I'm betting the end of QE won't end the bull market... we'll get a cyclical bear later, maybe in a couple years, when the Fed pushes hard to slow things down, e.g., inverted curve.
It doesn't factor in the fraction (which is big and growing) of American business value that's attributable to globalization, e.g., John Deere used to sell principally in the North American continent, now it has manufacturing and sales in emerging economies, much of which is not reflected in US GDP. It skews the number. The indicator is no longer useful...eventually we'll have a useful one with world GDP and world market value (netted against private co's).
The energy boom, yes... and housing is just getting started, the 30% drop in inventory tells you prices are too low. Very bullish.
FLEX is a straightforward model, looks reasonable to me. I'm looking for models where analysts are overlooking or failing to discount a material variable, e.g., NCR with the pension.
Nobody can beat AMZN on price, and they're so far out front, and now with the benefits of scale...those datacenters suck massive capex... which makes GOOG the only viable competitor...duopolies are cool.
Top 10 Pick: Buy Berkshire Hathaway [View article]
WB is not a trader, most of his positions are in place for the next decade... IBM is a mistake, and it's going to get slapped, but he's got some hidden gems that will offset, e.g., BAC warrants.
The company is saving $250Mil in interest expense this year because of 2 recent refi's... debt is manageable, it was much higher relative to revenue before the crisis.
Your comment is typical of someone in the business... seriously, talk to IT people? They are the ones being disrupted, who stand to lose... you think they'll give me the straight scoop?
The public cloud is a low-margin utility... you think Azure and Google Compute and AWS are high-margin? CRM uses the public cloud, they are not the public cloud.
The key with IBM is all it takes is a tiny incremental shift and their operating model doesn't hold up, can't raise margins, can't cut costs enough, and can't drive revenue higher, even by buying lots of other co's.
Depends on what you mean by low-margin; Software co's are high margin, retailers like HD are low-margin, HD sells at 1.2x sales... don't forget a growth premium too... AMZN is more like HD b/c of durability and quality of the model, worth 1x plus a growth premium; it's growing at 20% per year (30% in North America).
Agree, but here's the problem: you can't justify a $220Bil market cap ($105Bil rev) on services... they need fat margins from hardware (already commoditized) and software (headed the same direction). Unfortunately for management, the model needs restructuring and there just aren't any options available to them that will protect the stock.
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FLEX is a straightforward model, looks reasonable to me. I'm looking for models where analysts are overlooking or failing to discount a material variable, e.g., NCR with the pension.
Is This Really A Bull Market? [View article]
"...where have you been for the last 4 years?"
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The public cloud is a low-margin utility... you think Azure and Google Compute and AWS are high-margin? CRM uses the public cloud, they are not the public cloud.
The key with IBM is all it takes is a tiny incremental shift and their operating model doesn't hold up, can't raise margins, can't cut costs enough, and can't drive revenue higher, even by buying lots of other co's.
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