I-trax Inc. is an AMEX listed security that has been trading in a range between $2.39 and $4.69 over the past year. With 40,199,350 shares outstanding, a recent price of $4.15 gives a total market capitalization of $170,445,235. While there are certainly larger companies, I-trax Inc. has definitely earned its place in the pack. Last year, I-trax Inc. created $0.02 in earnings for every share outstanding.
I-trax Inc. is currently priced by the market at 0.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.
With a share price under $50 a share and earnings per share below $1 a share, I-trax Inc. is unlikely to be an interesting value proposition.
Showing posts with label Productivity. Show all posts
Showing posts with label Productivity. Show all posts
Sunday, July 15, 2007
Monday, June 4, 2007
The Labor Market Effects of Immigration
Immigration in the world today is largely an economic phenomenon. Despite the numerous differences in the structure and function of governments throughout the western world, the world's people are overwhelmingly migrating to the United States, Canada, and Western Europe at the expense of Mexico, Central and South America, Eastern Europe, Asia, and Africa. Indeed, looking at world immigration flows on a purely national basis paints a picture of migrants that move unerringly straight toward the largest concentration of wealth in their immediate proximity. The United States is the destination for well over 95% of Mexican migrants and Western Europe has a similar monopoly on Eastern Europeans.
Given the obvious economic incentives for the immigrants themselves to go wherever their lives will be most quickly improved, the only worthwhile area of study is on the populations already in the destination country and those remaining behind.
For those communities that send a significant portion of their population abroad, immigration is a mixed blessing. The local economy is likely to swell dramatically with remittances from abroad, but the workforce will be decimated by the loss of many of the best workers who receive the greatest potential benefit from moving away. So-called "brain drain" is a very real possibility, but wildly overpopulated countries like China or India are likely to receive competing benefits that overwhelm that force.
Communities that welcome numerous migrants, either explicitly willingly or not, are likely to feel a palpable sense of anger toward those migrants when they add to the labor market and drive down prevailing wages. But immigrants don't join the workforce solely as a source of cheap labor. If the immigrants have any degree of higher education, they are significantly more likely than the native population to start their own small businesses. In a modern service economy, of the type that dominates many of the world's immigration magnets, small businesses that employ fewer than 100 workers are actually one of the greatest sources of job creation. While most immigrants will not likely immediately start a new business upon their arrival, over the course of their lifetimes they are more likely than the general population to choose this path.
The ultimate labor market influence of immigration is likely to be a steep decline in the value of the goods and services that immigrants can produce, and a concomitant rise in the living standards of everyone else in society that is only a consumer of those goods and services.
Given the obvious economic incentives for the immigrants themselves to go wherever their lives will be most quickly improved, the only worthwhile area of study is on the populations already in the destination country and those remaining behind.
For those communities that send a significant portion of their population abroad, immigration is a mixed blessing. The local economy is likely to swell dramatically with remittances from abroad, but the workforce will be decimated by the loss of many of the best workers who receive the greatest potential benefit from moving away. So-called "brain drain" is a very real possibility, but wildly overpopulated countries like China or India are likely to receive competing benefits that overwhelm that force.
Communities that welcome numerous migrants, either explicitly willingly or not, are likely to feel a palpable sense of anger toward those migrants when they add to the labor market and drive down prevailing wages. But immigrants don't join the workforce solely as a source of cheap labor. If the immigrants have any degree of higher education, they are significantly more likely than the native population to start their own small businesses. In a modern service economy, of the type that dominates many of the world's immigration magnets, small businesses that employ fewer than 100 workers are actually one of the greatest sources of job creation. While most immigrants will not likely immediately start a new business upon their arrival, over the course of their lifetimes they are more likely than the general population to choose this path.
The ultimate labor market influence of immigration is likely to be a steep decline in the value of the goods and services that immigrants can produce, and a concomitant rise in the living standards of everyone else in society that is only a consumer of those goods and services.
Wednesday, April 11, 2007
Continued World Productivity Rate Growth Questionable? Please!
The Financial Times reports that worldwide economic growth is unlikely to maintain the momentum that has allowed it to grow at the "highest sustained rate since the early 1970s". Productivity in the United States at least has been driven by increased returns to almost all sectors of the economy as a result of information technology. This technological growth is actually preferable to the one-time growth that occurred in the 1970s due to the entry of women into the labor force because it is likely to continue, even if at a diminished rate, after the initial spurt of growth.
The IMF thinks lack of progress on multilateral trade liberalization, the costs of addressing global warming, and aging populations will all weigh down growth. Which while absolutely true, completely misses the point.
Economic growth in the United States is coming almost entirely from the service sector. The material well being of most Americans is unlikely to increase dramatically in terms of the amount of stuff, but it continues to advance in terms of the quality of the goods we own. Back in 2001, Apple was still primarily a computer company and everyone still listened to Cd's. Now 100 million Ipods later, people have negligibly more music devices, but their new music options are light-years ahead.
GDP, while still immensely important to economic analysts, is an anachronism. Our most basic economic statistic was developed to determine the United States' capacity to improve its industrial production for WWII. But now that the Cold War is over, the best measure of our well-being is not how many computers we produce, but how much number crunching they are capable of doing. Economists have trouble quantifying how much better televisions have gotten since plasma and LCD screens, but nothing is capable of measuring the improvement in our lives caused by something completely new - our ability to seamlessly communicate information over the Internet at almost no cost.
Right now the Internet's market capitalization is closely tied to the porn industry and advertisers. But just like television is mostly about what happens between commercials, the Internet is so much more than a new way to sell diapers.
The service economy is most perfectly leveraged over the Internet. One guy in his basement can create a great new piece of software and instantly send it out to millions of people across the globe. And if his video editing skills are any good, he could change the course of history by affecting the ongoing presidential campaign.
The world is unlikely to continue to grow in the same way that it grew in the past, but no serious person is going to be willing to go back once they experience a qualitatively better economy.
The IMF thinks lack of progress on multilateral trade liberalization, the costs of addressing global warming, and aging populations will all weigh down growth. Which while absolutely true, completely misses the point.
Economic growth in the United States is coming almost entirely from the service sector. The material well being of most Americans is unlikely to increase dramatically in terms of the amount of stuff, but it continues to advance in terms of the quality of the goods we own. Back in 2001, Apple was still primarily a computer company and everyone still listened to Cd's. Now 100 million Ipods later, people have negligibly more music devices, but their new music options are light-years ahead.
GDP, while still immensely important to economic analysts, is an anachronism. Our most basic economic statistic was developed to determine the United States' capacity to improve its industrial production for WWII. But now that the Cold War is over, the best measure of our well-being is not how many computers we produce, but how much number crunching they are capable of doing. Economists have trouble quantifying how much better televisions have gotten since plasma and LCD screens, but nothing is capable of measuring the improvement in our lives caused by something completely new - our ability to seamlessly communicate information over the Internet at almost no cost.
Right now the Internet's market capitalization is closely tied to the porn industry and advertisers. But just like television is mostly about what happens between commercials, the Internet is so much more than a new way to sell diapers.
The service economy is most perfectly leveraged over the Internet. One guy in his basement can create a great new piece of software and instantly send it out to millions of people across the globe. And if his video editing skills are any good, he could change the course of history by affecting the ongoing presidential campaign.
The world is unlikely to continue to grow in the same way that it grew in the past, but no serious person is going to be willing to go back once they experience a qualitatively better economy.
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