Dividend Cuts: The Pin That Could Pop The Stock Market Bubble [View article]
I'm curious as to why you think it's likely dividends will be cut. Pitney Bowes was a special situation - high debt loads, a tough industry, etc. More generally speaking, companies have a lot of cash on their balance sheets and are in relatively strong financial positions; earnings haven't been spectacular but it doesn't look like the bottom's about to fall out either. So what's the catalyst for widespread slashing of dividends? I'm not seeing one.
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
DB - without even getting into your assertion that Intel would like to abandon x86 (unlikely, given some of the neat extensions in the ISA)... from the Wisconsin whitepaper: "ISA differences have implementation implications, but modern microarchitecture techniques render them moot; one ISA is not fundamentally more efficient." The benchmarks from Anandtech/Tom's Hardware substantiate this further.
You can debate theory all day long, but the truth is that in the real world, there's no inherent efficiency difference between the ISAs; it's all about the microarchitecture implementations. And Intel's winning the perf/watt battle.
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
The vast majority of RISC/CISC commentary is based on technical ignorance. If I had a nickel for every time I've heard someone incorrectly state that x86 is an inferior architecture, I'd go ahead and retire right now.
The best objective, hard data I've seen on the subject:
Microsoft (MSFT) roundup: 1) ZDNet's Mary Jo Foley reports Microsoft is thinking of bringing back the Start button with Windows Blue, and of also allowing PCs to boot in desktop mode. The report follows major criticism of Win. 8's UI changes, and ugly Q1 PC data partly blamed on the OS. 2) In starting coverage at Overweight, Morgan Stanley asserts Microsoft "can still grow revenues with PCs declining 5% a year over the next five years." Also, an MS CIO survey found 20% of respondents using Windows Azure, compared with 13% using Amazon Web Services (AMZN). (earlier: I, II) [View news story]
As an early adopter of W8 (on a non-touch laptop* hooked up to two external 23"+ monitors, so basically a desktop configuration), I honestly have no idea why everyone's griping about the "new" start button. It took me all of a day to get used to the new interface, and now I find it to be quite intuitive, not to mention that W8 is snappier/more powerful overall.
Nonetheless, given the level of pushback from consumers on the issue, I think it's a smart tactical decision on the part of Microsoft to let users have it their way if they want to, so long as they don't take away my nice/clean/modern interface.
*Specs: 2+yo Dell Studio 15z powered by a Westmere core i5 and retrofitted with 120GB SSD, 8 GB RAM.
Wal-Mart (WMT -0.3%) may be losing sales due to a thin workforce unable to keep store shelves stocked, according to a growing number of anecdotal reports from unhappy shoppers. While the company increased its store count 13% over the last five years, the number of employees fell 1.4% - leading to less customer service and some stores tipping toward the disorganized side. It's a trend that may be working in the favor of Costco (COST +0.2%) and Target (TGT -0.3%). [View news story]
There are several Wal-Marts near where I live (no surprise, since I live in suburbia). The giant one seems to run fine, but the neighborhood market (grocery store concept) is severely understaffed. At one point, there were literally three employees visible in the whole store, one of whom was on break, and the other of whom was supposed to be at the customer service desk, where I had to wait 15 minutes for something fairly routine. The prices are great; the service not so much. Interesting to hear that it's not just a local issue.
If you're willing to forgo a phone subsidy, T-Mobile USA (DTEGY.PK) is willing to cut your phone bill ... a bit. The share-losing #4 U.S. carrier, which is set to merge with MetroPCS (PCS), has unveiled contract-free plans that range from $50/month (500MB of data) to $70/month (unlimited data). Free laptop/tablet tethering is included with the limited data plans, and installment plans are offered for phone purchases. The announcement comes ahead of a Tuesday event where T-Mobile's pending iPhone launch will reportedly be highlighted. (previous) [View news story]
I've personally been using their unlimited talk/text/web plan for a little under two years now. I live in Dallas/Ft. Worth, and the one thing I can say is that at least around here, data speeds are way slower than AT&T/Verizon - I haven't benchmarked; this is just from comparing load times/etc on my friends' similarly-spec'd phones vs mine. It'll be interesting to see if they catch up as they roll out LTE. (I'm hoping so.)
Why Price/Sales Is A Dangerous Valuation Metric [View article]
Awesome write-up. I've always thought P/S was a bit of a weird metric, because there's so much variability across industries with regards to margins et al. I think it can be useful in certain limited situations (perhaps as a quick comparison to other companies with similar business models) but even given that, it's a metric I never really use because I think there are many others that are far superior.
