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  • iPads And Tablet Growth [View article]
    Thanks for your reply. Let's make that happen.
    Apr 29 11:28 AM | Likes Like |Link to Comment
  • iPads And Tablet Growth [View article]

    Thanks for another great article, insightful, thought provoking and rich in evidence. Putting your piece together with charts in 10 minutes using a yet-to-be-available SaaS seems like a stretch, but I like how your articles cause us to stretch our minds. Your weekly mobile newsletter is great too. How is it going for you at Adreessen Horowitz in these early days? I saw Ben on Charlie Rose. Is his book a worthwhile read, or is this an impossible question for an unbiased reply?
    Apr 27 08:11 AM | 2 Likes Like |Link to Comment
  • ModernGraham Comparison Of Apple, Google And Microsoft [View article]

    Thanks for your fine work. The data crossed with the tests provides some useful illuminations. I'm long AAPL and MSFT. One element struck me in reading your article on a psychological aspect of investing, perhaps one could call it emotional, specifically related to stock price points. For years I've drawn comfort using simple math to feel more comfortable about making investments in stocks whose share prices are high in dollar per share terms.

    For example, 100 AAPL at ~$550 can be thought of as 1,000 at $55. I guess it might go to $45, though I think it's more likely to go to $70 before long. Of course it's the fundamentals and prospects that count (as shown in your analysis), but on the emotional aspect of investing, I simply draw a bit of comfort in feeling I can live with AAPL going to $45 though I believe it's going back to $70. The contrast, again simple emotions, is that if my $550 a share stock drops to $450, it feels more scary.

    What I noted in the comparative data in your article, in a similar vein, is simply that if GOOG had the same number of shares outstanding as MSFT, then GOOG would be trading at $43.50 per share. On the fundamentals, GOOG trades at a much higher PE than AAPL or MSFT, though GOOG has the growth to support the PE level. On the psychology of GOOG's price point, my thinking had been akin to "well let's see, at the moment I'm not about to buy 100 GOOG at $109,000 and is 10 shares at a tad less than $11,000 actually going to do me any good one way or the other?"

    Now however, after catching that little, what I'll call "price point psychological element" in your piece, I find that I have an entirely different point of view about buying 250 GOOG at $43.50 for the same amount of money invested as in buying 10 GOOG at $1.086. 250 GOOG at $43.50 for a tad less than $11,000 feels like it could be a nice entry point in building a direct position in GOOG.

    One could say this is sheer silliness, and I'd agree in the sense that what's being contemplated here is whether or not to invest roughly $11,000 in GOOG. On the other hand, getting over "sheer silliness" elements that can cloud our making good investments is exactly what I'm talking about.

    Dec 20 09:22 AM | Likes Like |Link to Comment
  • A Tale of Two Commodities: Android and Discount CDMA Carriers [View article]
    Hello Joel:

    Good piece on PCS and LEAP and the roles of Android and Qualcomm in broadening smartphone use.

    The thing I like about PCS is that they are not only leading the pack in lowering the fixed monthly cost of data plans; they are also profitable, with good margins, growth and returns on capital. LEAP and S are currently losing money.

    Nov 30 08:58 AM | Likes Like |Link to Comment
  • Lehman's CDS Mess: Who's on the Hook? [View article]
    In my post above, I noted one error. In paragraph 6, first line, strike "banks" and insert "governments" instead. So, as corrected, that paragraph, should read as:

    "While European, Asian and American governments have stepped up to be commited to their respective large banks, if the CDS exposure is concentrated, the scale of the CDS settlement payout's impact on a bank's capital base could be mind numbing."

    Tim Butler
    Oct 14 08:01 PM | Likes Like |Link to Comment
  • Lehman's CDS Mess: Who's on the Hook? [View article]
    I think Mr. Bo Peng's article is one of the very best, and most insightful articles I have ever read on Seeking Alpha. It goes to the heart of where we are in the global financial crisis.

    The Lehman CDS settlement on Oct 21st will be one of the biggest coming out events ever witnessed because of the scale of the numbers. Mr. Peng cites $100-$400 billion, while I think I saw the New York Times estimate the range at as much as $400-$600 billiion in an article at the end of last week.

    Think of these numbers -- $100-$600 billion on a single company's default (i.e., Lehman) relative to the US industry wide $750 billion rescue plan, or the Treasury backing of AIG to the tune of $85 billion.

    Yes, this single company CDS settlement on Oct 21st of $100-$600 billion is part of the $56-$58 trillion estimate of the global CDS market currently outstanding. Happily, Lehman is the only super scale level bankruptcy thus far.

