Showing posts from May, 2014

How Google got Driverless Cars on the Road + Why Google Will be World's Most Dominant Company in a Decade

Currently in Vegas working at Starbucks on Google Internet. SOOOOOOO much faster and superior to that Shitty AT+T service they still offer at the one I frequent in LA. Love how companies think they can offer crappy service and retain hearts and minds, this is why competition rocks.
I am all about Google and have been since '09. Watch what happens when the driverless car comes out. And in case you're following, here is a really good article for you about how Google managed to hurdle the normal BS legislative process to get Driverless Cars on the road.

Unless idiot lawmakers and special interests put in un-hurldlable  roadblocks, Google will be the world's most dominant company in a decade, and the American leader in robotics. Kudos to the politicians/ govt workers represented in this column.
Let's hope all this technology like drones and robots benefits mankind, and that not for evil (like Islamic extremists getting hold of easy use technology to spread their vitriolic …

Bearish on Apple Stock? - You're Looking in the Rear View Mirror

Bearish pundits of Apple stock often analyze the numbers and point to increased competition in the smart phone and tablet space. They are right in what they say, but they don't present a complete picture. They primarily look in the rear view mirror.
Rarely do these "backward thinkers" and I mean that literally, include the possibility that Apple might have already created a new and novel product that they will unleash.
Eventually most new awesome products become commoditized. Look at the HP Laser Jet which sold for thousands of dollars in 1980, and that's in 1980's dollars. A smaller, faster, much better laser printer today costs $150 or something in 2014 dollars.
Innovation is the key to growth and maintaining the brand. Steve Jobs predicted it would take 5 years for the competition to catch up to Apple after the release of the iPhone (which it has largely) so to have your bearish thesis be solely that the space is being commoditized, which it is, and cast a bli…

Will Walmart beat-up on Amazon with physical Locations?

A company that is always on the defensive, loses customers to the innovator. Do this enough, and you are a shell of the giant you once were, and your stock price follows. With Walmart and Best Buy losing sales and customers to Amazon, they have recently invested a lot of money to bolster their online divisions. (especially Walmart) 

So, who is destined to be the winner? Let's take a look at the scorecard right now. 

1. Online experience-  Amazon right now has the advantage over Walmart given the superior design of their website and much better search engine. 
However, with the amount of money Walmart has been putting into its online operations, I expect this lead to narrow pretty quickly. 
2. Shipments: Amazon Prime shipping is just fine for me, I rarely need anything outside of groceries quickly. In fact, using Prime is way better than Walmart whose orders arrive anywhere from the next day to a week after my purchase.  
3. Infrastructure: Using local distribution centers will certainl…

Will Microsoft Die Altogether? # Out of Business

Some pundits point to the following study by Softwatch as evidence that Microsoft will die altogether:
"Analyzing real usage of Microsoft (MS) Office in dozens of enterprises comprising over 150,000 total users. The benchmark shows that on average an employee only spends 48 minutes a day on MS Office applications, most of it on Outlook for email. It also reveals high numbers of inactive users in the organizations; in particular PowerPoint was not being used at all by half of the employees. In addition, most of the users of the other applications used them primarily for viewing and light editing purposes, with only a small number of heavy users: 2% in PowerPoint, 9% in Word and 19% in Excel.These results are in line with what industry analysts have stated that companies overspend on licenses that are not being used ... by transitioning light users from MS Office to Google Apps, companies can save up to 90% on their Microsoft licensing fees."
as someone who has been saying that…

Does Amazon Ever Have to Earn a Profit?? How to Value Shares

Amazon is branching out at such a rapid rate it's amazing. Everything from developing robotics on the floor to speed shipping, fulfillment centers for same day delivery, drones, HBO shows for Amazon Prime, the list goes on and on and on ... 
Meanwhile, investors are frightened of the high Price to Earnings ratio, which is one the more worthwhile metrics to value a company by, especially for a mature company as it indicates if profits maintain their current pace and all earnings were paid out to investors, how long it would take before you recouped your original investment. 
So,when you see a PE of 150 or whatever Amazon's happens to be on the day you read this column. 

According to Amazon Bulls, the theory is that  as Amazon's growth opportunity slows, CEO Jeff Bezos will cut spending, and the savings will go directly into the bottom line, meanwhile Amazon would have cultivated a Giant base of loyal customers that enable revenues to stay stable. It's why Amazon puts such …

Netflix/ Amazon Prime or HBO-- Who’s Winning the Streaming Video Battle?

