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The Cody Blog: Cody on RM: The Long-Term Bull of Free-Flowing Information

Thursday, August 17, 2006

Cody on RM: The Long-Term Bull of Free-Flowing Information

The Long-Term Bull of Free-Flowing Information
08/17/2006 2:35 PM

We all focus on the Googles and Texas Instruments of the world when we talk about the information revolution, but there are implications are much, much bigger than just whether or not Google wins the next MySpace or AOL advertisement delivery bid or not. I argue that the incredible revolution of free-flowing information (and capital, which I will address again in an upcoming post) is the very reason that China, India and the rest of the developing world will become so economically viable.

Want a bullish counter to the endless drone of "we are doomed eventually from our twin deficits, profligate Fed, etc."? There you have it. I sure won't argue that we're going to enter some period of Utopian peace. But just as the magnitude of today's global issues has changed -- we've gone from discussing war deaths in tens of millions to tens of thousands -- so too does our ever more informationally and economically connected globe drive other remarkably bullish changes.

A story on the front page of today's Wall Street Journal underscored this revolution, perhaps without even meaning to:

Why Ping-Pong Star Had to Spend a Week In a Cucumber Patch
Rowdy Chinese Player Got A Taste of the Simple Life; Shades of Mao Zedong

For many, talk of the Cultural Revolution remains taboo. The Communist Party officially condemned the episode in 1981, but fears too much discussion today about its role could damage its reputation. Schools don't teach about how Mao and other party leaders exhorted hordes of youthful "Red Guards" to destroy temples, harass intellectuals and, often, denounce their parents.

See, the state-sanctioned information flow that is taught in the state-sanctioned schools in China still tries to deny the truth. And while China does actively try to stem access to information by blocking certain Web sites and search terms, they certainly can't block it all in this day and age. And the Communists (or any other politicians) who try to continue to lie about reality will fail to convince anyone.

Another item in the Journal reinforces my thesis:

An Entrepreneur Has Quixotic Goal Of Wiring Rwanda
Greg Wyler's Internet Outfit Offers High-Tech Service In War-Ravaged Country
'A Booming Metropolis!'

MOUNT KARISIMBI, Rwanda -- Greg Wyler, an American tech entrepreneur, dreams of bringing the Internet to this troubled country. There are a few hurdles. One is a battered communications tower atop this 14,787-foot volcanic peak. The air is too thin for helicopters to transport the several tons of equipment needed for repairs. Instead, it has to go by hand.

In April I wrote in the Financial Times exactly about how burgeoning access to telephones and the Internet is by far the most important development for Rwanda and other places of horror in Africa. Forget "aid" -- the best way to help these places is to invest in them. And the gains will be huge as the ramifications of networking, communicating and free-flowing information forever alter the balance of power in these places.

My near term caution notwithstanding, one of the most important tenets of my being so bullish on the markets, the economy and especially society over the next few years is the free flow of information and the impact it will have on all facets of society. The masses -- all of us -- have always been subjected to compromised, biased information flow. In this country, the information flow has mostly been controlled by massive media titans who focus on the very politicians, issues and events that they have vested interests in. In too many countries, the information flow has been controlled by corrupt, oppressive governments.

As the old saying goes, "Freedom of the press belongs to those who own the printing press." And as I've written before, for the first time in history, the printing press is free. Whether we're talking about blogs, which have completely eviscerated the need for any capital to publish information, or podcasts or YouTube, the results are the same: Information flow is no longer controlled by anyone but the content creator.

And while each and every one of us will always have innate biases in our writing and therefore compromise the "truth," there's no arguing that having no filter between writer and reader is infinitely better than the many layers which in the past always had to approve any information flow. That is, we get "better" information without all the filters. Moreover, having many of sources for information that provide for triangulation of the truth is always better than having few sources that can collude with and/or feed off each other.

As this information flows ever more freely and often and can be accessed by ever more people through new devices and sources, corruption, coercion and, as I wrote in that FT article, even genocide become ever more difficult to carry out. Why? Because information flow is always the enemy of evil -- evildoers try to hide and don't brag about their actions for a reason after all.

People keep asking me when I'll get aggressive in the market again. I'm working diligently on finding some of the best-positioned companies to drive this revolution in the developing world. Motorola is on top of my list for its WiMax and cheap handset businesses. There are many more, and I would welcome any ideas from readers via either email or on our own revolutionary town hall Comments board.

At the time of publication, the firm in which Willard is a partner was long Google, though positions can change at any time and without notice.


Anonymous maximo Zeledon said...

What about Latin America Cody? How optimistic are you about our southern neighbors? South American firms are becoming quite good at doing business with China and India. Venezuela might have a pseudo socialist leader, but he certainly understands that trade and globalization makes Venezuela richer. And there’s Brazil, Chile, and Argentina. Are we neglecting our own backyard? Companies like America Movil and Cemex are huge.
I would love to hear your thoughts on this subject.

8/18/2006 01:06:00 AM  
Blogger BJ said...

"Because information flow is always the enemy of evil -- evildoers try to hide and don't brag about their actions for a reason after all."

I wonder what the most secretive administration since Nixon is trying to cover up....

8/18/2006 04:13:00 PM  

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