Review Of The Ethiopian Commodities Exchange

I'm not sure what to say about the Ethiopian Commodities Exchange. I recorded the Wide Angle's The Market Maker documentary last Friday but only got to watch it today.

First off the bat, I have to say that I was impressed by Eleni Gabre-Madhin's effort to start ECX, as it is commonly referred to. Going into the documentary, I was sceptical about the whole commodity exchange idea because I thought it does not address the needs of the farmers. I guess this is what she intended to do but life has a way of throwing a curve ball at us.

A few months after the exchange was started, the Ethiopian government decided to end the coffee auctioning system and use the newly opened facility. This turned out to be such a gigantic step, especially because the exchange required physical delivery before the sale and also quality checks.

The most glaring thing about the documentary was 'present bias'. I saw Africa's reluctance to change the way things are done even if it is to our advantage. Sesame farmer's declined to change a broken system because they focused on the initial hassle rather than the future benefit.

That said, I have to give it up to the Ethiopians who left the comfort of their corporate jobs in the U.S. and returned to their homeland to make a difference.

My First Buy-out Profit

It's not big business news but Bristol-Myers Squibb offered to pay a 90% premium to Medarex’s Wednesday closing price.

Mederax was one of my holdings and I was certain that they will one day be bought out. It so turns out that I was right. And with today's news I dumped all my MEDX shares for a tidy profit.

I'm not sure when I bought the stock but I've had it in my portfolio for at least two years and I was beginning to doubt if someone would ever buy them.

Online Shopping

I just put in an order through Amazon and as I was going through my account I noticed that they have a record of my purchases going back to my first order.

When I first started shopping in Amazon, my purchases were mainly DVD movies of titles that I could not find off-line. Later on I started buying books and now it's mostly small electronics and a mixture of books.

In total, I have spent $365.08 since my first order in November-2006, with the highest amount spent in 2008 when I bought a couple of books.

As far as alternatives to Amazon are concerned, I would say that I make offline purchases at Borders for books, BestBuy for DVDs and electronics, and Walmart for small electronics. BestBuy gets the bulk of my money because as of this year alone, I have already bought 2 digital cameras, a steam cleaner and a Netbook, not to mention other stuff. Never mind that I am being handtwisted to buy the Nintendo DS and games for each of the young ones which I will have to buy before the end of the year.

While I spend more money offline, the main reason for this is the instant ownership as opposed to waiting for delivery and also the fact that BestBuy offers 0% financing for up to 18 months depending on the amount spent.

The Ethiopian Commodities Exchange

A lot has been said about the issue of food security in Africa. Take for example the situation in Ethiopia. Despite a surplus of food in the Southern side of Ethiopia in 1984, nearly a million Ethiopians died from famine in the same year.

Personally, I do not support the idea of middle men in commodity markets because they end up 'eating' from both sides of the transaction. Producer's get poor prices and consumers are over-charged. What's more is that the system is prone to being turned into a cartel or a monopoly. Especially in Africa, where regulation is non-existence.

In April 2008 and after more than a decade of planning, Eleni Gabre-Madhin, launched Ethiopia's first commodities exchange, which she hopes will end the country’s persistent food shortages.

Her dramatic story will air on PBS Wide Angle starting on July 22nd, depending on the local programming. In my locality, the program is listed for 3 am on 24th July, which means I will have to record it.

More information can be found on the PBS website - Wide Angle: The Market Maker

Easy Money Has Been Made

I believe we are now at the point where the boys will be separated from the men (no offense to the ladies). The stock market seems trapped within a narrow trading range while the economy is getting worse, albeit more slowly.

Those who bought in the winter can thank their strong guts for one of the biggest stock market gains in recent times.

My bet is that the U.S. dollar will determine the direction of the stock market. Like before, when everyone and their friends were calling for a housing crash, everyone is now predicting that the dollar will tank. Only that we will be caught unaware like the housing crash.

Frankly speaking, I think commodities and emerging markets is where the next money will be made. Especially if the dollar does not hold. It may not happen in a few weeks or it could take a few months but as they say, where there is smoke there is fire.

Happy Independence Day

Until as late as two years ago, 4th of July independence celebration included a dazzling display of air force jets, a lot of fanfare and the grandiose fireworks display lasting for 2 to 3 days. Last year all this changed.

As housing prices began to tumble and job losses started to mount, cities have scaled down the 4th of July celebrations. In my locality, all that is left is the fireworks display. Complete with all the bells and whistle that can be expected from the 4th of July fireworks.

I have to say that the fireworks display has always been the climax of the celebrations especially after spending the afternoon barbecuing.

To everyone with the US who is reading this blog, happy 4th of July celebrations. Enjoy the Brats, hot dog's, hamburgers and what would independence day celebrations be without cotton candy.

Advertising Works?

Until I started my business, I used to be very skeptical about advertising. Now I understand why advertising is a billion dollar industry. Even with well known companies, like Wal-Mart, the best way to reach out and keep your customers is through advertising.

It is worth noting that there have been a few great companies that do not advertise. I think Amazon is one of them but this may have changed. That said, I'm doing a search of successful (i.e. profitable) companies that do not advertise and if anyone knows of any, they can write it in the comments section.

ATT To The Rescue

I have to give it up to ATT for taking customer service to a whole new level. I've been having problems with my wireless connections at home. When we signed up with Uverse, ATT provided us with a wireless router that is situated downstairs next to the cable DVR in the family room. However, my home office is not on the main floor. At first I had my desk in the basement and then later on I set up my home office upstairs where there is an additional room which is basically a balcony landing overlooking the living room. For some odd reason, the 2Wire router that ATT provided keeps dropping the signal and this can be frustrating especially when I'm running my FTP client.

I've tried calling ATT several times before but the resolution has always been unsatisfactory. This made me connect a wire from the router downstairs to my laptop upstairs.

This evening all that changed.

When I got home, there was a ATT truck at my neighbors driveway. I decided to check with the technician regarding my poor wi-fi connections. To my delight, the technician turned out to be the one who installed our internet a few years back. When I told him my problems he promised to pass by after he was done with the neighbors.

To cut the long story short, he not fonly ixed the wi-fi problem but he gave me a free 8-port Ethernet switch for networking all the computers. In total, he probably left me with $200 worth of hardware, which included a PC card and a USB wireless adapters on top of the pluglink Ethernet adapter. Using the electric sockets and the pluglink adapter, he was able to set up the router upstairs.

I've just tested Ethernet router and I am able to connect my laptop to the main PC and external hard-drive. My next step will be to try and install software onto my new netbook using the networked computers. After which, there will be no more hassles of trying to transfer files between my external hard-drive and my computers, including my work laptop.

As for the two Wi-fi adapters, I'll pass them to someone in Kenya as I do not need them. ATT on the other hand don't have to worry about losing me to the competition. A 10 minute deed and several pieces of hardware has won them a customer for life. Though they had already won me over with their cable plans that come with more international programming than the other comparable cable service providers plans.

Blogger Block

Apparently, the good people at Blogger think I am a spammer. I got an email from Google, notifying me that my blog had "been identified as a potential spam blog". My last post about the netbook could have triggered Blogger into thinking I am a spamblog.

What I don't understand is why it took Google more than 2 years to realize that I'm a spamblog.