Seeking Alpha
View as an RSS Feed

David Jackson  

View David Jackson's Comments BY TICKER:
Latest  |  Highest rated
  • How Uber's Autonomous Cars Will Reshape The Economy By 2025 [View article]
    DRstem, I was with you until the last two sentences. If "the notion that a person should spend $30,000 (or more) on a vehicle that spends most of its life sitting idle will seem like a dumb idea in the future", why do you think you'll still own a car you drive?
    Jun 30, 2015. 02:29 PM | Likes Like |Link to Comment
  • Twitter's Biggest Problem Is The Lack Of User Engagement [View article]
    MAUs is not the right measure of user engagement. The right measure is DAUs / MAUs. When you look at that number, it's clear why FB is crushing Twitter. See:
    http://tinyurl.com/qjn...
    Jun 29, 2015. 07:56 AM | Likes Like |Link to Comment
  • Thoughts On Twitter's Growth Problem, And Why It's Losing To Facebook [View article]
    Tim,

    Ultimately everything must be valued on real earnings or cash flow. There are various ways to do that, eg. discounted cash flow model, project future earnings and apply a P/E ratio etc.

    Most sophisticated investors who own FB or TWTR try to calculate their earnings potential, and then value the stocks accordingly.
    Jun 13, 2015. 02:51 PM | 3 Likes Like |Link to Comment
  • Thoughts On Twitter's Growth Problem, And Why It's Losing To Facebook [View article]
    Excellent question.

    I'm not sure that the issue is that the relationships in Twitter are one-sided, and in FB they're two-sided. Perhaps the key distinction is that you friend someone in Facebook because they're already your friend, and marketing and the volume of their Facebook activity doesn't play a role in that.

    This doesn't mean there's no potential for relationships built entirely online. The key point I wanted to make as that content creators on a crowdsourced platform have to be incentivized to maintain a high signal to noise ratio.

    In SA, we do that with editors. We reject a lot of articles (to the chagrin of many contributors), and we won't publish something we don't think is actionable and convincing. But we know that using editors has limitations in scale, cost and expertise.

    One way to solve this is if the relationship is a paid one. If you're paying for someone's content, investors won't put up with a low signal to noise ratio. So once the relationship is paid, you can remove the editors from the equation.

    Twitter's key challenge is that people are used to a high liquidity stream of content, and accept that it has an exceptionally low signal to noise ratio. That means they don't penalize people who tweet a large amount of junk and a small amount of genuine insight. The solution to that has to be that they find a way to measure and reward quality.

    The key question (for Twiter and SA) is: How to do that?
    Jun 12, 2015. 12:33 PM | 1 Like Like |Link to Comment
  • Thoughts On Twitter's Growth Problem, And Why It's Losing To Facebook [View article]
    john, Piptief, quickcard and others -- thank you for the kind comments.
    Jun 12, 2015. 11:27 AM | Likes Like |Link to Comment
  • Thoughts On Twitter's Growth Problem, And Why It's Losing To Facebook [View article]
    I hope readers will forgive me for the format. I originally wrote this as a series of StockTalks, and George, our managing editor, decided it was good enough to publish. He'll now get a pay rise :-)

    I also want to thank Selig Davis, who runs mobile at Seeking Alpha, for compiling the data and generating the chart of Facebook's user engagement. The simple read of that chart is this:

    Facebook users on average now use Facebook for about 18 days per month, up from about 13 in mid-2009. The level is remarkable and the increase is an astonishing accomplishment.

    Unfortunately I don't have data for Twitter's DAU to MAU ratio, but it's clearly dramatically lower. If anyone has that data, please post it in a comment.
    Jun 12, 2015. 10:41 AM | 4 Likes Like |Link to Comment
  • Will Uber's Autonomous Cars Reshape The Economy? [View article]
    Shelby,

    Quick thoughts:

    1. I'm skeptical that the auto majors have the capabilities to transition to a world of driverless cars. You argued, for example, that the auto majors will eventually become network operators. However, GM, Ford and Toyota do not have the core software capabilities to compete with Google and Uber. Remember how Nokia failed in the transition to smartphones, and lost its market to Apple and Google? And Nokia, in contrast to GM, F and TM, was a technology company!

