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Marc Gerstein  

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  • Amazon: Are We There Yet? [View article]

    HYes, every retailer has e-commerce. But as I discussed in other cokmentsin thgis thread, there's a HUGE difference between competent e-commerce and incompetent e-commerce. Be carewfgul about getting caught up inb Morningstar style analysis (The company has competition. OH MY GOD! How horrible! We can't invbest in a company that has competitors). Pretty much everybnody has to compete. The good companies aren't those with "moats" (a cute fantasy and the world's WORST metaphor; Hoe many moat-prrotected castles withstood attcak and still rune today? Zero.). The winnbers are those companies that are just plain better.
    Apr 12, 2014. 10:12 AM | Likes Like |Link to Comment
  • Amazon: Are We There Yet? [View article]
    Actually, I am getting an idea. I forgot to mention that I had a very similar experience with the supposed web site of another prominent brick-and-mortar outfit -- Radio Shack (ov vey). And yesterday I went into a Best Buy inFlorida to get my mother a Kindle Fire 8.9. Had I not been extremely time constrained, I'd have stormed out of that hell hole and ordered on line at Amazon. I doubt I need to go into details. The absence of buyers (eight checkout stations seven of which were not manned and need not have been manned) suggests most readers already have abandoned Best Buy.

    Anybody who thinks AMZN succeeds based solely on lower prices (which I'm not even sure is always the case) is simply disconnected from reality.
    Apr 11, 2014. 08:59 AM | 3 Likes Like |Link to Comment
  • Amazon: Are We There Yet? [View article]
    Actually, I just got back from a rare trip to WMT to pick up something that according to the web site, was in stock at that particular store. It wasn't there, not ever. I said to the salesman "So you mean the web site is fake?" He said "All the time." I went to customer service and asked to speak to the manager. They confirmed that the information on the web site is fake. Good luck to the geniuses waiting for to give Amazon it's comeuppance. (P.S. I just ordered the item from Amazon.
    Apr 9, 2014. 02:38 PM | 2 Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "Noise is story, noise is buzz. It's overly dismissive to call it noise, really."

    I didn't means to offend. But if you do have a grievance with the terminology, you may want to take it up with Fisher Black (or, at least his estate), since he is, as far as I can tell, the first guy to use the word in this context.

    That said, "story" is also fine. I do, however, have a problem with "vision." That implies that everything except value is of high quality and worthy of consideration. Some of it definitely is. But there's also a lot that's really dumb. Whatever word is used to identify factors other than valuation, it should be broad enough to encompass the full spectrum of quality (that which the investor must assess).
    Apr 8, 2014. 07:02 PM | 1 Like Like |Link to Comment
  • Amazon: Are We There Yet? [View article]
    "Best Buy could be interesting once the sales tax advantage is removed."

    This reminds me of a time years ago when I covered airline stocks. A bunch of low-cost airlines formed and each CFO confidently explained that "an airline seat is a commodity" and that their victory in the marketplace was inevitable given their low (non-union) cost structures and the low prices they charged. And every single one of those carriers quickly went bankrupt because as it turned out airline seats were not even close to being commodities. Many other things counted as well or even more: convenient schedules, comfortable planes, good customer service, etc.

    Best Buy is not suffering because Amazon's has low prices. Best Buy is suffering because Amazon has stuff, something it's increasingly impossible for brick-and-mortar stores to claim,and also because if you want to buy any of the scant stuff BBY has, or try to get info, you have to deal with the infamous blue shirts, the geniuses whose most frequent answer to a question is "I don't know" or "I'm sorry, I'm not familiar with this department." It's why Amazon is kicking Barnes & Noble's butt, and why they kick the butts of others in other retail categories. Amazon has; the other guys don't. Of course te other guys have web sites too nowadays. But there's a big difference between a web site that's easy to find things on, easy to learn about products, easy to pay, etc. versus web sites that just plain suck. (Notice how Nook is a failing business, despite being cheaper than Kindle and despite being more favored by quacks who write tech reviews; the successor to the prior generation of idiots such as those at Consumer Reports who once hailed the Texas Instruments 99/4A as the best pc on the market, until the Coleco Adam came out and opened the eyes of the moron contingent. SA comment threads on AMZN are far funnier than anything one can find on the comedy Channel!

    No matter, the haters will continue to rant. They think they're casting Amazon in a bad light. Actually, though, all they have zero impact on the market and are really doing is showing how jealous they are that others succeed more than they. Bezos haters, Jobs haters, Gates haters, Hastings haters. LeBron James haters, Yankee haters, it's all the same. So go on folks. It's hysterically funny to watch ; it's like slowing down to gawk at a highway pileup. ;-)
    Apr 8, 2014. 06:47 PM | 5 Likes Like |Link to Comment
  • Amazon: Are We There Yet? [View article]
    "But I guess they'll be shipping to Mars by then."

    That would probably be a good move. I heard there's no sales tax on Mars.
    Apr 7, 2014. 10:52 PM | 2 Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    " Surely most people would agree that there can be objective measures of value"

    In many cases, there are. But in many other cases (and not just the TSLAs of the world), those supposedly objective measures turn spectacularly subjective when one realizes that the data needed to develop truly objective valuations does not really exist. Beware of noise that masquerades as value, which is quite prevalent in the market.

