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Comments

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SLS Project Coming Up $400 Million Short

alexander_686 Re:SLS and comparing to spacex (123 comments)

Yes, the SSL will start at 70t and move forward to (maybe) 155t.

But no, 10 13 ton lauches of the Falcon 9 does probabbly does not get you the same thing as a single lauch of 130t. Assemble is a issue. Some things are better built and have less wastage in large intergated units on the ground than assempbled in space.

We should compare apples to apples, not oranges. Which leads me to my biggest gripe about NASA (and by extension, the American government) – their plans are so murky and ill defined. Each stage of the program was like a rung on a ladder – leading to the eventual goal. How does the ISS fit into going to Mars? How does the SLS? How come we are always punting this thing down the road by 20 years. It is almost a program in search of a mission. Please don't take this as an attack on basic science and research – just how NASA does it.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:surpising (166 comments)

Of their 144b enterprise value, only 15b is long term assets (i.e. infrastrucure) and 24b in short term assets (inventory). They don't own any employees

Most of the value is projected earnings, and those projections assume a good deal of growth in earnings - say 30%+ over the next 10 years.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:No... (166 comments)

Amazon has been booking profits since 2002.

The issue is that Amazon's return on investments has been low, lower than the S&P 500 as a whole. They have been pursing market share instead of short term profits. They have been investing in new risky business areas. Stockholders currently share Bezos's bullish predictions that short term sacrifice is worth the risky long game. It has worked for Berkshire Hathaway but not so well for Sony. At some point it is going to need to become a more normal company.

yesterday
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SLS Project Coming Up $400 Million Short

alexander_686 Re:SLS and comparing to spacex (123 comments)

True.

But the SLS should be able to lift twice as much as SpaceX's future Falcon Heavy and 10 times the current Faclon 9. If we want to launch man into deep space, we are going to need something close to SSL than the Falcon 9.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:This is how business should be done (166 comments)

I think we are mostly on the same page. My point, maximizing return in a risk / reward framework does not imply maximizing earnings this quarter. We may be arguing over language rather than concepts.

On the prospectus point I disagree. Common law and securities laws (examples would be the Securitas Act of 1933 and 1934) put additional fiduciary duties on the board and CEO that require them to work in the best interest of the shareholders. The prospectus says that the board can set the pay for the board and CEO with no restriction. The law prevents the board from confiscating a generous (or even all) of the profits for their pay. (This is kind of like your B example, but I will point out that is covered by law, not the prospectus.) See Tyco and Adelphia as blatant modern day examples. For a more subtle example, look up the various lawsuits between Craig's List and Ebay (a minority shareholder).

I personally feel you put too much emphasis on the prospectus. Yes, the prospectus 20 years ago talked about reinvesting profits – they had to fend off entities like Pets.com and Toys.com. Most companies (and their business environments) have evolved enough that 20 year old boiler plat language is no longer applicable. (The one exception to this might be mutual funds, which must issue a new prospectus every year. However, even than there is a whole host of rules that govern what a mutual fund can and can not do.)

http://en.wikipedia.org/wiki/T...
http://en.wikipedia.org/wiki/A...

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:surpising (166 comments)

Not quite.

The "book value" of equity, from the balance sheet, is assets minus liabilities. It is a accounting principle.

The "market value" of equity is the discounted (time / risk) value of expected future earnings. It is the general consensus of the stock market.

These two concepts rarely meet in real life.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:I will invest in that. (166 comments)

One reason the Japanese kicked our asses in the 1980's is that they were looking at 10-year plans ...

It is also one of the reasons why Japan has stagnated for the past 15 years. They kept plowing profits back into failing "zombie" companies. Japan would have been much better if they had returned some of their profits to their investors so the investors could invest in the next new shinning thing. Instead the Japanese conglomerates kept everything to themselves. One could argue that South Korea's chaebol are worse.

The answer, of course, is about balance.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:This is how business should be done (166 comments)

Not quite true. The board (and by extension, the CEO) have a fiduciary duty to run the company in the best interest of the shareholders, which means maximizing returns, factoring in risk. Boards and CEOs have been sued for this. Now, the courts have taken a very wide broad interpretation of this, normally deferring to the board decisions. Most of the time when the shareholders believe the board is incompetent they either sell their shares (flight) or start a proxy war (fight)

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:This is how business should be done (166 comments)

Stock prices have nothing to do with "influence of the company climbs" - I am not even sure what that nebulas term mean.

Stock prices are based on the discounted value for future profits (well, Free Cash Flow if you want to be technical). To use your example, FB is currently valued at 80x of price to earnings (Yes, FB has profits). The reason why it is valued at 80x P/E instead of the S&P 500's P/E of 20x, it is because of expected growth in profits. Same thing when FB was first starting out and had losses. Who cares about current profits and losses? That is water under the bridge. When you buy a stock it is because of expected future profits.

yesterday
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Amazon's Ambitious Bets Pile Up, and Its Losses Swell

alexander_686 Re:surpising (166 comments)

Profits can either be defined as earnings (revenue - costs) or beter yet, Free Cash Flow (FCF) to shareholders.

