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Paulo Santos

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  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    I haven't said anything about those. AMZN is what, 15 years old already? It's moving around $100 billion in merchandise. If it was going to be hugely profitable, it would be hugely profitable already.
    May 24 06:00 AM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    In all likelihood. Though it is NOT impossible that AMZN ends up making large profits. It's also not impossible to win the lottery, but that is no excuse to pay $10 million for a ticket yielding a prize of $10 million if it does pay out.
    May 23 09:01 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    It works like this:

    http://seekingalpha.co...
    May 23 05:26 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    Using rosy assumptions for the future, anyone can justify anything. You call it "short term", I call it 2.5 years of declining earnings - right now even I expect earnings to go up - I just don't ever expect them to be high enough to justify $120 billion in market cap. And besides, justifying $120 billion in market cap isn't easy, either. Very few companies attain the fundamentals necessary to do that.

    I've explained why it's hard for AMZN's earnings to go up as much as needed. And there are many different trends going against AMZN right now, such as the migration towards digital content (have you seen how content is bought for iOS, Android, the Xbox, etc? ALL of them have their integrated stores leaving browser-based buys as an afterthough) or the need to collect sales taxes now (a huge advantage that's disappearing).

    Plus we also know that a similar business - generalist mail order - lost out against bricks and mortar, certainly due to the fact that it has to eat the costs of delivery, picking and packing. That hasn't changed.
    May 23 05:25 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    "It's everywhere" in terms of chasing every asset.
    May 23 09:28 AM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    ...and nearly 2 more months of (probably) adding up to it have gone by, since. I believe a new record for margin debt will be set.
    May 23 06:45 AM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    Hard to say, no matter how many scares, the bottom line is that he's still printing. Though I do expect that somewhere down the road we'll be graced with yet another flash crash, since at some point the market will be composed almost solely of longs and leveraged longs and when it drops, it will drop into a void.
    May 22 06:22 PM | Likes Like |Link to Comment
  • Apple's Magic Is Broken [View article]
    Those are reasons why WP8 and Android do have a chance. Once people get to know what's possible with an OS that's not possible with the other, it can really make a difference.
    May 22 05:31 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    Depends on how you look at margins - the U.S. margins "seem" better because people have taken to ignoring compensation paid in stock. Most of this is paid in the U.S. so "CSOI" margins appear better in the U.S. Also AWS is in the U.S. and might be profitable, so it helps the U.S. margins.

    Obviously I think (and have explained why) that compensation paid in stock cannot be ignored. If it could, you could make ponzi schemes out of the thing (companies that looked profitable just because they sold something at cost but paid the cost in stock).
    May 22 06:39 AM | Likes Like |Link to Comment
  • Microsoft (MSFT) unveils the Xbox One, a 3rd-gen console it pitches as "the ultimate all-in-one entertainment system. The device has a rectangular, set-top box-like shape, a slightly bigger controller. a revamped Xbox Live UI, improved app/game loading and switching times, and fresh voice/gesture controls. AMD is widely believed to provide an integrated CPU/GPU for the system. (live blog) (previous[View news story]
    Trsanscripts, I mean demanding action games, for which consoles are usually used.
    May 21 09:38 PM | 1 Like Like |Link to Comment
  • Microsoft (MSFT) unveils the Xbox One, a 3rd-gen console it pitches as "the ultimate all-in-one entertainment system. The device has a rectangular, set-top box-like shape, a slightly bigger controller. a revamped Xbox Live UI, improved app/game loading and switching times, and fresh voice/gesture controls. AMD is widely believed to provide an integrated CPU/GPU for the system. (live blog) (previous[View news story]
    How many people have you ever seen playing games in windows, using windows instead of full screen?
    May 21 08:47 PM | 1 Like Like |Link to Comment
  • Microsoft (MSFT) unveils the Xbox One, a 3rd-gen console it pitches as "the ultimate all-in-one entertainment system. The device has a rectangular, set-top box-like shape, a slightly bigger controller. a revamped Xbox Live UI, improved app/game loading and switching times, and fresh voice/gesture controls. AMD is widely believed to provide an integrated CPU/GPU for the system. (live blog) (previous[View news story]
    I don't think anyone really wants to play windowed games.
    May 21 07:53 PM | 1 Like Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    lil, we don't need to "think" about this: we can check the P&L of several retailers, such as WMT or COST and SEE that their costs are LOWER than AMZN's.

    1) Means AMZN has a very similar business model to the Sears Catalog - it's a catalog, fulfills by mail order. The main difference is that AMZN's catalog is bigger and doesn't have to be distributed in paper, but the fulfillment is nearly the same thing. And the 80:20 rule means having a huge assortment doesn't necessarily translate into much better profits.

    2) While AMZN doesn't have to have as many employees in its warehouses as the stores, it does have to rely on a massive number of (third party) employees to make the deliveries. Obviously AMZN pays those AND a profit margin;

    3) In that normalized estimate he plugs in 1/3 of average costs which make no sense (tech, because AWS inflated it over time) or which are linked to GMV, not revenues (marketing).
    May 21 07:30 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    Comments regarding that:
    1) AMZN is similar to the Sears Catalog in terms of costs, it doesn't have to distribute a paper catalog but it has tech costs, it can have more selection but most companies and retailers are affected by the 80:20 rule which means more selection doesn't help much.

    2) AMZN has the costs of picking, packing, delivery, which physical retailers don't have (the customers do it for them);

    3) The study ignores the fact that marketing moves with GMV, not revenues - precisely the kind of thing I've been warning about. It's flawed to the core due to this. It also ignores that tech is where AWS costs go so it can't get back to levels existing before AWS existed;
    May 21 03:46 PM | Likes Like |Link to Comment
  • Amazon - The Mystifying Estimates For The Quarter Just Ahead [View article]
    Tech is variable - it's mostly the cost of operating AWS, much like RAX's or EQIX costs are variable with their activities. It scales with AWS's size, though, not with the 1P + 3P revenues.
    May 21 03:38 PM | Likes Like |Link to Comment
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