keep the domestic political focus on the U.S. economy and jobs on Monday, although the effort was overshadowed by more controversy from a foreign trip after hemade remarks that upset Palestinians.

– – – –
BUENOS AIRES – The South American trade group Mercosur welcomes Venezuela as its newest member this week but growing protectionism in the bloc’s leading economies and political posturing havereduced it to a shadow of its former self.

– – – –
MOSCOW – Three members of a Russian female punk band went on trial on Monday, facing up to seven years in jail for protesting against Vladimir Putin inside a Moscow cathedral, a prosecution they said was aimed at spreading fear and silencing dissent.

((London Editing Desk +44 207 542 4441;)

MONETARIO – Cosa succede oggi martedì 31 luglio

* Nessun comunicato al termine, ieri sera, dell’incontro Geithner-Draghi a Francoforte. Il segretario al Tesoro Usa aveva in precedenza incontrato Schaeuble, sull’isola di Sylt nel Mare del Nord: in un comunicato comune, i due hanno espresso fiducia per il sucesso delle riforme nell’eurozona e un giudizio positivo sugli sforzi compiuti da paese come Italia e Spagna (news). E mentre si avvicina un meeting Bce – quello di giovedì – carico di aspettative per un seguito concreto agli impegni presi da Draghi la scorsa settimana a sostegno dell’euro, il numero uno della Bce incontrerà anche il collega della Bundesbank Weidmann per cercare di superare le ultime resistenze tedesche alla ripresa degli acquisti di bond da parte della Bce, dopo che dal governo di Berlino è già arrivato un sostanziale via libera.

* Monti incontra oggi a Parigi Hollande in una colazione di lavoro. L’incontro precede il meeting del presidente del consiglio italiano a Helsinki, domani, con il premierfinlandese Katainen. Giovedì è invece in programma, ma ancora senza dettagli, un viaggio di Monti a Madrid, per incontrare Rajoy.

* Intanto l’Ue ha aperto un’indagine su Draghi a seguito dell’esposto presentato da Corporate Europe Observatory -ente che si occupa di tracciare le lobby europee – in cui si accusa il presidente della Bce di conflitto di interessi e mancanza di indipendenza per via della sua appartenenza al Gruppo dei Trenta, un forum internazionale di leader finanziari pubblici e privati. “Abbiamo ricevuto l’esposto e inviato una lettera alla Bce. Ora aspettiamo una risposta” ha affermato un portavoce Ue, aggiungendo che Francoforte a tempo fino a ottobre per rispondere.

* In arrivo un taglio del rating italiano daparte di Dbrs, una delle quattro agenzie di rating seguite dalla Banca centrale europea. In un’intervista rilasciata ieri a Reuters, il capo analista sovrano Giacomo Barisone ha spiegato che con tutta probabilità ci sarà un declassamento entro agosto. Il downgrade, dall’attuale livello di ‘A high’, potrebbe sarà di uno o più notch a seconda degli avvenimenti delle prossime settimane sia a livello interno sia a livello europeo (news).

* L’Istat pubblica oggi il dato preliminarerelativo al Cpi di luglio e il dato definitivo del Ppi di giugno. Per i prezzi al consumo Nic le attese sono di un +0,3% congiunturale (dal +0,2% di giugno) e di un tendenziale in rialzo del 3,3% (come nel mese precedente). Le cifre preliminarirelative ai prezzi al consumo di luglio sono attese anche dalla zona euro. Sul fronte macro si attendono anche i dati relativi alla disoccupazione di giugno in Italia e zona euro e di luglio in Germania.

* Attività manifatturiera in declino inGiappone al passo più sostenuto dal terremoto dell’anno socrso: l’indice Pmi manifatturiero è sceso a 47,9 punti dai 49,9 di giugno. In rialzo, invece, la spesa delle famiglie, dell’1,6% annuo in giugno, quinto dato mensile consecutivo di rialzo: leattese erano tuttavia per un incremento più sostanzioso, pari al 2,9%. Da segnalare anche il dato sulla disoccupazione, scesa al 4,3% in giugno dal precedente 4,4%. In questo caso le attese erano per una conferma del dato di maggio. Sul fronteimmobiliare il mese di giugno ha poi visto un calo dello 0,2% annuo nel numero dei cantieri residenziali avviati; +4,6% annuo infine per gli ordini nel settore costruzioni.

