Seeking Alpha

bkrolik

bkrolik
Send Message
View as an RSS Feed
View bkrolik's Comments BY TICKER:
Latest  |  Highest rated
  • Is There Really A 'Big 4' In Cloud? [View article]
    Dana,

    I do not quite understand. Is AMZN taking control because their infrastructure is cheap? MSFT and ORCL did not get dominance because their products were cheap...

    Aslo, do you know what is switching cost between any of the big 4 you mentioned?
    Jul 28, 2015. 11:40 AM | 2 Likes Like |Link to Comment
  • Gold: 3 Key Signs Needed For An Actionable Short-Term Bottom [View article]
    Thank you.

    Prices are indeed determined on the margin. I am not just sure retail can affect this margins, given daily volumes on major gold exchanges. And, presumably, even more volume coming from off-exchange institutional flow.... Maybe you are right specifically for the capitulation case, when we would see lines of retail investors dumping physical at any cost. ))
    Jul 21, 2015. 06:41 PM | Likes Like |Link to Comment
  • Gold: 3 Key Signs Needed For An Actionable Short-Term Bottom [View article]
    James,

    You mentioned you expect capitulation of Chinese buyers. Have you seen any indication of current retail sentiment in Chinese press? Also, should we expect some capitulation from Indian buyers?

    More general question - why do you think retail investors, either in China, or the US, have meaningful impact on gold prices?
    Jul 21, 2015. 02:09 PM | 1 Like Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    No, your statement is not based on facts. We have only one fact - China's report regarding increase in gold reserves. The only thing this fact implies, is that China's interest in gold is increasing.

    I am sorry I have to explain logic 101 to you, but this how it works. I buy more of something because you are interested in this. If you are not interested, you get rid of something.

    Your "logical inferences" are just guesses, as good as anybody else's.
    Your comment "that it makes little sense for them to accumulate quantities of gold much beyond what they have" is pure speculation. You cannot read mind of Chinese bankers. You cannot state they are going to buy more gold, or sell some gold they have. Additionally, you do not specify, what "quantities of gold much beyond...." actually mean. Is it 10,000 tons? Or 1750 tons?

    It is unlikely I will continue this discussion, as the whole point is mute. You correctly assumed that the recent Chinese disclosure does not really change the big picture for gold bulls (and bears too). Beyond that, it is just your opinion, which, by the way, is not related to the disclosure fact. To measure Chinese interest in gold and their intentions, much more info is required, and as I see from other responses here, you tend to cast doubt on any info piece regarding gold export/import, Shanghai gold exchange etc.

    Remember, Chinese government may be lying. Or maybe not. Even if the whole politburo stated in the central newspaper that they are going to sink all the gold into the ocean, it might have been to hide massive gold purchases....
    Jul 21, 2015. 02:01 PM | 3 Likes Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    "we do know that the chinese CB has accumulated less gold than it has in bonds denominated in fiat currencies. We also know that it has accumulated far less in gold than it has increased its own money supply"

    This is correct. The opposite would be impossible, given the total size of China's reserves, money supply, and WW gold market size. So, it is natural development that means nothing at this point.

    "all of this makes logical sense whereas the theory of massive gold hoarding by China makes no sense" Sorry, but this is pure speculation. You start to build your thesis on pure facts, and rightfully assume that the reported change in gold reserves does not mean much in the big picture. Then, for some unknown and unfounded reason, you conclude that China interest in gold is low. This is simply not correct. Based on the facts you described, we cannot make any guess about China real interest in gold. We only can conclude that China has "some" interest in gold.

    For example, looking on actions of Bank of England during the last 20 years or so, we can conclude that UK has very little interest in gold. Not so with China.

    The opposite can be implied from other actions of China government. Assuming "little" interest in gold would prompt China to act at least in line with UK and some EM gold producing countries - not grow or decrease gold reserves, discourage gold ownership among citizens (even India did this), and not only allow, but encourage gold exports. We clearly do not see such things.

