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  • KB Home: Time To Go Long  [View article]
    The list of unsold homes.
    Oct 30, 2015. 12:18 PM | Likes Like |Link to Comment
  • KB Home: Time To Go Long  [View article]
    Seeking Alpha has no idea what's going on. I'm actually at their project sites on a regular basis.
    Oct 29, 2015. 11:35 AM | Likes Like |Link to Comment
  • KB Home: Time To Go Long  [View article]
    If you're that confident, you should leverage up and go long. I think much of your analysis is backward looking and doesn't factor in the current state of the housing market. I'd rather stay out if not go short.
    Oct 28, 2015. 03:50 PM | 1 Like Like |Link to Comment
  • Promising Future For Zillow  [View article]
    Stock splits have no impact on income. Likely, management is using the multiple classes of stock with different voting rights to consolidate their position to deal with angry investors disappointed by results.
    Aug 17, 2015. 01:53 PM | 1 Like Like |Link to Comment
  • Promising Future For Zillow  [View article]
    Your assumptions reflect a fundamental misunderstanding of the real estate leads sale model's potential. Zillow addresses the US market, which generates about 5M home sales a year, depending on market conditions. Those sales generate around $45B in total commissions. That's a lot, but there's also a lot of competition to get at those dollars. Zillow may be on top of the internet model, but you're asking Zillow to capture 50% of all real estate advertising dollars and probably 200% of all internet advertising dollars in the next few years just to justify today's valuation. Realtor.com probably won't come over the top of Zillow, and who really wants that anyways.

    Z is not NFLX
    Aug 14, 2015. 12:27 PM | 1 Like Like |Link to Comment
  • Promising Future For Zillow  [View article]
    Exactly, there are only 8-10 million people casually shopping for homes at any given time and maybe 10% will pull the trigger each year.
    Aug 13, 2015. 01:40 PM | 1 Like Like |Link to Comment
  • Promising Future For Zillow  [View article]
    If the clear and dominant market leader in an industry can't be profitable after over 11 years in business, even during the best operating environment in decades, then the business model is fundamentally flawed. Hence the CEO will only pull money out of his holdings and not put one dime back to invest in his own company.

    And no, Zillow is losing customers. More consumers visiting the site don't matter, as shown in the sharp drop in display ad revenues. Agents are its true customers and it admitted its roster of paying agent customers decreased by 2% over last quarter.
    Aug 13, 2015. 01:38 PM | 1 Like Like |Link to Comment
  • End Of The Rough Patch For Zillow?  [View article]
    Zillow will continue to plumb new 52-week lows. The reason is simple. They bought a $2.5B company and found it added less than $10M per month in net revenue. Heck, if they know how to squander $2B+ in value in a year, who knows what they're capable of doing with the core business.
    Aug 12, 2015. 01:40 PM | 3 Likes Like |Link to Comment
  • Apple: Are iPhone Margins Sustainable?  [View article]
    As a long time Apple lover, I'm most concerned about the shift in the purchase dynamic with the unbundling of the phone subsidy. When my family plan had a subsidy, we would upgrade every 2 years like clockwork. It seemed stupid not to, even if the current iPhone was already amazing. As a result, we got 3 new iPhones every 2 years on the dot, whether we needed them or not. Without the subsidy and with the amazing quality from Apple, we're easily slipping to 3 years or more. So, instead of 1.5 iPhones per year, we're down to 0.8 iPhones per year.

    I think this is important as the iPhone in particular addresses a very first-world problem of looking good with a status symbol. For those consumers, they can and will afford to replace their iPhones frequently. So, even though that elite pool of high income consumers isn't huge, the regular turnover allows Apple to sell hundreds of millions of smartphones a year without growing the pool size. Meanwhile, China was/is growing that pool rapidly, allowing Apple to grow earnings to uncharted territories.

    But, if the core pool of buyers cuts their iPhone replacement rate by 30-40% with delays in purchases or even substitute with cheaper Androids, that would be a far bigger loss in sales than the entire Chinese market. Of course, perhaps the Chinese consumer pool continues to grow rapidly and maybe they'll keep buying iPhones regularly to keep up appearances since they never had the benefit of subsidies in the first place, as with most of the rest of the world. Otherwise, Apple has a Herculean task of replacing tens of millions of lost sales from its core pool each quarter with new customers.

