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Boris Marjanovic  

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  • Something Is Still Ridiculously Wrong [View article]
    All of this fear about a Fed rate hike is ridiculous. There are literally hundreds of stories published daily about how rising rates will affect the stock market. These stories are nothing more than meaningless noise. Anything that could have happened has already been priced in.

    The only people that have to worry are bond investors. The stock market will be largely unaffected. But if, say, the market does crash just because the Fed raised rates by a few "basis points," then it deserves to crash and burn. Personally, I don't think that will happen. Like I said, if you read hundreds of stories about it daily, it's probably been already priced in.
    Aug 13, 2015. 08:04 PM | 76 Likes Like |Link to Comment
  • Warren Buffett And The Art Of Focus Investing [View article]

    "If buffett diversified a little more and bought even small stakes in WMT and INTC when he was looking at them his record would be even better."

    As they say, hindsight is always 20/20. Always easier to make decisions based on past information.
    Aug 7, 2015. 04:35 PM | Likes Like |Link to Comment
  • Warren Buffett And The Art Of Focus Investing [View article]
    Dale Roberts,

    "Most do not realize they are essentially indexing when they buy so many companies."

    Well, given the fact that most people underperform market indexes, indexing doesn't sound all that bad to me.
    Aug 7, 2015. 04:32 PM | 1 Like Like |Link to Comment
  • Warren Buffett And The Art Of Focus Investing [View article]
    Ibex Investor,

    "Over the next ten years I'm confident Berkshire will outperform the S&P 500."

    You do realize Buffett is over 80 years old, right? The man is not immortal. Statistically speaking, he'll most likely be dead in less than 10 years.

    Moreover, Berkshire has been underperforming the S&P 500 for some time now. The company is too large to continue generating impressive returns. I'd rather buy the index or ETF that tracks the S&P 500 instead.
    Aug 7, 2015. 04:27 PM | 1 Like Like |Link to Comment
  • Warren Buffett And The Art Of Focus Investing [View article]

    "How can one be so stupid as to invest in a company that was probably teetering bankruptcy. Buffett never pulled such stunts. He only buys into high quality /profitable companies with strong track records; the risks are extremely remote that something will go wrong."

    Enron and WorldCom looked profitable and had strong track records. As we now know, their accounting could NOT be trusted. Numbers are just numbers -- they can always be manipulated. Thousands of very intelligent people lost money with these companies.
    Aug 7, 2015. 04:10 PM | 4 Likes Like |Link to Comment
  • Warren Buffett And The Art Of Focus Investing [View article]
    I completely understand why Buffett likes concentrated investing. You should put your money in your few best ideas. It makes sense. And it worked for him. The problem is that investing, like poker, is probabilistic. If you put half your net worth into one company, and that company turns out to be Enron, it would take you years to recover from such losses.

    Again, the strategy worked for Buffett. But using him as a justification to do concentrated investing is flawed. In fact, it's a sampling bias. The majority of people who have used a concentrated investment approach blew up -- lost everything. Nobody talks about these thousands of losers, and all the attention is put on a few lucky winners. This is flawed thinking.

    What if American Express turned out to be a fraud? Something like that is completely unpredictable and could have happened. Buffett would have suffered catastrophic losses. If history was just a little bit different, Buffett would be advocating a diversified investment approach today.

    I'm not saying people need to own hundreds of stocks, but 15 to 20 stocks is very reasonable. It eliminates most of the unsystematic risk, and can be easily implemented by most people. This way one mistake doesn't cost you your life savings.
    Aug 6, 2015. 09:50 PM | 27 Likes Like |Link to Comment
  • Now Is The Time To Buy Twitter [View article]

    I too am willing to accept negative free cash flow for a while. I've started many businesses myself and I understand that you can't always achieve profitability right away. But Twitter has been around for a decade and still has not generated a single penny in free cash flow. Honestly, how long do investors have to wait? 15 years? 20 years? 30 years? There simply comes a time when it is no longer worth investing in a company that constantly bleeds cash quarter after quarter, year after year.
    Jul 30, 2015. 12:02 PM | 2 Likes Like |Link to Comment
  • Now Is The Time To Buy Twitter [View article]

    "I think folks such as Boris Marjanovic doubt that Cash from Ops here can go from $140m to $1,000m, but hey, I am just a naive, optimistic charlatan so let's give TWTR some rope and let's assume advertisers are really desperate and wasteful with their money!"

    Cash from operations is meaningless when it comes to valuing a business . . . it's free cash flow that counts! Twitter's free cash flow has been negative every year. The company would have to generate hundreds of millions in free cash flow to justify its current valuation. So far there is no evidence that Twitter can achieve that kind of profitability.
    Jul 30, 2015. 10:59 AM | Likes Like |Link to Comment
  • Now Is The Time To Buy Twitter [View article]

    "Nope $5 is not the correct valuation."

