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  • Apple shoots down MVNO service report; shares down another 3.2% [View news story]
    "Shares go for 11.8x an FY16 (ends Sep. '16) EPS consensus of $9.77."

    Same question remains: what will they be earning in 5-10 years from now as opposed to over the next 12 months? For a company that derives the vast majority of its profits from a single product, that's a difficult question to answer...
    Aug 4, 2015. 11:37 AM | 5 Likes Like |Link to Comment
  • Allstate -4.5% after increased auto losses dampen Q2 [View news story]
    Esurance PIF growth continues to slow, and is down to half of the growth rate from two quarters ago; in addition, they're still writing at combined ratios well above break even (let alone profitability). With the company targeting rate and planning to pull back on advertising investments, expect PIF growth to slow even more in the coming quarters.

    They are too far behind to compete with Progressive and GEICO long term...
    Aug 3, 2015. 06:05 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "what's ironic is an investment in amazon has never been less risky than it is now."

    It's less risky than when you could buy it at the start of this year for 45% less than the current valuation? That much has changed at AMZN in seven months? You have an odd definition of risk...
    Aug 3, 2015. 10:45 AM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "i think you missed 3 splits... per morningstar the last 15 yr have compounded at 21.16%. again in line with biz performance."

    Nope - the reason the CAGR jumped so much is because the stock was already down 70% or so from it's peak by that point.

    "but what do they know."

    They're very good at doing math - my props to them. I can calculate compounded growth rates for you too if that's what you want.

    Who was at the top of the list in 1999 / 2000 - John Chambers? In his first five years or so as CEO at Cisco, the stock was up from ~$2 (split adjusted) to ~$75 per share - wow! That's a CAGR of 106% over five years! Clearly that's all we need to know - he's the best CEO ever!!!

    How would you judge investor perception of his tenure at his recent retirement? From what I read, most investors were happy to see him go. By the way, that stock is still down more than 50% from where it was 15 years ago; another case where valuation destroyed future returns despite decent business results (EPS growth has actually been quite good).

    As usual, reality lies in the middle ground. Jeff Bezos is very smart and a very good CEO; Amazon is a very well run company and has a great future ahead (I think). They were smart to recognize the importance of free shipping to customers early on and to do something about it.

    That does not mean the stock is a buy regardless of valuation. You guys can't seem to understand how those can both be true simultaneously...
    Aug 3, 2015. 09:59 AM | 1 Like Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    Fair enough Gary. You also could've used mid-2001, at which point investors in AMZN saw their investment decline by more than 90% from late 1999. Great CAGR if you start from there as well.

    To the rationale individual, that would speak to the importance of valuation in investment decisions, not just the future prospects of the company.
    Aug 3, 2015. 09:22 AM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    People don't even bother thinking about valuation (no argument the stock is actually cheap) - they believe there's no risk and any price is justified.

    Yes, I'd say we're closer to a peak than we've been in some time...
    Aug 3, 2015. 08:26 AM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "It is obvious how not buying AMZN has worked out for you. :( No need to check that out."

    From late 1999 (peak to peak), AMZN has increased at a compounded annual growth rate of ~10.5%; hardly an astounding return for the long term investor, but a good one none the less. At the start of this year, the CAGR from late 1999 was ~8% a year - or 3% a year better than what you could have got with a comparable (~15 year) AAA bond back in '99.

    That just goes to show you what sky high valuations can do for future returns (despite the fact that Amazon has done about as well as one could realistically have hoped for). Do with that info as you please.

    You're blind to this because you believe valuation is meaningless.
    Aug 3, 2015. 07:46 AM | 2 Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "I can't tell you what I would do at some unspecified point in the future-- at double the price--I'd analyze it at that time."

    Not some point in the future - double the price tomorrow. Would you still own the stock if that happened?
    Aug 2, 2015. 06:20 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    Ptatty - So was that a yes or no? Would you also buy Amazon currently and at $1000 per share? Want to see if you're on the same page as Gary.

    And there is middle ground between all numbers (your computer comment) and not giving any thought to the numbers (i.e. valuation).
    Aug 2, 2015. 05:50 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    Same for you Ptatty - buy at any price? Valuation is meaningless?
    Aug 2, 2015. 05:37 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "And a very basic answer. You buy great companies (assuming you know one when you see it) and hold it for an investing lifetime."

    I'm glad you put it that way Gary; that's the nifty fifty in a nutshell.

    If you go look at that list, you'll see a retailer or two; at the time, people "knew" they would be around forever and were worth buying at any price. I'll leave it to you to check how that worked out for them.

    You say "this time is different" - Amazon is worth ANY price, and no one can beat them (in the U.S. at least - we've seen how they've failed in places like China); we'll see if you are right...

    "Still hung up on numbers - evidence you don't get it. Too bad, so sad."

    Yep, I'll always be looking at the numbers, in addition to thinking about a company's realistic growth prospects and what that means for intrinsic value. I've yet to come across any other logical way of doing it...
    Aug 2, 2015. 05:35 PM | 1 Like Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    Ptatty and Gary,

    Both of you seem to be on the same page, so I'll ask a very basic question: would you buy Amazon shares currently? If not, how far would they need to fall before you would be a buyer? Assuming you are a buyer currently, about if they went to $1,000 tomorrow - would you still be buying? $2,000 per share? $5,000 per share?

    The way you answer that question is by looking at price (the number I'm giving you) relative to the value of the underlying business. Assessing the value of the business isn't some secondary task - it's your entire job as an investor. It includes thinking ahead, assessing the company's prospects, the potential return on those investments (obviously all rough estimates), and determining what that means for intrinsic value - i.e. what you're talking about when you say "vision for the big pictures".
    Aug 2, 2015. 05:00 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "They do when it matters more. Sometimes growth and prospects matter more."

    That makes no sense.

    Growth prospects, capital required to fund opportunities, potential return from those investments, alternatives to pursuing those investments (like capital returns to shareholders), etc - that's what business valuation consists of. It's the kind of stuff I've never seen you talk about.

    "At this point it's obvious you don't get it or don't want to get it so I just make light of it."

    There's nothing to get - either the stock is attractively valued relative to intrinsic value or it's not. Your answer is "intrinsic value doesn't matter"...
    Aug 2, 2015. 04:10 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "Here's an idea - bet against AMZN and make yourself some intrinsic value! Let us know how that works out for you."

    That doesn't even make sense Gary...

    And just to be clear, I'm not short Amazon and never have been.

    But I do like to see how other market participants think. I always find it interesting when people have no concern for valuation; it sounds similar to the way people were thinking with the Nifty Fifty and in 1999...
    Aug 2, 2015. 03:56 PM | Likes Like |Link to Comment
  • Why You Should Dump Amazon And Buy Wal-Mart Now [View article]
    "in the competition for the incremental dollar, walmart is losing to its competitors."

    The only way you increase market share is by grabbing more than your fair share of the incremental dollar; that's how Walmart got to ~25% of U.S. grocery sales, from ~10% back in the early 2000's. The factors that led to WMT's dominance are still in place, which is why they continue to win.

    They've now started a major roll-out of Neighborhood Market to more effectively compete for the small trip; comps have been in the mid-high single digits, so I'd say their doing pretty good so far. By comparison, DG (which you cited above) reported comps of less than 3% last year.
    Aug 2, 2015. 03:07 PM | Likes Like |Link to Comment
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