    2. One of the key challenges for the auto majors will be the reduction in new car sales, because driverless car technology will lead to an increase in car utilization rates, requiring far fewer cars per capita. Car production exhibits strong economies of scale; that's why there's been so much consolidation in the auto industry during the last 50 years. As a result, a decline in new car sales volumes would strongly impact the auto majors, possibly pushing them into bankruptcy. Your section on The Future of Car Companies didn't address that threat to the auto majors.

    3. You argued that the auto majors will successfully transition the majority of their sales from individuals to network operators. However, we know that fleet sales have far lower profit margins that sales to individuals, because fleet buyers have stronger bargaining power. This implies that the auto majors will face downward margin pressure, even ignoring the separate impact of lower sales volumes.

    Separately, I just published an instablog post in which I listed your article:
    Driverless / Autonomous Cars -- Resources For Investors
    http://seekingalpha.co...
    Jun 8, 2015. 08:25 AM | Likes Like |Link to Comment
  • How Uber's Autonomous Cars Will Reshape The Economy By 2025 [View article]
    Logical Thought wrote:

    ">>it is unlikely that major automakers like General Motors (NYSE:GM), Ford (NYSE:F), and Toyota (NYSE:TM) will survive the leap.<< This is pure silliness. Most of the majors are EXTREMELY advanced in their self-driving car capabilities (just search out the youtube videos) and if they need to shrink capacity they can always close plants and lay people off, as they've done many times in the past."

    Two thoughts about that:
    1. The fact that the majors are advanced in their self-driving car capabilities doesn't address Zack's core point that self-driving cars will lead to a huge reduction in demand.
    2. The auto industry exhibits strong returns to scale. You can see that from the reduction in the number of players over the last 50 years. Ergo, if you think there will be a a large decrease in demand, that would lead to reduced margins for the auto majors. Whether that would lead to bankruptcy would depend on the exact economics.
    Jun 7, 2015. 06:47 AM | Likes Like |Link to Comment
  • How Uber's Autonomous Cars Will Reshape The Economy By 2025 [View article]
    Fascinating article (and really well written). Thank you, Zack.

    Thinking about which stocks might benefit from driverless cars, I just did a search on Seeking Alpha for "driverless cars", and then limited the result to transcripts only by clicking on the Transcripts tab. This gives you the companies which mentioned "driverless cars" on their investor conf call:
    http://bit.ly/1KOfBeV
    Jun 4, 2015. 04:08 AM | Likes Like |Link to Comment
  • How Uber's Autonomous Cars Will Reshape The Economy By 2025 [View article]
    Fascinating article (and really well written). Thank you, Zack.

    Thinking about which stocks might benefit from driverless cars, I just did a search on Seeking Alpha for "driverless cars", and then limited the result to transcripts only by clicking on the Transcripts tab. This gives you the companies which mentioned "driverless cars" on their investor conf call:
    http://bit.ly/1KOfBeV
    Jun 4, 2015. 04:08 AM | Likes Like |Link to Comment
  • Google, Yahoo also showed interest in Flipboard [View news story]
    Not sure how happy the value investors who own YHOO will be to hear that it's considering this sort of acquisition.
    May 27, 2015. 10:28 AM | Likes Like |Link to Comment
  • Thoughts On Yahoo (And Alibaba) [View article]
    satyr, I think you've put your finger on the core issue here: What was priced into YHOO, and -- more generally -- how can you assess what's priced into a stock?

    I would argue that the easiest way to assess whether some information is priced into a stock is to look at how prevalent it is.

