Seeking Alpha

ubeenfranked

ubeenfranked
Send Message
View as an RSS Feed
View ubeenfranked's Comments BY TICKER:
Latest  |  Highest rated
  • At Best, Apple Is Trading At Fair Value [View article]
    P/E ratio should be used for back of envelope analysis, and should not be misconstrued as sophisticated analysis because earnings are a mere accounting measure. You want to take a closer look at free cash flow to the firm and the enterprise value.
    Mar 19 07:19 PM | 21 Likes Like |Link to Comment
  • Actually, Apple Should Buy Nintendo [View article]
    This is truly compelling strategically, but please provide financial reason for the acquisition to add value to Apple. Also, can you suggest other content producing companies Apple may acquire?
    Mar 9 11:23 AM | Likes Like |Link to Comment
  • Apple's Intrinsic Value And The Market's Irrational Valuation [View article]
    Victor,
    I think you miscalculated Apple's enterprise value, could you please show your work? I think actually EV is much lower.
    Thanks!
    Jan 31 05:39 PM | Likes Like |Link to Comment
  • The Achilles' Heel Of Apple Is Its Recalcitrant High-Margin Policy [View article]
    Thank you for the spirited article, but I must critique. Some of these graphs are particularly misleading, and the length of the article is a bit overkill. Too long! I will revisit this another time. Thank you.
    Jan 7 04:41 AM | 4 Likes Like |Link to Comment
  • Could China Be Moving Toward A Two Tiered Internet? [View instapost]
    Fascinating idea here, Glen.
    Jan 5 12:51 AM | Likes Like |Link to Comment
  • Apple Screwed Up Big Time [View article]
    Ashraf,
    You're jumping to conclusions; The fact that anyone can compete with Apple on hardware is well understood. What is important is the brand equity bringing customers back to Apple products, as well as the inimitable resource being iOS, MacOS, itunes, etc. If Apple maintains the benefits, lock-in, and perceived switching costs of the ecosystems, slight disadvantages in a particular spec will not be significant. Apple needs to work on bringing android users into the iOS world. I think iphone is the key device to win people over and convince to use the entirety of apple's product lines.
    Frank
    Jan 3 12:23 AM | 1 Like Like |Link to Comment
  • Why Microsoft Is Hands Down One Of The Cheapest Stocks On The Market [View article]
    Thank you for sharing your bold call, Valuentem. Would you say MSFT is more undervalued than AAPL? A good example of economic profit analysis and DCF, but could you comment on the likelihood of revenue growing at 5% per year for the next 5 years, verses scenarios of decline due to iOS, Android, and potentially even MacOS and ChromeOS gaining OS market share? The risks to MSFT's ecosystem seem larger today than they did 10 years ago. If MSFT can maintain a monopoly on the largest market segments for "productivity" software, then it is reasonable they can maintain current revenue levels and grow by raising prices over time, if there remains a high willingness to pay.
    Sep 30 04:30 AM | 1 Like Like |Link to Comment
  • Apple's Huge Ecosystem Blunder [View article]
    James, great points about network effects applied to software. I'm still not convinced that Apple is overvalued.

    Do you think an ecosystem can succeed with low market share if it is able to capture the most profitable segment of the market? If iOS users buy more ecosystem products, apps, services, and browse more and spend more through their phones, I would think a low marketshare could continue to be viable.
    Sep 13 09:06 PM | Likes Like |Link to Comment
  • Valuation Multiples Explained [View article]
    Thanks, Mr. Fu! Great point that the Govt is also a stakeholder.
    Apr 5 05:00 AM | Likes Like |Link to Comment
  • Texas Hold 'Em Tournaments And Value Investing [View article]
    But admit it, it was really best when Matt Damon referenced the quote in Rounders : ) .
    Apr 4 08:37 PM | 1 Like Like |Link to Comment
  • Texas Hold 'Em Tournaments And Value Investing [View article]
    Good points Fred, particularly interesting note about performance appraisal, which is extremely misleading to the untrained and unscrutinizing eye in both poker and investing.

    In investing you want to know your alpha, outperformance above the average market, but don't stop there. How do you know the statistical likelihood of your results being attributable to skill rather than "running hot over a small sample size"? (As my poker buddies would joke). Then, even assuming your results were due to skillfully valuing a company or two which happened to be inefficiently priced, how do you know that in the future similar inefficiencies will provide you opportunities?

    All of this is analogous to poker so closely, its amazing. How many beginner poker players get an inflated ego after "running hot over a small sample size," either because they are getting "hit by the deck" with pocket aces and the like, or because they are the ones calling bets with pocket 4's and flopping a 4, and subsequently getting paid off for a big bet from the other guy with aces.

