Cashing in on the Digital TV switchover

For more information visit www.dtv.gov.

If you haven’t been watching TV, you may not know about the digital TV switchover. If you have been watching TV, you may still not know what the digital switch over is or why it is important. On February 19, 2009 TV stations will longer broadcast analog TV, which people have been using these last decades. All the TV stations will switch to digital broadcasting.

The previous standard NTSC is capable of 1525 lines at 29.97 frames per second, while the new standard, ATSC is capable of up to 1080 lines at 60 frames per second. This means the pictures are more detailed with more fluid motion. Also, the information is digitally encoded, so you’re either going to see a clear picture or no picture at all if you can’t get a signal. Fortunately this means that most of us will get a clear picture. I have personally bought a TV converter box and it is definitely an improvement. You may also ask why 29.97 frames per second. The answer is because they didn’t know about color when they made the standard. Television has been long overdue for an update.

Where do I get a digital converter box?

You can get a digital converter box for your old TV at any electronics store, but you should take advantage of a government program that provides $40 vouchers for converter boxes. I was surprised when the BestBuy (BBY) employee there asked me where I got my coupon. She asked for the website, but I did not know it off hand. My receipt however had the website printed on it. You can get up to 2 coupons per household at www.dtv2009.gov. The converter box I purchased was $60, so it was $20 + tax out of pocket expense.

What is spectrum?

Electromagnetic waves come in many frequencies ranging from gamma rays to radio waves with visible light (red, orange, yellow, green, blue, indigo, violet aka ROYGBIV) sitting in the middle. The government regulates and licenses certain ranges of frequencies, so you don’t have different people interfering with each other. Since the analog television frequency band is no longer in use, the government auctioned it off with Verizon Wireless (VZ) and AT&T (T) among the winning bidders. One use of the extra bandwidth is to provide more wireless data services, which has also garnered the interest of Google (GOOG). This will advance the trend of mobile devices using more data services like the iPhone from Apple (AAPL).

How do I invest in the digital TV switchover?

Instead of buying a converter box, a significant amount of people will finally make the switch by buying a new HDTV. Television manufacturers are sure to sell many new televisions in the near future. A quick look at BestBuy and you’ll see television sets from Sony (SNE), Samsung (005930.KS, 005935.KS), Sharp (SHCAY.PK), LG (LPL), Insignia and others. All of these different HDTVs share some common components such as the digital TV tuner and decoder chips from Microtune (TUNE), Texas Instruments (TXN), Maxim Integrated (MXIM.PK) and Analog (ADI). Looking at a technological standpoint, Texas Instruments also provides its DLP technology in affordable rear projection screens and high end digital projectors.

There are many ways to invest in the digital television switchover, but it is hard to see who will come out ahead since there are so many players in the game

Stock Picking Basics (1)

With the advent of “systems” for investing and a new wealth of information about companies, it can be hard to figure out which stocks you want to invest in. While many commentators will tell you about a lot of different companies from a variety of industries, sometimes it helps to just simplify. One of the most basic stock picking adages is to buy what you know. There is also the corollary to buy what you buy. Now how do you put these sayings into practice.

If you are just starting out in the world of investing and have your strategy and comfort with risk evaluated, the next step is to start looking into companies you wish to invest in. Before looking for exotic companies with high returns, you really don’t even have to go to far to find successful companies that have had great returns already. For the poor college student/new college graduate that’s too lazy to cook, there are plenty of fast food restaurants that have been returning greater than 10% over the past few years. Companies like McDonalds (MCD), Wendy’s (WEN), Jack in the Box (JBX), and YUM Brands (YUM) which owns KFC, Taco Bell, and Pizza Hut are all strong companies with a lot of growth potential in the near term. When you go to these places for lunch or dinner then you’ll just be putting your money back into your investments. Plus, if you goes to these restaurants and watch how brisk business is at times, then you already have a bellweather into the health of the company’s performance. If you find you’re the only one in there, then perhaps it’s time to pull out of fast food restaurants.

Not one to partake in fast food, how about consumer electronics? Still seeing lots of iPods or hearing about all the new TV’s people are buying? Companies like Apple (AAPL), Research in Motion (RIMM) the maker of the Blackberry, Sony (SNE), or Philips Electronics (PHG) are all good places to start if you also plan on upgrading a few of your electronic toys in the near future.

So what are you spending your money on every week? Why not invest in the companies that are going to be getting your money anyways. The gas companies are not a bad idea if you have a favorite gas station to fill up your car. Ask yourself some of these questions when brainstorming about which companies to invest your money. Where are you getting your food from or what kind of drinks are your favorite? What about the clothes you buy or even the bathroom products you use? This is why the adage of investing in what you know and what you buy is such an easily understood idea that can be oft overlooked. Plus, you get the advantage of seeing how the company is actually performing without having to wait for its financial reports every quarter.