Alan, I lurk a lot, but usually only comment when I have something to say. I do read all/most of your articles, though, and I try to keep up with the articles on certain stocks, INTC being one of them ;)
Very interesting framework. Don't think I've ever heard that one before, but it makes logical sense to me as the reasonable valuation if growth trails off after that period and the multiple compresses accordingly. Sounds like a decent back-of-the-envelope valuation to me; I'd be interested to see how it compares to a full-fledged DCF or other analysis along those lines.
Alan, what's the saying - 80% sentiment/20% fundamentals in the short term, 20% sentiment/80% fundamentals in the long term?
Fully in agreement here; it's really a pity that so many investors (and analysts) are focused on next quarter without any regard for next year, let alone 2-3 years out.
How Abdullatif Bin Ahmed Al Othman Persuaded Me That LinkedIn Shares Are Overvalued [View article]
First off - awesome title.
Beyond that, very interesting. I've received a couple spam connection requests too (most notably, one from a manager of a hotel in Nigeria) as well as random advertisements in my inbox. Hasn't been enough to significantly detract from the user experience - it's just been a little annoying - but it'll be telling to see how LinkedIn responds to this in the future.
I also tend to be very skeptical of the valuation, as I am with AMZN/FB/many other "new tech" stocks. I think LinkedIn certainly has some growth opportunities ahead (and interestingly, they've started pushing the subscription service harder - I've noticed in the last few visits that you can't see third-degree profiles or send them messages without signing up) but the market cap seems to more than reflect those at this point.
Shares of Lululemon (LULU -3.5%) take another a leg down despite a spirited defense from Canaccord Genuity (reiterated buy, $87 PT). Concerns about manufacturing issues look like they could linger for a while and the retailer's CEO response during an earnings conference call on how to detect a problem with too-thin yoga pants didn't overwhelm investors. Christine Day on quality control: "The only way that you can actually test for the issue is to put the pants on and bend over." (transcript) [View news story]
MC team - you guys should keep a running list of "amusing things executives have said on conference calls" and we could run it as a holiday special. Y'know, "2013, in the Executives' Words." LULU, ECA... the possibilities are endless.
The Wisdom Of Not Reinvesting Dividends [View article]
Chowder, I absolutely love this comment, specifically:
"I'm not saying it's right for everyone. I share my tactics and if they are helpful to others great. If not, that's fine too. We each have to establish our own goals and find the strategies and tactics that support them."
I think far too often, investors get tied up in believing that they've found the one end-all method, which is one of the main criticisms of DGI by non-DGI investors*. While dividends and dividend growth are certainly factors I take into consideration when purchasing stocks, I'm much more focused on valuation and growth potential since my goal is to maximize total return**. That doesn't mean that either of our strategies is universally better; it means that there are many types of investing that can result in success, and investors must choose based on their specific circumstances. Nonetheless, while I'm not a dividend growth purist (although there are some sprinkled here and there in my portfolio), I do find all of your comments to be very insightful and thought-provoking - you're renowned around here as one of the experts on DGI, for very good reason. So thanks for sharing your knowledge.
*just occurred to me that "DGI investors" is a little bit like "ATM machine"
**for what it's worth... I totally did not intend to spark that CAGR debate. I think it really is semantics, and not all that important at that. But hey, I bet Tim got a few hundred pageviews out of it. =)
Dividend Cuts: The Pin That Could Pop The Stock Market Bubble [View article]
Celanese (CE): Q1 EPS of $1.14 beats by $0.35. Revenue of $1.61B misses by $0.01B. (PR) [View news story]
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
You can debate theory all day long, but the truth is that in the real world, there's no inherent efficiency difference between the ISAs; it's all about the microarchitecture implementations. And Intel's winning the perf/watt battle.
Intel Valued As Though New Technologies Will Bust, But I Disagree [View article]
The best objective, hard data I've seen on the subject:
http://bit.ly/ZdXZ2v
http://bit.ly/RSw0FL
http://bit.ly/Y6OHE4
Microsoft (MSFT) roundup: 1) ZDNet's Mary Jo Foley reports Microsoft is thinking of bringing back the Start button with Windows Blue, and of also allowing PCs to boot in desktop mode. The report follows major criticism of Win. 8's UI changes, and ugly Q1 PC data partly blamed on the OS. 2) In starting coverage at Overweight, Morgan Stanley asserts Microsoft "can still grow revenues with PCs declining 5% a year over the next five years." Also, an MS CIO survey found 20% of respondents using Windows Azure, compared with 13% using Amazon Web Services (AMZN). (earlier: I, II) [View news story]
Nonetheless, given the level of pushback from consumers on the issue, I think it's a smart tactical decision on the part of Microsoft to let users have it their way if they want to, so long as they don't take away my nice/clean/modern interface.