As to your point, you are confusing profits (a flow variabole, found on the income statement) with wealth (found on the balance sheet.). The "profits" you are pointing to are being caused by low intrest rates which causes future earnings to be more vaulabe. This has nothing to do with the current disccusion, how should Amazon increase it future earnings – by paying it profits in cash to it's shareholders or by reinvesting in new, risky ventures. (The answer, of course, is both – the tricky part is finding the correct balance.)

To explain, the stock market has not jumped up because of increased profits or expected income profits (there is some of that). It is because the Price to Earnings level has jumped to 20x. A better way of saying this is that the Earnings to Price has fallen to 5%, tracking the fall in 10 year US Government bonds, down to a Coupon to Price Yield of 2.5%. As intrest rates fall, the discounted time value of future profits increase.

Bill Gross, from Pimco, explaining why 20x P/E ratio may not be high.
http://www.pimco.com/EN/Insigh...

yesterday
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Microsoft FY2014 Q4 Earnings: Revenues Up, Profits Down Slightly

alexander_686 Re:so I went & had me a look (65 comments)

You are not going to find it on Microsoft's website. By the way, everything I am stating falls under subjective accounting judgments.

Microsoft must disclose any relationship that is material significant. i.e., if the US Government bought 10% of their stuff they would have to disclose that. Of course, Microsoft sells nothing to the "US Government" – they sell to the executive branch, Social Security Administration, etc.

Microsoft must break out results along geographic lines. i.e. North America. Still not going to help us.

Microsoft has the option to break out results along product lines. Commercial, consumer, phone, etc.

But Microsoft does not have that type of relationship with the government to break out the results. (not saying it should not be done.)

2 days ago
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Microsoft FY2014 Q4 Earnings: Revenues Up, Profits Down Slightly

alexander_686 Re:This must be confusing to y'all (65 comments)

In what fantasy universe does investment in one company yield lower risk than investing in 500?

I am a huge fan of passive index investing. However, that rests on the efficient mark hypothesis, which assumes the underlying stocks are being priced correctly. In order to do that you need to enter my fantasy world were 1. time machines don't exist, and the future is filled with risk and uncertainty and 2. people have varying risk profiles, some of which are lower than the generic risk profile of the S&P 500.

Without people pricing the individual securities correctly the aggregate index means nothing. Another way of say this is, "What price do you think MSFT should be?"

The S&P is expected to return what this year – 9.65% with a standard deviation (assuming a normal bell curve, which is optimistic) of 9.61%. Is that the right risk / return level for you? Maybe you want to invest in lower return but less risky stocks?

And on a side note, why chose the S&P 500 to invest in? Why not the Russell 3000 or the MSCI World Index?

2 days ago
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Microsoft FY2014 Q4 Earnings: Revenues Up, Profits Down Slightly

alexander_686 Re:This must be confusing to y'all (65 comments)

Microsoft has returned 100% in the past 10 years, dividends reinvested, or 7.25% annually. S&P 500 has returned 118% with dividends reinvested, or 8.2%.

Which, in my mind, makes them kind of equal. Microsft is now considered a value company , so lower risk and lower reward. Adjust for risk and it looks better. Also, chosing the past 10 years is kind of arbitrary - why not 7 or 12 years.

2 days ago
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Favorite "Go!" Phrase?

alexander_686 Re:Adam West (700 comments)

Such things do exist. An early application was to power pacemakers. A automaker (can't remember if it was Ford or GM) even built a prototype. IIRC it uses thermal power from the decaying atoms.

4 days ago
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Amazon Isn't Killing Writing, the Market Is

alexander_686 Re:Yep, how the music industry was killed... (191 comments)

And even those are not earning much money.

In a interview a few years ago with Ani DiFranco, the report was gushing on how much higher her margins, as a independent artist, than The Dave Mathew Band. Which made DiFranco laugh because The Dave Mathew Band was making so much more money. DiFranco pointed out that going independent was about freedom of control not about the money.

It is not about margins it is about market structure. Piracy has trained consumers that music should be cheap.

about a week ago
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Lenovo Halts Sales of Small-Screen Windows 8.1 Tablets Due To "Lack of Interest"

alexander_686 Re:Lenovo is overpriced (125 comments)

If we use a broad defention of "elements of communist china's government" you get 1/3. 60% of the stock is firmly in the public market.

about a week ago
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Ask Slashdot: How Many Employees Does Microsoft Really Need?

alexander_686 Re:About half of Apple's employees are in retail (272 comments)

oh, it gets worse than this. After MSFT fire everybody their headcount will still be higher than it was last year.

AMZN has lots of people in the warehouses. Redhat is more focused. FaceBook is more focused and has outsourced (depending on you define outsourcing) a lot of its processes. Etc. all are lousy companions.

about a week ago
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Preparing For Satellite Defense

alexander_686 Re:New potential battleground? (117 comments)

Your premise is based on the belief that no matter how hard the U.S. gets hit, it would refuse to retaliate in equal or greater strike(s).

