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Edward Harrison  

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  • Bitcoin For Wal-Mart And Target [View article]
    Well said.
    Feb 7, 2014. 03:54 PM | Likes Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    We agree this is about the payments system. And Andreessen and I were in a good Twitter back and forth with a couple of people about that just after his post came out.

    I still don't think you NEED a bank account in todays world because many people today DON'T have bank accounts. For people working at minimum wage, the fees are a hindrance to having an account and many don't. What I'm saying is they can continue that existence in a better way - getting some of the transactions benefits of a bank account without having one. This is EVEN more true in the emerging markets where people are talking about mobile micropayments for the unbanked. Billions of people DON'T have bank accounts but could be reachable through this kind of payment system.

    Finally, on fiat money and gift cards, we agree again. Better than gift cards, not as fungible as USD. The moneyness of the system lies somewhere in between. Good adjunct to fiat currency - frictionless money transfer - not a replacement
    Feb 7, 2014. 03:03 PM | 2 Likes Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    Good question on regulatory issue. I think you definitely have to pitch this as a payments platform. As soon as you get into the currency issue, it opens a big can of worms. One regulatory issue that may be onerous is Walmart's responsibility for the payments transfer ledger. The benefit of Bitcoin is that the transfer process is not centralized and that cuts regulatory maintenance that PayPal has. But you still might get a regulatory mandate to record those transactions in your system as the retailer - something that reduces security, by the way.

    The minimum wage issue is just my way of introducing this as a vehicle for digital payments. I think the tie to a big retailer's employee base make platform adoption instantaneously widespread and an immediate threat to other online payments systems.
    Feb 7, 2014. 01:14 PM | Likes Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    Tell them to come on over here!
    Feb 7, 2014. 01:09 PM | Likes Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    You make some good comments and criticisms, especially regarding tax implications. Personally, I don't see Walmart doing this. But I do think someone is going to take the Bitcoin algorithm and 'PayPal' it, meaning divorce the payment system from the currency by creating a centralized payments processor through which payments into and out of cash funnel.

    Your comments on loans and deposits though are irrelevant because what I am proposing here is divorced from the Bitcoin as currency mantra and is simply a PayPaled version of the existing Bitcoin payment system that is an adjunct to the existing fiat system.

    Also, gift cards DON'T work as well. As I told a commenter above, the moneyness of gift cards is much less than this sytem or PayPal or Google Wallet. You can't transfer them to anyone for cash. This is a liquid and pseudononymous market that allows you to securely transfer your money to anyone regardless of whether you know them or not. Giftcards can't do that as effectively - unless you set up an exchange to do so.

    The benefit over PayPal is that the system isn't reliant on the processor for transactions in-system, just transactions into and out of system - and that's where the fees are going to lie. This model will be lower in fees than existing models as a result. Walmart will wish it had done it.
    Feb 7, 2014. 12:58 PM | Likes Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    Cashing out of the system at face value would be something the retailer would need to allow in order to make the payment system more money-like. It's definitely a point to fine-tune. But not everyone shops at Walmart or Target or CVS. They need to give people an option to get their increased salary in something that converts to cash. My thinking initially has been that outsiders would pay into the system because of its security benefits over credit cards (something Target or Walmart would want because of transaction fees) and that the retailer would allow employees to cash out on a one-for-one basis with the external funds coming in.
    Feb 7, 2014. 09:08 AM | 1 Like Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    Yes, it wouldn't eliminate the entire fraud problem but it would reduce it for these transactions.

    I imagine anyone in the Target payment system universe would also still have to worry about security breaches of their personal information because they would also have that information on file outside of the bitcoin-like payment system in Targets systems too
    Feb 7, 2014. 09:04 AM | 1 Like Like |Link to Comment
  • Bitcoin For Wal-Mart And Target [View article]
    I thought about that but Walmart gift cards WOUDN'T work the same way though because you can't transfer them to anyone for cash. That's the problem. This is a liquid and pseudononymous market that allows you to securely transfer your 'giftcard/e-money' to anyone regardless of whether you know them or not.

    Also, you saw my point on the unbanked. Ostensibly they could use this system in lieu of bank accounts for their entire paycheck if the retailer allows that as non-employees pay into system. That avoids the bank late/overdraft/mainten... fees. Big improvement over gift cards.
    Feb 7, 2014. 09:02 AM | 1 Like Like |Link to Comment
  • How Apple Keeps Screwing It Up [View article]
    This article is from two years ago, Bastion. Many things have changed since and I have written on those changes. It's completely disingenuous to suggest this represents current thinking. The question is whether the core argument holds i.e. that Apple's go it alone approach will cause them to lose market share. That's really the only thing this article is about. It's not about margins, it's not about valuation and it's definitely not about Flash.

    Moreover, you do point to two areas that I never even touched on in the article (margins and Flash). If you would re-read this, you would see that the Flash reference is a blockquote and you will also see no reference to margins.