HBO and Amazon recently announced a deal where Amazon will receive rights to air old HBO content like the Sopranos, The Wire, and several other shows. The deal includes content aired 3 years after its original air-date, but excludes Game of Thrones, True Detective, and Sex In The City. Let’s break down the streaming video competitors and see who wins and loses.
The Big Winner- HBO HBO wins on a number of levels details were not released, there is no doubt they’ll be receiving a pretty penny for the content they are licensing out. 2.Viewers seeing the high quality of the shows will ancillary sales of HBO content unavailable on Prime, most likely via Amazon.3.Seeing the high quality shows makes it more likely they’ll subscribe to HBO.

Amazon Amazon just made their Prime membership much more attractive. They’ll also generate additional commissions from sales HBO’s other content I described above. The only question in my mind is how much they paid for the licensing fees, but i…

Charlie Munger Witty Quotes From Berkshire 2014 Annual Meeting

Charlie Munger is one my favorite investors/ comedians. His wry humor is full of not only wit but wisdom. To that end, as an investor, I think it's worth learning from him, and I have posted here some of my favorite quotes of his from the Berkshire Annual meeting 2014. 

On pay for corporate directors:
"You start paying directors of corporations two or three hundred thousand dollars a year, it creates a daisy chain of reciprocity where they keep raising the CEO and he keeps recommending more pay for the directors." 

Munger, who's net worth is about 1 billion dollars as a result of his stake in Berkshire, and both himself and Buffett get a salary of $100,000 from Berkshire Hathaway, a payrate which has remained the same for the last 25 years ...
On pay for CEO's and work habits:
Does the Supreme Court work less hard because they don't get paid like corporate executives? We have some corporate directors who draw more pay than members of the Supreme Court. That's …

The iWatch and Wearables- the first steps Towards Human Immortality

The first wearable computers, the Nike Fuel Band, Jawbone, and the Samsung Gear have largely been duds, with Nike announcing it would stop producing the Fuel Band altogether.
Meanwhile, Apple die-hards and the investment community eagerly await Apple Inc’s first foray into the wearable marketplace.
Round 1 of Wearable Computing The first round of the wearable marketplace battle appears to won be Pebble’s watch, according to Forbes for simple reasons such as long lasting battery life, which Samsung lacked, and the ability to be useful for multiple applications, unlike the Nike fuel band.The release of iWatch, or whatever Apple has under-wraps, might fare no better.  Eventually however, the right combination of useful applications (not just heartbeat rate) will be unearthed, and have a similar effect as the revolutionary iPhone did in the world of smartphones, spurring massive numbers of sales and intrigue into the wearable space.  There will undoubtedly be a tremendous amount of money …

Are EBay Executives Stupid? Ebay’s Tax Bill High + Makes NO Sense Why

Ebay recently announced a decision to repatriate (ie- bring back 9 billion dollars worth of cash back to the US) and pay an obscenely high tax bill of 3 billion dollars. Billion. Why? Here must be a reason that I am not considering. Let’s say that Ebay wants to use that cash to make a US based purchase of a company, and here my suspicion is it will be mobile payment player Square, repatriating the money and paying such a high tax rate simply makes no sense.
The Apple Way You see, now you are giving away 3 bills to Uncle Sam (remember when 3 bills used to be $300, talk about inflation) of shareholder value, and for what? Why not borrow the 9 billion you need at what are still historically low interest rates, and use that to fund your activity. This is what Tim Cook and Apple have done. Borrowing money to fund share repurchases, and avoiding bringing over the massive cash-horde they have overseas, and giving away money to the US Treasury.
There’s Always a Chance Furthermore, much of t…

Is There Any Chance Apple Might Drop Pandora from iOS?

A columnist I generally enjoy, Rocco Pendola of the TheStreet today suggested that there is an outside chance Apple might drop Pandora from the app store to bolster iTunes Radio. Would they ever do so? Aside of the fact that Apple generates income from Pandora when someone becomes a premium subscriber, which is no doubt a drop in overall Apple revenues, the notion is absolutely ludicrous. People would migrate to Android out of protest, Apple would lose much of the goodwill they've built and built and built for years. The ability to drop a company you decided to go to competition with from your platform would very likely attract government anti-trust. The media would paint Apple as evil and ruthless. This idea is a complete non-starter.
It’s always good to think differently, try to predict various possible outcomes, but the negative ramifications of this idea so far outweigh the positives it is a joke.