Ryan Barnes

The Best Times to Buy Shanda's Stock

You seem to be quite familiar with the company's history and offerings. I've been researching the company for some time, and I missed a chance to step in earlier this year. The multiple is now such that it will need to keep executing 25% + top-line growth in order to fulfill it.

How do you view the company's competitive position? Do you have any data on the number of monthly users, average purchases per user, etc? Enjoyed the article but I'm hungry for some fundamental metrics.

Best of luck in your investing efforts.

EpiphanyOne

Groundbreaking WSJ Story on Gold

Nice article and discussion here. good points from someone up the line about data mining, both on the performance of gold and the S&P 500. All depends on your start & end date, folks.

The best answer may be that both gold and stocks have gained in real value over the past 100 years, and whether you're a gold bug or not, there will be multi-year periods when gold performs better, and vice-versa.

To the folks who think gold hoarders are idiots, I only offer this hackneyed advice: a billion screaming fans (or idiots) can't be wrong. Supply and demand folks. It doesn't matter what the fundamental arguments are one way or the other, if enough people want gold, the "price" of gold will rise. The allure has held up for 2,000 years and counting, so I wouldn't fight the tape on that one. And this is coming from a equities man... I know many people that, despite years of my arguing against it, refuse to give up their secret stash of Thunderdome currency. You can't fight, reason with, or beat out deeply embedded beliefs.

Apple: Estimates Increased on iPhone and Mac

Apple loves to sandbag and beat estimates, and I think they will come out with a beat of .05 to .10 again. iPhone sales seem to be coming in strong by my channel checks, and headwinds from the Pre will probably be balanced out by guidance towards another carrier (VZ, CHL) being in the mix within the next 12-18 months.

Also, margins on Macs seem destined to compress, but this should also be seen as a net-net positive towards gaining share. I think that DELL has an outside shot at the best upside surprise this season, due to its increased leverage towards the next PC upgrade cycle in line with Windows 7.

Goldman Sachs: No Global Financial Espionage Story Here

Nice post, Kid. It's nice to see some good-natured give & take at a time when objective analysis is paramount. The problem with the folks who promote panic-room building is that they generate massive traffic. It quickly becomes a reinforcing feedback loop in this time of populism, when so many people have lost so much, and are looking for a "safe zone" to let their anger grow and mutate into full-fledged conspiracy theories.

To read TD and others, I have to assume there's only one trade left to make in our entire lifetimes - short everything, crawl down into my bunker, and maybe come out when it's time to enter the ThunderDome and fight for my daily ration of gasoline with a tire iron.

Not-Ready-For-Prime-Time Stock List

Really appreciate the input, John. Your comments are right on point. On my second pass over the financials, I see what you're saying. The income statement is like an exercise in LEGO building. Consistent and growing.

The margins have taken a slight hit this year, but then again, it is this year. I can easily forgive some top-line weakness. Cerner looks like they could be a prime beneficiary of healthcare reform, and Obama's stance on EHR is well-documented. The valuation is a bit rich, but balance sheet is stellar as is cash flow. And we all know that a 5 year window of positive catalysts can keep any strong stock in a premium valuation range (25-30x).

I'll be reading through the most recent 10-Q's and K to get a final feel for mgt, but I definitely like to see original founders who have serious skin (and a little pride) still in the game.

Best of luck in your investing efforts,

RB

IMAX: Welcome Back to the Land of the Viable

BigPicture: Appreciate the comments; the CFO, COO and the rest of the Finance crew are new at IMAX, but you're right about the lack of change at the CEO & Chairman level. Their previous escapades were due to bad financial management, but also strategic errors, so I'd have to agree that there hasn't been enough transition to start cheering for the stock.

My modest channel checks haven't come up with a poor viewing experience as of yet, but thx for the mention about the camera licensing. I'll be on the lookout for the mix of equipment at the company's theaters. That said, the odds of an acquisition (or perception hike) still seem well above the threshold that investors of a certain risk appetite would consider attractive.

Best of luck in your investing (or avoiding!) efforts.

Why I'm Buying Micron- Part II

To CPST1 - I appreciate your posting of those articles; I am always on the lookout for brain food.

But you'll forgive me if I'm not convinced that the $18b market in flash is "broken" because of an article that chiefly cites CEO Darrell Rinerson of Unity Semiconductor, a "next-generation memory hopeful". Can anyone say "bias"?

