Seeking Alpha

Rookie IRA Investor

View as an RSS Feed
View Rookie IRA Investor's Comments BY TICKER:
Latest  |  Highest rated
  • Apple: The Most Undervalued Equity in Techdom [View article]
    Ah, yes, the Cloud of Unknowing as the medieval Christian mystic called it--a state of switching off the intellect and giving the soul over to the power of the Almighty.

    Actually, you don't have to be a mystic to understand the cloud. In computer-talk the cloud just means a remote server or storage facility that you connect to via the Internet or a cell phone.

    I actually invented the cloud long before it had a name. When I wanted access to a document like a pdf or photo or something that I had written, I would (and still do) just attach it to an email or paste it into an e-mail and mail it from one e-mail account to another, so that it would be stored in my Sent folder and I could access it from any computer anywhere in the world. Big deal.

    Now The Cloud has been invented as a way to get your money. Wanting to know what The Cloud was all about, I signed up last week for the Amazon Cloud, so that I could store some music there. It sounded great in theory according to the blurb. Maybe I could upload my entire music collection and never have to look at a CD or hard drive again?

    Fat chance! You could load up music files, but only in mp3 and not in a lossless format, and there was a strict limit after which you had to pay for more space. The indexing system didn't seem much good either. Overall impression--just a con trick to impress kids.

    Of course, if businesses or the military want to upload their data to someone else's servers so as not to have to bother with running their own or paying IT guys overtime to come out and fix the network whenever there is a storm in the area, then good for them, but its nothing to get excited about.

    Meanwhile, how long do I have to wait for an app that will take my dog for a walk?
    May 31, 2011. 08:58 PM | Likes Like |Link to Comment
  • Why Wal-Mart Needs to 'Target' a Higher-End Market [View article]
    Didn't I just see you on Saturday Night Live? No one has asked Walmart to solve anything. Walmart is just one large company that has supermarkets and department stores in a competitive universe where there are other retailers selling the stuff people need or want to their everyday existence.

    Walmart is fairly efficiently run, makes a profit, expands, pays a dividend, and is not likely to go out of business anytime soon. It has some successful businesses overseas--for example the ASDA chain in the UK--and has been less successful in some other markets, possibly because the provincial Arkansas mindset has had difficulty adapting to some other cultures. This seems to happen. The incredibly successful UK supermarket chain Tesco has spend billions trying to break into the US market without much success, I understand. Apparently they focused too much on fresh food and not enough on coupons.

    Every Day Low Prices is just a marketing slogan. Every business has to have some gimmick to get people in. As George Orwell said: "Advertising is the rattling of a stick inside a swill bucket."

    Apple's slogan might be: "Don't Look For A Discount".

    Other department stores, especially those that sell clothing, tend to have a so-called "Clearance Sale" every few weeks. Clearly their game is to get in a season's worth of apparel, try to sell it for a lot, and if that doesn't work, then unload it for what they can get for it and get some more stock in. Wash and rinse.

    Who is to say what gets more revenue, Every Day Low Prices, or Quarterly Clearance Sales?

    And anyway, isn't it the purpose of businesses to serve human needs, which certainly includes things like food, clothing, medicines, toilet paper? Probably if Apple started selling toilet paper they could get $5 a roll, by telling everyone that it was the same paper Steve Jobs used to wipe his butt, but inevitably someone else would come along and sell Microsoft toilet paper for half the price.

    Disclosure: Long AAPL, MSFT.
    May 31, 2011. 01:08 PM | Likes Like |Link to Comment
  • Why Wal-Mart Needs to 'Target' a Higher-End Market [View article]
    Yes, but they DO!!!! If you go to Sam's Club you will find they don't sell any kind of portable music player other than Apple. Also top of the line iPhones, laptops, and expensive European cheeses like Wensleydale with blueberries, Stilton, and Gorgonzola, oriental rugs, etc., etc.

    You have to pay an annual membership to shop there, so no riff-raff.

    Yes, the executives may say certain platitudes at press conferences, but if you ask, they won't tell you what the real mark up is on a bottle of Equate acetaminophen tablets or a $10 polo shirt because they would not want their customers to know.

    In any case, as a self-described leftie, don't you think that selling a reasonable product at a somewhat reasonable price--enough to cover costs and make a profit-- is a reasonable and responsible way to do business?

    I have read estimates that the components and assembly costs for an iPhone would be less than $30. It seems to me that selling it for prices like $500 equals price gouging. Obviously this doesn't matter, because no one needs to buy an iPhone and you can buy a cell phone for less than $10.

    But Walmart is selling things like real apples, and sausages, and tortillas, and eggs, and plantains--things that people need to live.

