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Alex Cho

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  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    It evolved? Contradict the father of value investing? No, you're just being inconsistent. Everything was trading at a discount in 2009. I paid like 10 cents on the dollar to buy Citigroup at $1.20 per share. That's value investing, and it tends to work extremely well when markets are extremely oversold. Apple traded at $80 per share back in 2009, there were very many companies growing at high rates while trading at low P/E. Also, in a market where the mean valuation is consistent with the long-term trend line, value under-performs and momentum outperforms.
    Apr 7 02:42 AM | 1 Like Like |Link to Comment
  • Facebook: Stay With The Leader [View article]
    Interesting point in terms of nominal value, but in terms of number of shares it still stacks the same, right Bill? So let's say Facebook share prices increase, then the people who accepted Facebook's stock as payment, would end up riding along for the upside, and when factoring that consideration in, Facebook may have overpaid, because these businesses could wind up worthless while Facebook is a cash generating cow with extremely healthy margins. While, it's doubtful that WhatsApp, and Instagram won't be accretive, what about Oculus, that was a pretty huge disaster. Sure, I may be wrong, but could Facebook push out enough volume for a niche device to break-even and perhaps earn profit on the original acquisition value?

    Yeah compared to peers I won't deny Facebook is pretty cheap. That's good, and it makes it a no-brainer. Investors still have to contend with a guy who has 100% control, and occasionally makes terrible business deals. Overall, we can both agree that it's a stalwart in the space.
    Apr 7 12:13 AM | 4 Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    Samuel, thank you for reading the article.
    Apr 6 11:53 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    This article doesn't give advice on trading, nor does this website emphasize trading. It emphasizes long-term decision making with regards to investments. If my intended audience were day traders, I would have chose a title, thesis, and theme that would have been perfectly appropriate for people who trade.

    Also, I chose my title because it was consistent with the content that I wanted to present throughout my article. I could have said, "Tech Stocks Are Crashing, Here's Five Investment That Will Make You Rich!"

    Meaning, I know how to write attention grabbing garbage titles if I wanted to. Instead I chose to write a title that would give a preview to the content. The editorial staff here would not want titles that are too sensational, and I plan to uphold that part of the partnership.
    Apr 6 11:36 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    Your strategy is not growth, you're looking for businesses that have underperformed significantly, and may go through changes in its business processes prior to in order to reap a return on investment on the condition that a bad business will magically become a good one. Even Warren Buffett admits that at times it's better not to chase after value investments as they're like cigarette buds, good for one puff. Growth investing is where you find the vast majority of high quality businesses. High quality businesses tend to already exhibit pretty high growth rates. You can't call management competent for reporting low growth, poor growth, bad outlook, etc. Also in 2011, stocks were significantly cheaper and there were many more more misunderstood opportunities back then. I don't know if I would have detected an undervalued jewelry producer as it's a consumer discretionary good, but assuming a cyclical recovery there must have been a rapid change in trajectory between 2011 and 2014 as consumer spend improved.

    My most successful calls come from momentum and not from value. There's no such thing as a high growing business that trades at a cheap price. I've seen poor performing businesses trade at low prices, but end up trading higher as a result of a unprecedented change, but who's got the crystal ball to predict a change in an individual's behavior?

    It reminds me of how Kimberly Clark dumped all its Iron mills and went into making tissue paper. Basic materials tend to under-perform, but consumer household products trade at higher valuations due to being non-cyclical, and tend to grow consistently. So my question to you is this, could you have predicted the success of Kimberly Clark? The answer is no, not based on balance sheet metrics or P/E ratios.

    Peter Lynch was not a value investor, have you read any of his personal interviews. He spends a couple minutes reviewing the technicals, goes into great detail about the specific business, and buy into one based on qualitative factors rather than the quantified value of assets on the balance sheet. The only "value investing philosophy" consistent with Ben Graham, is when an investor buys a stock trading below book value. Not when a stock is trading at low P/E ratios, albeit that also helps. Overall, we're going to have to disagree on this discussion. You may have read the Intelligent Investor, but you completely ignored what Ben mathematically defined as a sound investment. You may recall that Ben wanted to buy good businesses at good prices, but that has more to do with timing. The most consistent theme of value investing has been to buy below book value per share. In that case, value investors should be digging through financial sector stocks rather than lecture a technology analyst who primarily contributes to the tech section of Seeking Alpha.
    Apr 6 07:37 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    So when Carl Icahn bought Netflix while it was trading at 300x earnings, tell me that's not a momentum investment.
    Apr 6 07:34 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    Twitter and Facebook are entering a trough period right now. However, the global addressable market for advertising is significantly larger than many other opportunities especially those you would call value investments amongst technology stocks. Also, there are many fund managers who make a killing from the momentum trade, look at Carl Icahn, and Peter Lynch.

