The Destroyer of Finance

 Biden.  So… to really attract the middle of the road and the apathetic, the machine at the DNC thinks: Hey!  Let’s pick an old white liberal senator from the northeast!  Well, we can’t pick a democratic governor from a republican state, because then we might lose that office in the replacement race.  Also, we should pick someone who is a real Washington insider (their words not mine) and strong on foreign policy… since (apparently) Obama’s weakness in economic policy doesn’t matter since we’re going to assume we’ve got a slam dunk on the economy.

 What a bad pick.  What a typical party pick.  Either Obama’s not a smart as I thought, or he had to bow to the party line.  A senator with a long voting record to target?  Someone who embodies party politics?  How does that fit in with the campaign?

 Also, I noted NPR running a promo for a segment on how the DNC convention was seeking to define Obama better.  Why?  Can’t they see that Obama’s campaign to date, the one that has energized people and attracted the middle of the road and the uncommitted right is built on being undefined?

 Hope!  Change!  This concepts are best lest formless so that they can take the shape most appealing to whoever receives the message!  You can’t even attack the issue, because then you’re just being a mean politician attacking hope and change.

 Once you define hope and change it becomes just a list of social programs, taxes, and/or spending cuts that turn off republicans and moderates and project a “politics as usual” air that deflates the enthusiasm of the apathetic voters.  Lists of programs etc is an easy target to attack as well.

 Bloomberg would have been awesome for Obama.  Epic.  Biden is epic.  Epic fail.

 So Bloomberg is a possibility for McCain, but I think Romney works better for him.  Bloomberg has had too much of a public love affair with Obama, and Romney would still give McCain the economic expert that Obama lacks (while McCain has his own foreign relations cred).

 Speaking of foreign relations cred, Biden has such a strong base:

 - Declared that the US had “no choice” but to remove Hussein in Iraq, and voted for the war.

 - Was described by the UN Weapon’s Inspector Ritter as having ignored Ritter’s arguments against WMDs in Iraq while seeking to support his own conclusion that Hussein not only had Bio and Chem weapons, but was attempting to gain nuclear weapons.

 - He supports a “third way” in Iraq, which sounds good on paper (and makes all Bill Clinton fans horny), but is doomed to total failure simply because not only are the majority of Iraqis not on board, the surrounding Arab states wouldn’t support it either (notably Turkey).

- It’s worth noting that he also co-sponsored a non binding resolution against the troop surge in Iraq and joined in referring to the move as the “McCain Doctrine” (actually John Edwards’ words).  Don’t hear much of that talk these days.

- Was/Is? a BIG supporter of the PATRIOT ACT, even going so far as to claim he had introduced an almost identical bill years earlier.

- He does cover Obama’s Jewish sore spot by being a staunch backer of Israel, so clearly that endears him to those other countries we might need to deal with… like Iran.

 I’ll grant that I agree with his more lenient stance on immigration and like that he’s against ethanol, not that he’s view on ethanol will do much good with corn fueled Obama around.  Throw in his views on guns, and he’s pretty much a disaster.

 Will he help the Dems win Pennsylvania?  No.  So he’s big in Philly?  Ahh… Philly has been a democratic stronghold for long time, no?  He’ll certainly NOT help in any of ther southern states.

 It’s amazing how often the DNC can’t get out of it’s own way.

 Back for more Olympics.

 This was the end of Olympic softball and baseball until at least 2016 for reasons not really explained by the IOC.  While I’m OK with the end of softball (despite the US loss to Japan, it’s still not really a competitive global sport), I’m not very on board with the elimination of Baseball.  At least 10 countries could, if they wanted to, field very competitive teams and 4 or 5 more teams could, and have, fielded competent if not competitive teams in the past (including China).  Further, the champions have been fairly evenly distributed… unlike, say, badminton where China has won 11 out of 24 golds and 30 out of 76 total medals.

