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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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  • The Cloud 22 comments
    Dec 17, 2013 11:33 AM | about stocks: ORCL, VEEV

    When you get close there is not as much there as it had looked like.

    My favorite short idea for 2014 is IPO, which I discussed here. My concern is that the IPO process, especially with technology IPOs, offers the perfect opportunity for showing off new ideas, fully pricing them in, and then some. Want a specific actionable example of what I'm talking about? For a perfect example, I highly recommend Suhail Capital's Veeva Systems: SaaS's Biggest Bubble And Tech's Best Short. It has already started to work, but it is still worth focusing on. Insiders' lockups expire on April 13, 2014. So, one contract worth considering is the June $35 VEEV call option. One can write this contract for at least $4.30. At that price, you will break even at a price of almost $40 per share. Either you will collect premium or, better yet, get short this stock at $35. It is a win/win. The market will be flooded with shares so that even if the supply/demand imbalance does not drive down the price, it will probably keep the short inexpensive and easy to maintain. There is currently a strong demand for anything that can allow users to socialize online with friends, print in three dimensions, or store on the cloud. Buyers should always beware, but should be especially wary of the new supply of securities being produced specifically in order to satisfy such demand. In conclusion, here is Larry Ellison, Oracle (NYSE:ORCL) CEO: What The Hell Is Cloud Computing?

    (click to enlarge)

    Stocks: ORCL, VEEV
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Comments (22)
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  • Andrew Williams
    , contributor
    Comments (239) | Send Message
     
    Great comment by Ellison.

     

    I remember during the .com era it wasn't unusual to hear a relative return manager say something like, "I don't know what they do, but they are in my benchmark, so I have to own them."

     

    I wish somebody would create a Cloud Bull 3x Leveraged ETF so that I can short it.
    17 Dec 2013, 12:37 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » That would be perfect. Alternatively, I would like to IPO the first company that can combine 3D printing with the cloud.
    15 Jan, 09:28 PM Reply Like
  • Rootarmo
    , contributor
    Comments (247) | Send Message
     
    I bought June 35 Put options..would that work ?
    15 Jan, 09:24 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » That will probably make a lot of money. We'll see.
    15 Jan, 09:28 PM Reply Like
  • 166649
    , contributor
    Comments (357) | Send Message
     
    MDSO- Chris how do you feel about them? Thank you so much :-)

     

    Medidata Solutions, Inc. provides cloud-based clinical development solutions for life sciences organizations in the United States and internationally.
    17 Feb, 06:07 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » I think that it is expensive.
    17 Feb, 06:17 PM Reply Like
  • 166649
    , contributor
    Comments (357) | Send Message
     
    Chris, thank you so much for your opinion. Would you short it?
    17 Feb, 07:49 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » Yes, absolutely.
    17 Feb, 08:27 PM Reply Like
  • 166649
    , contributor
    Comments (357) | Send Message
     
    Again, thank you Chris.
    17 Feb, 08:38 PM Reply Like
  • platonicbomb
    , contributor
    Comments (1285) | Send Message
     
    Be careful with a short on this one. I'm long ATTU and it has a PE multiple twice as high. The only thing growing faster than its trailing PE multiple is, well, its actual E. Be sure to get the whole story.
    20 Mar, 03:41 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » Veeva (VEEV) new 52-week low with one week to go until the lockup expires.
    5 Apr, 02:16 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » (VEEV) at a new 52-week low
    11 Apr, 05:58 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » (VEEV) at a new 52-week low.
    25 Apr, 06:31 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » (VEEV) hit another 52-week low.
    7 May, 01:30 PM Reply Like
  • connellybarnes
    , contributor
    Comments (338) | Send Message
     
    Education demand for computer science degrees is through the roof. Such demand appears to correlate with tech bubbles:

     

    http://bit.ly/1jEVUcw

     

    When I was in undergraduate, I told my friends I planned to switch to computer science for graduate school and they reacted in shock saying, "There's no future in that. All the jobs are going to be outsourced!" Of course those opinions were prevalent around the early 2000s when tech companies were priced cheaply. Now everyone and their dog has to major in computer science, especially "Big Data" and "Machine Learning." Probably the best shorts are Big Data / Cloud / Machine Learning companies with high price to sales.
    21 May, 09:45 PM Reply Like
  • platonicbomb
    , contributor
    Comments (1285) | Send Message
     
    The demand for data scientists is skyrocketing. Should be a strong market for at least 10 years.
    22 May, 12:45 AM Reply Like
  • connellybarnes
    , contributor
    Comments (338) | Send Message
     
    According to Wikipedia the 'data science' article was first created in 2012. My institution has a masters degree in it now. But I am not confident that the data science buzzword will even be in use 10 years from now.

     

    Certainly people who are experts in statistics and scalable algorithms will still have jobs. The question though is if capital is being allocated rationally, why are there giant influxes of maddened crowds in and out of my field?
    22 May, 02:50 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » More (VEEV) stock options' lockups expire June 13th.
    10 Jun, 11:13 AM Reply Like
  • bazooooka
    , contributor
    Comments (2786) | Send Message
     
    Chris are you still rolling your shorts; where are you looking to cover? I'd figure 10-15x EBITDA would be about right but this thing is still above 10x topline.
    11 Jun, 02:40 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » Yes. Still short; expecting to be so throughout most of the month (depending on the price of course).
    11 Jun, 06:10 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4251) | Send Message
     
    Author’s reply » Nobody Understands the Cloud:

     

    http://bit.ly/T2IPP1
    16 Jun, 09:27 PM Reply Like
  • platonicbomb
    , contributor
    Comments (1285) | Send Message
     
    VEEV is acting uppity.
    18 Jun, 05:14 AM Reply Like
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