David Tsao

Garmin: A Tech Stock Value Pick

Nice Analysis Jacob,

The trailing 5 year margin averages won't last unless Garmin comes out with new products, not just updated models of current devices. You have to assume margin erosion considering the competition and innovation these technology companies will bring to hand held devices. Google Maps splashing entry onto the next generation of Droid phones won't help either. Although mobile isn't Google's moat, the marginal cost of distribution for Google to push their maps service to Droid phones is extremely low. Google Maps deployment to mobile devices is not meant to generate returns from that program alone. They are setting the stage to collect geo-location data of mobile users to help further their AdWords cash cow. Give these services away for free to generate revenue somewhere else. Watch out for Google's developments after their recent AdMob acquisition. With tight integration into the mobile ad market and geo-location data collection, you have a brand new potent mix for advertisers to buy keywords.

Given that, your analysis is still very intriguing that I'm going to dig into GRMN a little deeper. I just wouldn't dismiss Google's efforts so quickly. They are a serious threat to GRMN and Tom Tom.

Will 2009 Bring Ring Three of the Financial Circus?

If you look into the ISM Manufacturing Report on Business and scroll all the way down to the Employment Index, you'll see that purchasing managers had a really negative outlook on employment last month (index fell to 29.9 from 34.2 the previous month. We are only a few days into the new year. Layoffs require time to plan and execute.

At the heart of any economic stability is employment. We won't see stabilization until we go through massive layoffs (which have not occured yet).

Reaching for the Bottom in the Markets

I was thinking about checking out the time frames around 1929, but there was one specific reason why I didn't. Many of the instruments available to governments, banks, and other institutions were not available back then.

The recent interventions aren't saying much to tame the market's wild rides... but over time the newly injected capital should drive a wedge into the fundamental economic situation and hopefully bottom out.

As for timing this, that depends on your frame of reference.