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Zhang Fei

Zhang Fei
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  • Apple: Fighting The Battle That Can't Be Won [View article]
    If a true believer like Bill Maurer is too skeptical for you, maybe it's time to turn to something that is a little more in tune with your personal inclinations, like organized religion. Compared to any of the major religions, Apple worship is weak sauce. Sic transit gloria mundi. Squared, when it comes to electronic gadget companies.
    Mar 11, 2015. 06:55 PM | 17 Likes Like |Link to Comment
  • Nokia Upgrades Will Create More Upside [View article]
    "Even the maniac Cramer belives in Nokia... man that is bad news for real."

    Actually, Cramer's always said sell NOK. His reference to NOK was as an instance of why everyone should own a speculative stock as a small part of his portfolio in order to have to potential for outsized gains. Cramer's a showbiz figure whose specialty is spewing stream-of-consciousness thoughts without any research. NOK fell from 4.82 at year-end 2011 to 3.95 at year-end 2012. All things considered, 2012 was a horrible year for NOK. The reason the stock went down so much in mid-year 2012 is because all the analysts thought it would be even more horrible than it turned out to be and took the stock down to a level that suggested impending liquidation in the first half of 2013.

    However, it's clear that NOK's Windows Phones are getting some traction. As Wim noted, NOK sold 1m Windows Phones in all of 2011, and 4.4m of them in 4Q12 alone. What's more, in 2011, NOK couldn't sell all they made, whereas in 4Q12, NOK couldn't keep up with demand. I think NOK's sterling reputation in feature phones will cause a lot of former users to migrate to the Lumia line, including no small number of Iphone users. It just takes time for the knowledge that NOK has a competitive smartphone out there to percolate down to the average consumer.

    You're thinking of this as some kind of major advance in the stock price. It's not. The stock price is below NOK's stock price at the beginning of 2012, back when NOK's Windows Phone sales volumes were negligible, and it wasn't even clear if Lumias could compensate for the collapse in Symbian phone volumes.

    Now that bankruptcy is off the table in the short term, a lot of portfolio managers will pick up a little NOK just so they can have the opportunity to get some fraction of a % in increased return in their funds. Given how tiny NOK's market cap is, and how crowded the short is (20% of shares outstanding), shorters will need plenty of Dutch courage, and cash to deal with margin calls as the stock inches up due to institutional interest.
    Jan 11, 2013. 04:03 PM | 14 Likes Like |Link to Comment
  • Lampert's Grip On Sears Weakens [View article]
    "I guess we have to say also that Lampert and Berkowitz are fools."

    It's possible to simultaneously be highly-capable and be wrong on or fail in a given field. Even experienced specialists in various industries lose to the competition and in some cases, over-invest because of excessive optimism about the industry's prospects. Neither Berkowitz nor Lampert has run anything (successfully) other than a hedge fund. Given Sears's losing record over the years, I'd say they are wrong, and unwilling to admit their mistakes.

    Note that plenty of highly-capable fund managers have abandoned Sears, so one could also say that if you side with Lampert and Berkowitz, you are implying that those other fund managers are fools. I think the simpler explanation is that they are wrong. The problem isn't that they're wrong, but that they're unwilling to take the steps to remedy their mistakes.
    Dec 4, 2013. 05:16 PM | 9 Likes Like |Link to Comment
  • China's Giant Catch-22 [View article]
    BG: "In the last 30 years, China came from being one of the poorest country in the world to be the 2nd largest economy in the world."

    That's really misleading. In per capita income terms, China is a middle-ranking country, which is far improved from being at the bottom of the list, but nowhere near number two. It's a lot like comparing an entire extended family's income to that of a single individual.
    Jul 27, 2012. 10:15 PM | 9 Likes Like |Link to Comment
  • Nokia's Revival: The Ship Has Sailed [View article]
    "Financials to me in some ways are trailing indicators (and are usually at least a quarter or two behind)."

