Asif Suria

Taking the Pulse of the Economy

Thank you Nick. Feeling much better since early July. Can't say the same about the economy. However it was surprising to hear JP Morgan's forecast of strong 3 to 4% GDP growth this quarter and a cyclical bounce even without labor conditions improving.

I must be living in a different world from the JP Morgan's economists.

Towerstream's Niche Is an Investor's Profit

Thanks KJP712.

@use_the_fed: I agree with you that the market and economic conditions are disconnected. I am more cautious than bullish at this point.

Towerstream Trading Below Cash

No idea why the stock popped 40% yesterday. I did post a blog entry this morning about Towerstream based on my conversation with their CEO last week.

www.sinletter.com/blog...

Shop at Costco, Invest in Safeway

Interesting thought Mark. Thank you for sharing with us.

I noticed your 2006 paper about Wal-Mart rolling out its organic initiative. Who would have imagined a few years ago that Wal-Mart would one day become the nations largest purchaser of organic milk and cotton.

What are your thoughts on Dean Foods, another company on my radar as a potential investment?

Shop at Costco, Invest in Safeway

@psonava You are absolutely right about Costco making most of their money on the membership fees. I am quoting from memory here and so don't hold me to the number but I believe they get more than 60% of their profits from membership fees given how low their margins are on the products they sell.

Big Bear almost makes a good point about rebates. I have an executive membership and get back almost as much money in rebates as I spend on the membership fee.

At any rate, I don't have to specifically calculate the membership effect because it is included in operating margins and Safeway's operating margins are better than Costco's even without membership fees.

What REALLY Caused the Mortgage Crisis - And What to Do Now

Thanks for your response Mr. Shaefer and for recommending my article to everyone on this thread.

While I agree with you that keeping a roof over their head is the primary concern for most people, young renters have the option of moving back in with their parents or splitting an apartment with other renters instead of renting by themselves. This is something Avalon's management mentioned in their last conference call. I am long the apartment REITs and will most likely add to my positions but wanted to play devil's advocate to get your thoughts about them.

Regarding liquidity and the ability to cover debt coming due, this sector of REITs has been fortunate enough to be able to borrow from GSEs like Fannie and Freddie to not only lower their interest rates but to cover any debt that is coming due in 2009 or 2010. I have some additional information about debt maturity of these on my website, which was not reproduced in the SA article.

www.sinletter.com/spec...

What REALLY Caused the Mortgage Crisis - And What to Do Now

A nice summary of what occurred and I am with you about the apartment REITs and wrote an article about them (specifically AvalonBay) a few months ago,

seekingalpha.com/artic...

What are your thoughts about the effect of unemployment on these apartment REITs, especially the more leveraged ones like AIMCO and Equity Residential.

iPhone Stock App Review

@mtkoren, I noticed that as I was wrapping up my review of DailyFinance and it certainly makes the native app more user friendly. Wish they had done this sooner.

I still prefer the charts and real time quotes of DailyFinance.

Long Ideas Increase in TIM Report

Interesting concept. Since this appears to be a sentiment indicator, like the VIX, it probably will not have much predictive power other than reflection the current reality. Could end up as a lagging indicator based on the time required to collect and compile the data.

Towerstream Trading Below Cash

@MMS2728, thank you for adding to the discussion and providing additional insight into some of your earlier comments.

I cannot comment to the Puerto Rico trip as I was not aware of it until you mentioned it.

Without a doubt the size of the layoffs was large. However based on the size of the company and the revenues generated, it was clear to everyone that they had ramped up very quickly in terms of employees.

With the focus shifting to reaching break even instead of growth at any cost, this seems like a logical step. It will be interesting to see what management says about it during the next conference call.

Towerstream Trading Below Cash

I saw the filing about 35 employees getting laid off and also talked to an ex-employee yesterday.

Since the second quarter has not yet ended and sales in first quarter of 2009 grew 64%, I am not sure where you are getting your 33% growth number from. In face for full year 2008, revenue grew 54% when compared to 2007.

From my understanding, the growth has been driven by offering lower priced products such as the $500/month 5 MBPS product. I have been approached by Towerstream sales about this product in my role as the Director of IT for a small company and have seen companies switch to Towerstream within the last year.

The allegation of false numbers is very serious and it would benefit everyone if you can back up these allegations with some details.

Can Intel Drive the Market Lower?

Cetin, I posted this on my blog last night.

Cisco: Compelling at These Levels

Albert, I work in the technology sector (not an accountant Moon Kil :)) and live in silicon valley. The practice you refer to has been widely criticized but also has its supporters amongst people who believe that it becomes an important part of compensation for tech workers.

As an investor I am in your camp and prefer companies like PICO Holdings (PICO) that focus on shareholder equity as a reporting metric over a company like Salesforce.com (CRM), where a large portion of GAAP earnings goes towards options granted to executives.

Cisco: Compelling at These Levels

Albert, I am in total agreement with you and Prudentinvestor regarding Cisco's dilutive stock options and mentioned as much in the comments when I stated, "but buybacks have not even been sufficient to offset dilution from options granted to employees."

This was one of the reasons I used to stay away from companies like Cisco. Sooner or later shareholders will wake up and Cisco might follow Intel and Microsoft's path of offering a dividend. Intel in my opinion is taking all the right steps towards becoming a shareholder friendly company.

The point of my article was that Cisco appears attractive from a valuation basis and since the inputs used in the analysis on a per share basis, the analysis still holds unless one of my assumptions are off.

Point well taken on the accumulation of profits over the last 15 years. I did not respond as I have not yet had the time to dig through the records to compile the information.

Cisco: Compelling at These Levels

Could not agree more on the dividends. Oracle finally found dividend religion just like Intel and Microsoft did and the stock appreciated sharply after the announcement. It is ironic that Oracle's dividend yield even at the time of announcement was just 1.25% and is probably under 1% now.

Cisco did announce a huge $10 billion stock buyback in late 2007 (talk about timing) but buybacks have not even been sufficient to offset dilution from options granted to employees.