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  • Amazon.com: E-Commerce In A Changing World [View article]
    Amazon is suing the Government over sales taxes charged. For those of you who are slow on the uptick, this means that sales taxes are probably significantly detrimental to their online sales patterns. My guess is that they will lower guidance as a direct result. Many, if not not most, of their items for sale are highly commoditized items, and the extra expense of sales taxes effectively eliminates Amazon's competitive advantage. I can tell you from personal experience that I have reduced my Amazon purchases because net net their prices are no longer competitive because of the sale tax. in fact, as a run rate, i am at least 5% better off over the course of 12 months as i learn to become more efficient at scheduling shopping trips.

    It appears that Amazon has showed its hand that their sales are declining as a direct result of the sales tax.

    Not to worry though: they are working on other "innovative" ways to grow...until they find out that their business plan for that wont be as profitable either because of inaccurate (though likely highly precise) expected (but not yet proven) sales forecasts...

    Really?!....wise up people...
    Aug 29 12:07 PM | 1 Like Like |Link to Comment
  • Amazon's Numbers Continue To Worsen [View article]
    closed below 50-day MA today. might test 100-day MA. Who wants to take a gander that the SEC announces inquiry into Amazon's revenue recognition policies, particularly regarding returns around quarter end? Forward P/e is unreasonably stratospheric still, and current earnings are a miss, so the only single thing that current, foolish investors are hanging their hat on, besides a wing and a prayer, is reported revenue that exceeds expectations. Without knowing anything, wouldn't Amazon be setting itself up for potential fraud in reporting revenue recognition? Just think about it...
    Aug 15 11:44 PM | Likes Like |Link to Comment
  • What Investors Should Expect From A Truly Disruptive Company [View article]
    price will keep rising as long as demand outstrips supply despite its current, unsustainable overvaluation. the largest money managers and hedge funds (demand --or price-- setters) in the world who are deeply invested in amazon trick others into continue buying amazon because the current longs benefit by creating a profit cushion and slowly sell out of as price rises. this "momentum" effect is manipulative. frankly i dont know why the SEC doesn't monitor causes of momentum in cases of AMZN whose earnings do not justify bullish propaganda from already long investors.

    Naive others buy into the propaganda. often its too late for them to get out before losing money (see AAPL, NFLX, MOS, etc), and the price-takers end up owning at the top, especially retail investors who own directly, not through mutual fund holdings obviously.

    So I surmise that momentum in its late stages are driven clearly by propaganda (distractions from EPS with red herring "other" metrics). The trick is to time when the price setters begin to exit all at once. Overvaluation could run for some time until that eventuality kicks in.

    I believe the trigger will be some other replacement investment because, sadly, the aggregate investment dollars available to spend by the price setters necessitates a very large cap name to replace AMZN with. The price setters probably in their hearts agree that it is dangerous to add to AMZN now, but the are caught in the conundrum that is if they begin to sell, supply would upstrip demand and they would lose money and in so doing shoot themselves in the foot. So they tacitly are left with no other choice to lie about AMZN's value so at to protect their own long positions.
    Aug 9 10:30 AM | 1 Like Like |Link to Comment
  • Amazon's Numbers Continue To Worsen [View article]
    AMZN rising for the wrong reasons: Take Blackrock, Fidelity, Vanguard, etc. How many trillion do they invest? Ok, now assume that their analysts, who make more than $150k, have to justify their salaries by buying a rising stock. Demand is outstripping supply and this is causing price to soar. So one has to ask themselves if AMZN's rise is a sustainable rise because stock analysts, who make more than $150k per year, are forced to put their money anywhere the potential to profit rises but preferably in a really large market cap stock. So, the likely candidates are AAPL, GOOG, FB, and, yes, AMZN.

    Stop for a minute: this means the "fundamentals" of the purchase are backed into or are stretched because the market cap restriction limits the universe.

    Now, take a step back: Amazon has been making promises since inception: first the promise was profitability from books alone. when that fail, amazon created a distraction from failure by promising success of online retailing. compressing margins because of extreme competition amonst liquid commoditized products. Once again, strategy failing as promised due to changing landscape: shiftign consumer tastes, Walmart, Target, etc and (here's to important one) TAXES!.

    By the way, has a regulator explored Amazon's revenue recognition policies? Whenever I have returned an item to Amazon, which has been about 15% of the time, it seems to me they would overstate revenue and lose money on the return shipping cost.

