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Investing in Open Source?
echrist1 asks: "I'm in my school's investment club, and I'm in charge of investing $10,000 (real money) into technology equities. Clearly I want to make a profit, but I also want to do something to help the Open Source movement. Does anyone know of mutual funds that invest specifically in companies that further Open Source?"
I'm assuming two things that are implied but not clearly stated in your question: 1) The money that you are investing - or at least some of it - is not yours, and 2) You like open source, but the owners of the money have not specifically requested an open source preference. If either of these are false, please ignore my post.
Assuming those two to be true, you should not even be considering the issue. If you are playing with someone else's money - even as a learning exercise - you have an obligation to act in their best interests. Otherwise, you're just doing a Halliburton on a smaller scale. Save your good intentions for your own money.
BTW, Sorry to criticize. I like the idea of supporting open source. It's just not the legally or morally proper thing to do here.
limiting yourself just to tech stock.
I'd stay far away from open source in the realm of investing. Open source naturally just has a disadvantage that...you know...it's FREE! Depending on how long you can keep it invested, I would put the majority of it in holographic storage technology like from InPhase http://www.inphase-technologies.com/investors/inde x.html. I personally have followed the development for years since I first heard of the technology and it's going to be commercially available within a very short time and with even just the experimental read/write speeds they've actually accomplished, it's gonna blow quantum, flash, and advanced magnetic storage away. Put at least some in google too if you wanna risk it but that's what people have been saying for years and it's never turned out bad :P And whatever's left over, put it in anything related to anti- global warming/mass starvation/weatger natural disasters technologies cuz you know those are gonna be huge in the next couple years.
Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
Invest in something proven,opensource does not have a trackrecord that i know off.Put it in other equities based on financial research and ratios.
The best way to support open source is to use the software and encourage others to use the software. Investing in open source is a long term benefit not a shot term one and what you get out of it is hard to put a value on; most companies invest because they themselves directly benefit from the labors of open source developers and it is mostly an investment in their own prosperity. If you are not in a software company and do not directly benefit from any open source product, I'd say invest elsewhere. Because I assume you want a return and you probably won't see a monetary one unless you have a product that directly benefits from an open source project.
This is my sig. There are many like it but this one is mine.
Maybe you've decided that open source will be the most profitable type of investment, but I think you chose open source for more ideological reasons. If your goal is simply to make as much money as possible, then pick your investments according to that goal.
Both of these companies invest heavily in open source, and are pushing Linux. I'd have recommended Novell as well, but I don't know what effect the Novell-Microsoft deal will have in the long term.
We all know what to do, but we don't know how to get re-elected once we have done it
You could always invest in Microsoft. Oh, I'm sorry, I can't even type that with a straight face.
Crack - Free with every butt and set of boobs
Free Software works because it doesn't depend on your money. Flush your money down the toilet, guess what, I keep hacking -- because I need that software to make my own money.
I also question the very premise of a "school investment club". Organized gambling in a national lottery system designed to fund and encourage greed and crime is one thing when done by adults, but do we need to encourage this in our children ? I think school activities should be limited to those that meet the ethical standard of not harming others.
My advice is to invest the money in BOOZE and HOOKERS.
Here's the plan:
One approach to finding out which funds might meet your needs is to look at which institutional investors have large blocks in the open-source companies you consider worthwhile. For example, we can look at the data for Redhat (and, yes, I'm laughing too at who is providing that data) and see that there are large positions in the company held by Fidelity, T. Rowe Price, etc. From that, you can check out the various funds that company offers and see if you can find one that matches your requirements. Taking a glance at our host's ownership information shows a large Fidelity block as well, but no other overlap I noticed. From this limited look, I conclude you should be looking at Fidelity's funds. That approach should get you on the right path. You can do the rest of the legwork--you're the student here, after all; I already know how to invest.
Red Hat
Google
Novell (hmmm?)
They are all solid, and all "good to open source", in some way.
Any technology distinguishable from magic, is insufficiently advanced.
"If you're an investor you can dump your money in the hole there."
That about sums it up. If you must invest in open source, look at the companies which offer tech-support: that's where lot most of the profits are.
Recently found a copy of the 1974 book, The Screwing of the Average Man. One of the early chapters is about how average folk got screwed in the late-60's stock market - funny accounting, etc. As I read it tonight, some 32 years after it was first released, I amazed at how "history repeats itself." The exact same things happened in the late-90's tech bubble.
The U.S. stock markets may be at or near record highs, but adjusted for teh inflation they'd still have to advance another 25% or so to match their bubble peaks. Where are the fundamentals that would justify another 25%? Corporate profits may be at record highs, but average folk are getting squeezed. The housing bubble has burst, foreclosures are going up. Ford recently got 35,000 employees to take a buyout aka paycut. What is the growing industry that will offer jobs that offer comparable pay?
