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Thursday, August 29, 2013

$tsla - quick short

The stock has accelerated too fast from the weekly 5sma. Looks like it wants to revert back to the trend.

This would suggest a move to low/mid 150. Although, pending market negativity, tsla could see the 10sma.

Great time to be Gawker - $GOOG

Android  boss breaks up with girl. Girl starts with Google boss. Android boss decides to fuck the entire mobile strategy of the company. 

Good time to be a gossip columnist. 

Xiaomi is Google's worst-case scenario for Android: A company that has completely forked android, creating their own hugely-popular vertically integrated ecosystem. Coincidentally, contains zero Google services.

What will be the real 'fuck-u' to Google will be if Xiaomi (a company who has awesomely benefited from Google's subsidizing of the Android OS) gains traction outside of China, and Google finds itself in a position of having to pay Xiaomi to be the default search engine.

Drama can be fun.

Monday, August 26, 2013

Slow reaction to a declaration of war

Surprised the market acted so slowly to Kerry's words this afternoon. The USA confirmed chemical weapons.

There really is not other option, allied forces are gonna have to intervene. And given the French and Germans are already pretty pissed at the use of chemical weapon, Assad is basically fucked.

Curious to see how far Russia goes with their Pro-Syria stance.  

Sunday, August 25, 2013

the turning point - $yhoo

Like every other sane investor, once Marissa Mayer was named Yahoo's CEO, $yhoo became interesting again.

With the rising stock price, came the obvious praise. But one tech blogger put that praise into its place. Om Malik did not hold back. Rise in stock price be damned, he ripped into the prevailing issues.  I wish more tech/media outlets did this, but as a student of the market and behavior I rarely see such things from the viable-institutional bloggers and influencers.  When a company is in vogue, the blog-o-sphere becomes a circle-jerk amplification of each others' positive take. Wall Street schmucks observe the chatter and with the positive perception continue to elevate (or depress) the stock.

I have seen it way too many times. In fact the circle-jerk has completely turned me off to Pando Daily and make me question The Verge and TechCrunch.  When Google was in the shitter over a year ago, Pando Daily gave it zero respect. Apple in the sitter, no more innovation. Facebook in the shitter, their model doesn't work.

Once key influencers get an idea out there, the others (with great reach) simply run with it. The most recent example is Facebook. Before their massive +30% run, key influencers had the perception that Facebook, as a mobile play, was threatened by "unbundling" and no longer being a "platform".  Both issues were viable threats, but the only problem between the two was that user engagement was growing (squashing the unbundling threat), and their mobile reach was getting huge (adding a new paradigm to what a platform can really mean).  Facebook's stock should never have been below 30 prior to this past quarter, but because these influencers have the ears of the hedge funds, many listen. (I see it, and listen to these guys/gals, but call out when I think they are wrong.)

And now, here too with Yahoo, I think Malik is a bit off base.

Before she became CEO, YHOO was trading around $16, with a market cap of around $19billion.  Alibaba was/is worth about $14billion and Yahoo Japan was/is worth about $10billion. Before Mayer, Yahoo web properties were valued at zero. But a cynic would value them as a liability.

A few months into her reign (and I use that word with purpose), the stock is trading with a market capitalization of $28.5billion. The remaining Alibaba shares are worth about $7b, and Yahoo Japan is still valued around $10.  This leave Yahoo's web properties and recent mobile apps with a value of $11.5B. (But if cash is factored in here, the properties are really worth less.)

Yahoo went from being a liability to being worth $11.5B. This does not seem like an outrageous valuation for a web property that has so much reach.

When a person sees the above charts it may seem outrageous, but that simply is not the case.

The next question, is the $11.5billion justified?

If we were strictly looking at revenue and income-from-operations, maybe not. The two key metric are still in decline. (Although, the last 2 quarters saw an increase in operating income due to a lower TAC cost.) But beyond the lagging indicators, there is definitely a foundation for growth.

Yahoo, from all facets, has been redesigned. Not just for aesthetics, but for social-mobile optimization. Its web properties are not dependent on a mobile app, even though it has them too. And their mobile apps have seen HUGE, I can not stress this enough, HUGE performance improvements.

And here is where I disagree with one of technology's great influencers. The redesigns matter. Yahoo's +700million active users matter. Targeted adverts does not just depend on facebook-type data, much is dependent on user activity, and Yahoo has that in spades. (If anyone gives Google+ credit, they must acknowledge the same for Yahoo.) And from the looks of the redesigns, they are trying to tap into this activity.

