1Google reported Thursday later afternoon and the early morning traders didn't know what to make of the numbers - with the stock gyrating up and down. The following day, CNBC's 2nd annual stock draft stock picking contest ended. Guess what happened? For the impatient, I can put the video here...

Published in BoomBustBlog

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I have received SO MUCH flack over the last year for pointing out the obvious FACT that Apple's phenomenal growth will be hit by Android's extra-phenomenal growth, it has been borderline disheartening. Well, the time is hear folks, and as is usual, logic. common sense and rational thinking rule the day once again. The results should be interesting, if not immediate, for many Apple investors and consumers are beyond loyal and ede to borderline fanatic. This portends much more irrational emotion in decision making and potentially unnecessarily drastic actions in the end. What do I mean? Well, Apple is purportedly just under 7% of the NASDAQ. If the Apple religion falls out of fad... Well, look out below! This may not happen immediately, for the love affair is truly torrid, and all sorts of excuses will be made. At the end of the day (or fiscal year, to be more accurate) the reality is bound to hit that Apple is a C corporation like everyone else and is subject to market pressures and competition, and truly does not fart fairy dust.

Of course, logic would dictate that the (literally) hundreds of hate mails I received should be replaced with hundreds of "Hey, Reg, you were right" mails, but it won't happen due to the fact that the nature of those that generated the hate mails forbids them from examining fact and instead allows them to be guided by a bisection of corporate marketing, brand loyalty and emotion. It should be quite interesting to see what the responses to this article will be in the comments section. This is a long post, but more than worth you time. I urge you to read in its entirety, or at least up until the part that reminisces:

"In our analysis of Apple, we are using real world assumptions of future performance derived from backing in to the low balling this company is prone to. If you look at its history carefully you can gauge what management is comfortable with, hence what they may be capable of on the margin. Using these more realistic numbers, it is much more likely Apple will deliver a miss in the upcoming quarters in its battle with the Android! The following is the reason why..."

Early last year, I started tracking the rapid ascent of ultra mobile computing in my Mobile Computing Wars series. At that time, I didn't have a favored winner, but as I researched more and dug deeper, clear patterns started to emerge. These patterns simply got clearer and stronger as time progressed, and it ended in my putting out highly contrarian research on Google in public - Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google and in substantially more detail in private -the subscriber forensic analysis (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional).

I also issued similarly contrarian research on Apple: File Icon Apple – Competition and Cost Structure).

Of course, the mainstream media and the Sell Side of Wall Street took the opposite sides of these bets, to wit: Goldman’s $430 Target, Screaming Buy On Apple At Its All Time High Is In Direct Contravention To Reggie Middleton’s Logic – Who’s Right? Well, Who Has Been More Right In The Past? and Reggie Middleton Takes The Challenge To Goldman Sach’s Apple Proclamation One Step Farther, Apple’s Closed System Risks Failure!”. Realize that It Should Now Be Common Knowledge That Goldman’s Investment Advice Sucks. Of course, that doesn't necessarily mean that there is any credibility in said proclamations, though. Reference this priceless nugget in light of the links above... Goldman Sells Nearly Half $Billion Of Apple Stock Directly Into Their Client’s Conviction Buy Recommendation: Guess Who Really Agrees With Reggie Now!I'd also like to reiterate, I've Told You Before, And I'll Tell You Again - Goldman Sachs Investment Advice Sucks!!!

Well, as luck would have it, the Street was wrong on Google, see Did A Blog Best Wall Street's Best of the Best In Guaging The True Value of Google? We Have To Think More Like An Entrepeneur & Less Like A Wall Street Analyst July 19th, 2011.

There were wrong on Apple, and to be absolutely honest, they are wrong in general - reference Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best? Not that this tidbit of fact and simple math will stop the sheeple from shoveling over billions upon billions of dollars to this industry to be recycled back into the bonus pool, versus supporting truly independent research such as BoomBustBlog, no matter HOW many times I'm right and they are proven wrong - and it has been a lot, trust me.

We also had pundits in private equity who I would have normally assumed should have know better jump on the Apple wagon, as excerpted from My Thoughts on Roger McNamee's View of Google and Mobile Computing...

Of note, pundit recommended long Apple and short Google for guaranteed profits. Google blew out numbers this quarter (Our Uber Growth Thesis For Google Is Intact and Performing Well) and Apple missed, all the while Google is strategically positioned to do much, much more damage. As for the comment about nobody makes money from Android, well those entities that make money from Android disagree. I have outlined this in the first quarter, reference Apple Gears Up To Combat The Margin Compression That Apparently Only It, Google & Reggie Middleton Sees Coming Monday, February 14th, 2011.

