William Trent1's Comments

Extreme Bearishness a Definite Bullish Sign

Tue, 21 Aug 2007 13:14:28 -0400

I'm not sure I would say either. But when bearish sentiment exceeds bullish sentiment the average return is fairly consistently in the 4% range over the following 3 months. There doesn't seem to be a significant advantage to finding the "end" as opposed to identifying the overall bearishness.

What the Big Boys of American Industry Are Saying

Mon, 20 Aug 2007 14:05:36 -0400

Glad you find it useful.

Continued Pricing Power in Store For Data Storage?

Thu, 16 Aug 2007 11:22:14 -0400

True. A full analysis would want to consider not only those points but also look at past market action, since investors may anticipate an improvement or deterioration. "at least through the next two quarters" could already be incorporated into the market price, whereas a subsequent decline may or may not.

Applied Materials Finally Stops Calling the Bottom

Wed, 15 Aug 2007 17:35:21 -0400

What about them? Solar will not result in sales for a couple of years, and not having debt has no bearing on whether a company receives orders either.

Still Time to Pull the Switch On Telecom Equipment?

Wed, 15 Aug 2007 11:03:10 -0400

The graph is the 12-month change in PPI for switchgear from the BLS. I don't think the bubble affected the equipment prices so much as the stock prices.

Smartphone Intelligence Report: Research in Motion, Palm and Apple

Mon, 13 Aug 2007 09:27:45 -0400

On the order of magnitude I am talking about sell-through vs. sell-in becomes relatively insignificant. For example, you could take out PALM's total sales from RIMM's numbers to reflect channel build and RIMM would still be much larger. For Apple to reach RIMM's scale on either a sell-through or a sell-in basis would be fairly impressive.

Smartphone Intelligence Report: Research in Motion, Palm and Apple

Sun, 12 Aug 2007 13:24:49 -0400

It wouldn't be the first time Apple opened up a product category to people who were not considering it previously.

Here's Hoping For a U.S. Concrete, Inc. Buyout

Thu, 09 Aug 2007 11:37:54 -0400

So... did you find the earnings as interesting as you were predicting?

Here's Hoping For a U.S. Concrete, Inc. Buyout

Wed, 08 Aug 2007 21:28:31 -0400

Thanks.

Here's Hoping For a U.S. Concrete, Inc. Buyout

Wed, 08 Aug 2007 07:54:58 -0400

Rob, Thanks for the clarifications. You clearly know the industry well. The only question I would have is, given that RMIX's acquisitions are much smaller could the lack of synergy (and thus lower multiple) stem from scale issues?

Starbucks' Earnings Reaffirms Solid Long-Term Prospects

Sat, 04 Aug 2007 15:18:36 -0400

Good enough. For me I like the fact that they are self-funding the growth, which most of the 20%+ growers are not. I am willing to pay a bit more for that.

Starbucks' Earnings Reaffirms Solid Long-Term Prospects

Fri, 03 Aug 2007 15:02:08 -0400

Why would 25% cut it for you but not the 22% they guided to?

Starbucks' Earnings Reaffirms Solid Long-Term Prospects

Thu, 02 Aug 2007 15:30:41 -0400

Sure. Because now it's $5.09 nobody will drink it anymore. Overall retail sales are up less than 4% year/year, let alone same store numbers. When Starbucks starts doing worse than average I'll listen to that argument.

As far as I can tell, this management team got it where it is and the only thing changing from one month to the next is the share price. Sometimes it's too high, other times it isn't.

Cognizant's Growth Begins To Tail Off

Thu, 02 Aug 2007 10:24:14 -0400

Thanks for the correction on the consensus number, but if the consensus includes it they beat by less not more...

Nothing is wrong with growing faster than expected while keeping costs in check. So why didn't the stock rise on the news? I argue that it is because the street is concerned that growth is leveling off. Alternate explanations are, however, welcome.

My EPS "analysis" is simply an extrapolation, not an analysis. It is back-of-envelope stuff. But it does include expected utilization improvements. The thing is, utilization also has a limit and it is something less than 100%. So utilization gains can only continue for a brief time and then it is all up to headcount.

I didn't say there was any evidence, so don't put words in my mouth by including it in quotes. I also didn't even say that I think headcount growth will flatten - I said "many will view this as the signal." My analysis examines the thesis of whether this is the signal and investigates what may happen to the stock if it is.

Feel free to provide your own thesis and analysis thereof, but please try to understand mine before misattributing it.

The Week Ahead: Earnings Galore

Thu, 02 Aug 2007 07:47:26 -0400

Not many stocks rising last week... Yesterday's end of day rally was a wild one, but the volume came in selling at the close.

The Week Ahead: Earnings Galore

Wed, 01 Aug 2007 10:44:55 -0400

Yep. Hopefully the one extra voice added to the discussion. If not, I guess worst case is my incremental hot air was insignificant in the scheme of things.

Forget the iPhone! Apple Investors Should Be Focused On Spectacular iPod Growth

Fri, 27 Jul 2007 09:45:01 -0400

No doubt. But I don’t think anybody expected the iPhone to possibly cannibalize Mac sales, whereas the iPod was considered more at risk. That was really more my point.

