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  • Apple Watch Is Making Luxury Watchmakers Uncomfortable [View article]

    No, you are right, these are extreme examples. But from point of view, Buffet's example is at least as extreme. His consumption is money, as making money provides him with the highest utility level. This is what is truly unique. For him, it is not about earning money to spend more, but instead to earn money to invest more, in order to earn more. His case could be studies in behavioral economics! He is an absolute lender and a compulsive saver.

    With his modest lifestyle and his low expenditures, he could give right away 50% to 75% of his fortune to charity and still be able to do what he loves the most - investing and making more money. Instead of that, he needs to wait until the final moment, when he will be 100% certain that he will not need his money. As I see it, it is not really about his good feelings, or his love towards humanity, but there is something else.

    "He just chooses to spend it on philanthropy"

    Are you sure that it is not simply about the taxes? There is a huge difference in my opinion.

    "spending wisely helps not to invite trouble in one's life"

    I could not agree more. Nevertheless, the question is what is spending wisely when you have got billions. Your perspectives obviously change and what represents an yearly wage for a normal person, might be equivalent to an ok weekend for a billionaire. Moreover, when you meet only wealthy people, after a certain moment you would simply not be able to interact with middle class anymore.
    Jun 2, 2015. 03:12 PM | 2 Likes Like |Link to Comment
  • Apple Watch Is Making Luxury Watchmakers Uncomfortable [View article]

    When I was a kid, I used to spare each and every penny in an extremely compulsive way. I never bought anything, I just worked, spared and started my first investments by the age of 16. When I turned 19, I moved from my parents and rented a small studio. Once my mother came to visit me and she was simply horrified by my lifestyle. We had a dramatic dispute and I still remember it as if it was yesterday. To be honest, I was so averse to spending that between 19 and 20 years I lost 1/4th of my weight, cause I found that food was too expensive. The positive thing was that I was certainly one of the wealthiest young people in the city, the negative is that I was living and looking like a real hobo.

    It is wonderful to be humble and to disregard what everyone else thinks, but what is the point of making money if you are (physically and mentally) unable to spend it. At some point my family and my fiance made some sort of intervention, they took me to see a psychologist and I finally realized how sick I was. Today I still keep sparing, but I also allow myself some pleasures.

    It is pointless to be a billionaire if you live like a middle class person. Billionaires like Buffet are slaves of their fortunes, while it is supposed to be the opposite. But of course, this is just my point of view and everyone should live as he/she wishes.

    It reminds me of the story of my doctor's brother. He has a university degree and he received €52 millions in heritage from his parents. He kept each and every penny on his bank account and he has been living on the streets for over 20 years now. There was another case of a dead homeless person who lived in Berlin. He was sleeping on his matras for decades on the exact same spot. When he died, Policemen found €10 millions in cash in his matras. It is obviously unhealthy and it must be some psychiatric disorder.
    Jun 2, 2015. 01:55 PM | 5 Likes Like |Link to Comment
  • Apple Watch Is Making Luxury Watchmakers Uncomfortable [View article]

    "If they forget to put on their Rolex, they may feel bare, for awhile. If they lose the connection with their Apple Watch, they may feel isolated and alone."

    I assume that they will still have their phones and computers, would not they? I would have perhaps agreed with you if Apple Watch was an all-in-one device. A device that can be used as a phone, internet access, car/home key, electronic ID, wallet and maybe even a 3D screen projector (the screen is still too small for all of that). But as long as it will remain an additional "bonus" gadget for a phone, no one will barely see the difference.

    It will take a while before luxury Swiss watch makers would need to worry about Apple. Swatch, Casio, Ice Watch, etc on the other hand will really feel lonely in the next few years. I have actually been shorting Swatch Group stock for a while now! It went from 550 CHF to almost 350 since Apple Watch has been released. I shorted at 550, covered at 370 CHF and now took another short position at 400. It trades at 355 today. Massive money can be made with that stock!

    Luxury watches on the other hand are a real dynasty, an independent institution. Many families (including mine) have been offering golden Swiss watches to their kids upon their 18th birthday for generations. It is a statement in itself. For me it says, you are an adult now and you can now be part of the elite of this world, as you have got everything you need to succeed.

    I am a big fan of Breguet (part of the Swatch Group, by the way - hehe) and what I find amazing is that when you open their catalogue, you see all the famous owners of Breguet, including Victor Hugo, Napoleon, European kings and queens, Winston Churchill, etc. You really feel that you are part of the history. A bigger picture that goes way beyond yourself. I doubt that Apple Watch could ever replace traditions. Watch and Jewelry businesses are timeless, eternal and have always been disconnected of current trends. Having the same watch as Winston Churchill could never be compensated by the fact that some Britney Spears or David Beckham wear Apple Watches. I would go even farther, people who follow these "celebrities" rarely have the funds to purchase luxury goods.