On this point, I must give props to Herb Greenberg for allowing me to espouse my contrarian, yet highly accurate mantra concerning Apple as well as US banks' derivative exposure through the mainstream, namely CNBC. The derivate issues have recently reported by Bloomberg and ZeroHedge, reinforcing my many warnings, ex. So, When Does 3+5=4? When You Aggregate A Bunch Of Risky Banks & Then Pretend That You Didn't?

Of course, as timing would have it, I predicted that Apple would miss 4 to 6 quarters after the pronouncement I made on international TV exactly 1 year ago via CNBC on the eve of Apple's earnings (3:40 into the video). Exactly 4 quarters later.... Hmmm!

Simple math, simple business logic, simply common sense, yet the Apple hordes attacked relentlessly. Listen, what Google has created to compete with Apple, RIM, MSFT and Nokia, was not a new technology - but a new way of doing business. Less than free was their new business model and it proved to be pretty damn effective.

Margin compression follows a slip in sales due to competition. You see, in order for Apple to maintain its unit growth, it wiill have invest more into the product, cut costs, or both. Any scenario leads to margin compression. Since I have written so much on this topic, I will not rehash, but simply point to the prophetic post I made two weeks ago in calling for what I considered to be the obvious: Sliced Apple Margins For Dinner?

In the meantime, let's parse today's news event: Apple Misses Big on Earnings, Revenue; Shares Tumble

Apple posted a rare miss on both earnings and revenue as far fewer iPhones were sold during the quarter than expected. Shares tumbled after-hours.

Again, it's Apple's expectations that will be the eventual undoing of this company as an investment. They are simply unrealistic, as I will get to in a moment, but first I'd like to point out the extreme favoritism that is still given to this company by the MSM.

Bloomberg reports: Apple Misses Estimates on Delayed Sales

Apple Inc. (AAPL) fell in German trading after profit missed analysts’ predictions for the first time in at least six years, evidence that customers delayed iPhone purchases before the release of the latest model.

This statement is bullshit. Customers delay purchases right before the release of every new model, yet that somehow didn't cause a miss for the iPhone 3G, the iPhone 3GS and the iPhone 4, did it? iPhone's sales dissappointed for one reason, and one reason only!!!


Profit was $6.62 billion, or $7.05 a share in the fiscal fourth quarter, compared with $4.31 billion, or $4.64 a share, a year earlier, Cupertino, California-based Apple said yesterday in a statement. That missed analysts’ predicted profit of $7.31 a share, the first disappointment from Apple in at least 26 quarters.

Apple sold 17.07 million iPhones, less than the 20 million projected by analysts surveyed by Bloomberg, as consumers held out for the iPhone 4S, released after the close of the period that ended Sept. 24. The shortfall underscores the growing importance to Apple for the iPhone, which was introduced in 2007 and accounted for 39 percent of revenue last quarter.

“The market was expecting very strong iPhone sales going into the product launch,” said Giri Cherukuri, head trader at Oakbrook Investments LLC, which holds Apple shares. “It stands to reason that a lot of people were waiting for the new iPhone to come out.”

Again, Bullshit! Why didn't this phenomena occur during the last three product launches? Oh yeah, that's right, because Android wasn't up to speed by then.

Apple shares dropped as much as 7.3 percent to the equivalent of $391.75 in German trading and were down 6.4 percent as of 9:03 a.m. in Frankfurt. Yesterday, the stock fell 6.3 percent to $395.50 in extended U.S. trading. The stock had closed at $422.24 in New York.

Sales of the smartphone are rebounding this quarter, and the decline in Apple shares represents a “buying opportunity,” said Cherukuri, whose firm is based in Lisle, Illinois.

Yeah, and thereing lies the problem, shares of Apple are always a buying opporutunity, no matter what the facts or circumstances are, right?

As excerpted from Apple on the Margin:

Writing about Apple is like writing about gold, despite the fact that there is a strong fundamental argument for or against it, the emotional response and lack of empirical outlook clouds the fundamentals, ex. Apple  and the iPhone vs Android or Gold and fiat currencies/inflation. I am not a Apple hater, and I am probably one of the most advanced iPad users you know of. Apple has its pluses and minuses, but people (including many professionals) are failing to look at the facts and instead are joining their respective "fanboi" clubs. Thus, in continuing with my attempt to educate my readers on the folly of believing Apple's position to be unassailable, I am illustrating exactly how vulnerable Apple is to either a compression of margin on the iPhone or a slow down in sales. Apple is just penetrating the market and has a fertile field to conquer, it is just that it will not be able to pursue that field devoid of competition as it has over the past 3 years. This should dictate an adjustment to the highly optimistic aura attached to the multiples used in forecasting economic results.

