Go to Africa, Young Investor [Paul Kedrosky's Infectious Greed]

While frontier markets in Africa are not yet the new Brazil, let alone the new South Korea, there are ample reasons to be optimistic about the economic resurgence in many African countries.

Consider:

• The number of armed conflicts in Africa has dropped from 20 in 1999 to 5 today. Granted, that's non-zero, and the human losses in the remaining fighting is horrific and unacceptable, but there is significant and largely unheralded change.
• Real GDP growth in sub-Saharan Africa (SSA) averaged 4.1% from 1997-2002, and has since risen to 6.6%
• Real incomes are rising, with GDP per capita hitting 4.6% in SSA in 2007.
• Africa has lower inflation, higher FX reserves, and more FDI than did Asian emerging markets in 1980 -- and that worked out okay.
• We're seeing bond duration extension, with government bond yield curves now stretching out to 10- and 15-years in some countries, which is a boon to project financing.

The obvious question, of course: How do you track and invest in African markets? The fast answer is, it isn't yet as easy as it should be. Yes, there are some frontier markets ETFs, including the just-launched Claymore/BNY Mellon Frontier Markets ETF, or the SSGA Emerging Middle East and Africa ETF, but they all skew heavily toward Eastern Europe and the Middle East, allocating precious little to continental Africa (outside South Africa, which hardly qualifies as a frontier market).

Nevertheless, there is a race into frontier markets in general this year, and into Africa in particular. Multiple frontier market ETFs and related funds will be showing up soon from PowerShares, Van Eck, and others. It will be worth watching.

Further reading:

Amy's Italian Vacation [Feld Thoughts]

I will never be as good a writer as Amy.  It's always fun for me to read her view of a shared experience we have had.  She's got a lovely post up titled Bella Italia about our Q2 vacation to Positano and Lake Como that includes a bunch of fun pictures include breadsticks and a scorpion.   If you want to live vicariously through us and get a sense of what one of the Q vacations is like, wander over to her blog and take a look.

Links for 2008-06-12 [del.icio.us] [localglo.be]

• Estonia’s Forticom Acquires Controlling Stake In Polish Portal For $92 million
• Odnoklassniki.ru Russian Owners Take on Facebook With Polish Deal

• Estonia’s Forticom Acquires Controlling Stake In Polish Portal For $92 million
• Odnoklassniki.ru Russian Owners Take on Facebook With Polish Deal

Yahoo --> Google --> Yawn [Paul Kedrosky's Infectious Greed]

Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.
Words cannot expressed my indifference to the Yahoo/Google deal.

That is all.

They're Better [The Fein Line]

After one of the greatest comebacks in NBA Finals history, there is no question that the Celtics are better than the Lakers.  It might take 5, 6, or probably not 7 games, but the Celtics have shown that they can win at home, or on the road.  And, I don't think that they've really been playing their best.  But, tonight even that was more than enough to come back against the Lakers.

Credit to Doc Rivers for putting in his small lineup to force the Lakers to spread their defense.  Maybe even some of his doubters will agree that he's done a good job after this one.

Media Mentions [Paul Kedrosky's Infectious Greed]

Two quick media notes for people who have these things called "televisions" -- and I know that many of you don't. For the former group, I am guest-hosting on CNBC's The Call tomorrow morning from 8am to 9am PST. I am also popping up around 9:20am PST on CNBC's Power Lunch.

Microsoft is Doing Some Spinning [Paul Kedrosky's Infectious Greed]

Microsoft is doing some heavy-handed spinning of its new decision to not buy Yahoo at any price. Here is Microsoft from today's release:

As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!.

Really? That's interesting, because I don't remember Microsoft ever saying anything like that. I remember it talking about alternatives, and it complaining that Yahoo turned down its $33 offer, but I don't remember Microsoft saying it wasn't interested in rebidding.

Then again, I have a poor memory, so let's go to the tape. Here is the relevant passage from the May 3rd release:

... your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

Yo Steve, to "formally withdraw" one offer is not the same as never rebidding.

