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  • If Amazon Is So Overvalued Why Does Google Want To Be Like It? [View article]
    Paulo - unless the Amazon CFO is lying on earnings calls he basically told us in the Q4 that as they add fulfillment centers they are adding more capacity than the current business needs:

    "As you know, certainly as you look at the last few years, we have been in very heavily expanding in terms of fulfillment capacity because of the growth that we have been experiencing that certainly would put pressure on our overall cost structure. Certainly as a per unit basis because we are not giving the productivity. We don’t get the full productivity for a number of years after expanding."
    Mar 16, 2013. 12:55 PM | Likes Like |Link to Comment
  • If Amazon Is So Overvalued Why Does Google Want To Be Like It? [View article]
    As far as Google and their competing cloud offering goes compared to AWS - you might want to read what the Netflix Chief Product Officer had to say here when comparing the two:

    http://bit.ly/ZQ6rnn

    "Google and Microsoft both have technology solutions, so they're chasing after similar customers. I would say that Amazon's technology is a very meaningful step ahead of them, in terms of having a complete solution of low-level components that can be assembled into a package that works."
    Mar 16, 2013. 12:44 PM | Likes Like |Link to Comment
  • If Amazon Is So Overvalued Why Does Google Want To Be Like It? [View article]
    The Sears store is one you wrote an article about and I think your wrong, but I commented on that article since it is not really relevant here.

    You said:

    "Given the fast revenue growth and the time it takes to set up the distribution centers, you can be certain that those distribution centers have LONG been working at their cruise speeds and profitability."

    The Amazon CFO noted on the Q2 earnings call in the Q&A section that they opened 6 distribution centers through Q2 and would open at least another 12 before the end of the year. In the Q4 conference call it sounds as if he says the ended up adding 20 fulfillment centers in 2012.

    This Bloomberg article from early 2012 notes that Amazon had 69 warehouses (assuming they mean fulfillment centers) after the Kiva acquisition - http://bloom.bg/Uxh3af

    If they started the year with a base of 69 fulfillment centers and added 20 it is hard to see how those distribution centers "have LONG been working at their cruise speeds and profitability" as you argue.

    If you can find an actual count of fulfillment centers in their Q or K reports I would love to see it. All I can find is the square footage figures they provide and then the additions the reference on earnings calls.
    Mar 16, 2013. 12:34 PM | 1 Like Like |Link to Comment
  • The Sears 'Real Estate Is Undervalued' Myth [View article]
    Kmart was the acquiring entity as noted in the 10Q: "The merger has been treated as a purchase business combination for accounting purposes, and as such, Sears’ assets acquired and liabilities assumed have been recorded at their fair value. Kmart and Sears determined that the merger would be accounted for as an acquisition by Kmart of Sears"

    So only the Sears assets were written up which, while a significant portion of the real estate, was only about 80% of the total .

    Outside of a business combination GAAP does not allow for retail property to be marked up to what a company may consider fair value which I assume you know. So since 2005 none of the real estate assets owned by Sears have been marked to fair value and on the contrary have continued to have their value marked lower through depreciation. In the future this could change for certain investment properties with a possible switch to International accounting regulations. This would still not apply to stores owned by Sears/Kmart that operate as operate as either a Sears/Kmart retail store.

    This is precisely why Sears was able to sell 11 (Sears retail) stores to General Growth Properties for $270M and make a gain of $223M on the real estate portion of the transaction. You can not make a gain like that if the assets are marked at fair value. Also as these stores were re-valued in 2005 at the height of the real estate market it is even more telling that the company was able to record such a significant gain on them 7 years later after the greatest real estate devaluation in the history of the United States. I understand these were better than average properties but they were still sold for 80% more than their cost basis.

    Tough argument you are making here that could have lots of holes poked in it.
    Mar 16, 2013. 12:13 PM | 2 Likes Like |Link to Comment
  • If Amazon Is So Overvalued Why Does Google Want To Be Like It? [View article]
    Let's just assume one of the most prolific tech companies understands GAAP and their auditors are ensuring they are properly depreciating their assets. Your comment about matching revenue and expenses, such as depreciation, has nothing to do with how a useful life is calculated.