Most Americans live in a media-induced Never-Never Land, where the American economy, stockmarket and military machines are invincible because they always have been. Never mind that this is demonstrably false (great depresion, 1970's inflationary recession, Vietnam, Iraq, etc) - we're conditioned via compulsory government schooling and the idiot-box (television) to have a short memory.
More on the Screwing of average folk...
I gave people $1 (1 ounce) silver coins last Christmas. Think I traded around 10 or 11 "Feral Reserve Notes" for each one. Silver is now up to $13.75 or so, so I'm looking at having to put out about 50% more funny-money paper if I want to do the same thing this year (coin dealers typically charge spot + $2, iirc). Inflation at work.
If I had another $10k, I'd split it between metals and Euros... As it is, I'm sitting on a couple hundred ounces of silver and a couple ounces of gold. Not a sure thing, but the economy we know is doomed. The stock market is terminal too, but the big money will be sure to get out first, in keeping with the traditional screwing of the masses (that's 'us' - me, you, and everyone who reads this comment who doesn't pull in $1million/year).
Actually, I'd buy more Earthboxes, potting mix, and fertilizer (already have plenty of seed). $10k could get me two pallets worth (200), and all the potting mix and f
Learn the rules so you know how to break them properly.
www.teslabox.com
You seem to be under the impression that if you buy $1,000 worth of Red Hat stock (for instance) that the money somehow goes to Red Hat. This is not correct.
The issuing company got their money at the IPO. When you buy that $1000 worth of stock, your $1000 goes to the previous stockholder, and *none* of it - not a dime - goes to the issuing company.
The only benefit the issuing company has - and it's an indirect benefit - is that if you buy that $1000 worth of stock you create a slight upward pressure on the stock price, which, in turn, will increase the "market capitalization" value of the company.
Frankly, if you want to help Open Source financially, your best bet is to take a percentage of the profits and donate it to your favorite non-profit Open Source entity.
-Maple Syrup
I'm going to go ahead and copy what I wrote the other day on the official ubuntu forum and see what you guys think of it
Hello
Now, I'm going to try my best to explain my idea, I am not great at executing ideas I have to people, so please bare with me.
I love ubuntu, and it's coming on fantastically, I see new specs added daily and they are very exciting to hear about.
I also love the fact that many ideas are incorporated into this system, such as bounties which offer money to devs making that particular feature come into ubuntu with a reward to the coder who covers it.
Personally, I have a small part-time job and do freelance design work.. I have done some work to ubuntu, such as GUI concepts to help pitch my ideas, but wish to do more in the future.
I have been thinking a lot about ubuntu and ways to quicken the pace of development and getting more people involved in the project.
Many people are doing a great job already, and every time I hear about another developer switching across to ubuntu it makes me very excited.
I have a proposition to pitch to you guys, I feel very strongly about this idea and really believe it could work brilliantly.
In simple terms, the idea is just an enhanced bounty system - with a few more features within the forum/launchpad to help the idea come to life.
In complex terms it goes like this:
First, we make a special place where specifications are able to be voted for once they have been approved, a bit like how the feisty forum allows people to post their idea / explain it and then other users are able to cast their vote / talk about it.
Well, this is great and I think it's doing a fine job - I'd like to still have this within the idea I'm explaining, but I'd like to take those ideas the users submit and explain, then allow people to vote for them as specifications in the launchpad. (a bit like digg.com)
These specifications get some advertisement, a bit of hype.. the popular ones get the most coverage of course because they are the highest ones in the list, and people are able to add cash to the one(s) they like the most via paypal (easily and quickly).
This would generate popularity and of course developers would notice this.
The second part of the idea is improving the actual way the people who cover the bounty-sponsored specifications are paid.
Instead of one person being paid the full sum of the bounty for doing all the work, the bounty cash is split up within sub-sectors, allowing people to get paid a little for each bug / needed feature implementation for the final spec to be covered and finalised.
Say a particular specification is suggested in the forums, the people discuss this - give constructive criticisms, and just the general behaviour the forum ideas cover. If the idea is good and many people feel it would work, a specification is made and a person under the authority to approve it does so. If the spec is approved, it carries onto the normal process to go into the launch pad under 'approved status'. Now, instead of this spec sitting there, it is allowed to be voted upon and donated with it's own donation box and people are able to see this total price worth within launchpad/another system.
Each little bug that is addressed will come with a bounty of a realistic price for the total outcome of the actual bounty
I also want to mention that people should be able to donate to ubuntu via a 'paypal' button on the front page, to help distribution of CD's/merchandise, but the money would also go into the features/bug fixing in the launchpad, so that the money is distributed to every single specification.
Even though not directly related, wouldn't this fuel development?
