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  • Apple Is A Luxury Brand And That Is The Problem [View article]
    sog35, good catch!
    Sep 14 05:23 PM | Likes Like |Link to Comment
  • Could Alibaba's IPO Suck The Life From Amazon? [View article]
    "But will they be willing to pay over $300 a share for a company that is tracking to breakeven profits this year and just ~$2 a share in earnings next in 2015?"

    Bret, even though you paint a negative picture I think it's even worse than what you've portrayed. Amazon will probably lose money this year and next years estimate which is an average of $1.92 will surely be brought down significantly as have all of Amazon's future earnings estimates over the last couple of years. Fifteen months ago analysts estimated Amazon would earn over $3 a share this year, that future estimate will likely turn out to be off by at least 100%. If 15 months ago analysts had provided an accurate view of Amazon's earnings for 2014 I doubt that Amazon would be selling at $330 today. In all my years of investing I have never seen a large cap stock valued at over $100 billion in which future earnings estimates have been so consistently and wildly wrong and overly optimistic by such a large delta.
    Sep 14 11:53 AM | 6 Likes Like |Link to Comment
  • Amazon's Second Quarter: The Competitive Advantage By The Numbers [View article]
    "Amazon is an incredible business with a high degree of scalability. A competitor such as Wal-Mart (NYSE:WMT) or Target (NYSE:TGT) must invest in new stores to significantly increase sales. I've analyzed Wal-Mart's cash conversion cycle in previous articles to understand the competitive dynamics of the retail industry."

    Jesse, investing in new stores is not the only way to significantly increase sales. Wal-Mart in particular is investing a lot of capital in improving it's internet sales. While it is no where near competitive in on line sales with Amazon yet, it is growing its on line presence very fast and given the company's deep pockets I would not underestimate Wal-Mart if I were Jeff Bezos. Wal-Mart got to be the world's biggest retailer by knowing how to compete, and by winning against competitors most of the time.
    Sep 12 10:04 PM | 2 Likes Like |Link to Comment
  • Amazon's Second Quarter: The Competitive Advantage By The Numbers [View article]
    really_now, I just read your article. On what basis did SA reject your article? I've seen several SA articles that were extremely amateurish and poorly written possibly warranting rejection by SA editors but your article was very well written and very professional. I think SA should give your article another look, I would like to see their justification for rejecting it.
    Sep 12 09:43 PM | 2 Likes Like |Link to Comment
  • Apple Brand - Not Products - The Star Of The Show [View article]
    "This is a tough call because of the weakness of the product line introduced, but you never can assume Apple fans won't rise to the occasion and disrupt that thesis. This is a group of people that buy on emotion more than anything else, and getting hold of a new Apple product, even if it isn't as good as or is only equal to a competitor's, will gladly wait for the Apple offering."

    Another cheap shot at labeling Apple customers as people who stay with Apple mostly because of "emotion". I'm surprise you didn't come out with the "sheepie" term. I believe most of Apple's loyal "fans" are loyal because of the user experience, emotion has nothing to do with it. Up until 2008 I was a dedicated Microsoft guy and the user experience was killing me so I bought an iMac out of desperation. The user experience was so phenomenal that I subsequently bought an iPhone 3GS when it became available, bought Apple stock, and then bought an iPad. I'm now proud to say that I'm one of those Apple "fans" you talk so condescendingly about, and emotion has nothing to do with it. The user experience and getting the most bang for my hard earned buck has everything to do with it. As long as Apple keeps doing what they're doing I'm staying on the Apple team and I'm proud to be known as an Apple "fan".
    Sep 10 08:23 PM | 10 Likes Like |Link to Comment
  • Apple Is A Luxury Brand And That Is The Problem [View article]
    "To be so dismissive of a new product is, to me, to do a disservice to readers who should consider the longer term ramifications of the new product introductions, and what their potential payoffs could be to shareholders over time."

    rope789, you're exactly right. Regarding the authors dismissive view of Apple's new products/services, keep in mind that the iPod, iPhone, and iPad were all dismissed as failures/meh by a large number of so called analysts when the products were first announced. John Dvorak famously said that the iPhone would be a gigantic failure and that Apple would be ahead of the game if it just killed the effort and went back to computers. The author is showing his short sightedness and lack of understanding of Apple and how it does business. The iPhone 6 and 6 Plus, the watch, and Apple Pay are all going to be huge hits and are going to help grow Apple's customer substantially. Apple, its shareholders, and its customers are all winners in this, some analysts are going to end up with egg on their faces.
    Sep 10 04:00 PM | Likes Like |Link to Comment
  • Why Amazon Has No Profits (And Why It Works) [View article]
    mg, you're exactly right. As Amazon's revenues have increased substantially since 2010 it's profits cratered, my belief is that there are dis-economies of scale at play in Amazon's business model. As Amazon has expanded it's electronics and general merchandise (EGM) product offerings to include just about every product imaginable and has entered new business lines helter skelter it has introduced significant inefficiencies. Some of these business lines, like the Fire Phone, are dead in the water losers. So the company is growing revenue but its expenses are growing faster and eating into earnings resulting in losses. What's bizarre is that the market rewards Amazon and it's lack of profitability with a huge premium over other retail and tech large cap companies that are all highly profitable and in many cases pay dividends. This is a company with a market cap of $160 billion that can not turn a profit! What's wrong with this picture?
    Sep 5 05:37 PM | 5 Likes Like |Link to Comment
  • Amazon Has High Growth Potential: Determining Intrinsic Value Is Difficult [View article]
    Mike, you've hit the nail on the head.
    Aug 24 06:26 PM | Likes Like |Link to Comment
  • Amazon Has High Growth Potential: Determining Intrinsic Value Is Difficult [View article]
    "Amazon has moat after moat."