Yahoo's biggest challenge is to unify the data from their multiple offerings to better target the user.  Thereby increasing their ad rates, and increasing their revenue and income-from-operations.

Yahoo has laid the foundation, and time has to prove Mayer's right. (And I think it will.)

Friday, August 23, 2013

A list of $GOOG competition

Ranging from their ambitious services:

1. Microsoft
2. Apple
3. Yahoo
4. Facebook
5. Yelp
6. Amazon
7. IBM
8. Time Warner Cable
9. AT&T
10. Comcast
11. Verizon
12. Cable Vision
13. Ford
14. GM
15. Toyota
16. Mercedes
17. BMW
18. Audi
19. Tesla
20. Lenovo
21. All contract electronic manufacturers
22. Four Square
23. Volkswagen
24. Honda
25. AOL
26. eBay
27. Twitter

I think their only "partner" left are governments.

Last step: buy guns, take on Governments and the world. 

Ballmer to retire. $msft +7%

wow. So many questions. Most importantly, how will the new business structure work?

Tuesday, August 20, 2013

Market Thought... assessing a market crash

Back in June, Doom-and-Gloom Faber suggested the market can decline by some 20%. Didn't happen. Not yet anyway. But he is still singing the same tune.

The bearish scenario that is to bring such destruction are rising US rates. Specifically from the Fed loosing control of the bond market.  Every time I hear this argument I scratch my head and wonder,  what exactly is the magical number to which the bond market assumes the Fed has lost control?

In late June, this every chatter was to blame for a declining market. Its the Bro-down of all Bro-downs!

I do not know what the magic number is on the treasury, but I do understand patterns. Two years ago the rates were higher, with weaker employment figures and the existent threat of an Europe with an inactive ECB. Yet the US market rates have not exceeded levels seen with worse macro economics.

So how can the bond folks, and the press peddling their garbage, suggest (with a serious face) that the Fed has lost control over the bond market.  (Maybe if the Feds were not involved the treasuries would already be near 3%.)

The above, in relation to the current economic back-drop does not seem like the reason the market is rolling over.  But it doesn't matter as to what is true, its the moment's perception of truth that matters.  And right now, the perception seems to be turning.

Fundamentally, there is merit in caution.  Below are projections based on SP500 eps estimates, assuming the market is given a multiple of 17. (A trailing multiple of 17 suggests a fully priced market, with nice expectations going forward.) For the quarter ending in September, the market should be priced near 1641. The market is above this price despite the recent declines.  

If additional negative perceptions are allowed to seep through, then the market multiple can compress toward 15. (A trailing multiple of 15 suggests a normal market with reasonable expectations of earnings and little pricing of financial shock risk.) For the quarter ending in September, the market should be priced near 1448. If the market sees this multiple compression, the SP500 will decline by 12%.

The longer term charts suggest SMA supports for the SP500 near the mid 1400 level.

Some negative perceptions that can facilitate such multiple compression:

1. Escalated violence in the Middle East.

Syria can be on the brink of an international war, depending how US and Russia play their cards. Egypt, and one of the largest-economic-affecting transport routes (Suez Canal), seems to be on a path to chaos.

2. European wild cards.

There is always something fucked up that can happen in Europe. (Their craziness and stupidity is probably worse than our Congress.) Berlusconi is in the news again, this time threatening to disrupt the government, thereby putting at risk Italy's recovery.

3. US corporate earnings slow.

A slow earnings growth rate typically merit a lower trailing multiple.

4. Japan's abenomics implodes

Japan has gone all-in with their current stimulus plan. It must work. If it does not, there will be some messy market situations in the not too distant future.

5. China economic transition

So far so good, but the transition to a more consumer orientated economy is still being played out.

One very big positive:

Money is flowing out of bonds, at a sizable clip. This money will be put to work where the trends are working. And the longer-term trends are working for equities.  Especially in a decent macro-economics at play and global central banks facilitating loose policies.

If there is a market decline, its not likely going to be 20%.  (Unless something happens with Japan.) 

Wednesday, August 14, 2013

$goog, say hello to 840

Looks like Google has a date with 840.

If the market starts to treat Google with a bit less euphoria, a trailing multiple of 21-23 perhaps, GOOG has a date with the low 800s / high 700s.