The graph below illustrates the importance the iPhone represents to Apple's franchise. Believe it or not, this graph actually understates the importance of the iPhone to Apple for while it brings in 45% of the revenues, it is responsible for about 70% of the profits. Apple has become too reliant on one product, although that reliance was borne from the fabulous success of said product. While Apple will probably derive some much needed revenue diversification from iPad sales, the iPad will face the same hurdles that the iPhone is coming up against - and that is competition from Android-based devices and potentially even Windows Mobile 7 8 (albeit this is an admittedly much more speculative statement).

Breaking the argument down even further, you see how the iPod and the iPhone have literally transformed this company. While I am sure it will continue to be fantastic company with cool products, I doubt very seriously that it will be able to grow in the future as it has in during the last 7 years.

The saving grace is that the smart phone and portable computing market will grow quite quickly, allowing companies with dwindling market share to still capture increasing revenues. The ugly reality is that those revenues will have to be burdened with increasing R&D, marketing and distribution costs since the amount of competition will probably scale faster than the market itself. That, my friends, is a very good thing for you and I, the consumer!

All paying subscribers are welcome to download the mini-model which shows Apple's earnings sensitivity to margin compression through competition. This is the very crux of determining the extent of Apple's success or lack thereof, in the near to medium term. Click here to download (File Icon Apple iPhone Profit Margin Scenario Analysis Model), and click here to subscribe.

... Apple said that while iPhone sales fell off last quarter, the holiday quarter will be its best yet. First-quarter per- share earnings will be about $9.30 on sales of about $37 billion, Apple said in the statement.

That surpassed analysts’ projections, suggesting that iPhone sales are bouncing back with the release of the iPhone 4S, which set a record with debut-weekend sales of 4 million.

“In our wildest dreams, we couldn’t have gotten off to as great a start as we did with the iPhone 4S,” Cook said on the call. The drop in demand for iPhones in the second half of last quarter was “substantial,” said Cook.

This may very well be the case. I don't doubt it, but it also doesn't negate the generally stagnating growth trend - see Google's Android Now Leads In Market Share, Growth Rate and Potential Buyer Preference. Apple released a new product on two new carriers, which at best matches (and that's at best, I believe it falls far short) the Android flaghip device from 6 months ago! This much wider distribution network coupled with the iPhone popularity is bound to boost sales, but the popularity of Android (now the number 1 OS, globally and domestically, with the highest growth rate, to boot) make it unliekly Apple can regain the growth crown through marketing alone. It is now quickly becoming common knowledge that high end Android phones such as the Samsumg Galaxy S II series handily outperform anything from Apple thus far. As a result, the sales are becoming more fad generated and less technology/usability driven. We all know what happens to very fad, don't we? Apple will have to invest heavily into the tech, and that ain't free nor is it a guarantee for success. Hence the margin compression thesis. Look to my writings from last summer to determine the common sense reasons why Apple is at risk despite the lovefest that the media, the sell side of Wall Street and the equity markets have for it: . After nearly a year of showing nearly incontrovertible evidence that Apple has seen its heyday, the mainstream media is catching on. First a quick overview of my thoughts...

    1. Look & Listen Closely As The Solitary Margin Compression Theory Slowly Bears Fruit: Apple to Drop Flagship iPad Prices?
    2. Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof! 
    3. Is The Evidence For An Apple Margin Collapse Now Incontrovertible? 
    4. I Absolutely Dare Anyone To Read This And Still Not Consider The Probability (Not Possibility) Of Apple Suffering From Margin Compression

Smartphone Rivals

The new touchscreen handset is vying with new smartphones from companies including Samsung Electronics Co. and HTC Corp. (2498), which use Google Inc.’s Android operating system.

As excerpted from "Is The Evidence For An Apple Margin Collapse Now Incontrovertible?" 5/19/11:

This is going to be a much tougher fight for Apple than even that of the smartphone market, and you see how well Android did in that category as the current market leader in both footprint and growth rate. Literally98% more competition is coming down the pike this year, and products are already widely reviewed as at parity or superior in Apple's chief diversification segment (remember, derives ~70%  of its profits from the iPhone). With that, even the iPhone is supremely challenged by Apple's own parts vendors, Reference :

Apple's biggest suppliers (the most important parts vendors for the products that contributes about 75% of Apple's profits) and the companies that Apples is currently embroiled in global litigation with (no wonder why) also produce similar products, ex. the LG Optimus 3D and the Samsung Galaxy S II.

Speaking of the Samsung Galaxy, this newest refresh is nearly universally thought of to be the best smartphone available, including the Apple iPhone. I haven't found a single review yet that has said otherwise. This is an impressive feat considering how "Apple-centric" the media currently is. Reference this snippet from Endgadget:

For a handset with such a broad range of standout features and specs, the Galaxy S II is remarkably easy to summarize. It's the best Android smartphone yet, but more importantly, it might well be the best smartphone, period. Of course, a 4.3-inch screen size won't suit everyone, no matter how stupendously thin the device that carries it may be, and we also can't say for sure that the Galaxy S II would justify a long-term iOS user foresaking his investment into one ecosystem and making the leap to another. Nonetheless, if you're asking us what smartphone to buy today, unconstrained by such externalities, the Galaxy S II would be the clear choice. Sometimes it's just as simple as that.

