Jeremy Johnson's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/732085/comments http://seekingalpha.com/currents/post/931941?source=feed#comment-17385761 17385761 Mon, 08 Apr 2013 23:10:31 -0400 http://seekingalpha.com/article/520981/comments?source=feed#comment-17285021 17285021 Fri, 05 Apr 2013 17:26:06 -0400 http://seekingalpha.com/article/603331/comments?source=feed#comment-17273391 17273391
The biggest issue by far with Amazon is determining how profitable the investments of the last 3 or so years will be over the coming few years in terms of boosting gross cash flow. You can look at how I defined gross cash flow and add it up based on TTM. Chart that across a few years and it will give you a good idea.

By the way, there was recently an article in WSJ showing the results of a study that showed focusing on gross income predicted stock prices better than net income.

I am not long Amazon because I think they are overinvesting. I don't think they will make good returns on capital on AWS (I don't even think it's a good business to be in). If they were just the best online retailer in the world, and that was all they aspired to be, I might be able to get comfortable with the valuation.]]> Fri, 05 Apr 2013 13:12:56 -0400
The biggest issue by far with Amazon is determining how profitable the investments of the last 3 or so years will be over the coming few years in terms of boosting gross cash flow. You can look at how I defined gross cash flow and add it up based on TTM. Chart that across a few years and it will give you a good idea.

By the way, there was recently an article in WSJ showing the results of a study that showed focusing on gross income predicted stock prices better than net income.

I am not long Amazon because I think they are overinvesting. I don't think they will make good returns on capital on AWS (I don't even think it's a good business to be in). If they were just the best online retailer in the world, and that was all they aspired to be, I might be able to get comfortable with the valuation.]]> http://seekingalpha.com/article/1316401/comments?source=feed#comment-17174661 17174661 Wed, 03 Apr 2013 13:46:52 -0400 http://seekingalpha.com/currents/post/894641?source=feed#comment-16454361 16454361 Mon, 18 Mar 2013 15:08:27 -0400 http://seekingalpha.com/article/1261391/comments?source=feed#comment-16109721 16109721 Sun, 10 Mar 2013 20:16:44 -0400 http://seekingalpha.com/article/1248431/comments?source=feed#comment-15924781 15924781 Wed, 06 Mar 2013 12:26:44 -0500 http://seekingalpha.com/article/1251111/comments?source=feed#comment-15922151 15922151 Wed, 06 Mar 2013 11:45:00 -0500 http://seekingalpha.com/currents/post/863701?source=feed#comment-15779311 15779311 Sun, 03 Mar 2013 20:43:24 -0500 http://seekingalpha.com/article/1232731/comments?source=feed#comment-15778741 15778741 Sun, 03 Mar 2013 20:18:01 -0500 http://seekingalpha.com/article/1235041/comments?source=feed#comment-15709301 15709301
1) 2008-09 performance, both profit and stock price (this stock was $1.25 in 2009 and company lost money 08-09). How will Crocs do during the next downturn? My guess is much better because of lower reliance on clogs, but not everyone will jump in with two feet. There probably needs to be a "normalized" earnings concept applied to this company.

2) Tax reform. This company has a very low tax rate due to the quirky international tax laws of the U.S. If there is any tax reform in the U.S., their effective rate will probably increase to ~25%. Also, nearly all the cash on the balance sheet right now is legally off shore.]]> Fri, 01 Mar 2013 17:08:21 -0500
1) 2008-09 performance, both profit and stock price (this stock was $1.25 in 2009 and company lost money 08-09). How will Crocs do during the next downturn? My guess is much better because of lower reliance on clogs, but not everyone will jump in with two feet. There probably needs to be a "normalized" earnings concept applied to this company.

2) Tax reform. This company has a very low tax rate due to the quirky international tax laws of the U.S. If there is any tax reform in the U.S., their effective rate will probably increase to ~25%. Also, nearly all the cash on the balance sheet right now is legally off shore.]]> http://seekingalpha.com/article/1232731/comments?source=feed#comment-15707901 15707901 Fri, 01 Mar 2013 16:40:38 -0500 http://seekingalpha.com/article/1232731/comments?source=feed#comment-15644561 15644561 Thu, 28 Feb 2013 13:49:15 -0500 http://seekingalpha.com/article/1232731/comments?source=feed#comment-15643581 15643581 Thu, 28 Feb 2013 13:32:16 -0500 http://seekingalpha.com/article/1232731/comments?source=feed#comment-15637571 15637571
Japan has a lot of debt because they have a lot of assets. Foreign reserves are only one part of that. Also, its not really possible to sell foreign exchange to fund the government -- the government needs yen, not dollars and the dollars are owned by an exchange fund that has issued debt against them, but that is beyond the scope of this article.]]> Thu, 28 Feb 2013 12:04:22 -0500
Japan has a lot of debt because they have a lot of assets. Foreign reserves are only one part of that. Also, its not really possible to sell foreign exchange to fund the government -- the government needs yen, not dollars and the dollars are owned by an exchange fund that has issued debt against them, but that is beyond the scope of this article.]]> http://seekingalpha.com/article/1232731/comments?source=feed#comment-15635141 15635141 Thu, 28 Feb 2013 11:34:01 -0500 http://seekingalpha.com/article/1232731/comments?source=feed#comment-15633471 15633471
Debt to GDP is high in Japan, but the country also has one of the greatest stocks of fixed and financial capital per person in the world including a net international investment position of +56% of GDP. The country's balance sheet is sound especially compared to other's.]]> Thu, 28 Feb 2013 11:03:56 -0500
Debt to GDP is high in Japan, but the country also has one of the greatest stocks of fixed and financial capital per person in the world including a net international investment position of +56% of GDP. The country's balance sheet is sound especially compared to other's.]]> http://seekingalpha.com/article/1231141/comments?source=feed#comment-15611001 15611001 Wed, 27 Feb 2013 22:03:58 -0500 http://seekingalpha.com/article/1231141/comments?source=feed#comment-15606831 15606831 Wed, 27 Feb 2013 19:31:36 -0500 http://seekingalpha.com/article/1210901/comments?source=feed#comment-15503811 15503811
Even if you go by the most optimistic and outdated studies (outdated meaning a market inefficiency from 50 years ago must still be around today, right?), invest by P/E is giving you a couple percentage points a year of alpha. But no study I have seen has really been convincing to me because low PE stocks tend to be from the same industries and you could just be seeing a successful sector of the economy over the 15 year life of the study. Financials were always low PE stocks, for example and showed very good returns from 1991 to 2007 (if you chose that time period).

