Rating: 
Summary: Insightful!
Review: Imagine that companies throughout the economy had access to new, better technology every year, and made better products without raising prices - in fact, while cutting prices. Now imagine that the regulators and policymakers used outmoded measurements and models that ignored these quality improvements and this downward price trend. Imagine that the Federal Reserve saw a risk of rising prices even when prices were falling. Imagine that the Fed kept tightening the economy unnecessarily, sending interest rates up, slowing growth, inducing stock market crashes and recessions, and doing the opposite of what it should. If you can imagine all this, you have a picture of U.S. economic reality as seen by author Graham Tanaka. It's a picture no one, especially investors, should disregard. We found his book immensely interesting - too long by half, with too many repetitious references to his previous publications (perhaps just his way of saying, "I told you so"), often tendentious and labored, but not to be ignored. Just be cautioned: this sounds somewhat like the bubble speak we heard at the end of 1999 and the beginning of 2000 - other times of strong growth without inflation.
Rating: 
Summary: A Must Read Book!
Review: Mr. Tanaka did a very good job with this book. He presented us with both new and old theories about investing. The chapters are in depth and concise, which provides the reader with both, the necessary background and his thought out theories. Mr. Tanaka gives us a new and innovative perspective on how the economy will "ignite" in the upcoming future.The theory of Digital Deflation is solid! It is rooted! And it holds true! Technology improves every year; year after year we see new models of phones, PCs, laptops, etc. always superceding the previous ones. However prices remain relatively the same. Tanaka explains this phenomenon as "Digital Deflation," not in the sense that the prices are falling, but in the sense that the consumers are getting more for their money. In other words, "Digital Deflation" is a good thing. As Tanaka puts it; the product is "Faster, Better, Cheaper!" Tanaka also explains why some theories work and why others don't. He reveals the many benefactors that helped the economy boom during the 1990s; at the same time proving the inaccurate data that the government used to measure inflation. He explains why our economy was flourishing, and how we could go back to those good times. In addition, he gives investors the information needed for them to capitalize in their investments in the long run. Tanaka takes the mystery out of the New Economy. I was very impressed by the depth of research, the effort put into this book, and interviews with some of the most influential leaders of the "Digital Revolution" era such as Michael Dell and Gordon Moore. The tone used is really profession, formal, and captivates you. Definitely, you must read this book if you want to understand how to invest in the New Millennium. It is a must have for all investors!
Rating:
Summary: A Must Read Book!
Review: Mr. Tanaka did a very good job with this book. He presented us with both new and old theories about investing. The chapters are in depth and concise, which provides the reader with both, the necessary background and his thought out theories. Mr. Tanaka gives us a new and innovative perspective on how the economy will "ignite" in the upcoming future. The theory of Digital Deflation is solid! It is rooted! And it holds true! Technology improves every year; year after year we see new models of phones, PCs, laptops, etc. always superceding the previous ones. However prices remain relatively the same. Tanaka explains this phenomenon as "Digital Deflation," not in the sense that the prices are falling, but in the sense that the consumers are getting more for their money. In other words, "Digital Deflation" is a good thing. As Tanaka puts it; the product is "Faster, Better, Cheaper!" Tanaka also explains why some theories work and why others don't. He reveals the many benefactors that helped the economy boom during the 1990s; at the same time proving the inaccurate data that the government used to measure inflation. He explains why our economy was flourishing, and how we could go back to those good times. In addition, he gives investors the information needed for them to capitalize in their investments in the long run. Tanaka takes the mystery out of the New Economy. I was very impressed by the depth of research, the effort put into this book, and interviews with some of the most influential leaders of the "Digital Revolution" era such as Michael Dell and Gordon Moore. The tone used is really profession, formal, and captivates you. Definitely, you must read this book if you want to understand how to invest in the New Millennium. It is a must have for all investors!
Rating: 
Summary: Dow 30,000
Review: Sadly, another book like Dow 20,000 attempting to justify the excessive valuations of equities in their portfolio. You'd think one would learn that there is no "new economy" after the last bubble where these technology buffs lost more then half of their assets (perhaps that doesn't mean too much to a portfolio manager, after all it's not their money they're losing), but hope is a good thing, it's just no substitute for research. Were steel, concrete, railroads, the transatlantic telegraph, aircraft, or electricity any less revolutionary when they appeared? Certainly not. It's just that those with a myopic view of history somehow believe that the era in which they occupy is "new". It may be recent, but it's not new.