No, I am not making that assumption. You are right the opponents seek to exploit their opponent's weaknesses, and just because one has a relative strength in one area does not mean you have an absolute advantage. I just think that in this area we have a large potential weakness that would be hard to shore up against China.

about a week ago
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Preparing For Satellite Defense

alexander_686 Re:New potential battleground? (117 comments)

Asymmetric warfare. The US has more space assets and is more heavily dependent on them. If space warfare ever occurred the US would be hurt relatively more. And I have a hard time of thing of any decent countermeasures.

about a week ago
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Lenovo Halts Sales of Small-Screen Windows 8.1 Tablets Due To "Lack of Interest"

alexander_686 Re:Lenovo is overpriced (125 comments)

But it is headquartered in America, has factories in America, and is run like a real independent stock company. Not giving it a complete pass but let us try to put things in perspective.

about a week ago

Submissions

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Microsoft to Buy Nokia's Devices Unit for $7.2 Billion

alexander_686 alexander_686 writes  |  about a year ago

alexander_686 (957440) writes "On the heels of CEO Steve Ballmer announcing his resignation, it looks like Microsoft is going to be buying Nokia’s handset unit. Nokia is currently a big cheerleader for the Window’s 8 phone. Stephen Elop was a Microsoft employee, then Nokia’s CEO, and is now stepping down. He will be the head of the handset division after the sale is finial. Elop is the current front runner to replace Ballmer when he steps down in a year."
Link to Original Source
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Microsoft may invest $1B-$3B in Dell buyout

alexander_686 alexander_686 writes  |  about a year and a half ago

alexander_686 (957440) writes "We have talked about Michele Dell In Buyout Talks With Private-Equity Firms

Now the Talk is that Microsoft may invest 1 to 3 billion. I personally doubt Microsoft is going for majority ownership but it would be a significant stake. Dell is worth around 22b to 25b. Speculation is that investors would put up 5 to 7b in equity, borrowing the rest. You can do the math to determine the ownership percentage. As a point of reference, Michele Dell’s stock is worth 3.6b

We know about Microsoft’s relationship with Nokia – both in terms of ownership, swap of key personal, and the Window’s phone. Is this a repeat?"

Link to Original Source
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AT&T- Verizon collude to offer poor service

alexander_686 alexander_686 writes  |  about a year and a half ago

alexander_686 writes "I recently found a very good about article How AT&T and Verizon Manipulate Your Smartphone by Susan Crawford. It’s the 2nd excerpt from her book “Captive Audience.”

The two kinds of Internet-access carriers, wired and wireless, have found they can operate without competing with each other. The cable industry and AT&T- Verizon have divided up the world much as Comcast and Time Warner did; only instead of, “You take Philadelphia, I’ll take Minneapolis,” it’s, “You take wired, I’ll take wireless.”

I am a free market type of guy. I do recognize the abuse that can come from natural monopolies that utilities tend to have, but I have never considered this type of collusion before."
Link to Original Source

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SEC investigates Netflix CEO Reed Hastings over Facebook Posting

alexander_686 alexander_686 writes  |  about a year and a half ago

alexander_686 (957440) writes "SEC investigates Netflix CEO Reed Hastings on Facebook Posting

Hastings said in the filing the SEC is questioning his July 1 Facebook posting, seen by 200,000 followers, in which he said customers watched “over 1 billion hours” of videos on Netflix in June. He had previously posted on his company blog that members were viewing “nearly a billion hours per month.”

Rarely, outside of Carl Sagan, have I heard people saying that one billion not significant."

Link to Original Source
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Knight Trading Losses

alexander_686 alexander_686 writes  |  about 2 years ago

alexander_686 writes "Apparently old code never dies – it comes back to haunt you.

From Bloomberg, "Knight Capital Group Inc. (KCG)’s $440 million trading loss stemmed from an old set of computer software that was inadvertently reactivated when a new program was installed, according to two people briefed on the matter.""

Link to Original Source
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Harvard and MIT to provided online classes

alexander_686 alexander_686 writes  |  more than 2 years ago

alexander_686 writes "Harvard and MIT are launching edX with 60 million dollars to offer “low fee” online classes. No word yet on classes offered or who will be teaching. No college credit but certificates will be offered.

The technology used will be open source. Other institutions will be invited at a later date.

I hope low cost means low cost. (Under $25) I have really enjoyed the Stanford University free online classes."

Link to Original Source
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The Nook: From Android to Windows?

alexander_686 alexander_686 writes  |  more than 2 years ago

alexander_686 writes "It looks like Microsoft is buying a large chunk of Barnes & Noble, specifically the Nook and it’s college businesses. While nobody has said anything specific, I think the writing is on the wall on what the next OS system for the next nook is going to be."
Link to Original Source

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