User 486211's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/486211/comments http://seekingalpha.com/article/1406751/comments?source=feed#comment-18524121 18524121
CT]]> Tue, 07 May 2013 03:18:13 -0400
CT]]> http://seekingalpha.com/article/1361011/comments?source=feed#comment-18012171 18012171
IBM has such a diverse array of IT products and solutions, and it has been a promoter of Internet and Cloud Computing for its enterprise customers ahead of other companies in retrospect, such unique Business Model Transformation caliber is what really drove IBM's success since Lou Gerstener and it is still live and active today.

]]> Tue, 23 Apr 2013 22:43:01 -0400
IBM has such a diverse array of IT products and solutions, and it has been a promoter of Internet and Cloud Computing for its enterprise customers ahead of other companies in retrospect, such unique Business Model Transformation caliber is what really drove IBM's success since Lou Gerstener and it is still live and active today.

]]> http://seekingalpha.com/article/1330221/comments?source=feed#comment-17408921 17408921
HP Finance borrows money at very low interest rates from the banks and then lease out HP equipment to the corporate customers at higher interest rates, and the credit rating of those corporate customers are generally very good. So this kind of debt is generally collateralized by customer assets and basically a debt pass-through, which is not the same kind of debt that HP borrows from the banks to buy new properties or build new plants.]]> Tue, 09 Apr 2013 13:32:59 -0400
HP Finance borrows money at very low interest rates from the banks and then lease out HP equipment to the corporate customers at higher interest rates, and the credit rating of those corporate customers are generally very good. So this kind of debt is generally collateralized by customer assets and basically a debt pass-through, which is not the same kind of debt that HP borrows from the banks to buy new properties or build new plants.]]> http://seekingalpha.com/article/1283941/comments?source=feed#comment-16555021 16555021 Wed, 20 Mar 2013 13:13:19 -0400 http://seekingalpha.com/article/1283941/comments?source=feed#comment-16478321 16478321
Caterpillar just recently wrote off more than $600M for a China-based factory that was traded in HK Stock Exchange, because they later on found most of the reported assets were just non-existing.

I lost more than 80% of my investment in a NYSE-listed Chinese education service company (CEU) which later on was found to be a fraud and de-listed, just one among 30+ fraudulent Chinese companies listed in the US in the past two years.

It will be many years for China-based companies to have transparent corporate governance and sincere management integrity. Until then, I will not make a dime of investment in China related stocks.

C.T. Wu, PhD]]> Tue, 19 Mar 2013 02:14:53 -0400
Caterpillar just recently wrote off more than $600M for a China-based factory that was traded in HK Stock Exchange, because they later on found most of the reported assets were just non-existing.

I lost more than 80% of my investment in a NYSE-listed Chinese education service company (CEU) which later on was found to be a fraud and de-listed, just one among 30+ fraudulent Chinese companies listed in the US in the past two years.

It will be many years for China-based companies to have transparent corporate governance and sincere management integrity. Until then, I will not make a dime of investment in China related stocks.

C.T. Wu, PhD]]> http://seekingalpha.com/article/1283691/comments?source=feed#comment-16458861 16458861
IBM's superior free cash flow generation capability enables it to continue to engage in sizable stock buybacks, which in turn will trigger superior EPS growth rates better than its peers. Thus the capital appreciation prospect for IBM is better than the market average.

To judge a stock's prospect, it is better off to look at both the dividend yield and the capital appreciation potential, not just the dividend alone. The author bought IBM at $80 in early 2009 via this Total Return framework and made a fairly good return on IBM, Buffett started to invest in IBM in early 2011 and now is the No. 1 shareholder of IBM.

C.T. Wu, PhD]]> Mon, 18 Mar 2013 16:34:19 -0400
IBM's superior free cash flow generation capability enables it to continue to engage in sizable stock buybacks, which in turn will trigger superior EPS growth rates better than its peers. Thus the capital appreciation prospect for IBM is better than the market average.

To judge a stock's prospect, it is better off to look at both the dividend yield and the capital appreciation potential, not just the dividend alone. The author bought IBM at $80 in early 2009 via this Total Return framework and made a fairly good return on IBM, Buffett started to invest in IBM in early 2011 and now is the No. 1 shareholder of IBM.

