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  • How To Play The iPhone 5 Announcement [View article]
    "Very few hedgies own AAPL..." - here is a link (see below) to an article titled:
    "The World's Biggest Hedge Fund Hotel Just Became The Biggest Ever - 230 Hedge Funds Own Apple As Of June 30"

    See the table at the bottom of the article which lists Apple as the stock with the largest number of hedge fund investors.
    Sep 11, 2012. 10:37 AM | 2 Likes Like |Link to Comment
  • Google Likely Topping Here [View article]
    You wrote: "Increasing cost-per-click is eating into their earnings."

    Cost-per-click represents the price paid by advertisers who run ads on Google's web sites, so "increasing cost-per-clicks" would actually help their earnings.

    Also, you wrote: "As I see it, a move (and sustain) into the $790s would qualify as a breakout,..."

    $790 should be changed to $690 - correct?
    Aug 29, 2012. 12:40 PM | 1 Like Like |Link to Comment
  • Why You Should Short Amazon This Fall [View article]
    AWS is definitely a high-growth area for Amazon, but still represents less than 5% of Amazon's total revenue and does not appear to have a monopoly-like share of worldwide web services, utilizing Gartner's estimates.

    According to Amazon's 2011 10k (p. 26), AWS is included in "Other" Revenue, which was approx. $1.6B in 2011, representing 66% year-over-year growth but only 3.3% of Amazon's total revenue. In their latest quarter, "Other" revenue was about 4.3% of total revenues.

    So, assuming that AWS accounts for the vast majority of "Other" revenue, it represents a very small portion of total revenues, despite its rapid growth.

    Also, Gartner estimates in their 2Q12 update (see link below - actual numbers were not available, so I had to estimate from the chart) that the total worldwide market for 2011 Internet hosted services, including: Platform as a Service (PaaS), Infrastructure as a Service (IaaS), and Software as a Service was about $17B, estimated to grow to about $22B in 2012 (approx. 30% yoy growth).

    So, if one assumes that 100% of Amazon's "Other" revenue in 2011 was AWS, it would have represented just under a 10% revenue share of the the worldwide Internet hosted infrastructure market in 2011, hardly a monopoly position like Microsoft in 1995. Also, the vast majority of "Other" revenue is based in North America.

    Another Gartner survey shows that AWS is definitely one of the top service providers that customers are looking at, but they have plenty of competition (see Gartner 2011 User Survey Analysis: Infrastructure as a Service at:
    Aug 17, 2012. 01:09 PM | 2 Likes Like |Link to Comment
  • Buy Amazon: Digital Marketplace's Sales Are Growing, Gross Margins Expanding [View article]
    Paulo - good catch. Here is a statement from the 10Q, page 25, supporting your observation:

    "Infrastructure and other technology costs used to support AWS are included in technology and content."

    AWS is included in "Other" revenue, which amounted to $554M in the June quarter, up 54% year-over-year. If one assumes the vast majority of the $554M is AWS and 50% gross margins, this would negatively impact overall gross margins by about 200 basis points.
    Jul 27, 2012. 12:30 PM | Likes Like |Link to Comment
  • The Apple 'Buy Zone': Is It Time To Take Another Bite? [View article]
    Short squeeze on Apple? states that the Apple short float is only 1.6% and the short ratio is just 0.79.
    Jul 5, 2012. 09:21 AM | Likes Like |Link to Comment
  • The Apple 'Buy Zone': Is It Time To Take Another Bite? [View article]
    JH001 - yes, the quote is from 2010, but the CFO notes that the software stores have a high variable cost and require significant investment. The vast majority of applications/music requires Apple to pay significant royalties, since Apple does not own the content. Consequently, content/applications may contribute a consistent revenue stream, but little in the way of profits.
    Jun 27, 2012. 12:30 PM | Likes Like |Link to Comment
  • The Apple 'Buy Zone': Is It Time To Take Another Bite? [View article]
    The software ecosystem is run at essentially break-even (see comments from Apple earnings call below) and is "a means to an end" - selling very profitable hardware devices.

    Here's the quote from an Apple earnings call:
    "Regarding App Store and iTunes Store, running a bit over break even and that hasn't changed. Very excited to be providing developers with a fabulous opportunity...Variable cost structure is high and investing a lot in these stores. As revenue grows, continuting to invest more to give customers and developers a great experience."
    Jun 26, 2012. 07:55 PM | Likes Like |Link to Comment
  • More on Windows Phone 8: AT&T, Verizon, and T-Mobile have promised to support WP8, and Samsung, HTC, and Huawei are joining Nokia as initial hardware partners. Also, Zynga (ZNGA) says it will develop games for WP, and Qualcomm (QCOM) boasts all WP devices currently available run on its processors, while adding WP8 models will use multi-core Snapdragon chips. Broad industry support for WP8 could leave little room for BlackBerry 10 (RIMM) to emerge as a "third ecosystem."  [View news story]
    What's your source for the Lumia 900 being sold thru China Mobile?

    Nokia does sell the Lumia through China Telecom:
    Jun 21, 2012. 12:30 PM | Likes Like |Link to Comment
  • Google Presents An Opportunity [View article]
    Thanks. I just checked ValueLine at:

    and they had a P/E listed at 17.61
    Jun 7, 2012. 03:41 PM | 1 Like Like |Link to Comment
  • Google Presents An Opportunity [View article]
    What's the source of your P/E?
    "The P/E ratio of 32.96 is twice the market P/E of 14.40"

    Bloomberg, Reuters, and Finviz each of the ttm P/E at about 17.6 with a price of approx. $582.
    Jun 7, 2012. 03:08 PM | 1 Like Like |Link to Comment
  • Kindle Sales Plunge Made's Gross Margin Look Better [View article]
    What "high margin" digital products are you referring to?

    Amazon will likely begin pricing e-books very aggressively now that "agency" pricing seems to be on the way out. Music and Videos carry significant licensing/royalty fees which limits their profitability, and smartphone applications usually carry a hefty payment to the ISV.

    Amazon doesn't own the vast majority of content that is downloaded onto its devices; consequently, the margins are limited.
    May 4, 2012. 12:11 PM | Likes Like |Link to Comment
  • Trading Strategies For Apple And Amazon Investors [View article]
    Actually common sense doesn't and Amazon has never quoted any of their Kindle sales. The 4.7 million number is simply a rough estimate and should be stated as such, not as if Amazon has actually stated it as fact.
    May 3, 2012. 09:18 AM | Likes Like |Link to Comment
  • Trading Strategies For Apple And Amazon Investors [View article]
    But does Amazon actually report the numbers? I don't think so. I believe Comscore has estimates (, but I can't find any reports by Amazon of their Kindle sales.
    May 1, 2012. 11:46 AM | Likes Like |Link to Comment
  • Why Amazon Is Overvalued [View article]
    You wrote: "The operating expenses were $10.03bn or 76.1% of revenue compared with 77.2%..."

    Total operating expenses, including Cost of Sales, Fullfilment, Technology and Content, and G&A were approx. $13 billion and 98.5% of quarterly revenue.

    The $10.03 bn represents cost of sales.
    May 1, 2012. 10:52 AM | Likes Like |Link to Comment
  • Trading Strategies For Apple And Amazon Investors [View article]
    I just re-reviewed the AMZN conference call on SeekingAlpha and saw no mention of Kindle Fire shipments. In Amazon's press release they only stated:

    "Kindle Fire remains the #1 bestselling, most gifted, and most wished for product across the millions of items available on since launch."

    So, the 4.7 million does not appear to come from Amazon.
    May 1, 2012. 09:50 AM | Likes Like |Link to Comment