    And Blue Ridge, you actually do agree with this. You are not making any sort of argument or shedding any light in opposition. All you're doing is pulling up a bunch of cliches that demonstrate your personal disdain for the way things are. So while Shiller might say "smart money" and "ordinary traders," and while Prof. Lee at Stanford changed the terminology to "value" plus "noise," you might choose to re-edit the labels as something like "reasonable investors" and "stupid morons." Under the latter terminology, instead of saying P=V+N, we might say P=R+S. Whatever the choice of labels, everybody is describing the same thing. And in the models I use to parse these factors, instead of labeling variable @NoisePct and @ValPct, as I do, under your terminology, I might use @StupidPct and @ReasPct. But none of the logic would need to change.
    Apr 7, 2014. 05:33 PM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    The concept of Price=Value+Noise was explained n my prior article ( but here's a quick summary.

    The framework comes from Robert Shiller's paper, Stock Prices and Social Dynamics (the links I provided don't seem to translate well on SA, but you can google the title). Under his terminology, it's "smart money" and "ordinary traders;" (these were later re-named value and noise respectively).

    Essentially, according to Shiller, smart money investors (the value camp) are those who "respond to rationally expected returns but to an extent limited by their wealth." Ordinary investors (the noise camp) consist of everybody else, those who "have no model or at best a very incomplete model of the behavior of prices. dividends, or earnings of speculative assets."

    Theoretician that he is, when Shiller speaks of the value camp, smart money, and talks about rationally expected returns, he isn't kidding. He's talking about the present value of expected future dividends. My presentation is considerably more liberal and speaks of any rational valuation approach that can be used with reasonable confidence. So many, including many on SA, who I'd put in the value camp would actually be assigned by Shiller to the noise camp because their approaches aren't sufficiently optimal.

    So is ordinary trader/noise demand good or bad? Neither. It just "is." It's like the darkness we associate with night. Whether you like it or hate it is up to you. But if you are to have a complete understanding of the 24-hour cycle, then you have no choice but to recognize that night is part of it. And if you're going to go about in the world at night, you'd be helping yourself if you take the trouble to learn how to do so without hurting yourself (i.e. use artificial light). Similarly, if you are to have a complete understanding of the stock market, you have no choice but to recognize and understand the full range of factors that make stock prices what they are. Whether you like or dislike a particular component is your personal choice. But you have no choice in whether or not it's part of the market. It is. It always was. And it always will be. And if you're going to go about in this environment, it would help you to learn how to do it.
    Apr 7, 2014. 07:59 AM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    " I just wish that SA contributor Paulo Santos could get a copy of your article and stop his (senseless noise?) bashing of TSLA."

    Does he bash TSLA? Heck, I thought he only bashed AMZN. Paulo, are you here? If you are, I suppose this may not be the best time to tell you how much I love the 7" Fire I picked up, which I actually use more than my full-size iPad.
    Apr 7, 2014. 12:29 AM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "Nothing more enjoyable than the usual 'She said', 'He said'"

    Yup, and that's why every trade has a buyer and a seller.
    Apr 7, 2014. 12:20 AM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "Yes, noise, hype, fever, greed, are all synonymous with what I have termed the 'BS' factor when I perform due diligence in my stock picking. 'Pie in the sky', and "hope" also can be ascribed to the same group of terms that this author chooses to call 'Noise', and I call 'BS'. . . .Tesla and the like are not for investors, but for gamblers! But that is fine, to each his own. Personally, I prefer investing my portfolio, and hitting the craps table in Vegas several times a year to vent my gambling urge. "


    The substance of your comment is fine. But I think you should be concerned about the tone. There are many different ways to approach the stock market and ampler opportunities for folks of all philosophies to succeed if they are effective in doing what they choose to do. But there is no reason to denigrate others who choose an approach that differs from the one you favor -- except for raw emotion. And if there is one thing that is ALWAYS a danger to one who invests in stocks it's letting emotion take over. So you should be concerned about the emotion your post displays. My suggestion: Relax. Do your thing and prosper, and don;t worry about other who do their thing.
    Apr 7, 2014. 12:17 AM | 1 Like Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "'The fact that TSLA stock can’t be justified on the basis of value is not a deterrent from owning the shares.'"
    That is straight out of the Dotcom text book of "new metrics." I'm pretty sure if you go read about that exact same argument was made."

    I suggest you go back to the article, re-examine Figure 8, and review to related text.
    Apr 7, 2014. 12:10 AM | 1 Like Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "Investing based on noise? Pure speculation. Nothing wrong with speculation if you recognize it as such, but it is still speculation. "

    True, I suppose. But actually, speculation comes in a variety of forms some of which are thoughtful (quite a few examples are to be found in other comments in this thread and in other SA articles on TSLA) and some of which are just plain crazy.
    Apr 7, 2014. 12:07 AM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "I had to go back through your article and see if you outlined the idea of noise and that I had missed it. But I didn't see it. "

    It was in the first article:

    "If you expand this concept into a seminar, I hope you are, please message me and tell me where I can get that seminar."

    Don't know where you live, but it will be part of a presentation I'll be giving to the AAII Chapter in Cleveland on May 14
    Apr 7, 2014. 12:04 AM | Likes Like |Link to Comment
  • Tesla - Driven By Noise, But High-Quality Noise [View article]
    "how do you determine noise?"

    See my prior article, which addressed that in considerable detail:
    Apr 7, 2014. 12:01 AM | Likes Like |Link to Comment