And Buffett does not invest by P/E. Buffett pays big multiples for good businesses when buying stocks. If he is doing a special situation then he gets off market deals or no deal at all (GE, Goldman, etc. were off market and during times of significant distress).

By the way, I do prefer being both completely and utterly wrong than either or, there is something about the totality of it that is compelling. ]]> Mon, 25 Feb 2013 21:46:53 -0500
Even if you go by the most optimistic and outdated studies (outdated meaning a market inefficiency from 50 years ago must still be around today, right?), invest by P/E is giving you a couple percentage points a year of alpha. But no study I have seen has really been convincing to me because low PE stocks tend to be from the same industries and you could just be seeing a successful sector of the economy over the 15 year life of the study. Financials were always low PE stocks, for example and showed very good returns from 1991 to 2007 (if you chose that time period).

And Buffett does not invest by P/E. Buffett pays big multiples for good businesses when buying stocks. If he is doing a special situation then he gets off market deals or no deal at all (GE, Goldman, etc. were off market and during times of significant distress).

By the way, I do prefer being both completely and utterly wrong than either or, there is something about the totality of it that is compelling. ]]> http://seekingalpha.com/currents/post/849391?source=feed#comment-15498511 15498511
http://bit.ly/WnphQM]]> Mon, 25 Feb 2013 18:58:10 -0500
http://bit.ly/WnphQM]]> http://seekingalpha.com/currents/post/848471?source=feed#comment-15489241 15489241 Mon, 25 Feb 2013 15:51:40 -0500 http://seekingalpha.com/article/1210901/comments?source=feed#comment-15479061 15479061 Mon, 25 Feb 2013 11:59:28 -0500 http://seekingalpha.com/article/1210901/comments?source=feed#comment-15381351 15381351 Fri, 22 Feb 2013 14:35:19 -0500 http://seekingalpha.com/currents/post/839271?source=feed#comment-15279451 15279451 Wed, 20 Feb 2013 17:41:08 -0500 http://seekingalpha.com/article/1208221/comments?source=feed#comment-15279221 15279221
I know for a long time things like cables at Best Buy were literally 3x more expensive than on-line -- where the cheapest HDMI cable you could buy was $30-40, but not any longer. They realize this just made customers upset.

Anyway, I think people shop Amazon for convenience at this point first and price second (although bargain hunters can be a ... vocal group). Going to a physical store is just very inconvenient and its not like electronics retailers have much of a shopping experience.]]> Wed, 20 Feb 2013 17:35:42 -0500
I know for a long time things like cables at Best Buy were literally 3x more expensive than on-line -- where the cheapest HDMI cable you could buy was $30-40, but not any longer. They realize this just made customers upset.

Anyway, I think people shop Amazon for convenience at this point first and price second (although bargain hunters can be a ... vocal group). Going to a physical store is just very inconvenient and its not like electronics retailers have much of a shopping experience.]]> http://seekingalpha.com/article/1208221/comments?source=feed#comment-15275721 15275721 Wed, 20 Feb 2013 16:46:29 -0500 http://seekingalpha.com/article/1183881/comments?source=feed#comment-15062821 15062821 Fri, 15 Feb 2013 16:56:50 -0500 http://seekingalpha.com/article/1183881/comments?source=feed#comment-15048811 15048811
Kraft split had to be done to ameliorate post retirement benefits and Wal-Mart / other top 5 grocers exposure but the dis-synergies will hurt a lot.

Over short-term coffee / cocoa pricing going down will hurt revenues but stimulate demand and either help profit or at least help keep it stable.

Lastly, these businesses are not really very high return and everyone should realize this. Using book capital, it may look like it, but these firms have decades of marketing dollars spent to achieve their current "brand equity" and there is steady inflation in what it costs to get your message out.]]> Fri, 15 Feb 2013 13:21:38 -0500
Kraft split had to be done to ameliorate post retirement benefits and Wal-Mart / other top 5 grocers exposure but the dis-synergies will hurt a lot.

Over short-term coffee / cocoa pricing going down will hurt revenues but stimulate demand and either help profit or at least help keep it stable.

Lastly, these businesses are not really very high return and everyone should realize this. Using book capital, it may look like it, but these firms have decades of marketing dollars spent to achieve their current "brand equity" and there is steady inflation in what it costs to get your message out.]]> http://seekingalpha.com/article/1174331/comments?source=feed#comment-14909811 14909811 Tue, 12 Feb 2013 19:20:18 -0500