    So how do you appraise your performance as a serious poker player? You need to analyze every single hand through a computational Expected Value Calculator, comparing EV to actual results, or AV. This tells you how much money you would expect to win in the long run on each bet of each hand assuming each bet is "all-in..." Unfortunately, even this kind of sophisticated model is not perfect because it can't take into account the metagame of even the next bet on the flop, turn, or river, let alone the next hand. A model like that takes each bet in isolation.

    Let me explain with a simple example from Texas Hold'em. Imagine you push all-in preflop for $100 with Ace King, and opponent calls you with pocket twos. A coinflip, for a $200 pot. If you end up winning the flip, you made serious money, right? Double up, $100 of profit! Should you pat yourself on the back? Deserve a bonus of 2% and 20%? Not so fast - consider the EV, the expected value, of this coinflip.
    EV = P()win*$win +P()lose*$lose
    EV = 0.50 * $200+ 0.50 * $0.
    You guessed it, the EV of the coinflip = ZERO! There is zero expected value to be gained here, so the actual value of doubling up was just you running hot over a small sample size.

    Part of the reason why it can be extremely difficult for poker players and investors alike to give an honest, critical assessment of their relative skill against opponents is for one reason, personal delusions, but for additional reasons, the complexity of modeling your long-term EV, given the fact that no bets are ever placed in complete isolation, there is always the metagame to consider the next betting round, the next hand, etc. How often does a poker player slow-roll a monster, not realizing how lucky he is that a straight or flush did not materialize? If you think the math is complex in a straight up cash game format, it can get levels deeper in complexity to model equity outcomes in tournament poker. You must consider equity of the prize pool to govern decisions, not simple chip count, because the chips don't linearly correlate to dollars, each chip in your stack actually has a different value, depending on the prize payout structure and every other player's chipstack!

    Chris, your thoughtful article has inspired me to think/write about poker again.
    Apr 4 08:36 PM | 1 Like Like |Link to Comment
  • Texas Hold 'Em Tournaments And Value Investing [View article]
    Thanks for pointing this out, Glenn. I studied and played poker seriously after college. The game theory raised by folks who complain about irrational players ruining their day was particularly applicable on the bubble in a tournament. If your play follows a Nash Equilibrium unexploitable strategy (NE), that means no opponent can act in any way to gain an edge on you. No matter how irrational, no one can eek out a long-run +EV at your expense. However, NE does not mean you are playing optimally to maximize EV. If you learn that an opponent is irrationally tight, for example, you should be more aggressive with weaker hands, shoving in spots where NE would dictate a fold. But don't stop at optimal, you can increase your long-run EV further still - if you consider the metagame, i.e., next hand, next tournament, when you face the same player again, you can craft additional strategies to further exploit opponents in excess of NE edges and the seemingly "optimal" edge for a single hand in isolation.

    So tournament poker is very interesting to study from a math perspective. You could program an AI to actually play NE strategies perfectly for late game when antes are such that its push or fold - you can even attempt to program an AI to do better than NE by assuming common inefficiencies, but this becomes more challenging and risky. Like investing, reward comes with risk.
    Apr 4 08:03 PM | Likes Like |Link to Comment
  • Texas Hold 'Em Tournaments And Value Investing [View article]
    I think it was $1 million Buffett mentioned : )
    Apr 4 07:37 PM | Likes Like |Link to Comment
  • Valuation Multiples Explained [View article]
    Your educational articles are doing a great service to the amateur community. I even learned something - the key basis for these multiples is to consider the stakeholder and the reward available to that stakeholder group. Thus, for equity holders, it is P/E, but if you wanted to buy out a company and all its debt entirely you'd consider all stakeholders, so include net debt and preferred to get EV, and again consider the payback to all stakeholders, using EBITDA.

    Although I'm a little confused, how can you compare P/E to EV/EBITDA when EBITDA adds back in taxes, D&A which the earnings figure does not? Am I wrong?
    Apr 4 02:40 AM | Likes Like |Link to Comment
  • Android Is Dead - Part 8: The S4 Fights Back - BUT... [View article]
    You seem more bullish on BBRY than you were in previous installments of this thesis.

    Despite your prediction of Android losing share, what is your thesis on Google stock, long term? Do you think Google will disrupt android itself?
    Mar 29 09:24 PM | 4 Likes Like |Link to Comment
COMMENTS STATS
204 Comments
264 Likes