    In YHOO's case, information about the BABA stock spin-off was everywhere:

    (1) YHOO had discussed it openly on its conference call (along with its plans to monetize its stake in Yahoo Japan)

    (2) Seeking Alpha had carried many articles discussing Yahoo's sum of the parts (SOTP) valuation and the catalyst of the BABA stock spin-off. See: http://bit.ly/1IQJNUu

    (3) Many of the comment discussions on Seeking Alpha YHOO articles were discussions the mechanics of the spin-off and the SOTP valuation.

    This was the core of my discussion with Chris DeMuth in the first comments on his article: http://seekingalpha.co...

    Chris argued that "Why should something this big and this obvious be hidden in plain sight? Its size is pretty large for the price to be corrected by the typical aggregate position sizes of relative value arbitrage and event driven funds."

    See Chris's comments here:
    http://seekingalpha.co...
    and
    http://seekingalpha.co...

    Overall, my personal take-away from this is that the simple approach to assessing what's priced in is more reliable: If something is being widely discussed, assume it's in the price.

    This is one of the ways that Seeking Alpha is helpful for investors: you can check the articles on a stock to understand which issues are priced in to a stock, and which aren't. This becomes much easier and more powerful with a feature we just added to PRO: for any stock, you can quickly view the Long Case and the Short Case, which we created by providing a quick view of the bullet point summaries of the long and short articles on the stock respectively.
    May 21, 2015. 02:09 AM | 1 Like Like |Link to Comment
  • Thoughts On Yahoo (And Alibaba) [View article]
    A Fraser,

    Do you know of any investors who were long BABA, short YHOO? I've heard from investors who were long YHOO, short BABA, but nobody for whom the opposite was true. And that makes sense: YHOO had a catalyst for unleashing its sum of the parts (SOTP) value. As I mentioned in the article, that's why this move was so painful for many people -- they got burned on both sides of the pair trade.

    Moreover, the news about the IRS statement was widely reported as the cause for the move in the stock.

    For that reason, I'm skeptical that "The only reason YHOO is down is because of investors hedging long BABA positions with short YHOO positions". But open to being convinced otherwise...
    May 21, 2015. 01:43 AM | 1 Like Like |Link to Comment
  • Thoughts On Yahoo (And Alibaba) [View article]
    Quick follow up to my comment in the article that Yahoo's stock is more attractive now than a few days ago. The sell-side is also defending the stock. For example, here's what one desk sent to its clients this morning:

    YHOO (+1% pre-mkt to $41.50 after -8% late yday) – IRS considering changes to spin-off rules…requests already received proceeding (such as the BABA spin), but “that could change”…[our analyst] reits Buy / PT $56 (BABA ~$38 + YHOO Japan ~$5.65 + net cash $6 + core YHOO ~$6.68) on risk/reward…downside risk $36 (BABA taxed 38% & 10% SOTP discount)…late yday, desk also saw unwinding to the YHOO stub trade (Long YHOO / Short BABA) that lifted BABA 1-2% after 3pm ET)…YHOO stock likely pops today after yday’s drop, but faster money likely fades the move near-term on (at the least) spin-off delay risks…with the stock nearing downside case of $36 (last $41.50), longer-term and patient investors likely to accumulate on weakness
    May 20, 2015. 11:01 AM | 1 Like Like |Link to Comment
  • Thoughts On Yahoo (And Alibaba) [View article]
    I'd like to add an important clarification to this article, before anyone comments on this: I'm *not* saying that Yahoo is "a dog".

    My point in the StockTalk (which was repurposed into this article) was to say that there's a difference between investing in great businesses for the long term, and investing in special situations with short-term catalysts. With the latter, you might be left holding something without long term growth prospects.

    I write that from painful experience. Years ago I took a large position (relative) in Hollywood Media (HOLL), which I thought would merge its MovieTickets.com business with Fandango, and take the combination public. That never happened, and HOLL has been a disaster of a stock every since. I still own too much of it :-(
    May 20, 2015. 09:19 AM | 1 Like Like |Link to Comment
COMMENTS STATS
1,273 Comments
1,221 Likes