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John Tobey, CFA

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  • Goodbye Boeing, Hello ITT [View article]
    Thank you for pointing out my goof. I've asked Seeking Alpha to remove the JetBlue sentence.

    Regarding Boeing's 737 strategy. Yes, they've been considering doing something for some time, but they didn't commit until Airbus' A320neo showed competitive strength and long-time 737 users pushed.

    Thank you for the comment.
    John Tobey
    Oct 31 07:44 AM | Likes Like |Link to Comment
  • Wall Street Signals A Bull Market In U.S. Stocks [View article]
    You remind me of advice I got early in my career. My boss, an experienced institutional investor, said to be careful about reducing or selling out a position "just" because times were worrisome. He said that when the worry lifts, the market is suddenly up -- he called it the easiest 10% in stock investing.

    This time, with the pronounced worry and extended trading range, it's looking like we just got an easy 20% rise.

    Thank you for the comment.
    John Tobey
    Oct 29 08:53 PM | 1 Like Like |Link to Comment
  • Wall Street Signals A Bull Market In U.S. Stocks [View article]
    But, how do you know I am misguided if you only quickly scan my article?
    Oct 29 11:54 AM | Likes Like |Link to Comment
  • Wall Street Signals A Bull Market In U.S. Stocks [View article]
    Yes. And bear markets, too. It will be interesting to see who is right.
    Oct 29 11:52 AM | 1 Like Like |Link to Comment
  • Netflix's Classic Mistake Is Irreversible And Life-Threatening [View article]
    "Netflix outthought itself..."

    You raise two important points.

    First, being in an evolving industry, management jumped too fast to the future, making the mistake of foreseeing the DVD's imminent death rather than its potential source of cash flow. The lengthy switch from VHS tapes to DVDs is a good example.

    Second, as you point out, streaming is neither a perfect nor a complete replacement of DVDs yet, so the potential revenue stream from DVD rentals could be long-lasting.

    Thank you for the comment.
    John Tobey
    Oct 27 01:20 PM | Likes Like |Link to Comment
  • Netflix's Classic Mistake Is Irreversible And Life-Threatening [View article]
    jopocop and AlphaGen 2011-
    Yes, Netflix could, somehow, manage to attract back those that have left. However, that is not a natural or normal occurrence. Emotions may have caused some to leave, but most people make rational decisions. Netflix's rate increase encouraged many to reanalyze their usage, the cost and the alternatives now available. Chances are they are happily moving on to other video access routes. Therefore, unless those choices turn out to be disappointing and/or Netflix comes up with something that bests those alternatives, there will be few returns.

    History is filled with companies that faced and lost to trend changes. Hardest hit are the non-diversified firms because resources dry up. That said, it doesn't mean they die overnight. Attrition can be slow, meaning Netflix could have a decent revenue flow for some time. What's too bad is that a different strategy could have furnished the company with much higher revenues while keeping their reputation high.

    Thank you for the comments.
    John Tobey
    Oct 27 11:23 AM | Likes Like |Link to Comment
  • Netflix's Classic Mistake Is Irreversible And Life-Threatening [View article]
    Joe Dirnfeld-
    I'm not sure I have your thought right. I believe you are saying that you, as a consumer, are happy with Netflix. However, I'm not criticizing their services. Rather, as an investor, I am describing the weaknesses of their corporate strategy that are adversely affecting the outlook for their stock.

    Thank you for the comment.
    John Tobey
    Oct 27 12:13 AM | Likes Like |Link to Comment
  • JPMorgan's Wall-Street-Savvy Dimon Maps A Conservative Route [View article]
    I am not following any smaller banks currently, nor am I invested in any of the actively-managed funds that hold regional bank portfolios.
    However, smaller banks could be promising holds for the future. With large banks viewed as weaker and/or unfriendly (AKA greedy), the market is ripe for some well-managed competitors to gain ground -- especially those that are considered local.
    Oct 24 01:22 PM | Likes Like |Link to Comment
  • Fixing Wall Street: Cutting The Gordian Knot [View article]
    Hi Tom,
    You've done a masterful job of explaining the problems created by an over-reliance on the financial system. We are told that, by making (or not making) a change, life will be better. However, the arguments are simply part of a strategy on behalf of the proponents to improve their ability to make money.

    That said, there's nothing new with the financial industry lobbying congress and the regulators to get its way. What has been different over the past many years is the willingness of those in power to yield to the industry's wishes. It has been especially frustrating to watch the born-from-fire 1930's philosophy and regulations be reworked or skirted. At the same time, the regulators (particularly the Federal Reserve and SEC) accepted the arguments and backed off using the tools they had at hand.

    Personally, I expected our financial system meltdown would expose the weaknesses and produce the needed return to reality. Instead, the response was tepid and remains unfinished.

    The real challenge for investors is to remain focused on investment fundamentals by (1) using common sense to avoid getting fearful/depressed (e.g., wanting to own gold only), (2) remembering the real value of stock shares is rooted in a company's activities (not in the latest price whipsaw with media/pundit pronouncements attached) and (3) as Gerald Loeb wrote, investing is a "battle for investment survival" -- meaning it takes work and conviction (even courage) in the best of times to do well in the markets.

    Thanks again for the well-written piece.
    John Tobey
    Oct 17 11:13 AM | 7 Likes Like |Link to Comment
  • Google's Go-Nowhere Earnings Cycle [View article]
    I see you are new to commenting, and I'd like offer an important suggestion.

    To have comments taken seriously, completing Seeking Alpha's bio is very helpful to readers. It allows them to understand where the person is coming from.

    Simply saying you are a technology analyst who has been in the business for a long time without a bio or confirming details is a throw away statement -- especially when you make non-analyst statements like "political ropes surrounding stock prices and earnings" and "continued mega-growth." I have serious doubts you are actually an analyst because of your statement that Google is a "can't lose proposition." No analyst EVER uses "can't lose."