C.T. Wu, PhD]]> http://seekingalpha.com/article/1262281/comments?source=feed#comment-16144691 16144691
Bravo! You continue to amaze us! Thanks!]]> Mon, 11 Mar 2013 16:05:45 -0400
Bravo! You continue to amaze us! Thanks!]]> http://seekingalpha.com/article/1109031/comments?source=feed#comment-13651931 13651931 Sun, 13 Jan 2013 13:20:03 -0500 http://seekingalpha.com/article/1054981/comments?source=feed#comment-12452701 12452701
This is the most sensible article about HPQ that I have read in the past two months!

Judging from a Business Model Optimization perspective, a field that I have been doing active research during the past 20 years, Meg Whitman is doing all the right things. The PC and Printing business are virtually already spun off because Whitman assigned a very capable executive to run it so she can focus on fixing the Service and Autonomy part. And the PC+Printing business will continue to be cash cows for the company, to support the needed capital for the enterprise units, on top of the purchasing power synergy.

I bought a lot of 2014 HPQ Long Calls when HPQ dropped to $11.35, and that investment has already more than doubled in 3 weeks.

Most analysts are not insightful in their analysis, and tend to just echo the market sentiments rather than providing professional guidance's.

Look forward to reading more of your insightful articles!

CT]]> Mon, 10 Dec 2012 15:02:37 -0500
This is the most sensible article about HPQ that I have read in the past two months!

Judging from a Business Model Optimization perspective, a field that I have been doing active research during the past 20 years, Meg Whitman is doing all the right things. The PC and Printing business are virtually already spun off because Whitman assigned a very capable executive to run it so she can focus on fixing the Service and Autonomy part. And the PC+Printing business will continue to be cash cows for the company, to support the needed capital for the enterprise units, on top of the purchasing power synergy.

I bought a lot of 2014 HPQ Long Calls when HPQ dropped to $11.35, and that investment has already more than doubled in 3 weeks.

Most analysts are not insightful in their analysis, and tend to just echo the market sentiments rather than providing professional guidance's.

Look forward to reading more of your insightful articles!

CT]]> http://seekingalpha.com/article/1045571/comments?source=feed#comment-12281721 12281721
For example, if the coincident index declined a little bit, but the leading index rose sharply, then the ratio would drop a lot, but the economy actually is on the improvement track due to improving leading index which predicts better economic situations a few months down the road.

It's amazing why Dr. Hussman didn't see the big flaw in an economic context as implied by this simple formula.]]> Wed, 05 Dec 2012 13:02:13 -0500
For example, if the coincident index declined a little bit, but the leading index rose sharply, then the ratio would drop a lot, but the economy actually is on the improvement track due to improving leading index which predicts better economic situations a few months down the road.

It's amazing why Dr. Hussman didn't see the big flaw in an economic context as implied by this simple formula.]]> http://seekingalpha.com/article/1023261/comments?source=feed#comment-11866481 11866481 Wed, 21 Nov 2012 17:56:38 -0500 http://seekingalpha.com/article/968111/comments?source=feed#comment-11130861 11130861
Thanks so much for your insightful analysis! Points well taken!

CT]]> Thu, 01 Nov 2012 13:41:26 -0400
Thanks so much for your insightful analysis! Points well taken!

CT]]> http://seekingalpha.com/article/937361/comments?source=feed#comment-10744521 10744521 Sun, 21 Oct 2012 10:31:57 -0400 http://seekingalpha.com/article/872821/comments?source=feed#comment-9587201 9587201
Your weekly articles are the cream-of-crops among Seekingalpha's. Thanks for your generous sharing of your hard earned insights!

CT]]> Tue, 18 Sep 2012 14:12:50 -0400
Your weekly articles are the cream-of-crops among Seekingalpha's. Thanks for your generous sharing of your hard earned insights!

CT]]> http://seekingalpha.com/article/864331/comments?source=feed#comment-9407791 9407791 Thu, 13 Sep 2012 12:33:26 -0400 http://seekingalpha.com/article/862351/comments?source=feed#comment-9370091 9370091
Very good analysis! Really enjoyed it!

