30 December 2004

Part I.

Back in February, I wrote about an odd variant of spam that had been floating across my desk, into my inbox, and through my office fax machine: penny stock spam. About 10 months have gone by since then, and a few things have changed: the stock markets have fluctuated a bit, the U.S. re-elected President Bush, interest rates have gone up, the Iraq war has gotten worse ... Ok, not really a compelling reason to wonder about the 12 stocks I “profiled,” but a good enough time to check back with them nonetheless. Here’s how they’re doing now – and how your portfolio would look in total dollar value if you owned one share of each of them:

Table A

Company	Ticker Symbol	Day Spam Received[1]	Share Price as of 29 Dec. 2004	Closing Price, Day of Spam	Share Price as of 6 Feb. 2004
Pluristem Life Systems	PLRS.OB	2. Dec. 2003	$0.2075	$0.70	$0.75
American Multiplexer Corp.	AMUT.PK	2. Dec. 2003	$0.05[2]	$0.29	$0.50
ICOA, Inc.	ICOA.OB	3. Dec. 2003	$0.048	$0.08	$0.07
GK Intelligent Systems	GKIG.OB	7. Dec. 2003	$0.022	$0.08	$0.05
Summit National Consolidation Group	SPWP.PK (formerly SMNC.PK)	8. Dec. 2003	$0.01	$0.02	$0.018
Pacific Gold Corp.	PCFG.OB	10. Dec. 2003	$0.30	$0.35	$0.24
Tasker Capital Corp.	TKER.OB	10. Dec. 2003	$2.52	$0.28	$0.16
True Health Inc.	TRHLE.OB (formerly TRHL.OB)	11. Dec. 2003	$0.075	$1.08	$0.98
DMT Energy	DMTY.PK	12. Dec. 2003	$0.0[3]	$0.61	$0.44
Environmental Technologies Int'l.	EMTI.PK	14. Dec. 2003	$0.048	$0.17	$0.23
Mobile Reach International Inc.	MBRI.OB	14. Dec. 2003	$0.05	$0.44	$0.33
OnScreen Technologies Inc (formerly New Millennium Media International)	ONSC.OB (formerly NMMG.OB)	15. Dec. 2003	$0.84	$0.87	$0.98
Total Portfolio Value, 1 share of each company			$4.1705	$4.97	$4.748

Based on the information above, if you owned one share of each company, your portfolio would be worth $4.1705 as of 29 December. That’s down from a $4.97 on the day the spam was received, and also down from the $4.748 those same shares would have been worth on 6 February 2004. That may not sound like a lot of money, or a big difference, but it is – a loss of more than 16% from the high of $4.97 and a 12% loss from the 6 February closing prices. On a four dollar portfolio, maybe no one cares; on a $400,000 portfolio, 12% is a big loss!

Is there a moral to this story?  You decide.

Part II.

Last week, I wrote about some of the big lies in our economic and education policies, and how the U.S. needs to do more to maintain its high-end competitive edge, rather than working towards the low-end. Practically speaking, I suggested it is in American interests to produce high-quality goods and offer superior services and expertise. We should leave the cheap textiles and manufacturing to other nations, which can benefit from exporting them to us as much as we benefit from purchasing them at low prices.

Therefore, those who have been following the recent news that I.B.M. is selling its computer manufacturing business to Lenovo, a Chinese firm, may have seen in my article something contradictory. After all, if the Chinese are buying blue chip American businesses – like the business machines and services company that helped invent and popularize the “personal computer” – there must not be as significant a labor and production gap as I was suggesting. Perhaps.

The more interesting news, however, came on 25 December, when Lenovo announced that, in fact, it is moving to Armonk, New York – home to I.B.M. – rather than the other way around. Not only that, but Lenovo plans to keep much of I.B.M.’s executive team and use them to run the company, an acknowledgment of the vast experience that I.B.M.’s employees have, and their knowledge of the computer marketplace.[4] Now that Lenovo has purchased such a very well-known and well-respected company, they have clearly decided that they want to keep it that way.

Although I was not specifically advocating the takeover of American companies by foreign ones, the decision by Lenovo reflects exactly the kind of focus on quality, skills, and education that I believe is needed here in the U.S. The production of the new Lenovo-I.B.M. computers themselves may very well come from China, where many such costs are lower. But the executive leadership of I.B.M.’s computer division is not found in Beijing. That says a lot about the future of the American economy right there. If “globalization” is an unstoppable force, then this is the direction we want it to take, where the quality and skills found here in the U.S. are our most attractive assets.