    Moreover, I will add that in Europe, the new hype is to become disconnected. Wealthy people shutdown their FB and Twitter accounts and go back to their feature phones. It is the new sign of distinction, as Internet and the Internet of Things became too democratic and random.
    Jun 2, 2015. 01:38 PM | 4 Likes Like |Link to Comment
  • BlackBerry: This Isn't A True Buyback [View instapost]
    I think that you wrote a very decent article here, but one paragraph seems quiet dubious.

    "Another item to think about is that BlackBerry has a large amount of convertible debt on the balance sheet. If all of that debt is converted, 125 million shares are added to the company's total at $10 a share. [...]"

    Ok, first of all, what is the point of converting to stocks trading at ~$10.50 at $10? Personally, when I purchase convertibles, there must be at least a 50% premium in order for me to convert. Therefore, unless by some miracle BBRY trades at >$12-13, I do not consider that possibility even as a remote threat. If you switch a 99% secured bond, you would better get a decent premium, otherwise you just keep cashing in your interests.

    Secondly, I believe that Fairfax owns most of these convertibles. Since it already owns a huge amount of shares, I doubt that it would take the risk to convert before a very long time.

    Therefore, I believe that either it is a true buyout, either something big is being prepared and Chen is securing the share price before the upcoming rally. Why would he even consider the possibility that so many people would wish to convert?
    May 21, 2015. 08:14 PM | Likes Like |Link to Comment
  • Icahn hikes Apple target to $240, sees FY16 EPS of $12 [View news story]
    I agree and disagree. I think that the fact that someone like Icahn holds such an enormous position at AAPL makes the stock much more unstable and hence riskier. I doubt that he would announce his intention to sell the stock in advance. It is convenient to tell everyone on Twitter that you met with the CEO or that you increase your position when you are long, but it would be dramatic for him to announce that he is about to sell. Icahn could trigger a massive selloff by him own and I would certainly not want to be in the eye of the cyclone when he would do that. If the stock would remain stable and if he would realize that his price target is out of the reach, he could sell his positions just to buy them back later for much cheaper.
    May 18, 2015. 08:38 PM | 1 Like Like |Link to Comment
  • Icahn hikes Apple target to $240, sees FY16 EPS of $12 [View news story]
    Yes and no. I think that the fact that someone like Icahn holds a huge position in AAPL makes the share more unstable and hence riskier. I doubt that Icahn will announce his plans to sell his positions in advance. It is one thing to tell on Twitter that you had a meeting with the CEO, or that you bought more shares, but it is completely another to announce that you are about to disinvest. At some point Icahn might trigger a massive selloff and I would certainly not want to sit in the eye of the cyclone when he will do that. Very few hedge funds hold their positions for that long and I think that eventually Icahn might find a better use for his funds elsewhere. For example, he could sell his positions just to buy them back later for much cheaper if he would see that his price target of $216 is out of the reach.
    May 18, 2015. 08:31 PM | Likes Like |Link to Comment
  • BlackBerry briefly spikes on unconfirmed Microsoft rumor [View news story]
    $100 a share is common sense? Why not $1000 a share? Even if by some miracle the company hits $1.5 billion a quarter in revenue it is not likely to happen.
    May 15, 2015. 05:09 PM | 8 Likes Like |Link to Comment
  • BlackBerry briefly spikes on unconfirmed Microsoft rumor [View news story]

    It is not 'growing'. In the financial sense it is shrinking. However, there is a lot of interest in the company. Its purchase could contribute to many companies in different ways. Each part taken separately has value for a each supposedly interested company. Therefore I think that it would be sound to bet on an imminent buyout rather than on a turnaround. However the only ways for shareholders to get a deal at $15 would be an agreement to purchase the company by pieces or if there would be a betting war, which is much less likely.
    May 15, 2015. 05:00 PM | 2 Likes Like |Link to Comment
  • Las Vegas Sands misses by $0.06, misses on revenue [View news story]
    Agreed. If LVS will keep paying that high dividend, the stock will simply become a bargain. Unfortunately, without a sustainable growth, the dividend will start decreasing as well.
    Apr 22, 2015. 05:17 PM | Likes Like |Link to Comment
  • BlackBerry down 6.6% as analysts react to earnings [View news story]

    So can we expect that Passport and Classic would have their worldwide release by 2017, or is it still too soon and optimistic? 2020? I suppose that the world is not ready yet for these masterpieces. Therefore Chen keeps his precious phones for family and friends only. Blackberry realized such an achievement by conceiving these jewels of technology and competitors fell so far behind that Chen, being a man of honor, gave them 2-3 years to catch up Blackberry. What a man!