* Greggio sulla difensiva nelle contrattazioni della mattinata. Da una parte c’è l’attesa per le nuove misure di stimolo monetario che le banche centrali, Fed e Bce in testa, potrebbero annunciare questa settimana; dall’altra il timore che queste possano rivelarsi ancora insufficienti per rilanciare le rispettive economie.Alle 7,35 italiane il future Nymex <CLc1> tratta a 89,90 dollari il barile (+0,12) mentre il Brent <LCOc1> a 106,07 (-0,13).

* E le aspettative di nuovi interventi monetari delle banche centrali sostengono l’euro, in leggero apprezzamento suldollaro anche se sotto i recenti massimi da tre settimane. L’euro/dollaro <EUR=> tratta a 1,2276/80 da 1,2260 dell’ultima chiusura; euro/yen <EURJPY=> a 96,07/12 da 95,82; dollaro/yen <JPY=> a 79,26/27 da 78,15.

* Treasuries in flessione nelle contrattazioni asiatiche della mattinata dopo il marcato rialzo di ieri dettato da una domanda che rimane solida in attesa di possibili iniziative da parte delle banche centrali. Il benchmark decennale <US10YT=RR> cede 6/32, rendimento all’1,5207%.

DATI MACROECONOMICI ITALIA
* Istat, occupati e disoccupati giugno (10,00) – attesa 10,2%.

* Istat, stima prezzi al consumo luglio (11,00) – attesa dato Nic 0,3% m/m; 3,3% a/a; dato Ipca -1,7% m/m; 3,7% a/a.

* Istat, prezzi alla produzionegiugno (12,00) – attesa -0,2% m/m; 2,1% a/a.

FRANCIA
* Spese al consumo giugno (8,45) – attesa 0,1% m/m.

* Prezzi alla produzione giugno (8,45) – attesa -0,4% m/m.

GERMANIA
* Vendite al dettaglio giugno (8,00) – attesa 0,5% m/m; 0,4% a/a
* Disoccupati luglio (9,55) – attesa 6,8%.

GRECIA
* Vendite al dettaglio maggio (11,00). SPAGNA
* Vendite al dettaglio giugno (9,00) – attesa -7,7% a/a.

* Partite correnti maggio (10,00).

ZONA EURO
* Eurostat, stima prezzi alconsumo luglio (11,00) – attesa dato armonizzato 2,4% a/a.

* Eurostat, disoccupati giugno (11,00) – attesa 11,2%.

USA
* Consumi reali giugno (14,30).

* Redditi personali giugno (14,30) – attesa 0,4%.

* Core Pce giugno (14,30) – attesa 0,2%m/m.

* Costo lavoro dipendente 2° trimestre (14,30) – attesa 0,5%.

* Case/Shiller maggio (15,00) – attesa 0,5% m/m SA; 1,5% m/m NSA; -1,5% a/a.

* Pmi Chicago luglio (15,45) – attesa 52,5.

* Fiducia consumatori luglio (16,00) – attesa 61,5.

ASTE DI TITOLI DI STATO BELGIO
* Tesoro offre titoli di Stato a 3 e 6 mesi (11,00).

USA
* Tesoro offre titoli di Stato a 4 settimane.

BANCHE CENTRALI USA
* A Washington inizia riunione Fomc; termina domani.