Say if this guy wanted to invest in ubuntu, couldn't his money really help if put into the above example I quoted?
I have been watching it as well. In fact, I remember it from the late 80's. The simple answer is that if you are investing OTHER peoples money, you must pay attention to what will make money. In fact, if you are here asking, then you really MUST pay attention to what will make money shortly. Considering the world situation, tech can be blown out in 100 different ways.
Try energy. Oil is a good one. It is almost certain that W's tax cuts will be removed (and soon), but the simple answer is that China and India are are on a tear. They will be increasing demand on ALL oil resources. I would look heavily at any oil company. In addition, consider nukes AND alternatives. High Oil prices combined with Global warming will force us down this path. Wind energy companies are good ones. GE and westinghouse power are interesting.
Finally, consider looking more around the globe. America is heading towards a major slow down. W has ran up a major deficit like Reagan did. In addition, he is spending all sorts of money on funding the war, tearing apart EPA, buying the most expensive drugs for seniors, etc, and even cutting alternative energy research WHILE giving tax cuts to oil. Combine with moving core manufactuering to China, and you will soon see a collapse in our money policies. It is only a matter of time before the dollars starts to sink and we will be forced to raise interest rates AND taxes to keep foreign money flowing into America. This would normally induce a major global depression (think 1930s), but enough business is globalized as to allow the other markets to move forward without us.
I prefer the "u" in honour as it seems to be missing these days.
And considering that companies like Amazon, Google, and Redhat have done better than companies such as MS over the last 5 years, perhaps, he should invest in them. Of course, a very good bellweather would be IBM since they are heavily diversified.
I prefer the "u" in honour as it seems to be missing these days.
Consider waiting till early next year and investing in the Spectra Green fund, a fund set up by Bill Clinton whose goal is to invest in, and actually make money using, environmentally friendly alternatives to fossil fuels. It's tech, it's a good cause, it will(hopefully) make money.
Monstar L
Why do you seek to invest in mutual funds? I am also an investor, but I never invest in mutual funds. Choose index shares wisely and you won't be disappointed. Why pay for analysts's salaries when we all know that the economy is more or less a chaotic system that no one can predict its behaviour? What is your time horizon? If you can wait for many years, then use the method of the Sage of Omaha, as described in Buffettology: Buy shares of undervalued companies in markets with good economics, and keep them for years (be reluctant to sell, as in buy and hold). This may not work if your time horizon is short, however, so you might like to pay some attention to seasonality and perhaps sell in May and go away.
MySQL is an established and growing open-source company that operates as a for-profit business. Seems like a good fit.
A Multiplayer Strategy Game for Mac OS X, Windows, and Linux
No company has done more to further Open Source than Microsoft. Look at Windows for example - would you want that to be the only OS on the market?
Consider also the Monkey Boy video - I'm being deadly serious when I say I saw that, then immediately switched to Mac.
If Microsoft didn't suck, there would be no alternatives.
Not sure if I agree with your Open Source investment plan, but, if you really want to find mutual funds that invest in Open Source companies (how many public companies fit THAT criteria anyway?), you can look up the institutional shareholders (i.e. big guys) for the company. For example Red Hat, the Yahoo Major Holders page (http://finance.yahoo.com/q/mh?s=RHAT) tells us that the "FIDELITY GROWTH COMPANY FUND" owns about 10% of RHAT shares. I can't name very many publicly trading Open Source related companies... I rather doubt that you'll find a fund that has is primarily OSS focused.
Mutual Funs? That's when everybody has a good time! Nyuk nyuk nyuk...
Procrastination -- because good things come to those who wait.
Dude, you're investing someone else's money... That means you have a bigger responsibility to those people than you do to any number of open source companies.
If it was your own money, I'd say go ahead and invest wherever you want. But since you're just "in charge" of someone else's money, you have an obligation to invest it wherever you'll get the best return.
It was a nice thought, but in this case you really should try to make money instead of social policy.
Here beginth the sarcasm.
I hear Novell does linux and I hear there stock is going to soar due to some deal they made with Microsoft. That's gotta be a win-win combination!
Here endeth the sarcasm.
(/me ducks from the flying penguin thrown at me)
Using the Freedom of Speech while I still have it.
Having just gone through a corporate acquisition, businesses that make money primarily off the labor of their employees are not considered attractive investments.
Theoretically, the value of a business should be the net present value of its future income, discounted by risk. Consulting and services are perceived as more risky than revenues from intellectual property, therefore an open source company is likely to be valued less than a proprietary software company of equal profitability. In fact, a money losing intellectual property (IP) based business may have greater attraction to investors than a moderately profitable service business.