Forget the iPhone! Apple Investors Should Be Focused On Spectacular iPod Growth

Thu, 26 Jul 2007 17:28:39 -0400

That's the thing with Apple. When every other company is saying this division stank but this one is doing ok, Apple is saying this division is on fire, and this other division is making the first one look like a refrigerator.

Amazing.

Wake Up and Smell the Coffee: Starbucks Still Doesn't Get It

Thu, 26 Jul 2007 09:54:23 -0400

It is unbelievable how much attention has been paid to a relatively small increase in the price of one product, given how much increase there has been in so many others. The fact that it is receiving this attention is simply testimony to the hold Starbucks has on the collective imagination.

The Week Ahead: Earnings Galore

Mon, 23 Jul 2007 14:28:07 -0400

In part the stocks I am watching are based on whether they are on my watch list or have discussed them in the past. As you say, Apple is discussed to death and the incremental value of my own contribution would probably be minimal. While some will surely disagree, I feel I can add more value to the discussion of the others listed.

Semi Equipment Orders Declining At a Faster Rate

Sun, 22 Jul 2007 17:23:31 -0400

I sync it up the same way I sync up positive comments from any other industry insiders - considering their angle. It is possible that KLAC and NVLS will buck the industry trend, or that for the first time in history there will be no down part of the cycle- just perpetual supply demand balance because for the first time the industry gets it right.

The thing is, management at these companies can see the orders coming in, but they typically can't anticipate when those orders are likely to be canceled or pushed out. Often when things look best is when they are about to turn.

Google's Miss: A Wakeup Call For Investors

Fri, 20 Jul 2007 11:27:05 -0400

That's ok. I miss a lot of buying opportunities.

Intel and STMicroelectronics: The Art of the Deal

Wed, 18 Jul 2007 18:11:41 -0400

Intel/Micron is NAND flash, this one is Intel's NOR business.

Analysis of Infosys' Cash Flow Growth

Wed, 18 Jul 2007 18:06:00 -0400

Although a 100% ROIC is nothing to sneeze at, I'd argue that ROIC is relatively meaningless for a company built on human capital rather than fixed capital. The profit margins are probably a more useful metric for INFY.

As to what investors are willing to pay for the cash flows, it will depend on how much of the growth they can retain as they try to grow off an ever-higher base.

Nutrisystems, Inc.: Covered Call Opportunity

Mon, 16 Jul 2007 09:33:58 -0400

Nice work. NutriSystem is on my Small Cap Watch List and I have been watching it but have not bought yet either.

For those of us who don't yet own it, do you think writing puts would be a reasonable way to capture a volatility premium and possibly lower entry point? Or do you think the downside risk is too much now for such a play?

Infosys' Weak Outlook: Appreciating Rupee, Rising Wages To Blame

Sat, 14 Jul 2007 10:45:07 -0400

True - it is hard to find good programmers. But based on my experience, the quality programmer shortage is a global phenomenon. It is easy to find bodies anywhere, but the really good programmers have all started their own businesses, wherever they happen to live.

Infosys' Weak Outlook: Appreciating Rupee, Rising Wages To Blame

Wed, 11 Jul 2007 20:41:27 -0400

Thanks, Frank.

US workers may be getting nominally more expensive, but they are not getting comparably more expensive. As a percentage of US wages, Indian wages are rising. Mathematically, the advantage erodes.

You ask where else one can find the combination of growth, margin and multiple, and my answer is that you will no longer be able to find it in the outsourcers. Margins will be coming under pressure, and I doubt Infosys and the rest can continue to add 30% to their expanding employee base (which is what it takes for a consulting firm to grow). So what you are left with are 35x trailing multiples.

Infosys' Weak Outlook: Appreciating Rupee, Rising Wages To Blame

Wed, 11 Jul 2007 17:47:37 -0400

I provided the link for attrition figures.

As for the wage/currency differential, let's say that at time x Indian programmers cost 10% what US programmers cost. Assuming 10% annual relative wage gains and 10% annual relative currency gains (20% total narrowing) it would take less than 13 years for the gap to disappear.

But the gap doesn't have to be even for the demand to slow significantly. Outsourcing may only be attractive when there is a certain gap - say, at least 50% - to make up for the issues related to management, language and other factors. In that case, the relative parity would be reached four years earlier.

The further question is how long investors will pay 35x trailing earnings if the growth continues to slow.

I have been positive on the Indian outsourcing names for more than three years but have always said that the trend would end when it was too hard to grow the employee base as fast as it did the previous year. That has now happened.

CIO Tech Spending Poll: Growth Nothing To Write Home About

Thu, 05 Jul 2007 10:58:10 -0400

Corporations have been loaded with cash for several years now, but the tech spending growth keeps slowing. The survey may be questionable, but it has

1Q07 GDP Data Shows Current Rally Rooted in Optimism, Not Profits

Fri, 29 Jun 2007 21:25:52 -0400
Any favorites you can tip me on?