Rating:
Summary: Dow 30,000
Review: Sadly, another book like Dow 20,000 attempting to justify the excessive valuations of equities in their portfolio. You'd think one would learn that there is no "new economy" after the last bubble where these technology buffs lost more then half of their assets (perhaps that doesn't mean too much to a portfolio manager, after all it's not their money they're losing), but hope is a good thing, it's just no substitute for research. Were steel, concrete, railroads, the transatlantic telegraph, aircraft, or electricity any less revolutionary when they appeared? Certainly not. It's just that those with a myopic view of history somehow believe that the era in which they occupy is "new". It may be recent, but it's not new.
Rating:
Summary: Digital Deflation - A Myth
Review: Tanaka states his reason given for higher P-E ratios relies on the belief that accelerating productivity gains that will drive earnings growth to higher levels. Since stock prices are the present value of future dividends, it would seem natural to assume that economic growth would raise future earnings and dividends and be an important factor influencing stock prices. But this is not necessarily so. The determinants of stock prices are earnings and dividends calculated on a per share basis. Although economic growth influences aggregate earnings and dividends favorably, economic growth does not necessarily
increase the growth of per share earnings or dividends. The reason for this is that economic growth requires increased capital expenditures and this capital does not come freely. Implementing and upgrading technology requires substantial investment. These expenditures must be funded either by borrowing in the debt market or by floating new shares. The added interest costs and the dilution of profits that this funding requires place a burden on the firm's bottom line profits. Many investors believe that investment in productivity-enhancing technology can increase profit margins and spur earnings growth to permanently higher levels. But "cost-saving investments," frequently touted as a source of increasing profit margins, only temporarily affect bottom-line earnings. As long as these investments are available to other firms, competition will force management to reduce product prices by the amount of the cost savings and extra profits will quickly be competed away. In fact, capital expenditures are often undertaken not necessarily to enhance profits, but rather to preserve profits when other firms competitively adopt the same cost-saving measures. The data on economic growth and earnings back up these points. Real per share earnings growth from 1871 through 2001 has been a paltry 1.25% per year, considerably below the nearly 4% growth rate of real GDP.6 Because of the requirement to fund capital expenditures, earnings per share growth falls far behind aggregate economic growth over the long run. In fact, the 1.25% growth in real per share earnings can be explained solely by the investment of retained earnings and not by aggregate economic growth. Perhaps this is why Tanaka has has underperformed the indices over his career.
Rating:
Summary: Shining a Light on Statistics
Review: While statistics from the Government and other sources get the headlines, frequently "drilling deeper" is even more important. In an interesting and well written book, Graham Tanaka has debunked a lot of myths. While many will disagree with parts of his theories, depending upon their own perspectives, Tanaka has compiled a well thought out explanation of why inflation in this country has been, and continues to be, significantly overstated. Since the policy ramifications and the true valuations of the stock market are dependent on statistical underpinnings, Tanaka's facinating research shines a light on what is truly going on. While I suspect all of us who use technology and appreciate the ever increasing value it provides, the underlying value has not been quantifed as significantly until Tanaka came along with his research. Even if you don't agree with Tanaka's hypothesis or his stock market valuation conclusions, this book forces you to think. Hopefully it will be widely discussed among those in policy making roles!
Rating:
Summary: Shining a Light on Statistics
Review: While statistics from the Government and other sources get the headlines, frequently "drilling deeper" is even more important. In an interesting and well written book, Graham Tanaka has debunked a lot of myths. While many will disagree with parts of his theories, depending upon their own perspectives, Tanaka has compiled a well thought out explanation of why inflation in this country has been, and continues to be, significantly overstated. Since the policy ramifications and the true valuations of the stock market are dependent on statistical underpinnings, Tanaka's facinating research shines a light on what is truly going on. While I suspect all of us who use technology and appreciate the ever increasing value it provides, the underlying value has not been quantifed as significantly until Tanaka came along with his research. Even if you don't agree with Tanaka's hypothesis or his stock market valuation conclusions, this book forces you to think. Hopefully it will be widely discussed among those in policy making roles!
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