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Sunil Shah's  Instablog

Sunil Shah
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A fund manager who cut his cloth in Schroders London. He joined Coronation South Africa in 1998, running the Smaller Companies Fund which had the best 5-yr record in the sector during his tenure. In 2005 he left Coronation to pursue his passion in writing (and invest without constraints). He... More
My blog:
whitemansnumbers.com
My book:
White Man's Numbers: Excerpt Chapter 13
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  • The hot air hisses out of the cloud!
    Finally!! A big shift in the computer algorithm trading CRM,  this uber-overvalued (by 4.5 standard deviations IMO) stock. I live in Cape Town, and their PR propaganda on the insturmental role they play for the World Cup is laughable. Time to see some hot air come out of their cloud....

    Disclosure: short CRM
    Tags: CRM
    Jun 22 11:25 AM | Link | Comment!
  • WDC now underperformed S&P on 3m, 6m, 2yrs: Letter to Board

    WDC now underperformed S&P on 3m, 6m, 2yrs.


    Letter to Board

    Dear Board, without any preamble:

     

    This is ludicrous. After whopper earnings, huge eps reappraisals, mkt share gains...

    You know what? Normally I agree with a GOOD mgmt's premise: "we look after operations and let the market deal with the share price"

    HOWEVER: THERE IS A SERIOUS CAPITAL ALLOCATION PROBLEM HERE. With +$2bn on our B/S (yes OUR bal sheet- ie my money)earning 0.05% and the opportunity to buy a valuable,flourishing asset directly in our industry, yielding 25% (25%!!!) mgmt would in my opinion be negligent not to capitalise on the opportunity. The opportunity: WDC shares.

    Coyne et al, you need to think seriously about letting this pass. And if you buy some other asset on the market, you will be severely scrutinised for passing on one that is right under your nose.

    I will forward this, verbatim, to "Investor Relations", which seems a bit of an oxymoron with WDC at the moment. 

    Oh one more thing:

    As for the rationale, "Oh the money is offshore and we will be taxed if we bring it back to the US for a buyback."

     

    Its simple. Calculate the ROC after incurring the tax. Yes the ROC falls.   (ie 1-tax rate% * ROC. so if tax rate is 18%, then ROC post-repatriation-tax, falls from 25% to 20.5%.) Still the best looking asset out there by a mile.

     

    A philosophical point. The sharebase domicile and owners "reside" in the States. Operations are global, and profits as a consequence are global. This should in no way preclude the owners of the asset from benefitting from its utility (ie the global nature of WDC).  There will be a perpetual issue of overseas earnings. This cant be a new phenomenon for WDC- it must have arisen before! And the way to reattach the asset's utility to the owners of the asset is to repatriate the profits generated from it.

     

    If there is something I have misunderstood I would appreciate a clarification.

     

    thank you

    Highly disillusioned shareholder, hitherto loyal for the last 6 yrs




    Disclosure: Long WDC
    Tags: WDC
    Jun 11 4:26 AM | Link | Comment!
  • The Job's Rant about Adobe

    facts i think:
    90% of videos streamed today are via flash or some flash derivative.That is on all electronic devices: pcs, macs, laptops, netbooks, smartphones. Right?

    But what about smart phones per se? Is flash still the facility of choice, despite Jobs's ranting? Do other smartphones utilise flash (or flashlite) ? And if they do, its the medium of choice for smartphones as no-one is compelled to use it. Use what you like, albeit the smartphones hardware is not comparable to a PC.

    IF Iphones dont use flash for video streaming, what do they use. Does the alternative somehow indirectly use Flash?

    YOur hopefully straightforward ans would really help.
    ss
     



    Disclosure: long adbe
    Tags: ADBE
    Apr 29 11:45 AM | Link | Comment!
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  • $CRM Billings growth (rev + def rev) has tanked from 28.5% YOY to 17%! This should fall fast! Even Bend-my-ear-off Benioff cant change that!
    1 day ago
  • $CRM Billings growth (rev + def rev) has tanked from 28.5% YOY to 17%! This should fall off a cliff! Even Bend-my-ear-off Benioff cant up it
    1 day ago
  • $CRM remember this classic video. I want to buy Salesforce.com "I dont care" http://bit.ly/15T4uhK
    May 17, 2013
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