Endgadget is not the only reviewer to go head over heals over Android super-powered phones. Check it out, courtesy of onlinesocialmedia.net:

    1. Dan Sung of Pocket-Lint rates the phone with 4.5 out of 5 stars and calls it a “cracking experience” and like Engadget, “better than any other Android smartphone.” Very minor complaints included the 1080p DLNA streaming, which was noted could be better, plus minor quibbles with the camera lens but overall the conclusion is that “no one buying this superphone will have anything to complain about.
    2. Chris Davies over on Slash Gear. Guess what, Davies also says, “this could well be the best Android smartphone on the market today” and noted that iPhone users that were shown the Galaxy S II said they could have their heads turned by it. There were minor criticisms, such as the keyboard, but these were said to “pale in comparison to the Samsung’s strengths.” In conclusion Davies says “we’re running out of reasons not to buy the Galaxy S II.”
    3. Electric Pig by Ben Sillis, who gave the phone a staggering 5 out of 5 star rating and says “Samsung has triumphed again with theSamsung Galaxy S 2.” There are some quibbles about software in this review but not enough to get in the way of it being a “surefire contender for phone of the year,” and again the superb display gets a special mention.

... Apple’s fourth-quarter revenue was $28.3 billion, below the $29.6 billion predicted by analysts. Missing expectations caught investors by surprise since the company has so consistently beaten predictions. During the previous 19 quarters, Apple had exceeded profit estimates by an average 28 percent, according to Piper Jaffray Cos.

‘Clueless’

“Shame on me and other investors who got lulled into complacency based on how much they’ve beaten estimates in the past,” said David Rolfe, chief investment officer at Apple investor at Wedgewood Partners Inc.

Apple had said in July that it expected sales and profit to fall because of changes to its product lineup.

“It’s not the company that missed, it’s the people who follow Apple that are clueless,” said Trip Chowdhry, an analyst at Global Equities Research in San Francisco.

Analysts may revisit projections that Apple will continue to grow at a record rate and exceed estimates, said Michael Obuchowski, chief investment officer at First Empire Asset Management.

“That the company can maintain the growth rate that some of the analysts envision is not very realistic,” he said. “There will be a reevaluation of the analysts’ expectations.”

"Clueless"! “Shame on me and other investors who got lulled into complacency"!

Taken right out of the Reggie Middleton playbook! Refereince Apple Once Again Surprises The Unsurprisingly Inept Analyst Estimates: When Will Investors Catch On To The Earnings Management Game?: I will repost (for the 6th time) the earnings guidance snippet and challenge readers to possibility that we may have a very valid point.

In the meantime, sheeple-like investors are being hoodwinked by quarter after quarter of Apple blow out earnings. Don't get me wrong. I feel and fully acknowledge that Apple is executing on all 8 cylinders of a 6 cylinder engine, but it still has its real world limitations. Apple will start to bump up against these limitation over the next 4 quarters, and the signs of this bump are already apparent. Of course, the signs are being handily masked by the games that Apple management and the sell side analysts of Wall Street play, with the "Sheeple" retail and the lazier component of the institutional investors being put out to take the eventual bullet.

Riddle me this - If Apple can consistently beat the estimates of your favorite analysts quarter after quarter, after quarter - for 11 quarters straight, shouldn't you fire said analysts for incompetency in lieu of celebrating Apple's ability to surprise? After all, it is no longer a surprise after the 11th consecutive occurrence, is it? I would be surprised if my readers were surprised by an Apple surprise. Seriously! Apple management consistently lowballs guidance to such an extent that it can easily manage, no - actually create outperformance. This has has a very positive effect on their valuation. Of course, I do not blame Apple management for this, of they are charged with maximizing shareholder return. The analytical community and the (sheeple) investors which they serve is another matter though. Subscribers can download the data that shows the blatant game being played between Apple and the Sell Side here: File Icon Apple Earnings Guidance Analysis. Those who need to subscribe can do so here.

Below, I drilled down on the date and used a percentage difference view to illustrate the improvement in P/E stemming from the earnings beats.

In our analysis of Apple, we are using real world assumptions of future performance derived from backing in to the low balling this company is prone to. If you look at its history carefully you can gauge what management is comfortable with, hence what they may be capable of on the margin. Using these more realistic numbers, it is much more likely Apple will deliver a miss in the upcoming quarters in its battle with the Android! The following is the reason why...