    Looking at the stock valuation, Apple doesn't really need to grow sales in unheard of manner and can comfortably grow earnings into current valuations by serving its core pool of several hundred million customers for decades, like all the other luxury brands.
    Aug 11, 2015. 02:43 PM | 2 Likes Like |Link to Comment
  • Zillow: Conservative Approach For Now?  [View article]
    Trying to gloss over poor management by invoking Amazon's similar lack of profitability is a logical fallacy. The same has been done to death by poor managers who believe they'll create the next Apple or iPhone by being a jackass to employees. They totally miss the point -- they lack the genius of Steve Jobs to backup the aggressive behavior.

    Jeff Bezos succeeds by continuing to delight his customers with innovations in consumerism. Zillow can only cut losses (vs actually growing net earnings) by mercilessly squeezing their main customers (agents). How long can that keep going?
    Aug 9, 2015. 09:31 PM | Likes Like |Link to Comment
  • Zillow: Conservative Approach For Now?  [View article]
    As a prior customer agent of Zillow, I really don't see the potential in Zillow that all the outsiders seem to believe. While Zillow had a first mover advantage and consolidated most of the online real estate marketing industry niche, it will remain a niche player with limited potential.

    The number of agents willing to pay or be blackmailed by Zillow is pretty limited, as clearly evidenced by the shrinking headcount of paying agents. Sure, they might try to gloss over this huge warning sign by claiming that they're only weeding out the low spending agents. If the business were truly viable and well-executed, they would be getting 10% more spending and increasing the number of agents at the same time. The reality I see is that they're simply combining accounts from the Trulia acquisition and barely holding on to the revenue.

    The stock isn't in the low $80s today. It's already in the low $70s, on its way lower, $40 maybe, even with the breeze from the recovering housing market. Actually, I don't think it's recovering. The recovery has already materialized and winds are changing soon. Doesn't bode well for Zillow. If aiming for the long-term, wait for a much lower entry point and plow in. The insiders certainly are waiting.
    Aug 7, 2015. 10:17 PM | 1 Like Like |Link to Comment
  • Zillow -3%; Citron predicts shares will fall below $40  [View news story]
    If anything, Citron is being kind with its analysis. Among my fellow Realtors, the relationship with Zillow has always been bitter. While Zillow provides a nice service to consumers, Zillow takes our listing data to steal our customer leads which they then try to sell back to us. For the larger brokerages, they've had no choice but to pay up to keep up their volume. Smaller brokerages initially followed suit, purely out of fear of missing out. While that drove agent growth for a few years, many have finally decided to pull the Zillow knife out of their backs and focus on what really works. As for the rest of the agents who've never wanted anything to do with Zillow, good luck trying to sign them. We can't slam our phones down fast enough on those cold calls. Forget the song and dance with the stock split. Zillow stock is headed down by 50-70%.
    Jul 24, 2015. 02:54 PM | 2 Likes Like |Link to Comment
  • Surface 3 And Apple Watch - Red Oceans Vs. Blue Oceans  [View article]
    How is it my mistake? I'm just questioning the comparison made by the author.
    Apr 3, 2015. 02:52 PM | 1 Like Like |Link to Comment
  • Surface 3 And Apple Watch - Red Oceans Vs. Blue Oceans  [View article]
    "at $499, it is cheaper than any tablet from market pioneer, Apple" What about the $299 iPad Mini or $399 iPad 3?

    In any case, Apple has consistently proven naysayers wrong by simply building a far superior product than anything else available. As Steve was fond of saying, people don't know they need something awesome until they have it. With the Watch, I wouldn't bet against Apple, unless it's terribly flawed in execution.

    With Surface, it's just too hard of a pitch to convert. Apple created a new blue ocean for tablets from Fujitsu and others. Then Samsung immediately copied and made it purple. Later, Microsoft decided to make it really red, along with dozen of others. I started with Macs back in the mid 1980s and only had to go with Microsoft for the big savings and got stuck for 25 years. Now that Apple crushes on design AND operating efficiency, even the price advantage is gone for Microsoft.

    The Surface may be good, but it's too little, too late. Microsoft needs to defend its turf with better software, not hardware gimmicks. My MacBook Air costs about the same as a kitted out Surface and is almost as thin but it doesn't look like a piece of rubber floor tile.
    Apr 3, 2015. 04:11 AM | 7 Likes Like |Link to Comment
  • Swatch CEO says he's unfazed by Apple Watch  [View news story]
    Yep, take it from a guy who has taken his "I can't believe it's still alive" company exactly no where for the past 5 years.
    Nov 27, 2014. 08:16 PM | 1 Like Like |Link to Comment