aleax

3 Comments

    • ON: Mon Feb 25th 11:02 AM
      Commented on:
      A Beautiful Mind: Microsoft over Google
      Jim Meidel: there is a Nobel _Memorial_ Prize in Economics (not quite the same thing as the Nobel Prizes proper, as the money does not come from Nobel's estate, but nobody draws the distinction...!-), and that's what Nash won; where does the movie "insinuate otherwise"?
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    • ON: Wed Dec 19th 00:32 AM
      Commented on:
      Why I Just Bought Amazon
      Funny coincidence, Fred -- I came to much the same conclusions on my own, and ended up buying AMZN today (I got lucky with the timing and bought on the dip, so I'm already over 3% up at closing!-), but that's hardly significant since I mean to hold for a long time). No, SimpleDB is NOT technically all that good (and I _am_ technical enough to judge on this -- S3 and EC _are_ good, though), but, it's just a trial, and Amazon can make it technically sound in the next release while keeping some interface compatibility, and meanwhile they're getting traction, market share, and invaluable feedback on how the next release should be. Release early, release often -- a crucial mantra to good and profitable SW development. So even though I think Kindle will tank, and Unboxed has been an absolute zero for over a year, I nevertheless took the plunge -- they WILL make a bundle off this, eventually. And, parv, if you want other reasons, look at many recent analysts' take on EBay: sellers (and buyers!) moving to Amazon is Ebay's chief business issue. (I got off Ebay [and Sun and Yahoo] very recently, and have ploughed back most of it into Amazon -- keeping some small amount of "mad money" to get into Palm at the current ridiculously-depressed post-earnings prices, but that's a highly speculative play that _might_ tank just as my equally small, equally speculative venture into UGTH has done of late thanks to the House's changes in the energy law -- but, I digress...:-).
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    • ON: Sun Sep 23rd 21:44 PM
      Commented on:
      Google Shares Hit All Time High Friday
      I don't think it's very useful, to "provide just a modicum of perspective" on GOOG vs WMT, to compare their revenues (finding out that WMT's are 33x GOOG's) -- retailing is a field known for its incredibly thin margins, which can't be said of GOOG's business, and market cap doesn't depend on revenues, but rather on profits (specifically, discounted free cash flow).

      So, it's more useful to note instead that WMT has a forward P/E of 14.55 with estimated yearly growth of NEGATIVE 1.8% (i.e., EPS are estimated to go DOWN almost 2%), while GOOG has a forward P/E of 33.19 with estimated yearly growth of over 40%.

      It's then much less surprising that investors are happy to evaluate both firms at about the same market capitalization!

      Computing discounted cash flow you can see that GOOG is actually slightly undervalued (if you believe it can sustain that 40% growth for 5 more years, then go to 0% forevermore, and a safe index market investment yields 12%) while WMT is strongly overvalued (if you believe it's stuck at 0% growth forever, same "safe index" benchmark of 12%) [looks to me like the market is wisely considering Google's continuing needs for strong capital investment to keep growth vibrant, as well as Walmart's hopes to resume some modest rate of growth, so that both evaluations appear to be well in the ballpark].
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