CT]]> Wed, 12 Sep 2012 13:48:07 -0400
Very good analysis! Really enjoyed it!

CT]]> http://seekingalpha.com/instablog/1066208-tim-travis/1061811-ttcm-s-rebuttal-to-wsj-article-why-stocks-are-riskier-than-you-think?source=feed#comment-9337821 9337821
This is really an awsome article! Thanks!

CT]]> Tue, 11 Sep 2012 18:14:03 -0400
This is really an awsome article! Thanks!

CT]]> http://seekingalpha.com/article/854761/comments?source=feed#comment-9227821 9227821
In the long term, business fundamentals prevail.

When Lou Gerstner took over IBM in 1993, he was faced with a cumulative loss of $16B in the previous 8 quarters, and had had to lay off 70,000 staff in the following 8 quarters. He made one critical decision, to keep IBM as ONE company.

Whitman's turnaround challenge is much easier compared to that of Gerstner. The company is still achieving 9+% operating margin, merging PC and Printing business to create a superb Global # 1 leverage on the supply chain and global distribution channel will generate higher ROI. 30,000+ staff cut is being undertaken now, although which is unfortunate for the families affected. Future growth areas such as Security, Cloud Computing and select Software areas had been singled out.

Lou Gerstner is not an engineer and he made it. Lou has a superb talent that seems to also exist on Whitman, namely, "being able to see things as a WHOLE". Whitman used to be VP of Strategy at Proctor & Gamble, that position also demands similar talent.

One thing I applaud is Whitman's decision to eliminate executive suites and now all executives are in cubicles, a great Silicon Valley tradition pioneered by Intel.]]> Sat, 08 Sep 2012 14:29:11 -0400
In the long term, business fundamentals prevail.

When Lou Gerstner took over IBM in 1993, he was faced with a cumulative loss of $16B in the previous 8 quarters, and had had to lay off 70,000 staff in the following 8 quarters. He made one critical decision, to keep IBM as ONE company.

Whitman's turnaround challenge is much easier compared to that of Gerstner. The company is still achieving 9+% operating margin, merging PC and Printing business to create a superb Global # 1 leverage on the supply chain and global distribution channel will generate higher ROI. 30,000+ staff cut is being undertaken now, although which is unfortunate for the families affected. Future growth areas such as Security, Cloud Computing and select Software areas had been singled out.

Lou Gerstner is not an engineer and he made it. Lou has a superb talent that seems to also exist on Whitman, namely, "being able to see things as a WHOLE". Whitman used to be VP of Strategy at Proctor & Gamble, that position also demands similar talent.

One thing I applaud is Whitman's decision to eliminate executive suites and now all executives are in cubicles, a great Silicon Valley tradition pioneered by Intel.]]> http://seekingalpha.com/article/825421/comments?source=feed#comment-8754251 8754251
The Consumer Products business has the No. 1 world leadership position and even it may not grow at all or will just slowly decline, it will be a great CASH COW to continue to generate free cash flows for the rest of HP to innovate and grow. But its bloated workforce is just too big to bear so Whitman had to take big staff cuts, although not good for many families, but unfortunately that is what a responsible CEO like Whitman had to do.

Whitman had stressed many times with press interviews, that HP cannot simply copy IBM or APPLE for its turnaround because each got it current success via endeavors put in more than 15 years ago. As far as I can tell as a 20-year Business Model Optimization research veteran, Whitman really has been doing all the right things so far, but the challenge to undo all the damages left over from the three ex-CEO's is certainly not an easy task. But my gut feeling is that she will prove out her way by EOY2013, when more solid progresses are expressible in numbers. Win-8 PC and Tablets release may be a near-term catalyst for HPQ.

If Wintel PC ecosystem is likely to fail very fast, the valuation of MSFT and INTC should go down significantly.

This reminds me of the August 2011 US Credit Downgrade fiasco, so many of my friends just sold their stocks after losing 20% value in just 1 week. I told them to hold but they were all panic and didn't listen.