As of this writing, I currently own shares of YUM Brands (YUM).

Don’t know what to buy? Now might be the time for tech stocks

For those of you that don’t have a position in the Technology sector in your portfolio, now is the time to buy. Big institutions (i.e. mutual funds and hedge funds) all obey an investment cycle. These big institutional investors are the ones that move the market and whose investments are the ones that counts. According to Jim Cramer (A former hedge fund manager, who has his own show Jim Cramer’s Mad Money on CNBC, which I highly recommend for people to watch) now is the time in the investment cycle to buy tech stocks because the big institutions are now buying tech stocks. The two stocks that he recommends now are Dell (DELL) and Hewlett-Packard (HPQ). However whatever tech stock you ultimately buy into, you should sell the stock by no later than January 31, because as you can guess that is when the big institutions begin to sell their holdings in the technology stocks. The only exception to this (according to Cramer) is Apple (AAPL), this is the only stock that historically does well year-round and doesn’t move with the investment cycle. So, for any of you looking for something to buy during this down time in the market, definitely rid yourself of Financial’s (because they are definitely taking a beating) and get yourself into the Technology sector. At the very least definitely take some time to look at Dell and Hewlett-Packard, for they come highly recommended by Jim Cramer. Remember it is almost back to school time for a lot of students, and students will be in the market for technology products, which will definitely bode well for the growth and earnings of companies like Dell and HP.

Small Cap Talk: TransGaming

At the Apple (AAPL) World Wide Developer’s Conference in San Francisco on June 11, 2007, Electronic Arts (ERTS) announced that they would be bringing games to Mac computers. EA is one of the biggest game publishers with titles such as, The Sims and various sports games like Madden. EA now sees Macs as a viable market, but why now? The Apple iPod is one factor. One of the places that one can buy an Apple iPod is an Apple Store. These stores also happen to have Macs all over the place. The increased visibility of Apple computers, has helped the them gain market share. The market growth is greatest in the laptop market, because of Apple’s superior design of their laptops. As a software developer, I see many fellow developers programming on their MacBook Pro laptops. Additionally, the image of Apple computers has changed since they rolled out their OS X operating system which is based on rock solid FreeBSD operating system. Every group of friends has a computer person they go to for computer problems and recommendations. This computer person is now recommending the purchase of Apple computers. People are buying more Apple computers, so they might also like to play games on their computers too. This gaming need was recognized by EA.

What is the current state of gaming on the Mac?

There are few companies that make games for the Mac such as Blizzard, the publisher of the massive multiplayer online role playing game (MMOPG) World of Warcraft (WoW). One of the questions I get asked by people when I recommend a Mac is, “Does it play WoW?” The answer is, “Yes!” The Mac platform has been largely ignored because of its smaller user base. The majority of games developed are for Windows. For those Mac owners who cannot live without their games, there are several ways to play Windows games on Mac hardware. One way is to install Windows on your Mac and use Boot Camp to boot into Windows. Another way is to run Windows on a virtual machine using Parallels or VirtualBox. Boot Camp is inconvenient and Parallels suffers in performance. There has to be some easier way of playing games on the Mac.

What does this have to do with TransGaming (CDNX:TNG.V or TNSGF.PK)?

There are several ways for EA to bring games to the Mac. One way is to program a game from the ground up like with any other platform. Another way is to take an existing Windows game and port it, which takes time but not as much as writing a game from scratch. A third option is to use TransGaming’s Cider technology that acts as a bridge between Windows commands and Mac OS X commands. This allows EA to bring games quickly to the Mac with Cider as a translator for Windows games. Cider is based on TransGaming’s experience with WINE, a program that lets Windows programs run under Linux. TransGaming has an application called Cedega, which specially makes it easier to run Windows games on Linux.

What is the future state of gaming on the Mac?

As more people buy Macs, there will be more games on Macs, which will make more money for game studios, which will in turn make more games for Mac perpetuating the cycle. TransGaming’s Cider is a stopgap measure that allows Windows games to run on Mac. As more focus turns to the Mac, studios will write games specifically tailored for the Mac and thus will not need to use Cider technology to translate Windows games to run on Mac. Cider’s own success will be its downfall. Long term outlook for TransGaming is not amazing since they produce niche products to bridge platforms. Short-term outlook is good as more and more publishers sign on to use Cider technology to produce Mac games.

The price of TransGaming jumped from $0.50 CDN the day before the announcement to $0.69 CDN on June 13^th. A nice 38% gain for 2 days, but the current price is at $0.60 CDN.