Barron’s on the Kirk Report: The Anti-Cramer

Kudos to Charles!

Barron’s gives the Kirk Report a terrific review, noting his "refreshing — and proven — approach to investing has made his blog one of the Internet’s best-read financial sites."  They also discuss why he’s in cash.

Here’s an excerpt:

"UNSETTLING FOR THOSE WITH STRONGLY BULLISH or bearish convictions, Kirk decided back in November that the times were — with apologies to Dylan — "a-changin’." He moved to cash and, with the exception of a handful of trades, has remained on the sideline for the longest period of his stock-trading decade or so. "I don’t see a distinct advantage in being on either side of the market," he explains. He confesses to a lot of questions. Among them: How will earnings fare next year? Will housing fall apart? And how resilient will consumers be? "Until we get some clarification on those things," says Kirk, "the best thing for me to do is to sit and to wait."

The soft-spoken former Cornell philosophy and political-science major shares at least one preoccupation with the herd on Wall Street. "I have to figure out if the Fed is going to make the same mistake they did previously. Will they increase interest rates higher than they should? Or will Ben Bernanke do something different?"

Kirk blends judgments on these fundamental issues with technical analysis to arrive at an overall market view and specific trading plays (technical factors get a much heavier weight to determine individual trades). A self-confessed "stock-screen addict," he runs more than 200 different sortings a month in search of attractive trades. "The art of stock screening," he says, is to find the proper screen for current market conditions. Among his favorites are those that seek out poor-performing shares with good fundamentals or, for trading purposes, stocks with scant analyst coverage, little institutional ownership, positive money flow/accumulation, strong earnings and improving relative price performance.

"I’m a flexible chameleon — I go where the money is, and my strategies will vary quite a bit depending on market conditions and where the money is flowing," says Kirk, who got hooked on investing while working in a Motorola kiosk at a local mall about 10 years ago to help pay tuition at St. Paul’s Hamline Law School. (He realized the company was selling lots of flip-phones, bought the stock and ended up making about as much on the shares as he did hawking the phones.)"

Track record . . .



The Anti-Cramer: Highway 61 Revisited
Kathy Yakal
Barrons, April 1, 2006 6:02 a.m. EST

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Rise of the Pure Patent Business Model

Back in December 2004, I wrote a column titled "Five Under-the-Radar Trends for 2005". One of the below radar trends I predicted was the acceleration of intellectual property lawsuits. That turned out to be rather prescient.

There are actually two different issues here: The first is, should the USPO
be issuing so many patents, especially those for business methods? Amazon’s One-click buying, and MercExchange’s Buy it now auction are certainly questionable "inventions." That’s an issue for Congress, who needs to adequately fund the Patent Office so they can hire many more patent examiners, rather than merely have an under staffed patent office rubber stamp applications.

The second issue is that once a patent becomes issued, who gets to use it and how? Very often, we see the first issue inappropriately raised as a PR defense in the second. I don’t get the sense that all of the financial media really has a firm grasp on this. There is an entire world of patents, innovation, USPO issues, and large corporate litigants that have not been adequately discussed. Some get it, some don’t. Compare  this story: "eBay Takes on the Patent Trolls" with this one "In Patent Case, EBay Tries To Fight Its Way Out of Paper Bag." (For some intercorporate litigation, see Apple against Apple Corps. Ltd., and TiVo’s against EchoStar’s Dish Network).

Incidentally, the term "Patent Troll" was invented by Peter Detkin when he was defending a patent case against Intel. Ironically, Detkin is now managing director with Intellectual Ventures, an intellectual property firm suing patent infringers.

If you recognize the property right inherent in patents, then the term "Patent Troll" is quite meaningless, meant to stir up political opposition to patents. How you use your property is irrelevant to the property right attached to it. What does it matter if you choose to manufacture widgets — or merely license the patent to thos ethat do? 

What is actually going on now is a massive land grab underway by large corporations, looking to keep the fruits of entrepreneurs and innovators labor for themselves. These are not meek and vulnerable entities at the mercy of lawyers; rather, these are very astute players seeking to use the patent to further their own goals — often at the expense of innovation.

Take Intel, where Detkin was vice president and assistant general counsel, for example. They are certainly no stranger to patent litigation. As the book Inside Intel makes clear, INTC used its patents as a club to thwart competition in the CPU market for decades. That’s why its taken AMD so long to become a legitimate competitor to the chip giant.

The stealing of entrepreneurial innovation by large firms is fairly common place. My own experience with patent enforcement is that it is an enormously expensive, difficult, time consuming venture, fraught with peril. Consider the case of Robert Kearns, the inventor of the intermittant windshield wiper. In 1967, he received several patents on his design, which he tried to license to the Big 3 in Detroit. They sent him
packing, but later the intermittant windshield wiper somehow found its
way into autos. Long story short, he ended up in litigation for decades before finally winning. Thats decades later.

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