 Badminton, however, as goofy as it sounds, is an awesome sport to watch and I will not be the one to suggest it’s elimination.

 Let’s look at some other places worthy off being cut out of the games tough:

 1) Equestrian, All: The games are about human people showing off their skill and athleticism, no?  Equestrian is about animals.  Oh, sure, if you put me on one of the gold medal winning horses not only would I manage to kill the horse, but I’d also manage to kill myself.  I don’t deny that it takes a good rider… and trainer.  However, you take the same rider (and trainer) and put them on a braying donkey, and they won’t win either.  I don’t see the Westminster dog show at the Olympics.  I don’t see the frisbee catch at the Olympics.  I don’t see horses sprinting a mile and a quarter at the Olympics. Further, this ”sport” might be among the LEAST accessible to the poor nations and people of the world.  Equestrian needs to be on the very short list of sports heading out the door at the games.  Also, 6 medals?  6?  Really?

 2) Synchronized Diving: Stupid.  It’s hard enough to get a good competition where judges are involved, especially one where the judges are as far away as they are in diving and for an action that is so fast in its completion.  Adding a second person to judge complicates the judging and compounds judging errors, not to mention being a totally unnecessary addition to the games.  4 medals?  Out.

 3) Rhythmic Gymnastics.  Hard?  Yes.  Requiring intense practice, athletic ability, and fine skills.  Check.  Olympic level competition?  No.  Just because every failed ballerina and artistic gymnast needs an activity to keep their dreams alive doesn’t mean the IOC has to subsidize failure by continuing to sponsor this travesty of yet another judged competition.  Sure, it’s cool to watch and impossible for a common person to do, but it’s not up to Par for my Olympics.  2 medals?  Out.

4) Badminton: what?  I just said that this was safe?  Well, it is, but the gold medal for mixed doubles isn’t.  Tennis and freaking ping pong (which misses this list my the narrowest of margins) don’t see the need for “mixed” doubles, and neither do I.  Badminton should be grateful it gets the same number of medals as the actually globally competitive sport of tennis and accept the loss of its mixed gold with dignity.  1 medal?  Out.

 5) Trampoline:  See Rhythmic.  It’s not the IOC’s place to sponsor dreams for failed gymnasts just because Trampoline is also hard.  2 medals?  Out.

 6) Shooting.  I’m a big fan of a little bang bang on the range, and even of shooting targets (hey-o!), but I’ve got to admit some of the shooting is being a little generous.  10 meter shooting?  With a rifle?  Shit.  Take out the 10 meter competitions totally.  I’d like to see them bring back the 800 and 1,000 meter competitions, though.  4 medals?  Out.

 I’ve eliminated 19 medals, while still retaining the suspect ping-pong (oh, I’m sorry, “table tennis”) and synchronized swimming.  Given that I’d like to investigate the following additions:

 1) Baseball: bring it back, fools.  +1 Medal

 2) 800M and 1,000M shooting: at least 2 medals, maybe 4 if the girls want to play.

 3) Cricket: it’s a huge and important sport in no less than 5 countries on 4 continents including the second most populous nation on earth.  It’s more than you can say for badminton or ping pong. +1 medal (do women play cricket?)

 4) Rugby: Bring this shit back already.  And no, it’s not just Britain and New Zealand asking to bring it back.  How the IOC can pass over rugby for squash and karate bottles the mind, especially when they can’t even judge the martial arts they’ve got without sparking controversity and roundhouse kicks to the face. +1 medal.

 5) Golf:  I know, not very athletic, but loads of skill and a world wide sport.  +2 medals.

 So I don’t replace all the medals and that’s fine.  You can add a couple medals to golf for national team events if you want, or have room to add truly worthy competitions later.  None of the sports I’ve put back in are purely judged events, which is good.  There is rules enforcement in Cricket, Rugby, and Baseball, but the impact is usually minimal.  800M and 1,000M shooting is a big upgrade over 10M shooting because it requires all the same discipline over muscles and breathing as 10M but also a mastery over the shooters environment (wind, humidity, temperature).