*Specs: 2+yo Dell Studio 15z powered by a Westmere core i5 and retrofitted with 120GB SSD, 8 GB RAM.
Wal-Mart (WMT -0.3%) may be losing sales due to a thin workforce unable to keep store shelves stocked, according to a growing number of anecdotal reports from unhappy shoppers. While the company increased its store count 13% over the last five years, the number of employees fell 1.4% - leading to less customer service and some stores tipping toward the disorganized side. It's a trend that may be working in the favor of Costco (COST +0.2%) and Target (TGT -0.3%). [View news story]
If you're willing to forgo a phone subsidy, T-Mobile USA (DTEGY.PK) is willing to cut your phone bill ... a bit. The share-losing #4 U.S. carrier, which is set to merge with MetroPCS (PCS), has unveiled contract-free plans that range from $50/month (500MB of data) to $70/month (unlimited data). Free laptop/tablet tethering is included with the limited data plans, and installment plans are offered for phone purchases. The announcement comes ahead of a Tuesday event where T-Mobile's pending iPhone launch will reportedly be highlighted. (previous) [View news story]
Why Price/Sales Is A Dangerous Valuation Metric [View article]
Intel: $48 Per Share In 4 Years [View article]
This pops up altogether too much.
A few good reads:
http://bit.ly/ZdXZ2v
http://bit.ly/RSw0FL
http://bit.ly/Y6OHE4
2013: Long And Short Of It [View instapost]
Intel: $48 Per Share In 4 Years [View article]
Very interesting framework. Don't think I've ever heard that one before, but it makes logical sense to me as the reasonable valuation if growth trails off after that period and the multiple compresses accordingly. Sounds like a decent back-of-the-envelope valuation to me; I'd be interested to see how it compares to a full-fledged DCF or other analysis along those lines.
Out of curiosity, why two years?
Intel: $48 Per Share In 4 Years [View article]
Fully in agreement here; it's really a pity that so many investors (and analysts) are focused on next quarter without any regard for next year, let alone 2-3 years out.
How Abdullatif Bin Ahmed Al Othman Persuaded Me That LinkedIn Shares Are Overvalued [View article]
Beyond that, very interesting. I've received a couple spam connection requests too (most notably, one from a manager of a hotel in Nigeria) as well as random advertisements in my inbox. Hasn't been enough to significantly detract from the user experience - it's just been a little annoying - but it'll be telling to see how LinkedIn responds to this in the future.
I also tend to be very skeptical of the valuation, as I am with AMZN/FB/many other "new tech" stocks. I think LinkedIn certainly has some growth opportunities ahead (and interestingly, they've started pushing the subscription service harder - I've noticed in the last few visits that you can't see third-degree profiles or send them messages without signing up) but the market cap seems to more than reflect those at this point.
Shares of Lululemon (LULU -3.5%) take another a leg down despite a spirited defense from Canaccord Genuity (reiterated buy, $87 PT). Concerns about manufacturing issues look like they could linger for a while and the retailer's CEO response during an earnings conference call on how to detect a problem with too-thin yoga pants didn't overwhelm investors. Christine Day on quality control: "The only way that you can actually test for the issue is to put the pants on and bend over." (transcript) [View news story]
The Wisdom Of Not Reinvesting Dividends [View article]
"I'm not saying it's right for everyone. I share my tactics and if they are helpful to others great. If not, that's fine too. We each have to establish our own goals and find the strategies and tactics that support them."
I think far too often, investors get tied up in believing that they've found the one end-all method, which is one of the main criticisms of DGI by non-DGI investors*. While dividends and dividend growth are certainly factors I take into consideration when purchasing stocks, I'm much more focused on valuation and growth potential since my goal is to maximize total return**. That doesn't mean that either of our strategies is universally better; it means that there are many types of investing that can result in success, and investors must choose based on their specific circumstances. Nonetheless, while I'm not a dividend growth purist (although there are some sprinkled here and there in my portfolio), I do find all of your comments to be very insightful and thought-provoking - you're renowned around here as one of the experts on DGI, for very good reason. So thanks for sharing your knowledge.
*just occurred to me that "DGI investors" is a little bit like "ATM machine"
**for what it's worth... I totally did not intend to spark that CAGR debate. I think it really is semantics, and not all that important at that. But hey, I bet Tim got a few hundred pageviews out of it. =)