Hey, this realm of technology is all about change; what works today is bound to be upended tomorrow. We know this. And as soon as Unity Semiconductor gets a $100m OEM deal for their "passive rewritable crosspoint memory array" technology, I hereby promise to figure out just what the heck that means.

To amdman - appreciate your comments as well, and will try to read up on EDRAM and RRAM at some point in the future. I happen to really like NVDA, and pointedly disagree that they are a "dead stick". Intel is obviously one helluva scary competitor, but they don't win in every market they enter; NVDA is a large holding in my model and some of my thoughts on GPU vs CPU architecture can be found here :
epiphanyinvesting.com/.../

Intel would love to prove NVDA CEO Huang utterly wrong on GPU, but I am a believer. So far the tests show that a CPU carrying all the heavy lifting of processing and graphics simply runs too hot for smaller devices.

Healthy competition is always a good thing. As with all, time will tell; best of luck in your investing efforts.

PA; thanks for the posting; $1.05 in Fiscal 2010 would be quite the feat, but hey, I'm all for the occasional bout of optimism.

EpiphanyOne

Words of Wisdom from the Oracle of Omaha

As I read your first paragraph I was perfectly content to give you the benefit of the doubt on your opinions. Everyone is entitled. But then I get to the 2nd half only to read "the socialist policies of the....."

Sorry, you lost your objectivity there. This piece wasn't meant to be a discourse on politics. Buffett has been criticized for not just months, but years, in the past. It is his burden to bear for being a long-term investor; the man rarely changes his mind. You either like that or you don't, but could we please leave socialism talk at the doorstep?

Buffett was called a fool, idiot, over-the-hill, you name it for almost an entire decade in the 1990's. "the old fart refuses to invest in technology because he doesn't see their long-term competitive advantage...what an idiot! Look how much money he's missing out on!!" It wasn't until the Fall of 2002 that people came back around and realized that while everyone else was down 40% over the past two years, he was up. Steady, staid, and always adding a little bit of value.

I say the man deserves a statue just for his very vocal callout of the burgeoning derivatives business, going as far back as 2001. If you read his shareholder letters from that period, it will shock you. He knew exactly what he was talking about, and he was exactly right.

And finally, to Glen, if your loathing of our government continues, you could always move to Europe. That's one of the favorite arguments of the uber-conservative. "When taxes go up in such-a-such place, the people will RESPOND. They will move their money, or find a new place to live." I hear Spain is nice.

Best of luck to all in your investing efforts; at the end of the day we're all just trying to learn a bit more, become a little more prepared for the future challenges and opportunities we know are just around the corner.


On Jun 25 10:10 AM Glen L. wrote:

> I hope I'm not the only investor in the world who doesn't worship
> the old fool you call an Oracle. Buffett is, if anything, living
> proof that anyone can make a fortune if they are fortunate. He made
> a lot of lucky guesses in his career, but his track record since
> 2006 is abysmal. Follow him over the cliff if you like, I'll take
> my chances following my own guesses.
>
> The sad part is his praise of Bernanke, the Fed, and the socialist
> policies of the federal government. Capitalism has made many a Lefty
> rich over the years, ironically enough, but the notion that we should
> be taking macoeconomic advice from them is just crazy.

Selling Schering Plough, Looking to India, Brazil and South Africa

To Old Trader - I see where you're coming from with your comments, and I might have written that part of my piece a little opaquely. My frequent suggestion to investors that outsource their investment mgt (by far the best choice for most of them) is to, on their own, choose how much they should allocate to cash, stocks, and fixed income investments. Even the most basic investor can use simple charts based on age and tolerance to risk to make these allocations.

From there, they should take the part they want to hold in cash and literally invest in MM's. Give the stock allocation to an "all-stock" fund manager (understanding of course, that any manager will need to hold a few % in cash just to handle redemptions and rotations), give the bond portion to a bond manger, etc.

This way, the investor has made 1 broad, overriding choice that they know will remain fixed. I think the problem many investors ran into during 2008 is that they sent off the majority of their assets to managers without thinking about their own tolerance for risk. Its foolish to assume your stock fund manager should be managing your asset allocation risk for you. Keep in mind I'm speaking only about mutual funds and the like, not separately managed accounts which are often a one-stop-shop but custom suited to each investor with the help of CFAs, CPAs, and RIAs.

I realize this may seem like a lot of steps for individual investors, but they are steps EVERY investor should take. Heck, if they really refuse to have but one single investment, they can pick up one of those unsightly but possibly useful "lifecycle funds" from Vanguard, Fidelity, and others.