In the meantime, more inaccurate and uncalled for Apple bias in the media that will do naught but cause losses for investors that bother to pay it any attention... Bloomberg reports Google, Samsung Announce Updated Android Phone:

“Ice Cream Sandwich could provide the critical push in the race to catch Apple,” said Mark Newman, an analyst at Sanford C. Bernstein & Co., who is based in Hong Kong. “Apple’s software is still on the cutting edge.”

This is outright nonsense! Apple's most recent OS5 release simply brings iOS up to par with what Androids are currently running since the beginning of this year. As a matter of fact, as of today, Apple's tech is still behind since Google just released an OS update (Ice Cream Sandwich) that again puts it leaps and bounds above the Apple OS. 

Apple’s new iPhone was unveiled earlier this month with Siri technology, which lets users ask for weather updates, make calendar appointments or send messages without tapping on the keyboard. The iPhone is the company’s best-selling product.

The article fails to mention that this feature was available in Android from the beginning of the year, at least. Again Apple is playing catch up, but it has not yet caught up!

The latest Android incarnation also offers easier multitasking and a new People app, which helps check status updates from Google+ and other social networks.... Android controlled 43.4 percent of the global smartphone market in the second quarter, while Apple’s iOS had an 18.2 percent share, according to researcher Gartner Inc.

This is up from zero hust three or so years ago, reference:

  1. More of the Android Onslaught: Increasing Handset Revenues and Growth
  2. The Complete, 63 pg Google Forensic Valuation is Available for Download

For tablets, Apple’s iOS dominated with 61.3 percent market share in the second quarter, according to research company Strategy Analytics. Android accounted for 30.1 percent of the tablet market.

Take note that the the tablet market is taking a very similar path to the phone market where Apple started with ~90% share and dropped very, very quickly with no explicit recognition of such from the media or the sell side. Reference:

 

Archived 2010 posts on the Creatively Destructive Pace of Technology Innovation and the Paradigm Shift known as the Mobile Computing Wars!

  1. There Is Another Paradigm Shift Coming in Technology and Media: Apple, Microsoft and Google Know its Winner Takes All
  2. The Mobile Computing and Content Wars: Part 2, the Google Response to the Paradigm Shift
  3. An Introduction to How Apple Apple Will Compete With the Google/Android Onslaught
  4. This article should drive the point home: 
  5. A First in the Mainstream Media: Apple’s Flagship Product Loses In a Comparison Review to HTC’s Google-Powered Phone
  6. After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
  7. RIM Smart Phone Market Share, RIP?
  8. Android is gaining preference as the long-term choice of application developers
  9. A Glimpse of the BoomBustBlog Internal Discussion Concerning the Fate of Apple
  10. Math and the Pace of Smart Phone Innovation May Take a Byte Out of Apple’s (Short-lived?) Dominance
  11. Apple on the Margin
  12. RIM Smart Phone Market Share, RIP?
  13. Motorola, the Company That INVENTED the Cellphone is Trying to Uninvent the iPad With Android
  14. Android Now Outselling iOS? Explaining the Game of Chess That Google Plays in the Smart Phone Space
  15. More of the Android Onslaught: Increasing Handset Revenues and Growth
  16. The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
  17. The Complete, 63 pg Google Forensic Valuation is Available for Download
  18. iSuppli Continues to Validate BoomBustBlog’s Original Thesis: Android as the Viral Game Changer!
  19. BoomBustBlog Research Hits Another One Out the Park! Google up nearly 10% after hours, true blowout earnings unlike JPM
  20. As I Warned in June, DO NOT DISCOUNT Microsoft in This Mobile Computing War! Their Marketing Campaign is PURE GENIUS! and it Appears as if the Phone Ain’t Bad Either
  21. Reggie Middleton Wasn’t the ONLY Openly Apple Bear in the Blogoshpere, Was He?
Published in BoomBustBlog

Subscribers can expect fresh banking research to be released this weekend. In the meantime, CNBC reports that our (lone) bullish outlook on Google is on point: Google Earnings Blow Past Expectations; Shares Surge 13 Oct 2011

Google earnings and revenue blew past expectations, sending its shares sharply higher in after-hours trading.

Google shares finished the day at $558.99 and jumped more than 5 percent after-hours. 

"Christmas came early for Google shareholders," said Colin Gillis, an analyst at BGC Partners. "It was a great beat on the bottom line. It's not necessarily because they are controlling expenses. It's because they are driving more revenue," he said.

This driving of revenue is not inclusive of several multi-billion dollar start-up ventures that Google appears to be successfully nursing to the point of generating earnings. We are very, very optimistic about the Android initiative, which in three short years has become the dominant mobile OS in the world, up from virtually nothing (see below). Their expanding cloud services now offer a credible challenge in the enterprise SaaS space, actually winning large municipal and corporate accounts from Microsoft's Exchange Server. Display ad revenues are expanding rapidly as is their core bread and butter search ads (which they are wisely, aggressively and relatively rapidly diversifying away from).

