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Dialectical Materialist

Dialectical Materialist
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  • Netflix's 'The Ranch' Shows Network Flexibility With Programming Business Model [View article]
    Ace, I just wanted to give you fair warning. I went long today. With all the positive expectations and the anticipation of the stock split, I couldn't justify continuing to take it on the chin being short. I am still short some shares, but I am long call options under the expectation that NFLX will continue to run up in the near term.

    Now that I'm long, I just thought I should give you a heads up. As we bears capitulate, it could be marking a top. And my timing isn't usually so good. So be careful out there!
    Jun 23, 2015. 05:41 PM | Likes Like |Link to Comment
  • Apple's Cash Dilemma [View article]
    Joel,

    My understanding is that the foreign subsidiary would not be able to retire the shares. In other words, the subsidiary could buy stock but it could not "buy back" stock. Apple's float (total number of shares) would stay the same.
    Jun 22, 2015. 11:15 PM | 5 Likes Like |Link to Comment
  • Taylor Swift > Apple [View article]
    "If Taylor Swift was in the NFL, her name would be Tom Brady."

    Now there's an image I will never get out of my head. It's half Taylor Swift and half Tom Brady and believe me it is not a good look.

    But I liked your point.
    Jun 22, 2015. 07:32 PM | 6 Likes Like |Link to Comment
  • Monster bull call on Netflix from BTIG Research [View news story]
    nerd_rage, I would agree with you on one point. NFLX bulls do not lack imagination.
    Jun 22, 2015. 06:50 PM | 1 Like Like |Link to Comment
  • Netflix: The Countries That Matter [View article]
    Ace, to me the notion of future growth is an abstraction. The only evidence is current margins. If the key to Netflix success is future content production, there is a long track record from other studios that suggest this is not a high margin enterprise.

    So if margins are constrained (based on current evidence) any abstraction about future growth should assume conservative margins. Which makes today's stock price seem a bit optimistic, IMHO.

    I have no qualms about assuming that Netflix will pick up tens more millions of subscribers. But punching that number into a revenue model and accounting for costs still doesn't produce all that much in earnings.

    TTM Netflix got 5.8B from 62 million users. That is $93.70 per user annually. This number will have to come up a lot to justify today's share price.

    Netflix is an awesome service. I don't know what their pricing power is, though. They have some room for incremental increases, almost certainly. But if they have to be a production studio in order to keep subscribers, they will have to spend a lot per user.

    There are some legitimate mysteries about whether Netflix, even as the dominant content streamer of the future, can produce the earnings that are priced into today's stock.
    Jun 20, 2015. 04:31 PM | 1 Like Like |Link to Comment
  • Amazon.com: A New Gauntlet Is Thrown [View article]
    Where was the idea that AWS is not important to the overall value of the company after the last earnings call? The stock popped on "great" AWS numbers. Either it matters or it doesn't. If it doesn't, then why the excitement? If it does, then issues that may impact this segment's profitability seem relevant.

    And Robin Hood? I look at Bezos's relationship with Wall Street and I don't see the resemblance.
    Jun 20, 2015. 04:19 PM | 3 Likes Like |Link to Comment
  • The Future Of Apple Hinges On The Mac Upsell [View article]
    "I wonder if buying Apple stock satisfies a requirement in the act of selling your soul to the devil? "

    How kind of you to include a comment that allows readers to put your analysis into context.
    Jun 20, 2015. 02:16 AM | 4 Likes Like |Link to Comment
  • Netflix: The Countries That Matter [View article]
    It does seem like there is an error here or else I don't understand what's being shown. It seems to suggest that the PE would be 36.9. But assuming no dilution (as the model does), a net income of 2.25B would be 37 a share. At today's price, that about an 18 PE, not a 37.

    It seems what is calculated in the box that shows 36.9 is not the PE, but the EPS.
    Jun 19, 2015. 08:32 PM | 2 Likes Like |Link to Comment
  • Report: Apple Watch 2 set to have FaceTime camera, iPhone-free data use [View news story]
    Arnie, speaking as someone who bought the Space black stainless steel, I can't say I'm surprised that there will be a new version of the watch and that it will be better. Anyone who didn't expect this product to improve over time hasn't been paying attention. Both the iPhone and the iPad saw significant improvements in the second version as well. But the next Apple watch probably won't go on sale for more than a year. The price of being an early adopter is that your device becomes obsolete. The upside is you get to experience the product sooner. There is never a right time to buy. Or there is never a wrong time to buy, depending on your perspective.

    I'll probably upgrade to version three in a couple years. Imagine how good that one will be!
    Jun 19, 2015. 01:03 PM | 4 Likes Like |Link to Comment
  • How Apple Will Reduce Its Interest Expense By More Than 50% [View article]
    ArnieW, not just physical control but also root access. A friend signed into your computer on a guest account could not exploit this vulnerability.
    Jun 19, 2015. 12:04 PM | Likes Like |Link to Comment
  • How Apple Will Reduce Its Interest Expense By More Than 50% [View article]
    Glen,

    So are you saying you jack the technical expertise to contradict these claims? Do you understand why the ability to edit the plist is important in this context? If you have a technical rebuttal to this explanation of the limits of this exploit, I'd be interested in reading it. You seem very convinced this is a dangerous security hole. If you can make a convincing technical argument for how this hole could be exploited without already having root access to someone's computer, I'm all ears.
    Jun 19, 2015. 12:01 PM | 1 Like Like |Link to Comment
  • Report: Apple Watch 2 set to have FaceTime camera, iPhone-free data use [View news story]
    "Obviously, you missed the boat, the train and then even the bus."

    The next available ride is the short bus. Lots of analysts are already on that one.
    Jun 18, 2015. 07:29 PM | 6 Likes Like |Link to Comment
  • Apple's Debt-Funded Repurchases: Terrific Or Terrible? [View article]
    Thanks, but mostly I just commented because you rarely get a chance to say, "Arnie, I'm with Ernie."
    Jun 18, 2015. 06:53 PM | Likes Like |Link to Comment
  • How Apple Will Reduce Its Interest Expense By More Than 50% [View article]
    Glen,

    The first article you link contains these comments. Can you address them from a technical perspective?

    "An app from the App Store can’t edit its plist file, you even need root access for that.
    The author edited the plist file behind the camera, and also authorized app’s complete access to Keychain."

    "The point is that the video starts with everything open already… it doesn’t show the (very important) fact that none of this is possible without the user’s password (a stunt to presumably hype up the severity of this bug). Arguably people are the easiest part of the computer to hack, but the point is that it isn’t like this can work just randomly. Getting this running on the mac in the first place is still a very big hurdle to overcome, which they don’t address here."
    Jun 18, 2015. 06:51 PM | 1 Like Like |Link to Comment
  • Apple's Debt-Funded Repurchases: Terrific Or Terrible? [View article]
    Arnie, I'm with Ernie. I think everyone gets that the debt is not earnings. The wrinkle was whether and how these bonds could be repaid in order to avoid paying US taxes.

    I was hoping we'd get an expert to comment by now. The issue is not what you can do with the money you borrow, it is what money you can use to pay back the debt.
    Jun 18, 2015. 06:04 PM | 1 Like Like |Link to Comment
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