    Consumer gadget companies are a lot like oil companies. Their balance sheets are life support systems for oil strikes. What NOK's financials tell us is not that management is fiddling the books or is incompetent at financial management, but that it hasn't - in recent years - managed to do the consumer gadget equivalent of striking oil - producing a wildly profitable gadget that consumers want in large numbers. The reason for those lousy financials is simply that NOK had the equivalent of its oil fields petering out without warning while being saddled with a workforce that was geared for peak production volumes. However, the moment it strikes oil again, those financials clear up. So it really boils down to whether NOK's current and future products are worth their salt, not financials that merely reiterate the fact that NOK has had a dry spell with respect to getting a hit product out that was simultaneously profitable.
    Dec 16, 2012. 10:01 PM | 8 Likes Like |Link to Comment
  • China's Growth: Far Less than Meets the Eye [View article]
    MChen: "While Americans think only of next quarter, the Chinese plan for the next 5000 years!"

    That's pretty impressive - to think that Mao Zedong's mass famines (Great Leap Forward and Great Proletarian Cultural Revolution) were planned 5000 years ago. It's also kinda cool that 5000 years ago, the Chinese were planning to ditch all their traditions (polygamy, legal prostitution, traditional costume, absolute monarchy) and adopt Western customs wholesale.
    Aug 3, 2009. 07:35 PM | 8 Likes Like |Link to Comment
  • Apple: Debunking The Recent Cowen Survey [View article]
    "Are you calling Tim Cook A list, you realize he made a public disclosure that 85% on iPhone sales in Q4 was new to iOS."

    That's not what he said, namely:

    http://bit.ly/1FWbCcJ
    "He said fewer than 15% of older iPhone owners upgraded to the iPhone 6 and 6 Plus and that the majority of switchers to iPhone came from smartphones running Google Inc.’s Android operating system."

    15% of the 400m iPhone installed base* comes to about 60m iPhone upgraders. That means of the 75m sold, 15m were previously non-iPhone users. Of the 15m new iPhone users, some were switchers and some were presumably new to smartphones. Cook doesn't specify how many were switchers and how many were new to smartphones. According to Cook, of the switchers, the majority were Android users, which is what you'd expect, given that it's the other major smartphone operating system.

    * http://bit.ly/1uGXM5I
    Mar 26, 2015. 12:47 AM | 7 Likes Like |Link to Comment
  • Lumber Liquidators Is Evil [View article]
    "I starting seeing Lumbar Liquidator ads on TV a few years ago. I wondered why homeowners would install cheap and unattractive laminate floors when hardwood floors are much more attractive and last longer."

    Let them eat cake.
    Mar 23, 2015. 05:21 PM | 7 Likes Like |Link to Comment
  • Why Lumber Liquidators' Wood Testing Doesn't Comply With CARB [View article]
    Getting formaldehyde banned might be a bigger project than Tilson and 60 Minutes can accomplish, given its application in any number of day-to-day products.

    As to whether management's response is an indicator of guilt, the fact is that an inquisitor's power to question, and to hog the megaphone via media outlets hungry for scandal, puts companies on the defensive, and management's response will necessarily not be in the form of rapid and witty one-liners, because of the potential financial consequences of saying the wrong thing*. If they can't find anything wrong with the product, among other things, they will be investigating whether Tilson and his accomplices committed fraud, figuring that a minnow like Lumber Liquidators would have gone under before anything managed to discover irregularities in their so-called investigation. That is possibly why Tilson & Co went after LL instead of Home Depot, which might have put them through a meat grinder of investigations and libel suits, to the point that Tilson might beat the rap, but not the ride, to tune of tens of millions in legal expenditures.

    * Massive corporations like Apple and Microsoft have looked like deer-in-the-headlights after allegations of product problems cropped up, yet in time, they managed to separate hysteria from any actual problems. The fact is that *nobody* is prepared for outrageous accusations except for the obviously guilty.
    Mar 4, 2015. 06:12 PM | 7 Likes Like |Link to Comment
  • Why Lumber Liquidators' Wood Testing Doesn't Comply With CARB [View article]
    "Because it isn't just "fines" that they are facing. It will be a massive class action lawsuit. Think about what it would cost to remove and replace wood flooring with new, compliant wood flooring (more expensive than they stuff they sold) in tens of thousands of homes?"

    Even Tilson does not allege that LL is out of compliance with Federal standards. It's CA standards that are at issue. Note also that no one has verified independently that Tilson's allegations are in fact true. 60 Minutes has signed on for the ride, but this is the same 60 Minutes that was duped by fake documents just about anyone should have detected during the George W Bush Air National Guard imbroglio. On something this technical, who knows if 60 Minutes has its ducks in a row?
    Mar 4, 2015. 05:16 PM | 7 Likes Like |Link to Comment
  • Why Lumber Liquidators' Wood Testing Doesn't Comply With CARB [View article]
    "Many friends have told me that China is for the Chinese; if they can screw Americans, they will – and they did with LL, which might take down company."