    The whole argument is mute and speculative at this point. The interesting thing though is level of response to it from both bulls and bears....
    Jul 21, 2015. 06:39 AM | 1 Like Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    I agree. I also think we will know about China's real interest in gold only after they break the USD peg. For that, they would need to further develop capital market, and to internationalize renminbi. Also, I am afraid, they will have to go through major debt crisis, with possible devaluation, before achieving world currency status. So, probably no real insight into China's gold policy for some more years.....
    Jul 20, 2015. 11:05 PM | 1 Like Like |Link to Comment
  • China's Gold Reserves: A Strong Dose Of Reality [View article]
    James,

    It seems your article is as futile as the ones written by "gold bugs" about China.

    In the comments you say: "China did not report anything about their gold reserves between 2009 and 2015, PERIOD. The Chinese reported in April 2009 that they had X tons. In July 2015 they report they have Y tons. Period. They have not said anything about when they accumulated those reserves between the two dates; could have accumulated the gold at any points in time during this period; we have no idea nor did they say anything about it."

    You also state, quite correctly, that we do not know whether China is lying or not about it's gold policy.

    So, in reality, we still know nothing. China may have bought this new gold reserves gradually. Or it may have done it just before the last reporting period, as, strictly speaking, this would be the correct way to report increase in holdings, right?

    Maybe China will buy the same amount, or more before the next reporting period, as it now entered the "official" gold accumulation phase. Maybe not...

    Or, they may have bought less, or even sold some gold, and are lying to us, to preserve gold from plunging. Who can tell?

    Regarding your thesis on diminishing trading surpluses. Sorry, but this would not affect their gold policy either way, unless they plan very significant reduction in reserves. Their reserves are huge, and the uttermost problem would be to preserve its value, not to care how to invest incoming surpluses. Are you bond perma-bull? If not, you should see the problem here.....
    Jul 20, 2015. 10:59 PM | 1 Like Like |Link to Comment
  • Riddle Me This On Amazon Prime [View article]
    This very well may be the case, but the historic trend assumes the usage of Prime members of the streaming video content is more or less constant.

    To make your hypothesis correct, not only new Prime members should not watch AMZN streaming video at all, but also big part of the old members should significantly decrease viewing time during last half a year, or so.

    Why could it happen? Based on both NFLX and AMZN total subscription and subs growth numbers, it is very unlikely that many AMZN prime members suddenly subscribed to NFLX and started to watch only their content....
    Jul 17, 2015. 12:42 PM | Likes Like |Link to Comment
  • Netflix Virtuous Cycle Is Intact, But Stock Is Fully Valued [View article]
    Hi Eric,

    For all your major charts you have nice % growth, except for the content lease obligations. It would be helpful to have that there too. Also, you are missing an important piece - cash flow chart.

    Using your own numbers - content lease obligations per streaming sub looks pretty flat to me. If you compare it to averaged free cash flow during last three years (which is essentially zero), you will see that NFLX does not really have much negotiating power with the content providers - they squeeze it dry, so it just survives without any cash generated for the shareholders. Thus comes the debt financing.

    Also, you'd better use cash flow for DCF, not EPS.
    Apr 22, 2015. 09:28 PM | 3 Likes Like |Link to Comment
  • Amazon Becomes An Investment With A Long Tail [View article]
    "The belief is based on evidence"

    What evidence? I have not seen any, except repeated mentioning of "belief".

    "... on news surrounding the company..."

    But you specifically said "Forget the news...". Sorry, but you contradict yourself.