    InvestingInvestor, I respectfully disagree, I don't believe Amazon has any moats. If it had moats it would be able to raise prices and net margins. Amazon's businesses are all highly competitive and have extreme pricing pressures due to this competition, that's the opposite of having moats. That's why there is so little profit in Amazon's retail and AWS businesses. Major competitors include deep pocket companies like WalMart, Target, Costco, Google, and Microsoft that can go toe to toe with any company in the world. All of these competitors are much more profitable and have more cash than Amazon. I don't see this competition ever going away, therefore I don't see any of Amazon's current business lines ever having a "moat". So low prices and low profits aren't going away as far as Amazon is concerned, they're here to stay.
    Aug 24 11:09 AM | 5 Likes Like |Link to Comment
  • Amazon: $389 Or $209? Pick Your Scenario [View article]
    IMO your bull case operating income is crazy optimistic, your bear case operating income is just wildly optimistic. You even show $200 million for this year in both cases when it looks pretty likely that they will report a loss. Given Amazon's earnings history since the down slide started after 2010 I don't see how anyone can reasonably predict a prolonged period of improving earnings for this company. Amazon has not demonstrated that it can sustain positive substantive earnings with it's business model. In fact it has demonstrated exactly the opposite, consistently missing earnings estimates and disappointing even after estimates are brought down quarter after quarter. Rather than a prolonged period of earnings growth for this company, I believe the greater likelihood is that Amazon will continue to report losses and insignificant earnings for the foreseeable future.
    Aug 20 06:14 AM | 3 Likes Like |Link to Comment
  • Amazon Stuck Deep In The Jungle [View article]
    Don, Amazon can't wave a magic wand and suddenly have a 5% or 12% net margin. Net margins are a product of prices, revenue, and costs. Amazon is in highly competitive businesses in which low prices are crucial to maintaining and growing market share. If Amazon decided to raise prices to allow 5% or 12% net margins they would lose customers and revenue/market share faster than you could say Bezos. Amazon's competitors would have a field day touting their lower prices and stealing customers and sales. The other big problem holding down net margins for Amazon is on the cost side; shipping costs are increasing and are a huge anchor as EGM sales grow as a proportion of overall sales. Shipping costs makes Amazon inherently less efficient than old school brick and mortar especially regarding EGM sales. This is one reason why the big brick and mortar operations like Walmart, Target, and Costco have much higher net margins than Amazon. Given the highly competitive nature of its business and it's cost structure I can't see how Amazon can raise it's net margins to anywhere near 5% let alone 12%.
    Jul 30 08:51 PM | 3 Likes Like |Link to Comment
  • Update: Amazon.com Earnings Estimates Revisions [View article]
    "The best business to own is the business with little to no competition."

    ForeSight, respectfully, Amazon has tons of competition and will have tons of competition forever. Amazon is in competition for retail dollars, it's competition includes other etailers as well as brick and mortar stores. So WalMart, Target, Costco, BuyDig, Best Buy, to name a few are all in the game and increasingly are beating Amazon on price or price matching. Concerning AWS there is growing competition from companies like Google and Microsoft. Virtually every business Amazon is in is extremely competitive, that's why Amazon's prices are low and it's profitability is low and will stay that way. Many of these competitors have deeper pockets than Amazon and are not going away, they're going after customers. The fact that many of them are far more profitable than Amazon and growing cash reserves every quarter makes them formidable competitors indeed.
    Jul 30 11:20 AM | 3 Likes Like |Link to Comment
  • What Amazon's Earnings Won't Tell You [View article]
    Ravi, you compare Amazon with Apple using certain metrics to try to show Amazon in a positive light. Here is where earnings do tell a very different story. In this last quarter, the slowest of the year for Apple, Apple earned more than double the money that Amazon has earned in it's 20 year history. Data from Q Charts. Enough said.
    Jul 28 12:02 PM | 4 Likes Like |Link to Comment
  • Amazon: The Perma Bears Will Cost You Money If You Listen To Them [View article]
    Just the opposite, they're diluting their stock with stock based compensation and awards.
    Jul 28 11:07 AM | 6 Likes Like |Link to Comment
  • Apple And Me: Why I Finally Bought Some Apple Shares [View article]
    "The ONLY way anyone is going to beat Apple is by being better. Do that, and you have a chance. Talking the talk won't do it, mind. You've got to walk the walk, because people see through the flim-flam. They're not as dumb as some people make out. "

    steftheref, even that may not work at this point. I bought my first Apple product, an iMac, in 2008. Now I'm fully in the Apple ecosystem with iMacs, iPads, and iPhones. My experience has been so great that I'll never switch, when I need another device I don't even consider a non Apple product, and I don't think I'm alone. I have a couple of friends who also switched to Apple a few years ago and now they are totally hooked. I believe the population of committed Apple customers is growing and Microsoft, Nokia, Samsung, you name the company, would have to pull an incredible miracle to win them over. I also bought a bunch of Apple stock in 2009 and held on to it. I don't plan on selling any time soon.
    Jul 27 06:07 PM | 23 Likes Like |Link to Comment
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