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Paul Zimbardo  

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  • Palm Pre: Are Returns Slowing Growth? [View article]
    It is also important to mention that some of these returns could be due to Apple's move to lock-out the Pre from synching with iTunes. This was another strong selling point for the Pre that could be a catalyst for returns when removed.
    Jul 21, 2009. 12:49 PM | Likes Like |Link to Comment
  • Coffee Drinkers Not Necessarily Abandoning Starbucks [View article]
    "'Consumers are trading down, but not always away from Starbucks,' he said in a note Monday. 'Trade down remains a risk this summer due to the Frappucino platform, and deteriorating breakfast trends at restaurants.'"

    There is no doubt that consumers are trading down, either to less expensive Starbucks products or to DD or MCD beverages. The real question is whether Starbucks will be able to get those customers to trade back up to their more expensive products when the economy starts to recover. I cannot envision SBUX enjoying the success it has in the past with the heightened competition going forward.
    Jul 21, 2009. 12:14 PM | Likes Like |Link to Comment
  • Caterpillar (CAT): Q2 EPS of $0.72 beats by $0.50. Revenue of $8.0B (-41.5%) vs. $8.9B. Shares +9.3% premarket. (PR)  [View news story]
    I like CAT and considered it very attractive two weeks ago but after it is up almost $11 points or 35% over that period, I think it is time for me to make my exit. The recent upgrade, strong earnings, and upward guidance are all positives but I cannot justify buying it at this temporarily inflated price.
    Jul 21, 2009. 09:42 AM | 1 Like Like |Link to Comment
  • Why I Sell Put Options (Part I) [View article]
    I have been selling cash-secured puts for over a year now and I find them a great tool that I have added to my bag of trading skills. Good post but I believe that you should stress a few points:

    1. The biggest risk involved in selling cash-secured puts is the “catching a falling knife phenomenon”. This scenario happens when you sell a put and the stock price falls far below the strike price of the put. If this scenario materializes, you will be forced to be the stock at the strike price, often far above the current market price of the stock. This often happens when bad news or poor earnings are reported before the exercise date. Therefore it is important to always check the economic calendar of any stock you are selling a put on. For example, AAPL reports earnings tomorrow. If you sell the $145 put and AAPL reports disappointing numbers, you could easily be forced to buy the stock at $145 when it is trading at a much lower price.

    2. Since you do not own the stock, you are not entitled to any dividends, nor do you have the ability to sell covered calls to generate income on the position.

    3. Selling puts often requires account approval from your brokerage provider.
    Jul 20, 2009. 10:49 AM | 11 Likes Like |Link to Comment
  • Game Consoles: Industry Attempt at Self Destruction [View article]
    "I have never understood the industry obsession of cramming all its releases for the year into Q4, it does nobody any good and holds back the total revenue for the industry."

    The objective of a publisher is to maximize their own company's profits, not the industry's total revenue.

    You repeatedly use the term "we" when describing the video game industry in the article: Do you have an undisclosed interested in the industry?
    Jul 19, 2009. 09:56 PM | 1 Like Like |Link to Comment
  • 3 Must-Know Options Strategies for Dividend Investors [View article]
    I use both covered calls and cash secured puts to generate income and this is a well written article that is a great introduction for others.

    Good job.
    Jul 17, 2009. 10:24 PM | Likes Like |Link to Comment
  • Quite an earnings season so far, with 150 S&P companies to report next week, including Yahoo (YHOO), Apple (AAPL) and (AMZN). For this week, the Dow +7.3%. S&P +7%. Nasdaq +7.4%.  [View news story]
    The real question on my mind is how much more room does Apple have towards the upside even if it reports great earnings? It is already up 8.5% this past week, outpacing the NASD by 1% over that period.
    Jul 17, 2009. 09:30 PM | Likes Like |Link to Comment
  • CIT: A Win-Win Trade Idea [View article]
    Not a good day to have picked for shorting CIT. Currently up 110% right now.
    Jul 17, 2009. 01:50 PM | Likes Like |Link to Comment
  • IBM (IBM): FQ2 EPS of $2.32 beats by $0.30. Revenue of $23.3B (-13%) vs. $23.6B. Sees FY09 EPS of at least $9.70 (had seen $9.20) vs. $9.15. Shares +5.3% AH. (PR)  [View news story]
    @Archman Investor

    The explanation is pretty simple. Analysts anticipated that revenue and earnings would fall more than they did.