    When Dickens toured the USA in 1842, he wrote this:

    "Another prominent feature is the love of ‘smart’ dealing: which gilds over many a swindle and gross breach of trust; many a defalcation, public and private; and enables many a knave to hold his head up with the best, who well deserves a halter; though it has not been without its retributive operation, for this smartness has done more in a few years to impair the public credit, and to cripple the public resources, than dull honesty, however rash, could have effected in a century. The merits of a broken speculation, or a bankruptcy, or of a successful scoundrel, are not gauged by its or his observance of the golden rule, ‘Do as you would be done by,’ but are considered with reference to their smartness."
    May 31, 2011. 10:03 AM | Likes Like |Link to Comment
  • Why Wal-Mart Needs to 'Target' a Higher-End Market [View article]
    "Now, it's back to the "I got paid today so it's time to go to Walmart and spend my check and hope what I bought lasts us for two weeks." "

    Well, that's how about 90% of the population of the US lives.
    May 31, 2011. 09:26 AM | Likes Like |Link to Comment
  • Why Wal-Mart Needs to 'Target' a Higher-End Market [View article]
    This is the most brilliant piece of satire since Gulliver's Travels! Yes, Walmart should be like the Apple stores.

    Of course, the truth, as I am sure you have perceived, is that these Walmart execs talking about helping the poor are absolutely full of it and are talking out of one side of their mouth, while sucking up billions of dollars through a straw in the other.

    The real truth of the Supercenter business is that while the displays of fresh vegetables and organic herbs look nice, they are really just a part of the window dressing, while they make their real money in the US stores through food stamps purchases, the sale of lottery tickets and cigarettes, "envios de dinero", cheap cell phones and prepaid minutes, oil and tire changes, garden center stuff, pharmacies that loss lead with their cheap generic drugs program while making a FORTUNE out of Medicare and Medicaid.

    Everyday low prices are possible because Walmart displays expensive brands on the shelves while selling out, (like Apple), on their own cheaper and more profitable Great Value brand of grocery products or Equate generic drugs and pharmacy products.

    Also not well understood is that Walmart is all about distribution. It builds its massive distribution centers first close to interstate highways and then build stores around them, making them much more efficient than competitors.

    So it would be nice to think that Walmart is your local community benefactor, but really they are all about the money. They may not make their shareholders rich quickly, but they aren't going anywhere either.

    (Of course, in real life they also have the hugely successful chain of Sam's Club stores for their more affluent customers and small business customers.)
    May 31, 2011. 08:31 AM | Likes Like |Link to Comment
  • Apple: The Most Undervalued Equity in Techdom [View article]
    Perhaps Mr. Jobs, being the charitable soul that he is, will remember that Apple might not have survived without an injection of new capital from Microsoft in 1997
    May 31, 2011. 07:53 AM | Likes Like |Link to Comment
  • The Improbable Dominance of Barnes & Noble and Apple [View article]
    Several good points. However I doubt that someone who was listening to the incredibly fresh-sounding Sonny Rollins album Saxophone Colossus from 1956 who was not familiar with the music would realize that it was more than 50 years old.

    My main point was more than public tastes can become an avalanche and a frenzy of buying for a defined period of time, but it can't last for ever.

    I wouldn't deny for a moment that from a technical point of view Apple has led the field in making improvements in music players, phones, and hand held computers, but I still think that MANY (not all) people who buy their products for non business purposes do so because of the "bling" factor rather than because Apple is meeting a previously unmet technical need and that this buying frenzy may fade away.

    Glenn Miller recorded at Abbey Road Studios, but the name of the facility was hardly known to the public until the Beatles named one of their albums Abbey Road.

    However a lesser known production of the Abbey Road studio was George Harrison's "All Things Must Pass, which was issued on the Apple label--a brand name that became a huge revenue source when a computer company with the same name started to encroach on the music business.
    May 31, 2011. 07:23 AM | Likes Like |Link to Comment
  • The Improbable Dominance of Barnes & Noble and Apple [View article]
    Actually there have been devices like a tablet computer around for a long time. I know that when I take my car to get the oil changed, they punch my phone number into a hand held computer and it brings up my information, when I last changed the oil, etc. It may not have a touch screen, but it has similar kind of functionality. Also the guy who reads the electric meter comes round with some computer device that he points at the meter and it reads off the amount used. So does the UPS guy who delivers packages.

    In hospitals they use medication carts with touch screens that pull up the patients' prescriptions, allergy information, and open the correct drawer when the screen is tapped.