Personally, I think the risk differential is exaggerated, but in fairness the IP of a proprietary software company is an asset that could, in the worst case, be liquidated. Also, labor is expensive and it is difficult to grow labor intensive businesses quickly. A well run consultancy usually can be characterized by conservative growth goals and high efficiency. This places constraints on achieving high ROI. However, within those constraints you may find a solid, undervalued investment.
Of course the fun of investing is finding exceptions to the rule. I think most people who like to do their own investing think of themselves as contrarians. The flip side of the bias towards proprietary business is that service businesses may offer the chance to buy a share of future income that is relatively undervalued. However, this requires more homework, because you're placing relatively more faith in the management and sales team.
There is one kind of intellectual property that an open source company can avail itself of: trademark. Red Hat was for many years practically synonymous with Linux in the minds of many managers. It is still a name that commands immediate attention. If you are looking to make a killing, as opposed to merely outperforming the market by a bit over a long period of time, I think this means that you are looking for an outfit that has a plan that will create a brand that will command respect.
Brand is an instance of a broader class of assets: things which give you an unique competitive advantage with customers. Perhaps you are looking not for a software company, but some kind of consumer facing retail or service outfit that is an open source contributor. Maybe you are looking for a company that has uses open source in an unique hardware device. If you had enough money to place VC (which you don't), you could look for companies with innovative plans to entrench themselves in a vertical market -- a difficult but underexploited path for F/OSS.
You have to decide what kind of investor you want to be. All investors who hope to beat the market are contrarians, but you can be contrary in different ways. Some investors are like the tortoise in the fable: they beat the market by focusing further down the path to the finish line than most. Me, for example. I like money, but I have other things I'd rather be occupying my attention with, so I check in on my investments maybe twice a year tops. While the open source movement as a whole is something that will continue to grow and prosper, I don't think a single company that is highly dependent on F/OSS is an appropriate investment for the tortoise except as a part of a diverse portfolio.
Other investors are hares looking to beat the market by finding something before others have noticed it. Maybe that's you. The important thing is to be very critical of your argument for investing in something on that basis. Creative people can envision virtually anything working, and are very good at selling blue sky scenarios to others like themselves, and ready to buy the scenario when it piques their imagination. Mark Twain was no sucker, but he lost his fortune investing in high tech printing equipment.
Remember you are not investing in "open source" or "technology", you are backing a specific business plan. Is the data in that plan verifiable and correct? What way
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Bullshit indeed. Two wrongs don't make a right, and you can't be the "good guy" by using immoral means. Whatever problems you have with corporate morals or behaviour, turning into an immoral asshole yourself and blowing other people's money to reward people you like (whether it's your girlfriend or your favourite OSS developper) is _not_ a moral high ground.
No, I don't think you fully grasp that, seein' as you promptly handwave it as some secondary consideration. That is the _whole_ point.
A corporation, in the end, uses its own money. And it is _supposed_ to use them in whichever way it benefits itself. Be it charity to polish its PR image, or encouraging developpers for their system, or just buying friends, or whatever. Even when we buy their shares we do so, basically, on the assumption, "go do something good for yourself with these money, and incidentally I'll benefit too from your growth and good fortune."
An analyst is _not_ dealing with his own money. He's acting on behalf of other people, and under the implied relationship of trust that he'll act in their best interest. Anything else is violating that relationship of trust. Unless those people explicitly aggreed to use their money for the global good of the economy or whatever noble goals you may have, it is simply wrong to basically steal from them to pursue those noble goals.
If you will, consider the following two cases, because they're _fundamentally_ different: (A) corporation X gives $10,000 to charity, vs (B) stock market analyst Y takes $10,000 from other people's money and gives them to charity. The former is good and commendable, the latter is plain old theft and morally wrong. You cannot be the good guy, when that "good" is based on theft and dishonesty.
We're not talking even some kind of Robin Hood taking from the oppressors and giving to the poor oppressed peasants. We're talking about blowing $10,000 out of some kid's college fund or out of some grandma's pension fund, to pursue your own bullshit ideals instead of their interests.
Which is still bullshit if those people didn't explicitly aggree to use their money for that. Just because something is some vaguely defined "greater good" or "common long term good", doesn't make it right to use dishonesty and theft to forward that goal. See the charity example again. Charities are good for society too, but that doesn't make it right to steal someone's college fund or pension fund to support your favourite charity. If you want to forward the "greater good" or "common good", do it with your own money, not by stealing other people's money.
"Probably someone else will block it anyway" is not an excuse for dishonesty. I'm sure that if someone from your bank emptied your account and gave them to a charity, you wouldn't think it's ok if they say, "oh, I thought they'd catch me and stop me in time."
A polar bear is a cartesian bear after a coordinate transform.
Where the heck do you go to school that people in the investment club have $10k to play with?
Nothing to see here. Move along.
1. Invest in Open Source
2. ????
3. Profit!