Let's move forward to the May 18th release, however. Maybe that's when Ballmer tipped his hand about never rebidding. Here is the relevant passage:

Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.

Yeesh. Not only is Ballmer not saying he won't rebid, he categorically reserves the right to rebid in future. Where am I supposed to get "not interested in rebidding" from this? I am no English major, but I get something closer to the opposite.

While there are clearly issues at Yahoo requiring a change of leadership, Microsoft is, if anything, in more need of change. This sort of heavy-handed spinning of what has happened over the last few months should be offensive to any semi-sentient being.

Carl Icahn: Smart, Stupid or Just Plain Screwed? [Paul Kedrosky's Infectious Greed]

You have to shake your head at how this Microsoft/Yahoo misadventure has ended up. Yahoo turned its nose up at a huge 50% premium, then Microsoft handled negotiations about as clumsily as a contractor after Friday drinks , and then Carl Icahn tried to insert some adult and shareholder-friendly thinking, only to get blown up today.

The latest revelation? Microsoft apparently "categorically" told Yahoo's board in a meeting four days ago that it would, under no circumstances, buy all of Yahoo, not even at the $33 price it pseudo-offered for the company weeks ago.

That is frickin' nuts. How could Carl Icahn be expected to stick-handle his way past a founder/CEO given too much initial slack, plus a deranged CEO-salesguy whose board trusts him so little with acquisition offers that he had to first mumble "$33" up his sleeve, and then had to walk away from it a scant few weeks later. Nuts. Absolutely nuts.

Now, could Carl Icahn could riding back in with Microsoft after Yahoo fires Yang, changes its board chair, etc.? Sure, but why would he hang around to do a deal at lower prices than the one at which he (and his friends) purchased a stake? That'd be stupid, and he'd have a moral victory but be financially screwed.

Anyone see another outcome in here? Because I don't right now.

We Realize You have a Choice of Bankrupt Airlines [Paul Kedrosky's Infectious Greed]

This quote caught my attention today on the ever-illiquid airline industry:

Nine small airlines have gone into bankruptcy or stopped operating in the last six months, crushed by the doubling of fuel prices in the last year, but so far very little capacity has actually been taken out of the market.

Four of the major U.S. carriers have been through bankruptcy in the past five years ...

Reminds me of something a pilot on a flight I was on once said while landing: We realize you have a choice of bankrupt airlines, so we're glad you chose ours.

[via Reuters]

SF Travel Tips [Venture Chronicles]

Heading up to SF for meetings? I have found two very helpful tips to avoid the hassle and cost of driving and parking in downtown SF.

1) Take BART. The Daly City BART station is a mere 15′ish minutes away from the Embarcadero BART station. You can take BART from Milbrae but it more than doubles the time into SF so I drive an extra 10 minutes and park at the Daly City station. It’s about $5 roundtrip and parking is $2 but after 3:00pm the parking is free. The Powell St. station has an entrance to the Westfield Mall, which when you walk through the mall to the other side is a block away from Moscone.

Savings: $30 for parking downtown, gas.

Cost: $7

2) Take your car over to The Bay Detail on Pier 38 (True Ventures is here, home to Gigaom among others). Mario will handwash and clean the inside of your car for $30 or fully detail it for $250 (includes a clay bar treatment). From Pier 38 it’s a quick Muni ride away from pretty much anywhere in the downtown area and you don’t have to pay for parking and I would add that it’s probably quicker. I’d rather spend the $30 getting my car washed than having it sit in some parking lot for the day.

Savings: $30 for parking downtown

Cost: $30 for carwash, $1.50 or $3.00 for Muni ticket

Heading up to SF for meetings? I have found two very helpful tips to avoid the hassle and cost of driving and parking in downtown SF.

1) Take BART. The Daly City BART station is a mere 15′ish minutes away from the Embarcadero BART station. You can take BART from Milbrae but it more than doubles [...]

Mega Mansions Bloom [Venture Chronicles]