Ron Haruni

Ron Haruni
Contributor since: 2007
Thanks for all your comments. Very respectfully, in response to JohnL and Nick M -- -- In the article I used the term "laissez-faire methodology" not "laissez-faire policy". The distinction imo is very important.
Laissez-faire as a 'policy' generally dictates, restricts and limits government's intervention in the marketplace. And I absolutely agree with that definition. However, the "laissez-faire methodology" ; while as a concept it still applies to economic liberalism, it recognizes the government's legitimacy to play an active role, if it chose to do so, in the interest of public good. And in this case, referring to article, the gov did what it does best, kept giving raises to themselves and didn't act regardless of Bair's warnings.
Woofer thanks for pointing that out. Meant Clear Channel. My mistake and already corrected ticker n my blog. Appreciate it.
I respectfully have to disagree. The 1.1% inflation rate is based on how the govt. calculates GDP = C + I + G + (X - M). If we add imports into the equation (check BEA #), nominal growth registers at 5.5% Q2'08 annual rate, then using 4% inflation rate means real GDP growth equals still 1.5% positive territory. We shouldn't confuse CPI with GDP inflation measures.
As far as the revision of Q4'07 goes....many are finding it convenient not to mention that the govt. added a full point to real GDP growth in Q2'07 prompting an impressive 4.8% real GDP growth annual rate.
Payroll employment: the monthly job losses in fiscal '08 – at 73K per month are not large enough to suggest the U.S. economy is in recession let alone depression. If we get 140K+ job losses per month then there is some validity to the argument. Additionally, productivity is growing at an average 2.5% annual rate which is nowhere near recessionary levels.
These numbers in my view and other data left unmentioned here, are not indicative of recession, granted the economy is sluggish, but growing nonetheless.
Outside of housing and banking, reasonable economic stability and corporate profit growth is evident. I have to agree however, it is hard to keep an objective perspective with all the negative financial headlines.
I understand your frustration however, PZE chart was provided by SA and wasn't part of the original submission. Regardless, I have addressed the issue. As far as ticker is concerned. Last sentence, second paragraph from the bottom clearly states PBR as the ticker.
Check out link. Article writer met personally with Jorgos Economou for about half an hour.
yes Mike K, User143705, pps given as target includes Rio T. takeover effects.
yes, figure is on the NYSE.
I don't own any shares yet - Disclosure should say instead "Author intends to own shares" which I will when ipo hits the market tmrw.
Meant Trimble there rather than tremblin and my apologies. I ware glasses for a reason...seems though need thicker ones at this point. My apologies again.
Thanks drewster. Please know that it's very much appreciated.
Thank you 'ciam' - I appreciate your comments.
First and foremost and very respectfully here, if read carefully ; article never alluded of market weakness constituting a shorting basis on this ticker, far from it. My whole point rather, was to challenge objectively, the correlation btwn - shorting a solid fundamentally stock such as VMW with its continued uptrend under shaky market conditions, and the pretension of pps unjustifiably high based on standard measures. My personal take is again, that shorting from the angle I just described would not be a viable option from an investment perspective. Day trade/wise...absolutel... one could be on the right side of the trade and scalp it to profitability a few times however, we are talking investment.
In relation to the valuation argument:
Rather then calc'ng only 25% increase btrw fiscal '05-'06 which is still a very significant and positive number......., I'd be nice to accumulatively state what the growth %wise has been, btwn 2003 to present......$100 million in revs 2003 with almost $2 Billion projected in 2008. Yes, explosive is the right word. Also Googles next 5 yrs growth estimates stand at 33.65% while Vmware's stand at 60%. Let's say 1.5 Billion will be added to books in 2008 based on 60% estimates, revenues should reach the $12 Billion mark by 2012.
Imho, to conclusively rate stock as 'over-valued' , based only on its multiples..I'd say ; it is not a sound counter-argument since noone can 100%, base an investment decision on this measure alone with all its already known susceptibilities.
My take on Vmware is that ; fair value rather than anything else, should be determined in terms of its ability to maintain its monopoly position at this point along with its pricing premium, if it is to face competition in the very near future. They are in a monopoly position since only one seller and way too many buyers. Over 20,000 companies now running VMware technology, including 99 of the Fortune 100 companies...[they will be omnipresent at some point if they go with this rate.]
Competition/wise, Microsoft currently offers only basic virtualization offerings. To say that somehow, MSFT poses at these present stage in their virtualization efforts "great competition" honestly, it is analytically misinforming.
It is true MSFT plans to introduce a more robust enterprise version in fiscal '08, but what we are not mentioning here, is fact of new offering still expected to be lacking in functionality relative to VMware’s comprehensive and constantly improving product set.

Imo, this is a solid company and it will continue to reflect its standing pps/wise.