Thanks for the comments, and best of luck in your investing efforts.

Emerging Markets: Betting Against Conventional Wisdom

I gotta' go with HaavBline here...this piece is both chuckle worthy and a head-scratcher - the patented "double enigma"!

You can't simply write about mega-hindsight picks without any mention of what you ­actually did then, or what you held, or what you told clients, etc.

The author here seems to be proposing a policy where investors should be on the lookout for "Black Swans" every calendar year. Why? If there was one to find every year they wouldn't be black swan events in the first place. The two mentioned (tech stocks in 99 and housing/financials in 07-08) were essentially a decade apart. Any investor who was told to bet on the nasties in the meantime would have been bleeding premiums for nothing, meanwhile missing out on a pretty decent global market.

And this quote "Since the market low on 3/9, it's almost like investors have completely forgotten about the financial crisis. Did it ever exist?"

This is definitely worth a chuckle to anyone that, oh I don't know, reads the daily newspaper, or turns on the TV for 30 seconds, reads the internet, or picks up their pink slip or foreclosure notice. Pretty sure all those folks aren't doubting the existence or persistence of the financial crisis.

As for the "investing strategy" proposed - which I have to deduce because there's nothing concrete given - it seems that we should be betting against a basket of emerging market sovereign debt. If I were advising clients to do that I'd be filling out my next job's applications right along with it. But go ahead and short 12 emerging market ETFs, and you'll probably get one that goes bust, maybe even two. But on the other 10 or 11, what do you think will be the result when the countries sport 5% annualized, organic GDP growth? I'd say you'll lose much more than your profit on the former.

Sorry folks, I'm not usually a Negative Ned, but this piece seems like a great way to sell a newsletter to scared, tattered investors, and a really poor way to dispense financial advice.

Portfolio Reshuffle: Freeport's Out, Some Pharma's Next

Prudent - thx for the comments. I still like the reflation theme in certain areas (I think steel & aluminum have some room to run if the production cuts are to be believed). I also think the hydrocarbon trade is alive and well; for all the talk of alternative energy the fact remains that 98% of the world is still running on oil. My long term thesis here is simple. Someday when XOM announces that the last drop of oil in the world has been extracted, there will be some buyer in Namibia or Madagascar or Chile that will be thrilled to pay $200+ for it to stick in the 30-year old engine that for them is top-of-the-line equipment. I have long-term bets on PBR and even BTU as a measure of my conviction, and I'm looking to get into a services company with an eye on RIG or SLB. Best of luck in your investing efforts.

Why I'm Buying Micron: Part I

To flashguy - you have 8 comments, and 7 of them are completely antagonistic. I have no problem with that per se, as I imagine you get some perverse sense of pleasure out of berating. Tell people what you like, or elaborate what you don't, but I have to wonder who is doing the most harm at SA - those who post ideas for discussion, or those who clog up the gears with baseless chatter. Good luck in your investing efforts.

to Flinstoneous - I wasn't saying that TXN, INTC, and NVDA are competitors of MU. My comment on this short post was that there aren't a lot of semi stocks that have any fundamental or balance sheet strength. These three are the best. I wasn't talking about industry competition in terms of product offerings; sorry if there was any confusion. If you're interested you can read my post tomorrow on my investing thesis. If not, I frankly don't care. Good luck in your investing efforts; your comments on Samsung and overseas competition are quite astute. My bet on MU is based on a bottoming of DRAM and NAND pricing, and the positive catalyst of the exit from CMOS (well, mostly an exit). It's a positive step

To Beandog: Didn't know you traveled outside of the RMBS boards. Your alliances are extremely well-documented. I know many people who have been holding that stock for the better part of a decade. My experience with extended patent disputes is that the payout rarely comes, and never in the dollar terms hoped for. Nevertheless best of luck.

Ecuador's Idiotic Default

fascinating stuff. It's mind-boggling just how patchwork the emerging market economic system is set up. Not that we've done much better with our fancy "SEC"...

Las Vegas Sands: Sustainability Thesis Looking Better?

This is definitely a high risk proposition, especially when using real estate values as the crux of an investment thesis. But the upside (a 5 or 10-bagger) could be realized quickly enough (3-5 years) to make the risk/reward favorable for a small allocation within a broader portfolio.

Electronic Arts: Sell-Siders Flee on Lowered 2009 Guidance

Your comments give no information and only state words, and you have not yet realized yet....I'd be happy to hear what will replace the $15 billion revenue that ERTS competes for each year.