The technology company reported earnings excluding items of $9.72 a share, up from from $7.64 per share a year ago. Net income rose to $2.73 billion from $2.17 billion. Net revenue, which excludes fees that Google shares with partner websites, increased 37 percent to $7.51 billion from $5.48 billion last year.

Analysts had expected Google to post earnings of $8.74 per share on net revenue of $7.22 billion.

Again, a total misunderstanding of how this company operates and the massive value embedded within in the form of a series of implicit, premium free call options.

"A lot of people were expecting spending to be out of control, but they had good control," said Herman Leung, an analyst with Susquehanna Financial Group.

That's because they couldn't differentiate between spending and investing. The investments are paying off quite handsomely, both in a vaccuum and in comparison to historical results, and the company has kicked investment into overdrive. If a similar ROI can be achieved over the next year or two, this company will be minting value and owning even more spaces in the Web, the Cloud, social media, advertising and mobile computing.

Google said they're getting a good  response to their Google Plus social-networking site, which just passed the 40-million user mark.

By far and large, the only credible extant threat to Facebook (see Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!).

Aggregate paid clicks, which come from ads on Google sites and its AdSense partners, rose 28 percent from a year earlier and the average cost-per-click increased 5 percent from a year earlier. Though, cost-per-click was down sequentially by 5 percent from the second quarter.

"The digital economy is still strong. Google is capturing all the economics from this and we are moving into the sweet spot when investors want to own Google," Gillis said.

And to think, this is the core revenue driver that the skeptics feared Google would lose control of, and be subject to excessive competition.

As excerpted from my diatriabe illustrating Google's performance from the 2nd quarter: Did A Blog Best Wall Street's Best of the Best In Guaging The True Value of Google? We Have To Think More Like An Entrepeneur & Less Like A Wall Street Analyst July 19th, 2011

First of all, congratulations to all BoomBustBlog subscribers that have recieved windfall profits on their researched Google positions for the second time in less than a calendar year. Google traded down to a 4 handle as recently as a couple of weeks ago and the January 880 calls (which I kept in inventory) were trading as cheap as 5 cents each. As I type this, those same options last traded at $1.40 each (now down to 1.05)- that's a 21x-26x return! 

Google's latest quarterly results should lead many - if not most - to believe Reggie Middleton and his team at the BoomBust bests ALL of Wall Street's sell side research. For previous examples (a lot of them), reference Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?

It is now well known that Google has once again knocked the ball out of park with their performance. Those who follow my blog know that I have been bullish on Google since the spring/summer of last year, with signfiicant profits being taken along the way. Many on the Street have turned rather negative on Google despite some of the most positive results and promising actions of its history, and in the industry! Why is that? How did I see so much value in Google while the Street was remiss, only to be taken totally and utterly by surprise? Let's take a historical traipse of my take on Google, but first we peruse the "short term-ities", looking forward only three months at at time mentality of Wall Street to ascertain why only Reggie Middleton's BoomBustBlog screamed on the The Gross Misvaluation of Google. [Subscribers, please follow along with the subscription documents - Google Q1 2011 earnings review - Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google and the subscriber forensic analysis (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional).]

....

Has Google given investors a reason to believe in Page's diatribe?

Reference the BoomBustBlog post, A Realistic Look At The Success Of Google's Investment History

As promised, I am presenting historical justification of the logic behind my call of absurdity in the drastic drop in share price after Google announces a redoubled effort in investment and marketing of its nascent businesses. I went into the logic in detail via our Google Q1 2011 earnings review - Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google. The following pages are excerpted the subscriber forensic analysis (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional).

To begin with, Google apparently realized early on that it could better realize returns by investing shareholder capital through acquisitions. It has actually been quite acquisitive, making 88 purchases over the last 13 year. Last year was Google's most acquisitive year, ever!

While many of the referenced acquisitions have been to bolster existing products, several have literally become home runs - rising to the top of their respective categories and even threatening to go farther in that hey have the distinct potential to creatively destroy the status quo of several multi-billion dollar industries. Let's walk through a sampling.

Doubleclick + Youtube + Google TV (organically grown)

This combination is probably the closest thing to a direct replacement for TV as we know it. Even if Google TV does not succeed, YouTube is currently the most watched video site, by far and Doubleclick (for monetization, along with adsense style ads) is the 2nd largest display ad entity. Again, the potential to reconfigure the TV industry. Google is already seed funding original content and cutting licensing (streaming rental) deals with the large established studios. The ability to threaten TV as we know it was purchased for just over $1 billion. A pretty good investment, no? Would the NY Times parent co., Fox, Disney, NBC/Universal have considered this a wise purchase?