    None of these devices are iPads, but probably a lot of industries will have purpose built hand held or mobile computers of one kind or another.
    May 30, 2011. 10:36 PM | Likes Like |Link to Comment
  • Fully Confident in Wal-Mart's Plan to Boost U.S. Sales [View article]
    "Anyhow, I hate to sound classist, but there's no way WMT can continue to rely on this paycheck-to-paycheck customer."

    "They need people who are used to spending more money to live and have the cash to spare."

    I love your sense of humor.

    "I can afford
    To board
    a Benton, Arkansas
    choo choo
    I've got my fare
    And just a trifle to spare..."
    May 30, 2011. 09:37 PM | Likes Like |Link to Comment
  • The Improbable Dominance of Barnes & Noble and Apple [View article]
    OK, you don't have to agree, but what is your rationale? All I am saying is that something can be all the rage for a few years and then rapidly fade into oblivion. It has happened before.

    Why did Miller have so many hits? Like Steve Jobs he hit on a formula that appealed to the masses.

    In Job's case a digital music playing device that was originally designed as a adjunct to the Mac computer was admired by so many people that the idea of marketing it as a standalone came about and it was a huge, though unexpected success. From that sprung the iPod that could make phone calls--and the rest is history.

    In Miller's case, when a trumpet player injured his lip, a clarinet player had to stand in, and he hit upon the idea of having the lead melody played by the clarinet accompanied by the tenor sax an octave lower, with two more saxophones playing harmony below, and the formula was an incredible success that produced hit after hit. The nearest equivalent would have been when the Beatles had 7 records in the top ten at the same time, except that Miller's popularity was probably greater than that of the Beatles and Elvis combined.

    The big bands became obsolete for several reasons. After World War II it was too expensive to keep them on the road, less people went to public dances, TV started to replace radio, the invention of hi-fi and improved recording techniques in the early 50s greatly reduced the market for studio bands, and o on. In other words the music business moved on.

    If you listen to music recorded in the 1940's it sounds tinny and shallow and has little bass. If you listen to anything recorded after about 1953, you really can't tell if it is contemporary or ancient from the quality of the recording.

    Now who is to say that the iPhone and the iPad could not go the same way if competitors come up with better technologies and devices that make them obsolete by costing less and performing better? How will Intel's new 3-dimensional chips change the nature of hand-held devices, if at all?

    I don't have the answer to these questions, but many knowledgeable people think that one of the reasons Wall St. is rather reserved about Apple stock is that consumer tastes can change very rapidly.

    There are STILL bands touring playing the Miller repertoire, but no one thinks that they will ever replace whomever the current pop music fad is. There will always be Apple phones and computers, but will people be lining up to buy them at 5:00 a.m. in the morning a few years from now? Or will it be some other company that no one now under the age of 25 has even heard of? Like Microsoft?

    Anyway, hopefully Apple will help me to double my money within the next couple of years.
    May 30, 2011. 02:53 PM | 1 Like Like |Link to Comment
  • Apple: The Most Undervalued Equity in Techdom [View article]
    Oh, yes, I agree 100% with this. A round lot of 100 Apple shares will set you back well over $33,000 so that is the price of admission to play with this stock.

    I am all for a 10 for 1 split, as I think that would lead to the stock doubling within a year.

    I just don't know how many small retail investors there are these days who are investing out of a paycheck. I imagine a lot of people with retail accounts are playing with inherited money or retirement accounts, or are wealthy persons such as NFL stars or Wall St. bankers. A lot of small business people have money to invest, but don't trust the stock market as they see it as a form of gambling (which it is).

    As the moniker I am using implies my primary focus is on people trading in retirement accounts, which may include large sums that have been rolled over from other retirement accounts, pension funds, etc.

    Apple has only 29,000 shareholders which is much less than a company like MSFT and I am sure one of the reasons is that the high price of shares makes it impossible for smaller accounts to buy enough shares to be able to trade options.

    Then again, buying a LEAP is cheaper than buying the stock. You could buy a $260 strike Jan '13 LEAP for $100 per share, which is $10,000.

    Of course Apple consumer products appeal more to the affluent person, so it would be nice to see the 10:1 split leading to thousands of iPhone buyers buying shares next month with their spare changed instead of buying a different colored cover for their iPad!
    May 30, 2011. 11:58 AM | Likes Like |Link to Comment
  • The Improbable Dominance of Barnes & Noble and Apple [View article]
    There are actually lots of Android computers that are cheaper than the iPad. Here is a link below, not for sales commissions, but just for discussion purposes to a tablet with good specifications for about $300.

    ... or even one for less than $2O0.

    One could also consider devices like the Archos Web browser.