    The $1.2B HQ building that Amazon just purchased will be depreciated over no more than 40 years. Will the building fall down in 40 years? No it wont but you have to set some reasonable period of the useful life. That is why you read about all these retail companies like Sears or JCP where some make huge arguments that they have valuable real estate assets marked to zero on their balance sheets simply because they have been in existence long enough to depreciate to zero from an accounting standpoint.

    Matching depreciation expense with revenues is not GAAP. The useful life of something, which is the period of time for depreciation expense, can be significantly shorter than how long that asset can generate revenues. Upgrades, maintenance, and just the conservatism required by GAAP ensure that many assets are fully depreciated long before they are retired.
    Mar 16, 2013. 10:05 AM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Here you go buddy. The analysis that backs this up is that for the first time since 2007 Apple saw a decrease (93% to 88%) of users who planned to make their next purchase an iPhone. Call that noise if you want but 5% is a statistically real and sales impacting amount.

    Just so happens to correspond with Samsung offering the first great iPhone alternative to the market since the iPhone was launched.

    I don't think I am missing anything here.

    http://huff.to/15SjLvh
    Mar 16, 2013. 09:12 AM | Likes Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Apple has had the success they have had to date without even figuring out how to be a top competitor it what will become the world's largest smart phone market, China.

    All the reason for them to diversify their product offering with a lower end iPhone for markets that will continue to forgo subsidizing the price.

    In the US, while after this no longer the biggest but still the most profitable market, Apple has a chance to move up the food chain with a larger phone where Android (with Samsung being the most successful) currently operates with no real competition. It is not rocket science.
    Mar 16, 2013. 09:07 AM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Not having seen one in action should be extrapolated to be a bad thing. You probably have seen just about every other smartphone in action.
    Mar 16, 2013. 08:57 AM | Likes Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Should they do that or just license BB10 (or buy the company) if that OS gets any traction at all?
    Mar 16, 2013. 08:55 AM | Likes Like |Link to Comment
  • Something That Amazon Did Well [View article]
    Actually think you are overstating the positive impact in this case.
    I know that Amazon offered short 1 or 2 day sales on both the 7' and 8.9' HD Fire models leading up to Christmas. I bought the 7' model for someone as a gift and paid $174.99 ($25 off). That same time the 8.9' model was going for $249.99 ($50 off).

    It is hard not to imagine that drove a large amount of their unit sales and/or people who paid full price days earlier did not either ask for a retroactive refund or just returned the full price device for the discounted version.

    Food for thought
    Mar 16, 2013. 12:25 AM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    So the Galaxy S4 will have 2600 mAh battery and ultimately less juice than the Note 2 battery of 3100 mAh if what your saying is correct. But the S4 will have 1920x1080 pixels and pixel density of 441ppi. The Note 2 is at 1280x720 pixel resolution and 267ppi.

    So S4 has much more of a battery hogging display than the Note 2 and a significantly smaller battery. Am I missing something?
    Mar 15, 2013. 11:54 PM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Bigger display = bigger power drain. They added over 1 million pixels to the display which will kill the batter even if it is bigger.

    Optically the old display is preferable to the new one. You have no contrast or edge of the display the screen essentially just falls off the side of the phone. Sure your using what real-estate you have but it just does not look as clean as the S3 or the iPhone 5.
    Mar 15, 2013. 10:55 PM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Thanks for the opinion. I would disagree that Apple stock going up today and Samsung going down is something to outright dismiss. Certainly selling the news is something that happens in the market all the time. But Apple has had its fair share of analysts call the bottom and upgrade the stock the last 30 days and it has had no impact on the stock.

    Samsung is facing brand confusion by having 2 competing 5+ inch phones in the market. Arguably anyone who wanted a 5 inch Samsung phone already could have purchased one in the Galaxy Note. What market are they serving today that they were not already previously serving?

    Subsidies will effect all phone manufacturers and do you really think Apple is concerned about losing Samsung as a chip supplier? Like there would not be dozens of companies lining up for this business?
    Mar 15, 2013. 09:53 PM | 1 Like Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    I clearly meant to say Apple above - sorry for the confusion.
    Mar 15, 2013. 09:20 PM | Likes Like |Link to Comment
  • Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
    Sounds comfortable
    Mar 15, 2013. 08:42 PM | Likes Like |Link to Comment
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