    I agree, it's not...$0.50 is the correct valuation (and even that is pushing it).
    Jul 29, 2015. 06:45 PM | 8 Likes Like |Link to Comment
  • Now Is The Time To Buy Twitter [View article]

    "Weren't you recommending this back in the 50's?"

    "Yup. But I didn't own it in the $50s."

    Next time don't make buy recommendations unless you have skin in the game. It's what charlatans do, and you don't want to be a charlatan!
    Jul 29, 2015. 06:40 PM | 9 Likes Like |Link to Comment
  • If YouTube Is Valued At $80 Billion, How Much Is Netflix Worth? [View article]
    "Despite accelerating revenue growth, YouTube’s operating model isn’t quite as good or as profitable as Netflix’s business. Netflix probably deserves a premium to YouTube."

    Whoever says that YouTube's "operating model isn't as good as Netflix's" clearly doesn't understand YouTube's operating model!

    YouTube, unlike Netflix, benefits from a tremendous self-reinforcing network effect. The more people use YouTube, the more people are going to use it and the more YouTube content will be uploaded (by the way, the majority of that content is free...YouTube doesn't have to pay for it like Netflix). It's a wonderful competitive advantage that Netflix simply does not and cannot have.

    Moreover, Netflix is not profitable on a cash-flow basis. Sure, it has positive net income, but net income is just an accounting number. It's not real money. Netflix's free cash flow has been deteriorating for years (and is negative now). Netflix also has billions in off-balance sheet content liabilities, which continue to grow every quarter, so its financial situation is also worsening. Simply put, Netflix is a literal "House of Cards." YouTube doesn't have any of these problems and, as mentioned, benefits from a tremendous network effect advantage.

    In short, if I had to chose between the two businesses I would chose YouTube. It's a superior business in every way.
    Jul 28, 2015. 08:56 PM | 4 Likes Like |Link to Comment
  • Buying Apple: Consider The Scale Of The Potential Investment [View article]

    "Model FCF for 4 or more years for every revenue stream. Do not get complacent!"

    As someone who actually used to do that for a living (I used to be an analyst...not something I'm proud of), I can tell you that modeling is complete BS! I've seen thousands of models made by Wall Street analysts and they all have one thing in common -- they are always wrong! In fact, the more sophisticated a model is, the more wrong it tends to be. (Anybody who has a basic understanding of probability will understand why this is so.) In short, attempting to make precise predictions about the unknowable future is junk science done by charlatans.
    Jul 23, 2015. 03:10 PM | 29 Likes Like |Link to Comment
  • A New CEO Won't Save Twitter [View article]

    "From my experience, the most important person of the company is the leader or CEO of the company, no matter how big or small the company is. I stopped reading after the summary!"

    Your experience is anecdotal and is not a valid argument. The objective empirical evidence is what matters, and it strongly suggests that the competitive advantage of the company matters more than the CEO.

    Moreover, the fact that you stopped reading after the summary suggests that you only read things that agree with your preconceived opinion. This is not how you learn new things. People like you believed that the earth was flat -- even though the evidence proved that it was in fact round. I think it's best for you to stop commenting, it only shows your laughable ignorance.
    Jul 19, 2015. 10:04 PM | 1 Like Like |Link to Comment
  • A New CEO Won't Save Twitter [View article]

    "Guys a good CEO can turn around the company period."

    You clearly did not read my article. I cited a lot of example where good CEOs failed at managing struggling companies. In fact, according to studies that looked at hundreds of management changes, bad companies are rarely made good by bringing in a good CEO. The objective empirical evidence is what matters, not what you "feel" is the truth. Your feelings and subjective opinions are meaningless (and usually wrong).
    Jul 17, 2015. 10:50 AM | Likes Like |Link to Comment
  • A New CEO Won't Save Twitter [View article]

    "People did questioned mark's ability to monetize the platform. No one questioning now. I believe he could do the same to Twitter if he were to run it."

    Facebook was profitable within a few year after it was started. Twitter has been around for a decade and never earned a penny.

    Zuckerberg got lucky with Facebook. In my article I mentioned an interview in which he clearly stated that he did NOT create Facebook in order to generate revenue. In another interview he said he originally created the website with the intention of only getting 400 to 500 users at the most.

    Facebook, at least the Facebook of today, was clearly never planned. It was an accidental success -- Zuckerberg himself has mentioned this countless times. If he left Facebook and ran Twitter, he would struggle just like all of Twitter's former CEOs. Twitter is simply an inferior business . . . not because it has poor management, but because it was less lucky than Facebook.

    People have this illusion that the managers at the top change everything, but they simply do not and cannot. The economics of the business matter most. Put me in charge of running a company like Google and I guarantee it will continue growing and generating record profits. If I was forced to run an inferior business like Yahoo, on the other hand, it would not be as easy -- in fact, I would probably fail. In short, bet on the horse (company), not the jockey (boss).
    Jul 17, 2015. 10:44 AM | Likes Like |Link to Comment