 I am an Olympic freak.  For 1444 days every four years, I will not even think about a wide range of sports, and yet for 17 days I’ll follow (or try) every minute of tons of obscure competitions.  This doesn’t count my companion obsession with the winter games as well that led to being the treasurer of a curling club in Texas.

 So now the summer games are over and the question becomes, “Who won?”  Well, China had the most gold medals with 51.  Does that mean China won?  The US countered by winning the most medals overall, which ought to count for something.  So did the US win?

 From an athlete’s perspective, getting a gold medal is the pinnacle of acheivement (for most sports, at least).  However, most athletes would also be estatic to win a silver or a bronze.  I like to gauge the medal count by a somewhat common points system: Gold is the pinnacle and gets 10 points, Silver is great and gets 6 points, and bronze is superb and gets 4 points.  If you were a competitor, would you rather have 1 gold or 3 bronze medals?  It’d be a close call, I’d think… or if you’d rather, would you rather have 1 gold and three bronze or 2 gold (thus eliminating the competitive desire to be best at at least one thing)?  This point system usually carries down through 6th place, but since that data isn’t really collected at the olympics (or even determined at all in some cases), we have to discard points 3,2,and 1.

 In the end, I declare China the winner of the 2008 games with 748 points over the USA’s 732 points.

 The rest of the top 10:

 Russia with 468

 Britain with 328

 Australia with 298

 Germany with 280

 France with 234

 South Korea with 222

 Italy with 180

 and Japan with 166.

 For the most part it follows the raw medal count except where Japan passes by Ukraine (and China passing the US of course).  UN Security Council represent!

 In 2012 look for China to maybe pull back a little in the medal count based on the fact that many of China’s medals came from judged events and a home crowd DOES impact the judging.  I’m not implying that the judges don’t try to do their unbiased best, I’m just saying it’s next to impossible to have a human subjective opinion influenced to some degree by the reaction of a crowd.

 Regardless, 2012 will likely be the last time there is any debate about the medal count winner as in 2016 and beyond China’s population and government backed programs will certainly overwhelm the US.  I saw a good suggestion that instead of donating $3 of your taxes to the damn presidential campaign fund, we should have the option to donate it to the Olympic program.  Probably be a much more popular option.

Company: Rackspace Hosting, Inc.

Symbol: RAX

Current Price: ~$10.40

Summary (per yahoo): Rackspace Hosting, Inc. provides information technology systems and computing as a service for businesses worldwide. It delivers enterprise-level managed services, such as Websites and Web-based information technology systems. The company’s portfolio of hosted services includes managed hosting, email hosting, cloud hosting, and platform hosting. It offers hosting solutions comprising virtualization, security services, email services, database services, storage and backup, reporting and administration, and professional services for small businesses, medium to large businesses, software as a service providers, and Web designers and developers. The company was founded in 1998 and is headquartered in San Antonio, Texas.

 2007 Net Income: $17.8M

 A profitable tech?  More specific, a profitable *IPO* tech?  Shocking.  I’ve never paid big money for a rack, but everything I hear says it’s a booming business (bada bing?).  Seriously though, it IS a growing industry and there is no real reason for RAX to suddenly become a money losing business.

 RAX has to be MORE than a money making business though.  It has to be an exploding business, one that continues to grow at 60%/yr over the next four years or so.  An influx of over $100M from the IPO is certainly going to help reach that goal by aiding in capital investments for new capacity (either directly or through debt reduction).  Asking any business to do this is always a risky proposition, although some do manage to succeed.

 You may remember that I steered away from a different company (Intuitive Surgical) for similar reasons, but there are some differences:

 - Known competition: No surprises in this industry as far as competition.  RAX has several established competitors and knows that it must constantly increase the value of its product for its customer to survival.  RAX is certainly at no risk of resting on its laurels at this time.