    I guess what the author means is that Apple's iPad is the cheapest tablet computer at a certain level of specifications and I cannot argue with that, though some people claim it is a plus, others might argue that the lack of a USB port or memory chip slot on the iPad are minuses.

    When a home appraiser does comparable valuations, usually the presence of something useful is considered a plus and the absence a minus. In computing, this may not compute.

    Another way to value a computer is to consider what you can do with it that you can't do with other computers, what commercial applications are available, and so on. For example if there is an app that allows a triage nurse to greet people at the door of an emergency room with a handheld iPad and quickly punch in their SS# and presenting symptoms and pull up a care plan and a list of their drug allergies, and at the same time link this information to the person's medical record and make it available at other terminals, and this is only possible with an iPad and not with other devices, then that makes the iPad much more valuable.

    This is just a theoretical example, and you could multiply it a million times in other businesses that have specific needs for inputting, storing, and manipulating data.

    On the other hand, if you are thinking of the tablet computer as a device for personal entertainment, to be used to store and play video, hi-fi music, make intercontinental Skype calls, get stock ticker information, read the international press and sports news, view and edit photographs, then surely it will ultimately be much more price sensitive as the individual consumer will buy the cheapest device that does the job that the consumer wants done.

    At the present time Apple enjoys the huge advantage of a kind of bling factor by which well off persons whose personal finances leave a large disposable income are very likely to purchase their products at premium prices. To what extent this advantage will still be present in 5 or 10 years is anyone's guess.

    Popular tastes change quickly, especially when they are linked with one individual. In 1938 The Glen Miller group was unsuccessful and was disbanded. In 1939 a reformed Glen Miller Orchestra had 17 top ten hits, 31 in 1940, and 11 each in 1941 and 1942. In 1943 when he joined the army his hit making career was over, and with his untimely death was never revived.

    Although big band music was the totally dominant popular music form of its time, it really only took off in 1938 after the Benny Goodman Carnegie Hall concert, and by 1945 it was all over bar the shouting as big bands were replaced by smaller groups that had much lower running costs. Some legacy bands like the Ellington, Basie, and the Stan Kenton orchestra carried on for many years playing to niche audiences or going on State Department sponsored tours, but as a popular phenom the big bands lasted less than a decade.

    Could Steve Jobs be Glenn Miller?

    May 30, 2011. 09:13 AM | 1 Like Like |Link to Comment
  • Apple: The Most Undervalued Equity in Techdom [View article]
    That shows his dad is making lots of jam selling Blackberries for his bread and butter.
    May 29, 2011. 11:02 PM | 1 Like Like |Link to Comment
  • Fully Confident in Wal-Mart's Plan to Boost U.S. Sales [View article]
    Rocco, as you said before, a lot depends on where you are. I haven't seen Targets here in Florida that are full service food supermarkets, though they usually have a few shelves of dry foodstuffs. I tried some of their coffee and it was nothing special. Nor do Target do oil changes or car tires, as far as I know, so really in a different market.

    From what you are saying, Walmart has a lot of potential for expansion in the US.

    What you say is interesting, though, because I go in Target now and again and it had never struck me that their merchandise or clientele was in any way upmarket or superior to Walmart--only that there were much fewer people.

    Then again, although I exaggerate a little, Walmart is the social hub of the city where I live, and every time I go there I see people I know who want to stop and chat. So it is like Facebook. Target is 30 miles away.

    Actually, wherever you go in the world, all the stores have the same merchandise these days, though sometimes the name brands vary. A pair of Fiskars bush trimmers I saw recently in Home Depot was 100% identical to a pair of Wilkinson Sword bush trimmers in a hardware store in London and in Port au Prince, Haiti!
    May 29, 2011. 10:58 PM | Likes Like |Link to Comment
  • Fully Confident in Wal-Mart's Plan to Boost U.S. Sales [View article]
    Mmm! Not sure I get the thing about education. Most of the people who work at my local Walmart I have known them and their families for years. Some are smart, some aren't.

    One thing I noticed in Walmart today was that they had a cell phone for $29.95 that had calling, messaging, Internet etc., which was the same price as a cover for an iPhone or two protective films for an iPad.

    The thing about Walmart is that they are all about distribution. So they will build their massive distribution centers FIRST and then plan the stores and Sam's Clubs AROUND the distribution centers.

    Walmart is very strong on Hispanic foods and produce and signage in Spanish, so I think they might try to concentrate more on areas with larger Hispanic populations.

    I can't see them putting a lot of bread rolls in wicker baskets for the urban Bobo (bourgeois bohemian) crowd.
    May 29, 2011. 10:31 PM | Likes Like |Link to Comment