    AIG and hedge funds seem to be the prime suspects for having to face the Oct 21 Lehman CDS settlement pay-out. Who else will take a big hit, we do not know. To further illustrate why Oct 21st becomes so important, just suppose the Lehman CDS exposure is concentrated in a single additional firm such as Bear Stearns, now inside JPM, or an RBS or DB?

    While European, Asian and American banks have stepped up to be commited to their respective large banks, if the CDS exposure is concentrated, the scale of the CDS settlement payout's impact on a bank's capital base could be mind numbing.

    No wonder interbank lending has virtually ground to a halt. No wonder LIBOR, as the best barometer, is nearly 5%. No wonder, as Mr. Peng explains so well, the banks were calling hedge fund debt last week, which in turn was a significant contributor to the scale of last week's equity market rout.

    In a nutshell, US housing price declines over the last two years, are the source of subprime mortgage problems, and in turn, mortgage back securities problems, which with asset liability gap mis-management and an inherent degree of high leverage, led to large bank losses and capital problems.

    But the big kahouna looming in 2008 has been the CDS settlement risk faced by CDS issuers in the event of a large scale bankruptcy (i.e., Lehman), and that day of reckoning comes on Oct 21, as pointed out and explained so well by Mr. Peng.

    As a credibility check on Mr. Peng's article, I checked the "Oct 21" web link at the outset of his article, which leads to the ISDA web site. To see the Oct 21 date, one has to click on "Lehman Brothers" at the top of the ISDA page, then click on the link next to "Protocol", and then click on "Plain English Summary".

    We're not out of the woods yet (as of today, Oct 13). Hopefully, the concentration of Lehman CDS issuer risk will not be too great. We will find out in little more than a week.

    Oct 13 10:00 AM | Likes Like |Link to Comment
  • Comparing This Past Week to the '87 Crash [View article]
    Bespoke Investment Group's charts are virtually always insightful and fact based -- this one is another good example.

    It would be nice to see the Dow Stocks in a table with current P/E, P/Bk, P/Sales, and P/Cash Flow, along with a last line entry showing the Dow's long run average for these benchmarks.

    As for Chris E's comment above -- beware -- and be wary:
    1. I do not believe that the $400b in CDS's (Credit Default Swap) have been paid, which are the contract obligations due on the Lehman debt default auction which was completed at the end of last week.
    2. Chris E's website is non-operational.

    Tim Butler
    Oct 12 09:42 AM | Likes Like |Link to Comment
  • AIG and the Lunacy of GAAP Reporting [View article]
    This is a superbly written, insightful commentary about AIG.

    FASB mark-to-market accounting rules do their level best to give an accurate picture of a balance sheet at a point in time, namely today. However, the equity value of a company is a function of all of it's future cash flows, discounted to today's present value. The distinction between the two numbers can be, and usually is, large.

    Notwithstanding Robert Merton's argument suggesting that capital market stock prices accurately reflect all the information available about the value of a stock today, I concur with the author of this Seeking Alpha article, in suggesting that Wall Street today is paying too much attention to today's mark-to-market book equity, along with the risk of 1 to 2 year sustained EPS losses, rather than focusing on longer run cash flow generation from AIG.

    Of course it's a matter of opinion, I just happen to think that Hank Greenberg, Warren Buffet and Robert Willumstad might well agree.

    Disclosure -- As of Friday, August 25th, I'm long AIG too. I'm trying to make up for buying AIG Jan 60 '08 Calls at $10 in September '07!

    Timing is everything, and differing views is what makes a market. I've placed my bet, and I like to think of it as an investment, though I'll be the first to admit that it certainly does have a speculative component.
    Aug 27 10:14 AM | Likes Like |Link to Comment
  • WaMu: Intensification of Stealth Buying [View article]
    Superb, insightful article. Interesting contrast with today's other WM piece on the resumption of short selling in the wings.

    I do hope WM has fully come clean, and surprises to the upside in October. Nous veron, as the French say.

    With the strong retail franchise and deposit base, and book value at ~$15.35 per share, there is a lot of upside if WM is really clean, relatively speaking of course.

    Thanks for sharing your hard work and insight in this forum.

    Sadly, Seeking Alpha has become 90% junk or regurgitated crap, whereas your piece is rich, substantive, insightful, and clearly opinionated, which I think is always a good thing.
    Aug 13 08:36 AM | Likes Like |Link to Comment
  • On-Demand Software Update: SuccessFactors Files For IPO, Acquisition Target for [View article]
    Why is Seeking Alpha doing straight PR pieces directly from the company issuer?
    Jul 26 11:01 AM | Likes Like |Link to Comment