    More seriously, if Chen doesn't know anything about production, supply chain and distribution, besides how to layoff people and cut their expenses, I'm sorry to say that, but you are obviously not praying the right Messiah. Here in Europe we've got plenty of Passports and Classics in stores and on Internet stores, but somehow nobody buys them. Perhaps next quarter Chen will try to sell these in McDonald's and Beauty shops, so that he could say that they are still not being sold everywhere and that is why their revenue and sales numbers will not be included in the next earnings reports. Unfortunately his excuses begin to get way too dubious and at least as old as Passport is about to become next quarter...

    Saying that these phones don't sell would have been so much easier and honest. But no, let's hide as much information as possible and maybe eventually shares will rise. - TH v2.1
    Mar 30, 2015. 11:07 PM | 5 Likes Like |Link to Comment
  • BlackBerry down 6.6% as analysts react to earnings [View news story]
    "We need to see a full quarter of Classic and Passport sales now that carriers are assisting once more."

    And you claim that Bears live in the past and repeat the old same arguments? I've been hearing you and other longs talking about the supposed full quarter sales of Passport and Classic, but somehow it never comes. That unicorn quarter keeps systematically to be postponed.

    Let's just make it clear. Do you expect higher device sales, or do you hope that BB would become a software company? In the first case, maybe they will sell 200k more devices eventually... In the second case, with 10% of the revenue in software there is simply no chance for that to happen.

    Maybe one day, in 10-15 years from now you will finally dare to face the dire reality and eventually you will realize that the whole story about the Walhalla and the 70 virgins that Chen and Heins have been feeding you during these last 3 years was a complete utopia.

    I really hope that you will be rational enough to head to the exit before Chen will jump from this Titanic with his golden fat greasy parachute.
    Mar 30, 2015. 04:22 PM | 5 Likes Like |Link to Comment
  • Apple sets Watch prices; pre-orders start on April 10 [View news story]
    Correction : iWatch is SUPER -DUPER interstellar status. It says "I can throw $17,000 in a trash can and I don't care, cause next year I'll be doing it again for the next generation simply to prove that I still can".
    Mar 9, 2015. 03:23 PM | 12 Likes Like |Link to Comment
  • Apple sets Watch prices; pre-orders start on April 10 [View news story]
    Yes, it's hard to admit, but you're most probably right. I clearly underestimate people's stupidity. Moreover, if the golden watch works out, it wouldn't be surprising to see a "Vertu" version of iPhone and iPad in the very near future. After all, I doubt that they opened fashion/luxury departement only for the watch.
    Mar 9, 2015. 03:12 PM | 1 Like Like |Link to Comment
  • Apple sets Watch prices; pre-orders start on April 10 [View news story]
    Well, maybe they will sell 1,000 golden watches worldwide, who knows. A lot of noise for nothing. At most they will steal some customers from Casio and Swatch, but not even sure of that with a maximum of 18 hours for the battery life...

    I really thought that the golden edition would cost $2,000-4,000. Let's be clear, while Swiss watch makers use ultra expensive mechanisms made of gold and precious gems, here you've got only a slim golden body. A golden Swiss watch is different of a steel watch not only from the outside, but also from the inside with a much more expensive and complexe mechanism. Here you get the exact same $349 watch with the only difference is that it's made of gold. Sorry, but it doesn't worth over 28 times more.

    Moreover, when you buy a Rolex, a Hublot, an IWC or whatever luxury Swiss watch for more that $10k, you keep it for decades and you can even resell it, while this first version of Apple watch will be out of trend in 2 years. Even worth, knowing Apple, the OS won't be supported in 3-4 years and apps won't run. As a result you will have a golden piece of trash.

    Clearly, it's a robbery and I really think that it's going to be the first and the last golden edition from Apple.
    Mar 9, 2015. 02:52 PM | 16 Likes Like |Link to Comment
  • U.S. oil inventory highest in 80 years; crude drops below $47 [View news story]

    If your input price decreases, it means that your margin increases on the output. If oil price goes down, ceteris paribus, your refining margin increases, so I don't really follow your logic. Oil price decreased by roughly 60%, while the price at the gas stations decreased by roughly 25-30%. Refiners and governments (tax revenue) make even more money today, since much more people can afford a cheaper gas, while their main input costs them 60% less than only 5 months ago.
    Jan 22, 2015. 01:38 PM | 1 Like Like |Link to Comment