    You'll need to come up with something more robust as a rebuttal. Take a look at Dialectal Materialist's comments. I think he makes good points below.
    Apr 22, 2012. 07:43 AM | Likes Like |Link to Comment
  • How Apple Keeps Screwing It Up [View article]
    Thanks for the reply, Dialectical. It was a thoughtful response. The place where I would take issue with your analysis is where you indicate that "Apple's "closed system" is precisely what will protect it in the post PC era."

    My view is that the technology ecosystem we are moving into is inherently open because of mobile. The portability of data across platforms and devices is going to INcrease over time and not Decrease (think of contact lists, music in the cloud, PDFs on Google Apps, social networking apps, mobile game apps, etc ). I think switching costs will diminish and this will make economies of scale and network effects more important in utilizing the switching costs that do remain.

    I agree with you however that calling a top for a momentum stock is a losing battle. The question has to be the fundamentals.

    If one does a DCF on Apple, it's clear that there are three effects that predominate: market share, growth, and margins. And all of these effects depend not just on near-term variability but medium term maintenance.

    What I don't say in this article since it is not geared to valuation but would now given Apple's share price is that Apple will need to maintain all three (share, mobile market growth, and margins) over the medium-term in order to be a good long-term play. The crux of my analysis here that holds up is that the share aspect has become threatened. In later articles, I also pointed to the margin compression theme we are discussing here. In my view, those are critical components to maintaining valuation for Apple. The erosion in one has already begun (share). This has been offset by the tablet market of course. I am predicting an erosion in the second (margins). Again, let's look at this come October.
    Apr 22, 2012. 07:34 AM | 1 Like Like |Link to Comment
  • How Apple Keeps Screwing It Up [View article]
    Dialectical, we should always revisit any conclusions we make that underpin our investments every six months or so to see if the basic logic holds up. I have done so again and again and the logic has held. The question for an Apple shareholder has been: why should we sell then? And to date the answer is: there is no reason to do so yet. I don't think you can make that statement as easily now. For me, it was in seeing the component prices of the iPad 3 that did it. It told me, margin compression was happening and that now would be the time to monitor sales growth.

    From a pure momentum perspective, I mentioned a couple of weeks ago that the stock looks tired. But so what if the fundamentals are good? The problem has to be margins and growth. And I would be looking at these closely, especially in the tablet space.
    Apr 20, 2012. 03:52 PM | 1 Like Like |Link to Comment
  • How Apple Keeps Screwing It Up [View article]
    We seem to be already seeing the share price erosion I mentioned would happen this year. Let's see how this plays out though.

    My point in this comment that Apple was way overbought and recent indications were that margins were being compressed on the iPad 3. I expect this to weigh on the stock by the end of the year.

    My point on this post is till the same and it had nothing to do with the share price: Apple's market share will erode because it is one 'closed' competitor competing against an army of Android 'clones'. It is irrelevant whether HTC makes money as it was irrelevant whether Packard Bell made money in the Clone Wars in the 1990s. The key is distribution and network effects of platform adoption. That speaks well for Android and will negatively impact margins at Apple.

    Once growth does slow this will erode growth and the shares will be impacted. I believe 2012 is when this will occur.
    Apr 20, 2012. 03:44 PM | Likes Like |Link to Comment
  • How Apple Keeps Screwing It Up [View article]
    I stand by everything here. Nowhere did I predict Apple earnings or share price eroding. In fact I wrote this.

    Here’s how I see it shaping up. Android continues to make huge inroads and developers start focusing more energy on that platform. Either Apple’s market share erodes or eventually they are forced to compete at a lower price point. None of this is a problem near-term as the growth rate is still high. But when growth in the cloud- and mobile-related computing revolution slows, Apple will be exposed.

    We are now much closer to margin compression and share price erosion. I would say some time this year as growth rate for mobile slows we will see compression. The stock looks tired.
    Apr 8, 2012. 12:10 AM | 1 Like Like |Link to Comment
  • Credible Lenders Of Last Resort Use Price, Not Quantity Signals [View article]
    Asbytec, hi. I normally don't comment on SA but you're a good commenter so I wanted to point you to how I see it.

    As a central planner (note the negative connotation implied there), the Fed can explicitly target any maturity it likes for assets in its own currency as the monopoly supplier of reserves. Financial repression only works via interest rate (price) targets because the Fed is a price fixing monopolist. The same would be true for the ECB. It will achieve its goal of repressing rates not through buying up paper but signalling credibly that the policy rate will be low for an explicit period and that it stands behind specific asset classes at a specific maximum target rate or spread.

    Here's a specific answer about targeting quantity over price on Operation Twist:

    "Operation Twist can only move rates a few basis points. And since the Fed is targeting quantity not price AGAIN, it's not even clear that rates will decline. Rates are already so low that these basis points won't make ANY difference. I see this as a non-event, a big fat yawn. It’s not treason at all. It won’t even be effective."
    Nov 8, 2011. 08:52 AM | 1 Like Like |Link to Comment
  • China Currency Bill Is About U.S. Politics, Not Trade [View article]
    Yes, but Japan and Germany are even more dependent on imported oil than the US and they have trade surpluses. Again, it's not about oil.
    Oct 6, 2011. 09:57 AM | 2 Likes Like |Link to Comment