Closing VmWare: Darkened Clouds

My apologies. I promised this article yesterday, but didn't have time until now.

I closed VmWare (VMW) position yesterday. It was done according to plan, outlined in annual portfolio review. I waited for a better price, but missed the opportunity back in March.

Company missed earnings target two quarters in a row. That's enough. These misses is a confirmation of my thesis: cloud computing moves out of IT departments to specialized companies. The biggest IaaS (infrastructure as a service) providers are Google (GOOG) and Amazon (AMZN). Neither of them uses VmWare software. Other companies trying to crack IaaS and PaaS (platform as a service) are IBM (IBM) and Microsoft (MSFT). They don't use VmWare either. For me, Google and Amazon are obvious winners here. For VmWare, it doesn't matter though, they are losers in either case. Their product was designed for internal clouds.

Bye, VMW. It was a good run, with a good overall profit.

Disclosure: I am long GOOG.

Additional disclosure: Positions can change any time

Back From Vacation

Returned to about 2% drop of my accounts. Sucks.

But vacation was great. Italy, despite many naysayers, is still in place. People are working, trains are running (mostly) on schedule. Service sometimes not very good, not many people speak English, which is surprising. But food is great, wines are pretty good and cheap. And weather was so good, I couldn't believe it. My head is still trying to digest this trip. Bologna, Venice, Ravenna, Florence, all in one week! By the way, style and design are superb. Even everyday things are pleasant to look at. Somebody will make huge money selling Italian design to the world. Not high fashion, it's done already, but simple things. Like kitchenware, furnishings, tools, even plumbing fixtures.

Back to markets. Main trend of this year is confirmed: commodities are going down. Gold, oil, base metals, grains, you name it. Natural gas in US is the only exception, so far. I think commodities were severely overpriced in the first place. People, as usual, built linear progression of Chinese growth, but China is moving to less material intensive economy. Besides, production of many commodities went up.

Google (GOOG) earnings: pleasant surprise. It's still my biggest position. Looks like company is improving mobile search, and it's a huge money maker, if done right.

Changes in my positions during vacation: my Facebook (FB) puts got exercised. So I bought FB for $26.20 plus commissions. Little loss for now, not a big deal.

Looking ahead, bad news and good news. Bad news: global disinflation, with a threat of global deflation. Deflation = depression. Good news: EU starts to understand that austerity doesn't work. Maybe US can understand it too. I hope.

Disclosure: I am long GOOG, FB.

Additional disclosure: Positions can change any time.