    So fast-forward to today to yet another distraction: Amazon is promising extrordinary profits from digital content. If i had to guess, i would surmise that is promise to deliver will fail again to deliver. but rest assured, amazon will propagandize yet another goal that will continue to lure in stock analysts, who make over $150k/year into buying the stock.

    Oh, one last thing: AMZN employs the best and brightest Industrial Engineers, Marketing people, etc, from Princeton, Stanford, Harvard, Columbia, etc. So AMZN ALREADY has the best available talent. Yet, they still cannot justify its growth targets. But they are brilliant from this standpoint: after failing at past promises, they design brilliant and complex business strategies that are probably not understaable to the stock analysts, who are from the same schools, and in order to justify extraordinary compensation, the stock analysts buy AMZN, not based upon the company's promises to execute upon promised and equally complex business plans, but upon the trust fact that only cronyism can explain. If you were ever in a fraternity or sorority, you would understand that tacit trust.

    I guess it is not for conspiracy theorists alone that the CEO's purchase of the Washington Post is consistent with brilliant and slick attempts to influence peddle. After all, if you personal wealth were $25 billion, and based at least partly on the other Ivy League graduates who "trust" your promise to execute upon future business plans, although there has been a 10+ year track record of failing to deliver as promised when they have been made over the past decade, you would be worried too.
    Aug 7 10:23 AM | Likes Like |Link to Comment
  • The Game Has Changed: 4 Dynamics Impacting The S&P 500 In 2H 2013 [View article]
    has anybody noticed that today's ADP print includes a "catch up" for prior months? As we all know, ADP has been lagging the DOL monthly payroll prints (too low v. DOL). Does that suggest ADP's number today is an overshoot, whereas prior months have undershot, versus this Friday's DOL print? I guess that implies that job grow in June was a lot weaker than expected (or in line with Bloomberg estimates).

    Assuming that I have gotten the numbers aligned with their respective months caught up-to-date, it would seem the adjusted payroll number for June to be released on 7/5 by the DOL would be a weaker number? Does that make sense?
    Jul 3 11:04 AM | Likes Like |Link to Comment
  • LinkedIn After The Earnings: The End Of Amazing Growth Rates? [View article]
    interesting: yesterday's bounce off of $162 was the 50% retracement support level between $200 and it's price before taking off this year. today's +3% is either a very bullish sign or a head-fake before dropping down a LOT.

    The jury's still out. The 30-day movement indicates lower highs and lows, but today's bounce should be interesting to watch.

    the big question is what are PIMCO, Blackrock, and Fidelity doing with their longs, which are massive. Is the smart money buying puts to protect their massive longs in anticipation of paring down near these levels?

    Recent significant insider sales of LNKS (Sze, other directors, etc) indicates a top around here.

    Jury still out on this +110 FORWARD p/e stock. good luck to all, whatever your directional bet
    Jun 5 11:40 AM | Likes Like |Link to Comment
  • 4 Reasons It's Time to Sell Google [View article]
    this is great. current pessimism likely setting up currently inexpensive call options for unusual gains on Friday after earnings announcement. look at Google's history. my guess is that those who go long call will make unusually large gains. but what do i know...everybody else hates google...for now...
    Oct 11 12:16 AM | Likes Like |Link to Comment
  • Earnings Preview: Salesforce.com [View article]
    about one year ago, my company was contacted by salesforce.com to explore their product array. by the end of the call it had occurred to me that salesforce.com was very similar to a sophisticated rolodex. when they discussed pricing at $125k/year, i was shocked at the pricing for our small business. since then i have noticed many competitors offering their services at a fraction of the cost.

    now the larger tech players oracle, etc are encroaching on salesforce's space. with as many choice we now have to pay more or, in our case, much less for a comparable product, I would be shocked if salesforce met it lofty future earnings and profit targets. yes, they hire the most attractive sales people from the top business schools. they are not hard on the eyes.

    but when it comes down to functionality, does it really make sense to pay a lot more for a product that is overpriced for what it delivers when comparing to competitors?

    it seems hard to imagine that salesforce is trying to brand itself as a premium product (such as neiman marcus or coach) when basic products would work equally well.

    might I remind you that CRM's 90+ P/e has embedded in it very very high rates of growth in earnings?

    good luck to you CRM! you will need it
    Aug 24 06:18 AM | 1 Like Like |Link to Comment
  • Retail Sales Growth Has Run Out Of Steam [View article]
    Here's food for thought: $16mm miss on revenue. At $8/burrito (roughly), that's 2 million units. Each person eats, lets say, weekly one Chipotle burrito and 12 per quarter.