- Customer Savings: Unlike an expensive medical tool, RAX’s product is easily marketable in both down times and up times.  Every potential client is looking for ways to cut costs while maintaining/enhancing their technical abilities, which are both things that RAX offers.  It’s one thing to pitch a million dollar machine  based on superior surgical results for the patient and long term revenue enhancements, it’s another to pitch immediate cost savings to a profit seeking corporation.

 Sounds good, but there is also the regulation tech industry draw back:  over-build.  My brief in-depth research suggests that there has been significant expansion in the hosting industry and therefore greater than normal opportunity for some rough times should demand for services not continue to increase at the expected rate (think hi-speed internet infrastructure build out in the late 90’s that collapsed in the dot com bust).  The strong rise stronger for the shake out, but it’s not something you want to be a shareholder for.

 So what’s RAX worth?  After the IPO there are about 115.4 million shares outstanding.  Yahoo tells you that there are 101 million shares outstandings, but Yahoo is essentially retarded and never gets an IPO’s shares count right.  I’m right.  Check it with the man.

 Heck, that document in the link has all the numbers.

 Anyway, so 115.4M at about $10.40 a share amounts to about $1.2 billion dollars.  That’s fairly steep for a company that pulled in $17 million in profit last year, but if it can achieve 60% growth, then it’s worth it.

 But wait!  There’s more.

 22.8 million extra shares in existing options and warrants and an extra 6.8 million shares “available for grant” under employee incentive plans.  Wicked!  So YOU think there’s 115.4 million shares, but really there’s 145 million shares.  The “strike price” on the options are all either significantly below the current stock price (making at least a handful of employees instant millionaires) or about what it’s trading for right now.  As a shareholder you would HAVE to hope these options get exercised, because if they don’t that means that stock price has never gone up any.

 So 145 million shares at $10.40 = $1.5 billion!  WOW!  After all that, I can admit that if RAX holds the 60% line, it’s still fairly valued.  Still maybe even undervalued even.  If you could promise me 60% growth, it could be worth $30 in five years or so.  If you only get 50% though, it drops to more like $22.  And if it’s just a puny 40%/year, well, I’d probably only give you about $12 for that.

 So there’s definitely some range here.  What would I recommend?

 Hell, I don’t know.  How much more can the Western market for this product grow?  Let’s not talk about China… if you think an American company is going to bust into the dragon’s lair and storm the nacent hosting sector their, I’ve got a Georgian military offensive to sell you.  If you want, let’s consider stateside demand for the service by Chinese firms.  Let’s not worry about India, as I’m fairly confident that they’ll take care of their needs in house.  I hear they have some tech labor over there.

 You figure out how much room is left in the US, Canada, Europe… maybe even South America and Africa.  Then you’ll have a better idea how long RAX can keep up the growth.  I couldn’t even begin to claim to have the beginnings of an idea, though.

 I would, however, recommend waiting 6 months before buying into RAX.  Use it to research the stock if you want.  Why 6 months?

 That’s when pre-ipo shareholders can begin to sell their stock.  It might not hurt the price, but it won’t help it either.

 Life lessons from the Journal of Wisdom According to Awesome: 

 Form your hand into a straight, rigid flipper as though you were about to power chop your way through a cinder block or a 2×4 plank.

 Now take careful aim at your cat.  Any other nearby life form will do as a substitute.

 Lunge at said cat/lifeform and feint an mega death blow attack by thrusting the tips of your flipper fingers in the direction on the target with all undue velocity available to your particular combination of body mass and muscular build.

 Realize that due to an oversight in your scouting report on the local terrain (perhaps, say, your bedroom) you have now speared your hand into the door frame.

 QED: Pain.

 Aleve takes the edge off, so good times for only being in uncomfortable pain.  I’m told it’s most likely a muscular/tendon injury, so it’ll be about a month before it’s completely better, and there’s no point to x-rays because if it were a small fracture, there’s nothing that could be done for it.