Tag Archives: intellectual property

Timely Investing Thoughts

Equity markets tanked on Monday of this week.  The typical labels describing the day have been coined; not necessarily the most imaginary but probably the most common is “Black Monday”.

I saw a great tweet on the topic from someone living in a third world country aimed at the first world nations  ” I feel really bad for you, having to sell one of your 4 TV’s”.

One of my favorite questions is about why people panic sell.  I actually doubt that the majority of the trades were anything but well planned profit taking.  Remember on any given day institutional and day trading initiate most of the trades (buy or sell) and well it’s possible fund managers/day traders are acting emotionally it is far more likely they are selling to realize profit with a plan to reinvest when the market settles, that is market timing approach versus value investing.  I am sure some panic selling occurs but my guess would be a very small percentage.

How would it work?

Say you bought 1500 shares of Bank of Montreal (BMO) at cost basis of $35 share.  On Aug 19th BMO was approximately $71.5 share.  If you sold on say Thursday as it started to drop at $70 you would have locked in $54,750 profit.  Whoo hoo!

If you bought those 1500 shares back on Monday at $66.18, (spending some of your profit) you would be up on paper today by      $7,860 as the value of the shares is back to $71.42, you would still have your 1500 BMO share and associated dividend flow while  retaining $5,730 cash profit which was removed to spend on something else.  (A nice dinner maybe).

RISK???

Yes, this profit taking has risk, however in the volatile market of the last couple of years, there are a number of large cap stocks for which this market timing practice has shown to be quite predictable  (in hindsight of course).

 

Protecting Intellectual Property

With the advent of the internet it is very common for people to share and access others intellectual property without the owners explicit permission.  A common example of this is multi-media files (ie., music, movies, pictures, books, etc) .

Is this wrong?  Is it a bad thing?

Let’s Explore!

To start, I will share a couple of quotes on the topic that resonate with me.

“He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”   Thomas Jefferson

“My words and my ideas are my property, and I’ll keep and protect them as surely as I do my stable of unicorns.”   Jarod Kintz

When I write a book, or a song or video tape a story should I be able to charge money for the privilege of accessing my intellectual property creation (my ideas).

I would say yes; However, I should be free to choose  if I want to share freely  (light other peoples candles so to speak) or protect my unicorns and decide who get’s to play with them (usually for financial remuneration).

Civilized societies have long recognized the need to protect property rights, in a way it is the cornerstone of individual freedoms.  This is not to say the socialist/communist societies are not civilized, or maybe it is.

To enable the intellectual property owner to decide how they want their output shared (a book or song) we have created the  “copyright”.   This can be used to mark your book, music, movie, etc as requiring your approval for use – whether via payment of money or just ass kissing.  Of course you can always choose the Thomas Jefferson course and share freely to the enlightenment of others – like this blog post.  (Don’t you feel smarter already?)

Does the Internet Promote Theft?

If your copyright  property (say a movie) is freely available for download on the internet without your permission is that theft?  Well technically not until someone downloads it;  then, you betcha it is theft.   The interesting question is who is at fault, the person who made it available, the person who downloaded it or even in fact the people that created the internet which allows this kind of theft to occur relatively easy (and frequently).

Personally, I don’t think these questions are easy to answer (although many would disagree arguing both the up-loader and down-loader are complicit  while the internet is a thing so not part of the equation).

To complicate matters further if you don’t actually download the intellectual property but rather stream it did you steal it at all – is just viewing it theft.   If you enter a movie theater and watch the movie or crash a concert without paying are you stealing?

What’s the Impact 

Most interesting is the impact the internet has had on music, book, movie sales.  It has changed the way the items are sold, I am not sure it have changed how much get’s paid for.

It is true the ability to access property owned by others without permission (generally payment ) is made much easier via the internet, that being said sales and “legal” transmission of such content far outpaces theft of said content.    Basically the trading of books, music, and movies freely is not new (many people share their actual paid for copies of CD’s or records or books with others for no cost.) This free sharing occurred before the internet and continues to occur and though I have no metric to prove it the level of this type of sharing has not really changed that much, just the way it is done.

So does the internet enable theft of intellectual property?  Sure.  But has it really changed the fact most people continue to pay for intellectual property they acquire – I don’t think so.