Admob and Android

For a mere $250 million (plus ongoing support and development costs and investments), Google now commands the largest global footprint of mobile phone OS, the fastest global mobile phone OS growth rate, the largest (by a very, very wide margin) mobile ad presence, and inarguably the most disruptive force in mobile computing. What tech, media, telecomm or strategic investment company would NOT by the Android/Admob combo now for 10xor eve 15x what Google paid for it? Microsoft, Nokia, Apple, Samsung, LG, RIM, Oracle, IBM, HP, anyone???

The list of strategic acquisitions that have paid off in spades goes on, as well as the requisite flops that go along with a high volume strategy.

So, assuming that Google has done a good job at spending its shareholder's money and sprouting several billion dollar businesses to assist in the diversification away from pure web search advertising - and realizing that last year was Google's most acquisitive to date, and realizing that Google is dumping more money into research, marketing, headcount and acquisitions now than in any time in its existence (including last year), should you be bullish on the stock? Three or four more Androids, YouTubes, Admobs and Doubleclicks to disruptively take over 5 or six more multi-billion dollar industries is a reason to lop 15% off of this stocks price (which currently barely accounts for just the search engine potential)???

As excerpted from Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google:

For the quarter ended March 31, 2011 Google reported gross revenues (before traffic acquisition costs) of $8.58bn, an YoY increase of 26.6% and QoQ increase of 1.6% while net revenues (after traffic acquisition costs) increased 29.1% YoY and by 2.6% sequentially to $6.54bn. The YoY growth in gross and net revenues was the highest at least since 2008 demonstrating a increasingly momentum in the growth of Google’s digital ecosystem. The increase in net revenues (after TAC) was actually stronger than the increase in gross revenues, indicating that Google has not only packed in growth but lowered aggregate top line expenses.

 However, despite a strong set of results the stock took a severe beating and was down c8% as the results were short of analyst expectations. The market’s reaction to Google’s numbers clearly reflects the very myopic view of US public markets wherein a stock is dumped if it fails to beat consensus – even when this view clearly overlooks the broader picture.

Google’s adjusted earnings came in at $8.08 a share below the $8.17 expected by the markets. However, a closer look at the results reveals that the perceived shortcoming was not a result of a revenue miss or margin compression but on account of Google’s entrepreneurial (and quite applaudable – at least from this investor’s perspective) endeavor to invest heavily in future projects. The miss was principally due to higher research and development expenses as the company continues to invest in new emerging businesses like Display, Mobile and Enterprise. Research and development expenses (including stock based compensation expenses) grew 50% YoY to $1.2bn and was 14.3% of gross revenues in Q1 2011 vs. 12.5% in Q4 and 12.1% in Q1 2O10. Had research and development expenses at 12.5% of gross revenues, the earnings would have been $8.51 per share, a clear beat to consensus and stock would have seen a roller coaster ride – despite the fact that future prospects would have been a fraction of that they are now due to lower investment in the future. Google has proven that their investments yield superior returns to that of cash holdings, ex. Youtube, Android, Admob, Google Voice, Teracent, etc. Instead, the stock was pushed down 8% as the shorter term players in the market reacted. Players such as sell side analysts whose employers benefit from the shorter horizon churning of stocks vs. a longer horizon and outlook, and traders who act on price movement and not value, were(are) clearly tangled between web of OPEX (ongoing cost for running a product, business, or system) and CAPEX (expenditures creating future benefits).

You see, the Street has become so accustomed to playing the earnings management game with their favored companies that most of them have actually lost the ability to ascetain true value outside of quarterly accounting earnings!

Published in BoomBustBlog

Bloomberg reports: Google Hands HTC Patents to Use Against Apple

 

rimm.goog.aapl

Apple reported blowout numbers and a record quarter yesterday. Not one, that's right,HTC Corp., Asia’s second-biggest smartphone maker, is using nine patents bought from Google Inc. (GOOG) last week to pursue new infringement claims against Apple Inc.

Google had taken ownership of the patents less than a year ago, with four of the patents originating from Motorola Inc., three from Openwave Systems Inc. and two from Palm Inc., according to U.S. Patent and Trademark Office records. 

HTC now has more ammunition in its fight to fend off multiple patent-infringement claims lodged by Apple that contend phones running Google’s Android operating system copy the iPhone. Google’s involvement in aiding HTC represents a new front in an industrywide dispute over smartphone technology that has also ensnared Android customers Motorola Mobility Holdings Inc., Barnes & Noble Inc. and Samsung Electronics Co.

“That’s a bit of a game-changer,” said Will Stofega, a technology analyst at Framingham, Massachusetts-based IDC. “Google was interested in protecting its licensees with Android. It shows they need to support their customers in order to make sure the customers stick with them.”

HTC sued Apple yesterday in court and filed a complaint at the U.S. International Trade Commission, alleging infringement of the patents obtained from Google.