My logic to hold was quite simple. If the fear is due to US Credit Downgrade, then US Treasury Bills would become junks and very few would want to buy. Instead the whole world went to buy US T-bills and the yields actually dropped, because most investors were panic and they all jumped on the perceived most secure bandwagon in the world, the US T-bill, which was just downgraded and caused all the fear. As long as there is no other country to replace US' world leadership position, US will be the most secure place to park people's money.

If most investors are still comfortable in assigning reasonable valuation levels to INTC and MSFT, the sky won't fall for HPQ. On top of that, Whitman is a savvy CEO with good Business Model Optimization judgment and leadership skills. Besides, HPQ still has a $60B Enterprise Solutions business that is the source of good growth potential in the future, most likely it will fare out better than PC business.]]> Fri, 24 Aug 2012 20:24:19 -0400
The Consumer Products business has the No. 1 world leadership position and even it may not grow at all or will just slowly decline, it will be a great CASH COW to continue to generate free cash flows for the rest of HP to innovate and grow. But its bloated workforce is just too big to bear so Whitman had to take big staff cuts, although not good for many families, but unfortunately that is what a responsible CEO like Whitman had to do.

Whitman had stressed many times with press interviews, that HP cannot simply copy IBM or APPLE for its turnaround because each got it current success via endeavors put in more than 15 years ago. As far as I can tell as a 20-year Business Model Optimization research veteran, Whitman really has been doing all the right things so far, but the challenge to undo all the damages left over from the three ex-CEO's is certainly not an easy task. But my gut feeling is that she will prove out her way by EOY2013, when more solid progresses are expressible in numbers. Win-8 PC and Tablets release may be a near-term catalyst for HPQ.

If Wintel PC ecosystem is likely to fail very fast, the valuation of MSFT and INTC should go down significantly.

This reminds me of the August 2011 US Credit Downgrade fiasco, so many of my friends just sold their stocks after losing 20% value in just 1 week. I told them to hold but they were all panic and didn't listen.

My logic to hold was quite simple. If the fear is due to US Credit Downgrade, then US Treasury Bills would become junks and very few would want to buy. Instead the whole world went to buy US T-bills and the yields actually dropped, because most investors were panic and they all jumped on the perceived most secure bandwagon in the world, the US T-bill, which was just downgraded and caused all the fear. As long as there is no other country to replace US' world leadership position, US will be the most secure place to park people's money.

If most investors are still comfortable in assigning reasonable valuation levels to INTC and MSFT, the sky won't fall for HPQ. On top of that, Whitman is a savvy CEO with good Business Model Optimization judgment and leadership skills. Besides, HPQ still has a $60B Enterprise Solutions business that is the source of good growth potential in the future, most likely it will fare out better than PC business.]]> http://seekingalpha.com/article/825191/comments?source=feed#comment-8711441 8711441
Very insightful analysis about HPQ! Thanks a lot!

CT]]> Thu, 23 Aug 2012 17:58:43 -0400
Very insightful analysis about HPQ! Thanks a lot!

CT]]> http://seekingalpha.com/article/824281/comments?source=feed#comment-8700011 8700011 Thu, 23 Aug 2012 13:33:22 -0400 http://seekingalpha.com/article/819721/comments?source=feed#comment-8623751 8623751 Tue, 21 Aug 2012 14:57:53 -0400 http://seekingalpha.com/article/797721/comments?source=feed#comment-8292281 8292281
I agree that CKSW has a good long term prospect, and will remain a patient investor in the foreseeable future.

CT]]> Fri, 10 Aug 2012 14:25:40 -0400
I agree that CKSW has a good long term prospect, and will remain a patient investor in the foreseeable future.

CT]]> http://seekingalpha.com/article/720401/comments?source=feed#comment-7382551 7382551 Sat, 14 Jul 2012 13:29:46 -0400 http://seekingalpha.com/article/690411/comments?source=feed#comment-6927561 6927561
Great point again!