    Sure, I don't blame you for wanting to buy cheap businesses, just don't buy cheap businesses that operate poor business models. Higher growth rates translates into a higher valuation, and if you're not willing to pay-up for the higher growth and added volatility, then it's likely that growth investing is not for you.
    Apr 6 04:43 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    I really like Yahoo! but it's not as conservative of a media investment as Google. Plus Google has a lot of growth ahead of it due to new business categories that are easy to understand.
    Apr 6 04:40 PM | Likes Like |Link to Comment
  • Chase The Bigger Tech Names, Especially If You Can't Handle Volatility [View article]
    No, I think the editors excluded the AAPL ticker.
    Apr 6 04:38 PM | Likes Like |Link to Comment
  • Can Microsoft Outperform Apple In 2014? [View article]
    Samsung uses lower pricing and broader geographic distribution in order to sell more product. Samsung had contracts with all the major telecoms in the world well before Apple. To do this they sold multiple variations of the Galaxy Series.

    Apple is likely to design a more consumer friendly device than Samsung, which is why Samsung sets the release of its products during different points of the year, so it doesn't have to directly compete with Apple. Also, you stated an opinion as to why you don't think Apple won't make it to 42 million units by comparing it to Samsung, but you ignore Samsung's inability to create a polished wearable product until the second generation. Sure Samsung uses heavy marketing, but heavy marketing only does so much to attract enthusiast users, which is why at higher price points $600-800 ASP Apple is able to ship more unit than Samsung by a fairly safe margin. Overall, when you play the game of inductive reasoning, betting against each successive product category that Apple has created would have lost you more than a 100% in either opportunity cost, or through an open short position. Every Apple investor heard the same "I don't think it's going to scale" when it came to iPod, iPhone, iPad, and just about everything else.
    Apr 4 06:08 PM | 1 Like Like |Link to Comment
  • Google And Luxottica... A Happy Marriage? [View article]
    Yeah you definitely have a very valid point. Google relies heavily on the creativity of third party developers when it comes to consumer electronic devices. It comes down to whether or not Google has developed the right hardware for third-party developers to take advantage of.
    Apr 2 09:32 PM | 1 Like Like |Link to Comment
  • Google And Luxottica... A Happy Marriage? [View article]
    I understand your concern, well it could potentially turn into a mass market product as it will allow for computing on the go. It would saturate a position where someone would be able to view text messages, information from social apps, and other content on a continuous basis without having to run to your smart phone, or etc. Now, the downside to the device is that the UI is heavily dependent on voice commands, which indicates that Google is banking heavily on the Android Wear to make for a device combination where people can get tactile feel over touch interface on a different wearable device. So it's sort of a 2-in-1 device combination that I see. The go-to-market for these devices will be different, as prescription lenses need to go along with computing, whereas a watch can be sold via third parties. My guess is that Google will attempt to combine the strength of three mobile devices, and hope that consumer spend can cover the expense of additional devices. Sort of like how a consumer doesn't just buy pants, he/she also buy a shirt, and shoes too.
    Apr 1 10:49 PM | 1 Like Like |Link to Comment
  • BlackBerry Investors Have To Be Cautious - Hardware Is The Main Concern [View article]
    Well, that's not the real problem, the enterprise market is rather limited. And many technology experts including myself believe that many employees will bring their own smart phone and install a security application from a third party like Symantec or AVG. Furthermore, it's the infrastructure access fees that have the most material impact on service revenues, which is why it's mentioned first in how service revenues are earned. Therefore, for BlackBerry to earn more on back-end service fees it needs to sell more consumer electronic devices. If it fails to do that, BlackBerry is in a lot of trouble.
    Apr 1 01:07 AM | Likes Like |Link to Comment
  • BlackBerry Investors Have To Be Cautious - Hardware Is The Main Concern [View article]
    Truthfully the automotive entertainment system segment can't grow to massive size as the refresh cycle on cars is vastly different from consumer electronics. Also, the MDM market is limited in size, probably in the $500 million to $1 billion range, with BlackBerry encompassing 50%+ market share. So it's the kickbacks that come from handset retailers that generate the vast majority of BlackBerry's service revenues.
    Mar 31 06:30 AM | Likes Like |Link to Comment
  • Sony And Oculus Will Make Virtual Reality...A Reality [View article]
    Great article, thanks!
    Mar 28 04:56 AM | Likes Like |Link to Comment
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