    I don't intend this criticism as a personal attack, and I would be happy to be corrected. Rather, I wanted to show that, in this day of easy internet communication behind anonymous user names, a person needs to reveal him/herself to be taken seriously.

    John Tobey
    Oct 17 01:36 AM | Likes Like |Link to Comment
  • Google's Go-Nowhere Earnings Cycle [View article]
    mikeurl and crosstherubicon-
    You each express an interesting idea: That Google management is employing a type of loss leader strategy to ensure they keep the company's search-based advertising revenues under their control.

    However, rather than a grand scheme, I believe it’s poor business judgment. Let's take the buying of patents as an example. Whether they wanted to build new activities or protect Android, they engaged in the bidding for Nortel Network's wireless patents. However, they then mystified Wall Street by using mathematical concepts to set their bids -- and lost. As a reminder, below is the report from The Economic Times ("Google bid 'pi' for Nortel patents and lost" -- July 5).

    "Google was bidding with numbers that were not even numbers," one of the sources said.

    "It became clear that they were bidding with the distance between the earth and the sun. One was the sum of a famous mathematical constant, and then when it got to $3 billion, they bid pi," the source said, adding the bid was $3.14159 billion. "Either they were supremely confident or they were bored." It was not clear what strategy Google was employing, whether it wanted to confuse rival bidders, intimidate them, or simply express the irreverence that is part and parcel of its corporate persona. Whatever its reasons, Google's shenanigans did not work.

    A group of six companies - Apple, Microsoft, RIM, EMC, Ericsson and Sony - won the auction of 6,000 Nortel patents and patent applications with a $4.5 billion bid.
    (Remember, too, they showed the same “irreverence” and played the same sort of games with their IPO, costing the company a huge equity infusion as the IPO price had to be knocked down.)

    Now, we come to Patent Acquisition #2 -- at least that's the guess as to why Google bought Motorola Mobility (MMI) for $12.5 billion (an even $40 share price when MMI was selling below $25). Why have to guess? Because management used puffery rather than rationale to explain the purchase (see the Google PR at They even changed the description of MMI, attempting to support CEO Larry Page's "perfect fit" claim. The Yahoo profile is accurate: "Motorola Mobility Holdings, Inc. provides technologies, products, and services for mobile and wire line digital communication, information, and entertainment applications." Google's PR description reads like the preamble for a mission statement: "Motorola Mobility Holdings, Inc. fuses innovative technology with human insights to create experiences that simplify, connect and enrich people's lives."

    So, I don’t believe management has a Great Scheme to protect and grow the company. Rather, it looks like the company's search/advertising large cash flow has allowed them to engage in activities without the commitment or business acumen required – to flit from one thing to another, as their interests rise and fall.

    Thank you for the comments.
    John Tobey
    Oct 16 10:35 PM | Likes Like |Link to Comment
  • Google's Go-Nowhere Earnings Cycle [View article]
    I see you're new at making comments at Seeking Alpha, so I'd like to offer a couple of suggestions.

    Disagreement is perfectly acceptable, but, to have your view taken seriously, it's best to include some rationale.

    Also, using acronyms (FUD instead of fear, uncertainty and doubt) is okay shorthand if widely used. Otherwise, your comment could be misunderstood or ignored.

    Hope that helps.
    John Tobey
    Oct 16 07:56 PM | 1 Like Like |Link to Comment
  • Google's Go-Nowhere Earnings Cycle [View article]
    I very much like your succinct description of Google's problem as an investment:

    "Unfortunately, it's not possible to buy that advertising company without getting a big old bucket of other stuff along with it that I may or may not want, most of which earns little or nothing and consumes income and capital. And, to make matters much worse, the board seems determined to continue funneling that business's returns into more such ventures rather than distributing them to the company's owners."

    However, I don't believe the non-payment of dividends (distributions), by itself, is the problem. Rather, as you say, it's management's inability to identify profitable investments that would build upon and diversify the company's main stream of income. Certainly, Google should distribute money they cannot successfully invest, but management and the board would have to admit to that gross weakness.

    Thank you for the comment.
    John Tobey

    PS - I understand how articles on Seeking Alpha (or any "real time" website) can seem incomplete. But the design and purpose is not to issue complete analytical reports. Rather, it's to advance discussion and understanding, presuming that readers are either already knowledgeable of previous facts or will conduct their own research to gain that knowledge. Personally, I am forever cutting out extraneous (i.e., already reported and discussed) information in order to provide readers with my point succinctly -- just like you did above.
    Oct 16 12:21 AM | Likes Like |Link to Comment
  • Google's Go-Nowhere Earnings Cycle [View article]
    PenName Dave-
    "Chartism always works, until it doesn't."

    I agree. Connecting the dots and calling it a trend is an investment strategy doomed to failure.

    My purpose here is to explain Google's flaws, then using the performance graph to show the resulting poor returns. My sense is that there are many investors who believe Google is doing well and the stock will soon rise to its deserved level. Certainly, articles such as Zack's "Google Hits Another Homer in Q3," support that notion.

    My skepticism comes from management's mistakes and my belief that they will continue making them. If so, that will be the source of continued underperformance.

    Thank you for the comment.
    John Tobey
    Oct 15 04:17 PM | 1 Like Like |Link to Comment
  • JPMorgan's Wall-Street-Savvy Dimon Maps A Conservative Route [View article]
    ** UPDATE **

    Barron's cover article this weekend is "Buy the Banks" by Andrew Bary. (

    "Financial companies are rebounding, but their stocks are not. A rare opportunity to buy in on the cheap."
    Oct 15 09:44 AM | Likes Like |Link to Comment