    Tilson jumped the shark here. The big product scandals - ranging from melamine in milk to meat jerky cooked in recycled cooking oil meant for biodiesel - have been in products sold to the Chinese market. The Chinese consumer has a pittance to spend compared to his developed country counterparts. That is why melamine showed up in milk there - pricing pressure. These companies aren't making lavish profits - they're skimping on quality to keep the lights on. Chinese companies rely on the domestic market to pay fixed costs. The export market is where they make their money, much as Detroit's Big 3 sell compact cars pretty much at cost, and SUV's to make money. That is why they are extra careful with export products - it's their bread and butter and foreign countries don't have tame media to keep scandals out of the headlines. The idea that Chinese suppliers band together to stick it to foreigners is so off-the-wall, it brings into question Tilson's knowledge and insight.

    While Tilson's thesis on LL should stand on its own regardless of any loopy ideas he might have, the fact is that we (and 60 Minutes) are relying on Tilson's word for a lot of the thesis. 60 Minutes was led by its sources up a blind alley during the George W Bush Air National Guard document imbroglio, where fake documents (in Times New Roman font) generated on Windows-era computers were claimed to have been copies of type-written documents (which should have been in the standard Courier font of all typewriters until the early 80's) created during the early 70's. Bottom line is that 60 Minutes is vulnerable to fraud by even unsophisticated, but slick-talking individuals who had no clue that Courier fonts were standard issue on typewriters until the typesetting revolution of the 80's. Tilson is probably an order of magnitude brighter than the people who perpetrated the fake Bush documents. If he chose to, he could do a better job of pulling the wool over the eyes of the producers of 60 Minutes.
    Mar 4, 2015. 04:23 PM | 7 Likes Like |Link to Comment
  • There Is Still Time To Short Apple [View article]
    Iphone units:
    1Q12 (99 days) 37.04m
    1Q13 (92 days) 47.8m (29% increase despite fewer selling days, due to relentless carrier additions)
    1Q14 (92 days) 51m (only 7% increase despite no decrease in selling days and relentless carrier additions)
    This looks a lot like the peak of a parabola.
    Jan 29, 2014. 10:34 AM | 7 Likes Like |Link to Comment
  • 3 More Things You Need To Know About Amazon.com [View article]
    Kroger, the blue chip mass market grocer, trades at 1/5 of annual sales. So it's conceivable that AMZN might eventually trade for $15b, or roughly $30 per share. Unlike AMZN, KR actually makes money.
    Sep 27, 2013. 07:19 PM | 7 Likes Like |Link to Comment
  • 5 Initial Thoughts On The End Of Nokia As We Know It [View article]
    I don't understand the philosophy behind the acquisition. I think MSFT would have been better off making an equity investment in NOK instead of buying the division. Why buy the cow when you can get the milk for free? Hand NOK the cash to do store-level marketing (spifs, tchotchkes for salespeople, et al), and wait for NOK's sales to get big enough to start producing net royalties for WP8.
    Sep 3, 2013. 07:18 AM | 7 Likes Like |Link to Comment
  • Nokia's Beaten Down Stock Finally Gets Some Asha [View article]
    "It is very telling of this being a matter of perception that Ashas are being accepted as smartphones while even their underlying platform is far inferior to Symbian S60 when it comes to its general ability..."

    Not surprising at all. This is what technology life cycles are all about. The early adopters have been milked for profits. The late adopters will buy smart phones - at much lower price points. And that will provide severe moments of angst for AAPL shareholders - what was once a scarce good will go mass market, taking margins down with it. Just another consumer gadget product cycle, but completely alien to AAPL's experience.

    Apple's market share will crash because smart phones will replace feature phones at feature phone price points. The same will happen for tablets - they will replace e-readers at e-reader price points. And that is why AAPL's stock is probably capped in the 700 range, whereas its long term price is probably in the low hundreds or even in the high double digits, as it becomes a niche player in mobile phones and tablets the way it is in PC's, assuming that mobile phone and tablet users are as loyal as Mac users (which may prove to be false, given the short life span of many consumer gadget brands).
    Dec 20, 2012. 09:44 AM | 7 Likes Like |Link to Comment
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