    That amounts to 166,667 fewer people eating burritos. At 1,300 stores, each store has lost 128 customers per quarter on average!

    Wow!
    Jul 19 06:38 PM | 1 Like Like |Link to Comment
  • 5 Valuation-Based Contrarian Picks [View article]
    Look out below! Technical Traders will move the stock lower over the short term.

    Institutional Investors will drive the stock lower over the longer term.

    CMG has had a nice run. Really nice!

    Ultimately, lofty expectations have already been built into the stock's soaring valuation, to a point where, the company was apparently forced to cut corners and even commit felonies to try to meet earnings targets. Sad, really, when you think about it.

    One more thing: Goldman Sach has more egg on its face. A Goldman Sachs analyst recommended buying calls options on Chipotle a few days ago. If it turns out that they sold into strength ahead of the weak earnings announcement and subsequent stock collapse, there will be suspicion of pumping up the stock for their personal gain. Look out for any possible legal action in this area.

    Interesting story, Chipotle is/has been/was...
    Jul 19 04:40 PM | Likes Like |Link to Comment
  • Retail Sales Growth Has Run Out Of Steam [View article]
    I have noticed that over the past couple of weeks, Chipotle has not been its usual self. What I mean is that when there are accusations of potentially detrimental events to it's stock price, their public relations effort is ubiquitous attempting to refute and quash such accusations.

    Over the past month, after the claims of the SEC labor felony investigation to accusations of them not using truly "natural" products, or their core business strategy, the Chipotle Public Relations department has been curiously silent.

    I was just wondering if anybody else noticed that. Just an observation.
    Jul 19 09:11 AM | Likes Like |Link to Comment
  • Why Investors Should Avoid Chipotle Mexican Grill And Boston Beer [View article]
    funny thing is that chipotle's appeal has been his "conscientiousness".

    In May, the SEC announced the beginning of a 2year investigation into fradulent/unfair labor practices.

    Today, there is a lawsuit announced against CMG which refutes it's single most important appeal, which is that meat sold is farmed "naturally".

    I am curious, what else CMG is hiding that could harm the premium to earnings that it currently enjoys? 53.84x P/E.

    What would be the appropriate p/e if it turns out that cmg is no different than the other burrito restaurants? 30x? That might be a long way down for CMG from here, I surmise
    Jun 27 03:28 PM | Likes Like |Link to Comment
  • Why I Don't Agree With Analyst Optimism Regarding Chipotle [View article]
    As a actual consumer, I must say I was not particularly impressed. Apparently analysts haven't actually purchased a burrito at Chipotle. It has been awhile since i have eaten at one so I am digging deep to recollect my experience. In case you are wondering, I haven't been back because I considered the burrito overpriced for a burrito that was very light on meat (a few scant traces from the restaurant in Pennsylvania).

    As a selected my a la cart ingredients, all the items were straightforward. I thought, what is the big deal about their product. When I got to the end of the assembly line, I was asked if i wanted guacamole or sour cream. Hesitantly, I asked, does it cost extra? I received a sheepish "yes". Then a long pause as I pondered if I wanted to pay the extra 16% for guacamole, almost embarrassed, I replied, "not today".

    The clerk, almost feeling sorry for me said: "well, it'll throw it in for free". Grateful, I proceeded much down on my burrito. Unfortunately, I found the burrito heavy in beans and rice and light on meat. Was it tasty? Sure! Would it make me go back for another? Not on a regular basis. When I consider that it costs me probably $2, maybe $3 to make myself, I almost cant stand the idea of paying 4x for a good burrito. Not great, but good.

    Let me circle back on the economics. I supposed Chipotle hope customer would order add-ons. That way, the relative profit margin would accrue to them. Unfortunately, guacamole is highly perishable and sour cream also but holds a longer shelf life. The fact that I did not want the add-ons because of the additional cost does not bode well for net income. Still worse, when restaurants give out charity toppings that are expensive, that reduces net income still.

    Does that make any sense to real consumer, not the theoretical consumer that dealer research analysts (who likely make well over $100,00 per year) would like you to believe?