EUROPEAN MORNING BRIEFING: 31 luglio 2012

MILANO (MF-DJ)–I principali listini azionari europei dovrebbero aprire in rialzo, mentre Bund e Gilt consolideranno le posizioni. L’euro, il prezzo dell’oro e i future sul petrolio sono in rialzo. Mercati azionari Le Borse europee dovrebbero estendere i guadagni degli ultimi giorni, in quanto gli investitori restano concentrati sulle decisioni di politica monetaria della Banca centrale europea, della Federal Reserve e della BoE. A meno di una settimana dai commenti del presidente della Banca centrale europea, Mario Draghi, il rischio di delusione dall’Eurotower e’ molto elevato. Il segretario del Tesoro statunitense Tim Geithner e il ministro delle Finanze tedesco, Wolfgang Schaeuble, hanno avuto un colloquio in merito agli “sforzi considerevoli” messi in atto da Italia e Spagna negli ultimi mesi per riformare le loro economie. Nel frattempo in Grecia, una fonte governativa ellenica ha affermato che i leader della coalizione di governo cercheranno di ottenere un estensione del piano di salvataggio europeo. El Pais riporta che oggi l’Esecutivo spagnolo non presentera’ il suo bilancio per il 2013 e il 2014 a Bruxelles, come richiesto dalla Commissione europea. Fonti del ministero del Bilancio iberico hanno minimizzato il ritardo, aggiungendo che sara’ pubblicato nei prossimi giorni. Per Stan Shamu di Ig Markets, i listini europei consolideranno i recenti guadagni in vista degli appuntamenti chiave di questa settimana anche se il sentiment di mercato e’ migliorato nell’ultima seduta asiatica. Ig Markets prevede che il Ftse 100 aprira’ in rialzo di 13 punti a 5.707 punti, il Dax di 12 a 6786, mentre il Cac di 7 a 3.328. Dick Green di Briefing.com sottolinea che il mercato si sta posizionando in vista delle riunioni della Bce e della Fed. Randy Frederick di Charles Schwab ritiene che c’e’ una certa esitazione in vista della riunione dell’Eurotower” e se l’impegno promesso dal Draghi la settimana scorsa “risultera’ essere meno sostanziale, i mercati potrebbero annullare i guadagni realizzati in questi giorni”. Valute L’euro e’ in rialzo sul dollaro in Asia dopo aver aggiornato i minimi nella notte. Il cambio euro/usd e’ ora a 1,2272 dopo gli ultimi dati macroeconomici australiani migliori delle attese. Un trader di una banca giapponese sottolinea che il dollaro australiano continua ad apprezzarsi – aud/usd a 1,0526 – in scia al dato di giugno sul numero di approvazioni di costruzioni edilizie. La sterlina e’ in rialzo rispetto al biglietto verde mentre e’ invariata sull’euro. Stuart Ive, senior trader di HiFX, si aspetta che l’euro restera’ stabile in attesa delle decisioni di politica monetaria di Fed, Bce e BoE. “Non credo che che la moneta unica avra’ oggi dei movimenti particolari,” sottolinea l’esperto, aggiungendo che dopo le parole del presidente della Bce, Mario Draghi, gli operatori sono in attesa di sviluppi prima di prendere ulteriori posizioni. I forex strategist di Bnp Paribas ritengono che l’euro/usd sia destinato a muoversi al rialzo fino a quando gli operatori sconteranno un possibile intervento da parte dell’Eurotower per contenere i rendimenti dei titoli di Stato periferici dell’Eurozona. La banca francese resta rialzista sull’euro/usd, con target a 1,2420. Titoli di Stato I Gilt hanno chiuso in calo ieri, anche se le perdite restano modeste in attesa delle riunioni della Banche centrali, in agenda questa settimana. Gli analisti di Anz, in una nota, scrivono che il mercato dei titoli di Stato core conferma i segnali di consolidamento, rafforzando i dubbi degli operatori su un possibile intervento significativo da aprte della Bce. Gli operatori oggi guarderanno con attenzione i dati sul mercato del lavoro tedesco e il tasso di inflazione preliminare di luglio dell’Eurozona. Petrolio I future sul petrolio sono in lieve rialzo in Asia, in scia ai guadagni dell’azionario. In una nota, gli analisti di Ritterbusch and Associates scrivono che l’ipotesi di nuovi stimoli fiscali negli Stati Uniti e in Europa potrebbero favorire il mercato del petrolio. Il future sul Wti, con scadenza a settembre, sale dello 0,03% a 89,81 usd/barile (89,65 usd/barile il valore di chiusura), e quello sul Brent, con stessa scadenza, scende dello 0,16% a 106,05 usd/barile (105,97 usd/barile). Oro Il prezzo dell’oro e’ in leggero rialzo, salendo a 1.623,47 usd/oncia.

Piaggio vista da C. Peccati (indipendente)

PIAGGIO (PIA.MI) – Situazione tecnica di breve termine rimbalzo tecnico. Fase grafica di medio/lungo periodo positiva.

Il titolo Piaggio è inserito in un solido trend primario rialzista, che ha avuto origine nel marzo del 2009 dai minimi storici a 0,80 euro.