    I am not looking for number-based analysis here. I would expect you to analyze/comment on news flow, but you repeatedly said to ignore it. Thus is my conclusion that your recommendation to buy AMZN is pure and unsupported belief. If your belief is based on "financial track record" (by which, I assume, you mean past stock price performance, as it cannot be "number-based analysis"), then it is good as it is. In this case I would advise to you read a footnote in any financial advisor document.....
    Apr 9, 2015. 12:47 PM | 5 Likes Like |Link to Comment
  • Amazon Becomes An Investment With A Long Tail [View article]
    "And yet Amazon is up again today" Yes, and moreover, it can also be up tomorrow )
    Securities indeed can trade up and down, sometimes it can happen for fundamental reasons, sometimes because of speculation, sometimes because of fraud. Shares in Madoff's fund had been advancing for years spectacularly, and you do know why.
    In AMZN discussion, my point is (and you just confirmed it again with your response), that you advise to buy the stock only because you simply believe its price will be higher.
    You not only fail to provide any quantitative, i.e. fundamental reasons for this, you also fail to provide any qualitative, i.e. "news flow" reasons. Moreover, you are specifically recommending to disregard such reasons, probably fearing that short-term news flow may be rather negative (the way you mentioned earnings in your response). In such case, it would be more prudent to advise to wait for the negative news to be released, and then buy on the dip.
    Again, I am not discussing the valuation of AMZN here. I am just analyzing your post and use it as an example of bull's thinking. If the pure belief is the only thing that remains to support the stock price now, it's to me a very interesting indication of sentiment - one piece (of many) of the valuation puzzle.
    Apr 9, 2015. 11:11 AM | 7 Likes Like |Link to Comment
  • Amazon Becomes An Investment With A Long Tail [View article]
    "•Forget the news and the noise"

    Fascinating. First, the bull's thesis was "profitability growth", "CFFO growth", "revenue growth", and "news are good". Then "profitability growth" got quietly dropped. Then "CFFO growth" followed. Then "revenue growth" died quietly. All these were sacrificed for "news are good" meme. And now what? A bull is killing "news"? Now they are just a "noise"? What is left??? How should we value this "....."? What ratio or multiple should we use?

    Hmm, even in the midst of Internet bubble, the bulls used some funny stuff like number of clicks. And now it is just "....", or, in other words, pure and unsupported belief? Welcome to the sect of Amazonah witnesses!
    Apr 9, 2015. 10:24 AM | 11 Likes Like |Link to Comment
  • Alloy Steel International: Weak Hands Sell The Headline To Their Detriment [View article]
    Nat,

    The company stopped to file with SEC a while ago. Are they filing with any other official/government agency?
    Thank you.
    Sep 8, 2014. 03:23 PM | Likes Like |Link to Comment
  • Why Amazon Has No Profits (And Why It Works) [View article]
    King, you are not Gary in disguise by any chance?
    Sep 6, 2014. 07:15 AM | 2 Likes Like |Link to Comment
  • Why Amazon Has No Profits (And Why It Works) [View article]
    "...Amazon is in fact organized not just in these segments, but in dozens and dozens of separate teams, each with their own internal P&L and a high degree of autonomy."

    Is it the unique structure of the truly "visionary" company, which is "investing in the future"? Not quite so. In fact, many very successful (and not) companies are structured this way. And, believe me, every single company would attest it is investing in the future. But let's look at some quite successful examples.

    One, quite known, is JNJ. The company is structured exactly as you mentioned - in many different segments, quite loosely connected, with their own management and P&L. The company is investing heavily "into the future", starting and buying businesses with possible return delayed by decades (biotech). And yet, JNJ is also extremely successful in generating FCF and distributing big part of it to shareholders.

    What would it say to a non-sophisticated investor, like me? That JNJ not only has "vision" (or whatever buzzword you can use), or can spend cash (extremely easy for anyone who has cash), but it also can successfully bring multiple projects from "visionary" stage to the actual cash generating and distribution stage.

    During its two decades of operations, AMZN has not proven yet that its "vision" can lead to building and maintaining a number of businesses with cash generation and distribution on par with its valuation. Why should I believe, that all its current investments/CapEx would lead in the future to the cash flow generation appropriate for its current valuation? I just do not see any ground for this.

    You can probably say that some business lines of AMZN are just what I want as a proof. Maybe. But I would agree only if AMZN discloses enough about those lines in the financial reports so that I can analyze them the way I analyze JNJ. Quite simple, for a company like AMZN - just to allocate corresponding P&L to the mature business lines would answer a lot of questions.

    Until then, it is just point of belief, not analysis. And in that Gary beats everybody.
    Sep 5, 2014. 03:55 PM | 15 Likes Like |Link to Comment
COMMENTS STATS
77 Comments
199 Likes