    One of the responders to this article apparently is one of those dealer research analysts making over $100k per year. I suspect most of Chipotle's consumers don't make over $100k per year. I found interesting his rationale. You should buy Chipotle stock because they sell "antibiotic-free meats and locally grown". Ok so, I would be unsatisfied and grow sick by instead continuing to buy a 6-inch Wawa hoagie for $4.50, loaded with a variety of topping which outnumber the two Chipotle offers (guacamole and sour cream) by 10-times?

    The problem is that people eat burritos why? Sometimes I crave burritos. Mostly I want something tasty to eat at a bargain because I need energy but want to eat something relatively nutritious. Unless I make more than $100k per year (as many of the dealer research analysts do), I don't care for as much for "antibiotic-free meats and locally grown" as I do about value and nutrition. If most Americans are like me, I am going to go out on a limb and claim that their experience has been similar.

    I do have one theory that i would like to throw out. Same store sales remaining " the same" is not because the same people dine there. It is a cycling of new folks who, like me, wanted to try it out. You can escape detection if the area is a rapid population growth neighborhood. At some point, each restaurant will run of new newbie's to taste test. I suppose this could go on for awhile. I have my doubts that such a strategy can contribute to a steady growth rate of net income.

    For this reason, I believe Chipotle is nothing special. It's lofty p/e is gambling. One bad quarter, and it will be Netflix redux. The other thing to consider is that momentum stocks, as this one is, means that its run will come to an end at some point. The problem is that the Fidelity's of the world, own such much stock, that when it decides to "underweight" the stock (a euphemism for "they are nervous they are nervous about losing hundreds of millions of dollars), momentum shifts are rather abrupt large blocks get sold as once. Another code words owners use is "rotate out of to make room for another investment". That means they are trying to be stealthy about heading for the exits without causing a large move in the market.

    Silly rabbits...

    I am curious about upcoming SEC filing of the largest holders of CMG. That is, how many of them have begun to pare down their positions in Chipotle, without attempting to move the stock price dramatically. I suspect the smart money has already begun to do just that, especially since their margins could reasonably be expected to compress further (see Chipotle's conference call ie. propaganda session, about calming investors over future labor costs increases because legal employees cost more and, further, demand decline because of price rises).

    I have been wrong more times than I would like to admit. I think my opinion on CMG beginning its momentum downward, might be one for the win column

    But then again, I'm just a typical consumer. What do I know?
    May 24 11:10 PM | Likes Like |Link to Comment
  • LinkedIn to Lose Steam as Competition Will Weigh on Unique Visitor Growth [View article]
    What I think is very important (perhaps most) is how Linked in could get its registered users to pay for its service. I can tell you from a personal standpoint, as a registered user for at least five years, I have never succombed to LinkedIn's efforts to entice me to pay for anything on its site. The day Linked in forces users to require to pay for its service will be the beginnng of the end. If Linked in doesn't charge it customers who refuse to pay the subscription, its margin will compress and multples drop. To me this scenario is plain as day to see. LinkedIn's market cap is a ponzi scheme but for the venture capitalists and investment bankers who own the stock at 45 and are pumping up the stock until their lockout period ends. Who loses? 401k's. pension funds, retail investors, who on own it through the Fidelitys of the world. What an incredible scam. Where is the SEC when you need them?
    Jul 28 10:35 AM | Likes Like |Link to Comment
  • LinkedIn to Lose Steam as Competition Will Weigh on Unique Visitor Growth [View article]
    I have been a registered user of LinkedIn for about five years and have resisted every attempt to pay any subscription fee. I suspect most other users feel the same way. While it's nice to connect with friends and acquaintances, I dont need to use LinkedIn to accomplish this. My alumni directory, contact lists, etc are more than sufficient. So the rubber meets the road when Linked in is faced with the reality that it will likely experience great difficulty getting its user to pay for its service. That said, margins should compress and the stock multiple drop significantly. I think LinkedIn is a great idea. I just dont want to pay for it. LinkedIn is a great idea, but it's stock valuation does not reflect anyone's reality except for insiders who are waiting for the lockout to expire.

    I suppose the few (if any) bullish proponents of Linked In's stock are the venture capitalists and investment bankers who own the public stock at $45 and are waiting for their lockout period to end before dumping it.

    Where is the SEC when you need them?
    Jul 28 10:35 AM | Likes Like |Link to Comment
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