People often just unilaterally associate R&D with assured business success, which most of the times were not true.
Economy of Scale is still a major factor for superior financial performance. HP can be grossly thought of as having two distinct business groups now, namely, Enterprise Solutions and Consumer Computing. Each has roughly $6B annual revenue and 10% operating profit before tax. Its Consumer Computing has a No.1 worldwide leadership and Enterprise Solutions No. 2. Many technology also-runs would love to dream to have such leadership positions.

Whitman first properly aligned HP along with its core target customer groups. Now the cost-cutting initiatives are being undertaken. Innovative products and solutions have to be aligned with its core target customer groups. Investing in R&D for R&D's sake can be a source for huge waste. Whitman has performed the right organizational alignment which paves the way for Business Model Optimization.

Even Whitman's predecessors made some foolish acquisitions, she is still much luckier than Michael Dell, who has been trying hard daily to integrate those 50+ small acquisitions made in the past four years.]]> Fri, 29 Jun 2012 14:03:05 -0400
Great point again!

People often just unilaterally associate R&D with assured business success, which most of the times were not true.
Economy of Scale is still a major factor for superior financial performance. HP can be grossly thought of as having two distinct business groups now, namely, Enterprise Solutions and Consumer Computing. Each has roughly $6B annual revenue and 10% operating profit before tax. Its Consumer Computing has a No.1 worldwide leadership and Enterprise Solutions No. 2. Many technology also-runs would love to dream to have such leadership positions.

Whitman first properly aligned HP along with its core target customer groups. Now the cost-cutting initiatives are being undertaken. Innovative products and solutions have to be aligned with its core target customer groups. Investing in R&D for R&D's sake can be a source for huge waste. Whitman has performed the right organizational alignment which paves the way for Business Model Optimization.

Even Whitman's predecessors made some foolish acquisitions, she is still much luckier than Michael Dell, who has been trying hard daily to integrate those 50+ small acquisitions made in the past four years.]]> http://seekingalpha.com/article/690411/comments?source=feed#comment-6889991 6889991 Thanks for another insightful analysis article!
Whitman so far has demonstrated that she is a quite competent Business Model Optimizer for HP:
1. Recognize and solidify its core
2. Cut unneessary costs
3. Grow the core with saved costs
4. She does recognize that innovation and customer needs are the true drivers for HP's future.
Whitman is just undoing the great damages to HP by its three ex-CEOs--
1. Fiorina-- Recognize the wrong core and pursued it fiercely
2. Hurd-- Cut the R&D roots, not costs
3. Appotheker-- Try to turn HP into a pure software business that he is familiar with without recognizing the company's core; totally an incompetent CEO.

As a Business Model Optimization researcher for over 20 years, so far I haven't been able to find major faults with Whitman's turnaround plans. ]]> Thu, 28 Jun 2012 13:49:15 -0400 Thanks for another insightful analysis article!
Whitman so far has demonstrated that she is a quite competent Business Model Optimizer for HP:
1. Recognize and solidify its core
2. Cut unneessary costs
3. Grow the core with saved costs
4. She does recognize that innovation and customer needs are the true drivers for HP's future.
Whitman is just undoing the great damages to HP by its three ex-CEOs--
1. Fiorina-- Recognize the wrong core and pursued it fiercely
2. Hurd-- Cut the R&D roots, not costs
3. Appotheker-- Try to turn HP into a pure software business that he is familiar with without recognizing the company's core; totally an incompetent CEO.

As a Business Model Optimization researcher for over 20 years, so far I haven't been able to find major faults with Whitman's turnaround plans. ]]> http://seekingalpha.com/article/686301/comments?source=feed#comment-6848961 6848961
Very good reference material for 6-month equity investment planning.!

How do you define the "earning quality"?

User 486211]]> Wed, 27 Jun 2012 12:51:03 -0400
Very good reference material for 6-month equity investment planning.!

How do you define the "earning quality"?

User 486211]]> http://seekingalpha.com/article/664221/comments?source=feed#comment-6508851 6508851
Imagine there is a Marathon contest with participants consisting of a world Marathon champion and 499 amateurs, the Efficient Market Theory would argue that all participants have the equal chance of winning. But common sense tells us the most likely the world champion would win out. The outcome of the Marathon contest is not impacted quite much by how those 499 amateurs think about the game.