    The most important take-away from the report to me? Full year EPS guidance up $.50. Another sign in my eyes that the economy is slowly improving.

    On Jul 16 04:18 PM Archman Investor wrote:
    > You always have to ask yourself, how did they beat by .30 when revenue
    > fell 13%? They took in less money right?
    Jul 16, 2009. 04:30 PM | 1 Like Like |Link to Comment
  • Unwise to Tax the Rich to Pay for Health Care [View article]

    Where is it stated that health care is a right of citizenship in America?

    As Senator and doctor Mr. Ron Paul so pleasantly reminds us the, "constitution only guarantees citizens 'life, liberty and (the right to) keep the fruits of my labor.'"

    Anyone who is following this debate should watch this interview with Senator Paul:
    Jul 16, 2009. 03:59 PM | 5 Likes Like |Link to Comment
  • Sony (SNE) and Amazon (AMZN) are pushing to get more e-book readers onto college campuses, but students give e-textbook learning only mixed reviews. Previously: Kindles for classrooms?  [View news story]
    As someone who has recently experienced the minimum of $300 per semester (usually much closer to $500) cost of traditional textbooks, I can say confidently that e-book readers will not be viable until the price of digital textbooks falls dramatically.

    Given the inability to sell the books back or highlight them, these books should sell at significant discounts to their hardcover equivalents. In reality, the $10 discount per book is insignificant, especially when compared to the cost of a four-year private college education.

    Start sell the digital textbooks for fifty percent less than the physical equivalents and then you may gain some traction. Until then, e-book readers in the college classroom will continue to remain a fantasy.
    Jul 16, 2009. 03:51 PM | 1 Like Like |Link to Comment
  • Some Free Advice for Electronic Arts [View article]
    After reading numerous tales of developers’ difficulties with getting their games/apps approved by Apple for release in the app store, I think this is the bottleneck that EA should focus on.

    By serving as the publisher, EA can help smaller developers to expedite the process of getting their app approved for sale.
    Jul 16, 2009. 09:51 AM | Likes Like |Link to Comment
  • Unwise to Tax the Rich to Pay for Health Care [View article]

    Why should the "rich" be forced to sacrifice to support the poor? The wealthy should feel fortunate for their successes and voluntarily donate to those who are less fortunate but the government should not force them to do so.
    Jul 16, 2009. 09:48 AM | 12 Likes Like |Link to Comment
  • A Short Trip for Garmin? [View article]

    As you can see from the segment breakdown I posted in response to RWCMom, smartphones are attacking the core of Garmin’s business. Apple does not need to offer capabilities to capture the marine and aviation markets to severely damage Garmin. By eroding the capital base and source of cash, Garmin will not be able to fund these niche segments. These segments do not generate enough revenue to even match the R&D expenses.

    I got a nice laugh when you dismiss the iPhone as “big” and “bulky” but commend Garmin’s products for being “activity friendly”. For reference, the iPhone’s dimensions are 4.5 inches by 2.4 inches by 0.5 inch. In comparison, the Oregon 400T (the highest rated hand-held Garmin GPS on Amazon) has dimensions of 2.6 inches by 2.6 inches by 1.3 inches.

    Garmin was overvalued at fifty and drastically overvalued over one-hundred. This is company facing increasing competition, shrinking margins, and selling a luxury product in a severe recession. If you still think Garmin fell for no reason, I suggest starting your research over again. The fact that you do not use DCF valuation leads me and other informed investors to dismiss your projections. DCF valuation is the way that we value equity on the street. The DCF is always right, just as arithmetic is always right. The assumptions may be wrong, but the method is sound. Any “catalyst” that you mention can be incorporated into the growth assumptions of cashflow forecasts.
    Jul 15, 2009. 10:26 PM | Likes Like |Link to Comment
  • $23 quadrillion. That's one expensive pack of smokes.  [View news story]
    In comparison, the GDP of the WORLD in 2008 was approximately $60billion.

    I never knew how expensive those cigarette taxes were getting!
    Jul 15, 2009. 12:23 PM | Likes Like |Link to Comment