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Slim Shady
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A retired hedge fund manager with over 20 years of experience in financial markets. Audited returns before fees of my hedge fund beat the S&P 500 by over 9.5% per year for over ten years. I have earned the CFA designation and am formerly a CPA.
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  • Amazon: Bezos The Magician

    This is the closing narration of the 2006 movie "The Prestige", a movie about an ongoing rivalry between two magicians.

    Every magic trick consists of three parts, or acts. The first part is called the pledge, the magician shows you something ordinary. The second act is called the turn, the magician takes the ordinary something and makes it into something extraordinary. But you wouldn't clap yet, because making something disappear isn't enough. You have to bring it BACK. Now you're looking for the secret. But you won't find it because of course, you're not really looking. You don't really want to work it out. You want to be fooled.

    In Amazon's case, Bezos is the magician and the analysts and buysiders are the audience. Bezos presents his ordinary retail business and his magic is delivering revenue growth and making profitability disappear. The audience asks, why aren't you profitable now, like Wal-Mart was when it was experiencing the same amount of growth? Bezos replies - because we are investing in our growth! Unfortunately, Amazon has yet to complete the 3rd step - bringing the profitability back. The analysts of course don't care if whether they were really investing or not, they want to be fooled. And they have been.

    Disclosure: I am short AMZN.

    Tags: AMZN, Short
    Jan 31 8:35 AM | Link | 1 Comment
  • Salesforce.com's (CRM) "Phenomenal" Quarter

    Here is the Superlative count from the Salesforce.com conference call for their 3rd Quarter. Grand total 109.

    Times used on the call:

    Phenomenal: 35

    Great: 14

    Tremendous: 9

    Exciting/Excited: 8

    Leader: 8

    Thrilled: 6

    Monster: 5

    Incredible: 5

    Delighted: 5

    Largest: 5

    Awesome: 4

    Spectacular: 3

    Outrageous: 1

    Unprecedented: 1

    Titillating: Zero (maybe next time Marc, that would be awesome)

    Disclosure: I am short CRM.

    Tags: CRM
    Nov 19 11:09 AM | Link | 5 Comments
  • The Netflix Death Spiral Continues
    Netflix announced that it will be selling $200 million of zero coupon Senior Convertible Notes due in 7 years to Crossover Technology Ventures (CTV), with a conversion price of $85.80.  CTV was their original venture backer who has subsequently sold all of its shares.  It is also where former CFO Barry McCarthy landed.

    As a condition to CTV giving them $200 million of cash that is Senior and Convertible, they are requiring that Netflix raise an additional $200 million of stock to non-affiliated 3rd parties.  The stock is currently trading at $70.00 in after hours.

    In the last two years, Netflix has spent $410 million repurchasing its shares at a gross price of $117 and an average effective price when taking into consideration share issuance from option excercises of $336 per share.  Even in the 3rd quarter ended September 2011, they spent $40 million repurchasing shares at $218 per share and on the year spent $200 million repurchasing shares at $222.  Now they have to sell $200 million of stock at the current market price, which if they're lucky, will be $70 per share less underwriting fees to have the ability to sell $200 million of debt that converts into stock at $85.80.






    Tags: NFLX
    Nov 21 5:33 PM | Link | 3 Comments
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  • Amazon: Bezos The Magician $AMZN http://seekingalpha.com/p/1kepv
    Jan 31, 2014
  • Netflix just filed an 8k (on a Fri after the close)announcing they are switching auditors. Not always a red flag, but makes you wonder...
    Mar 23, 2012
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