La mancanza di nuova forza ed energie per superare la forte resistenza di lunghissimo periodo a 3 euro ha favorito la recente fase correttiva, che ha avvicinato quota 1,66 euro, dalla quale il titolo ha reagito disegnando undoppio minimo ascendente (figura tecnica d’inversione rialzista).

Durante le prossime sedute, l’eventuale e probabile superamento dell’ostacolo di breve termine a 2 euro confermerà la ripresa della tendenza rialzata che, dopo questa pausa di consolidamento odierna potrebbe raggiungere l’obiettivo a 2,40 euro, incontrando un forte ostacolo a 2,20 euro.

La struttura grafica rialzista sia dell’indice RSI14 sia dal MACD rafforza questa possibilità, che sarà negata solo da una chiusurasotto quota 1,90 (sell down).

NOTA – L’analisi tecnica sui titoli della Borsa di Milano è curata questa settimana da Cristina Peccati, analista indipendente. Le opinioni espresse sono quelle dell’autore e non vanno in alcun modo collegate aReuters.

The Thing That Makes Americans Rich

by Alexander Green, Investment U Chief Investment Strategist
Monday, July 30, 2012
Alexander Green

The founding principle of Investment U is that if you want to be a better investor, you need to better understand the time-tested principles of investing and how they apply to today’s markets.

That starts, however, with comprehending the nature of business in a capitalistic society.

That is something that eludes many Americans, however, including perhaps the nation’s chief executive.

President Obama opened a can of worms recently with his remark, “If you’ve got a business – you didn’t build that. Somebody else made that happen.” He prefaced his remarks with references to how public education and government-created infrastructure allow businesses to thrive.

There’s no argument here. We all know the term “self-made man” isn’t a literal one.

But you have to wonder whether the President – a man with no experience in the private sector – truly understands how wealth is created in our capitalistic society or how an overweening federal government diminishes it.

A Culture That Rewards Individual Initiative

For example, every society depends on public education and the roads and bridges that the government builds. But if these were the primary determinants of economic success, why have so many countries with world-class infrastructure not been hotbeds of innovation and wealth creation? Clearly, a culture that fosters and rewards individual initiative and risk-taking plays a major role.

Also, if business owners themselves are not primarily responsible for their successes, who is responsible for their failures? In a letter to The Wall Street Journal last week, Dick Raddatz of Mequon, Wisconsin wrote, “My last business lost $1.5 million of which $750,000 was personally guaranteed by me. Please give me a call, Mr. President, and I will tell you where to send the check for your fair share.”

Perhaps the biggest fallacy in Obama’s remarks was the contention that the government pays for the nation’s infrastructure. The reality, of course, is the federal government has no money except what it collects in taxes. And since the vast majority of taxes are paid by businesses and high-earning individuals, we can thank them for the infrastructure we all enjoy.

My goal here is not to bash President Obama or influence the way you vote – I’m sure you’ve got your own ideas on that – but rather to point out that personal economic success is primarily about individual striving not government policies.

A Win-Win Proposition

Capitalism is a beautiful thing. It promises that you can have anything you want if you just provide enough other people with what they want. It’s about voluntary exchange for mutual benefit. That is why whenever you make a purchase you hear two thank-you’s.

You say thanks because you want the merchandise more than the money. The retailer says thanks because he wants the money more than the merchandise. Capitalism is not a zero-sum game where one side wins and the other side loses. It’s a win-win.

Remember, big business can’t make you do anything you don’t want to do. If you don’t like a company, you don’t have to patronize them, work for them or sell to them.

Big government, on the other hand, is all about force, not choice. Every year Congress generates thousands of pages of new legislation, with virtually every page requiring business owners to do something they don’t want to do or prohibiting them from doing something they would like to do.

Educated people realize there is a role for government to play. But it is a minimal role. Mandates, regulations, tax complexity and compliance bog down businesses, stifle innovation and, not incidentally, diminish confidence about the future, leading businesses to hire, spend and invest less.

In short, we shouldn’t discount or demean entrepreneurship. We should celebrate it. Hard work and risk-taking – not roads and bridges – is what creates fortunes. Understanding and appreciating this is the first step down the right path.

Good Investing,

Alex