$aapl technicals

Icahn's tweet caused the stock to break from its channel resistance.  

The stock has quickly approached its longer-term resistance, between 500-525.

Not really sure why icahn's tweet inspired such bullishness, considering Apple is already buying 60x what Icahn is assumed to have positioned. Also not sure Icahn will do much of anything at Apple. Apple already has the largest buyback in history, and has already shown it will make aggressive purchases. 

Tuesday, August 13, 2013

Icahn is allowing $aapl to breakout

If action holds, kiss the 8month resistance / channel trade good-bye.

Icahn's nicely times announcement is causing a breakout. 

Saturday, August 10, 2013

$amzn illustrated

Reason for insane multiple

Expenses grow too


Margins w/ Fulfillment and Technology

Growth of cash (the spike was due to a debt sale)

Cash from Operations

Relative to e-commerce

Wednesday, August 7, 2013

$paa still looks okay

Revenue growth looks good.

Operating income growth was not so hot.

But considering PAA is an MLP, to which I put more emphasis on potential distribution increases, the income from operations was fine.

The AM weak action was a bit surprising considering the above, but the stock eventually turned.

Structurally, the stock is back to the weekly 28sma.

Tuesday, August 6, 2013

breaking $ibm

Analyst downgrade today may do the trick. If IBM breaks below the weekly 100sma, the stock can see about a 5-10% decline. (From which it will be a uber strong buy.)

IMO, i think the downgrade is bullshit, but i try respect the technicals too.

Sunday, August 4, 2013

$goog Moto X - alienated

Few take always from the release of the Moto X:

1. Alienate the geeks. 

The technophiles are the ones that drive the nexus sales. They were the ones so eager for this phone, and they were the most disappointed when the specs were revealed. (Especially the screen specs.) They are disappointed the first versions of this phone will with have carrier bloat ware, as well.

They will prob stick with the nexus.

2. Alienate the layman 

The average mobile user buys a phone from a brick-and-mortar store. They still do not go online for it. 'design by you' becomes irrelevant. (Although some may like the overall design and finish of the phone.)

If they buy this phone at the carrier store, for $199 due to carrier 'salesmanship', they just got suckered because the value proposition between the S4 or even other recent high-end Moto Droids simply can not compare. 

Also, the average user barely uses Google Now or Siri. The new 'always listening' feature will freak them out. (Despite the feature being local to the phone, there is little trust from the average user.)

3. Alienate the high-end user

The high-end user, who are now acclimated to retina quality display, and the benefits of higher specs will most likely not downgrade, at the same price point. The assumed informed user knows better.

4. Alienate the low-end user

Low-end user wants free or $99. They aren't going to spend $199 for it. iPhone is a case study toward this behavior. 


Google is rumored to be putting $500million of marketing muscle behind the phone, so it may very well find an audience. But based on the current info around the business, alienation seems likely. 

Friday, August 2, 2013

Enabling social vs being social -$aapl

Apple's role is not about being "social". Apple's role in social is about enabling.

Apple creates hardware and software that allow users to share better, faster and easier. 

to short $goog

Looking to short goog near 926.

If the stock breaches the resistance, will look to cover and readjust the short to play the overbought condition that will emerge. 

I really like google as a company (despite its hypocrisy), but its multiple is no longer justified. The Moto phones were suppose to let Google fill into its out-sized multiple. The new phones do not inspire such confidence. 

GOOG growth, in relation to its size, is positioned for a stock trading near a trailing multiple of 20, not 27.

My only knock, fundamentally, is their chosen position to be everyone's competitor instead of partner. 

Partnering is working very well for Facebook and Yelp. The 'compete-with-everyone' mentality has yet to be deemed a victory, even though the market is projecting the victory with the high trailing multiple. (Most of Google's mobile revenue is still from search, and iOS. Although YouTube ads are making headway.)

Thursday, August 1, 2013

Where is the Moto X advantage? $goog

The first few phones out of Motorola, under Google's umbrella, and they are being releases with dated OS?!?

All new phones have Android 4.2.2 but 4.3 is available. 

All will have the same proprietary chip.

All new Motorola phones are so close in spec and capability, what is the point of the differentiation?

I am loosing the irony as to why the market keeps rewarding Google at these multiples. 

If the $500M marketing budget doesn't work, there is a huge write-down coming.