By our human nature, Buffett minded Value Investors will always be a minority and that is probably the major reason why they can outperform the market in a fairly consistent manner over the longer term.]]> Sun, 17 Jun 2012 13:32:48 -0400
Imagine there is a Marathon contest with participants consisting of a world Marathon champion and 499 amateurs, the Efficient Market Theory would argue that all participants have the equal chance of winning. But common sense tells us the most likely the world champion would win out. The outcome of the Marathon contest is not impacted quite much by how those 499 amateurs think about the game.

By our human nature, Buffett minded Value Investors will always be a minority and that is probably the major reason why they can outperform the market in a fairly consistent manner over the longer term.]]> http://seekingalpha.com/article/463321/comments?source=feed#comment-3914251 3914251 Wed, 28 Mar 2012 13:49:27 -0400 http://seekingalpha.com/article/451281/comments?source=feed#comment-3721701 3721701 I agree with you about your assessment regarding HPQ.

From a Business Model Optimization point of view, the most natural organizational dividing line is customer segment, i.e., Enterprise and Consumer segment. Because of the vast difference in these two segments' buying behaviors, it is always recommended to organize a mature technology company along the customer segment line, because technology and product change constantly, but the customer groups remain the same. HP in the past was organized by technology and product dividing line, which created a lot of "silos" as stated by Whitman. Motorola had a successful break-up two years ago, and created very good shareholders' values with its Motorola Systems performing well and Motorola Mobility acquired by Google.

With the new organizational alignment, HP can someday be split into HPS (HP System) and HPC (HP Computer), if they desire so. They can also continue to operate as a single company. Combining Printing and PC business together will give HP an unparallel bargaining power with its global distribution channels, and all PC veterans know how crucial channel presence is to the PC business, because it is totally different from the Direct Sales business model in the Enterprise market. Once HP's channel presence is further solidified, it can work out downstream cost reductions through its supply chain optimization.

Although HP's case is more in line with what Motorola went through two years ago, but I do agree that HPQ will experience the same positive results like CSCO. I bought CSCO at $15 right after John Chambers' business turnaround plan was announced mid-2011. I bought HPQ yesterday under the same notion.

HP can now be perceived as two strong business groups, i.e., Enterprise and Consumer one, each with roughly $60B annual revenue and $6B of profit, which will be much more manageable.

In essence, Meg Whitman has marched a very strategic first step to get HP's business model optimized from a higher level perspective. Execution and Innovation are the next step.

C.T. Wu, PhD]]> Thu, 22 Mar 2012 12:56:11 -0400 I agree with you about your assessment regarding HPQ.

From a Business Model Optimization point of view, the most natural organizational dividing line is customer segment, i.e., Enterprise and Consumer segment. Because of the vast difference in these two segments' buying behaviors, it is always recommended to organize a mature technology company along the customer segment line, because technology and product change constantly, but the customer groups remain the same. HP in the past was organized by technology and product dividing line, which created a lot of "silos" as stated by Whitman. Motorola had a successful break-up two years ago, and created very good shareholders' values with its Motorola Systems performing well and Motorola Mobility acquired by Google.

With the new organizational alignment, HP can someday be split into HPS (HP System) and HPC (HP Computer), if they desire so. They can also continue to operate as a single company. Combining Printing and PC business together will give HP an unparallel bargaining power with its global distribution channels, and all PC veterans know how crucial channel presence is to the PC business, because it is totally different from the Direct Sales business model in the Enterprise market. Once HP's channel presence is further solidified, it can work out downstream cost reductions through its supply chain optimization.

Although HP's case is more in line with what Motorola went through two years ago, but I do agree that HPQ will experience the same positive results like CSCO. I bought CSCO at $15 right after John Chambers' business turnaround plan was announced mid-2011. I bought HPQ yesterday under the same notion.

HP can now be perceived as two strong business groups, i.e., Enterprise and Consumer one, each with roughly $60B annual revenue and $6B of profit, which will be much more manageable.

In essence, Meg Whitman has marched a very strategic first step to get HP's business model optimized from a higher level perspective. Execution and Innovation are the next step.

C.T. Wu, PhD]]>