Google, which hasn’t been sued directly by Apple, has been criticized for sitting on the sidelines while its Android partners faced lawsuits. Taoyuan, Taiwan-based HTC, which gained attention in the U.S. by making the first phone to run Android, has defended itself partly by bringing two infringement cases against Apple at the trade commission in Washington, one submitted last year and another last month.

HTC also agreed to buy closely held S3 Graphics Co. less than a week after that company won a preliminary patent ruling against Cupertino, California-based Apple.

“Google knows that HTC is under tremendous legal pressure from Apple and clearly on the losing track,” Florian Mueller, a Munich-based consultant and intellectual property activist. “This intervention on Google’s part increases the likelihood of direct litigation by Apple against Google.”

I'm not so sure of this. This is more than a tit for tat schoolyard brawl. Apple faces significant risk in attacking Google directly after it has acquired the Motorola porfolio and Motorola directly. Remember, Apple is now effectively a smartphone and tablet company, as defined by both profit and revenues. In this position, it is actually quite vulnerable to a full out battle with the holder of 17 patents from the originator of the cell phone!

As excerpted fromfile icon Apple - Competition and Cost Structure 05/16/2011:

 Apple_-Competition_and_Cost_Structure_Page_08

Apple_-Competition_and_Cost_Structure_Page_10

And back to the Bloomberg article...

Google, which had been issued fewer than 1,000 patents as of the start of this year, had said it would build a stronger patent portfolio as a defense against intellectual property lawsuits. It made good on that promise last month when it agreed to spend $12.5 billion to buy Motorola Mobility, acquiring more than 17,000 patents.

HTC sued Apple in federal court in Delaware, claiming infringement of four of the patents obtained from Google and originally issued to Motorola before it split into Motorola Mobility and Motorola Solutions Inc. Google acquired one of the patents in October, two in February and one in March, according to the PTO.

And herein lies the risk to Apple's directly challenging both the largest and easily the most aggressive patent holder and OS vendor in the industry...

The lawsuit contends the Mac computer, iPhone, iPod, iPad, iCloud and iTunes are infringing patents for a way to upgrade software wirelessly; a way to transfer data between a microprocessor and a support chip; a method to store user preferences, and a way to provide consistent contact between application software and a radio modem.

Anything that materially hinders iPhone and iPad sales effectively hindes 70% to 80% of Apple's profits! A direct challenge to Google (post patent portfolio and Motorola Holdings acquiistion) is a risky proposition, indeed!

HTC also amended a complaint with the trade commission yesterday, adding five of the former Google patents to a case that targets many of the same products. Three of those patents Google bought from Openwave and two others had been owned by Palm, which was acquired by Hewlett-Packard Co. (HPQ) last year.

It is also a shame that Google's management was able to, in such short order, monetize the assets of Motorola in so much more an efficient manner than Motorola's own management was able to. It goes to show which company has - by far - the most astute and strategic management team.

The patents in the ITC case relate to an interface that lets the user add identifiers such as .com or .org; an interface that enlarges characters being typed; a way to display information on mobile devices; and status bars that let a user check phone calls, text messages or calendar events.

“HTC will continue to protect its patented inventions against infringement from Apple until such infringement stops,” HTC General Counsel Grace Lei said yesterday. “We believe that we have an obligation to protect our business, our industry partners and our customers, who love using our products.”

Google transfered the nine patents to HTC on Aug. 29 and the transactions were recorded by the patent agency on Sept. 1.

Openwave, a Redwood City, California-based maker of software for mobile phones, filed its own patent-infringement complaints against Apple and Research in Motion Ltd. last month.

The ITC case is In the Matter of Certain Electronic Devices with Communication Capabilities, Complaint No. 2841, U.S. International Trade Commission (Washington). The earlier civil case is HTC Corp. v. Apple Inc. (AAPL), 11-cv-715, U.S. District Court, District of Delaware (Wilmington).

This is very interesting indeed. If you recall, the vast majority of the non-Android industry ganged up on Google to prevent it from acquiring the Nortel patents. Google bid a whimsical derivative of Pi, which many thought was a foolish game beling played in a most serious arena... That is until they realized that Google was just causing the industry to bid up the value of these patents as it acquired the most valuable smartphone patent portfolio of all, that of the originator of the original cell phone, the original flip phone, and the largest holder of smartphone related patents in the industry - not to mention one of the top players in the cell phone industry itself (see Now, Apple Has a Direct Competitor That May Make Samsung Look Conservative In Comparison). This put Google in a very strategic position and it has already proved that it is willing to use its weapons quite aggressively to defend its turf of spreadng the negative margin, open source OS throughout the world.

This is a significant threat to Apple, Microsoft/Nokia and RIM, for Android's popularity goes way beyond lighting fast technological development and hardware diversity (see As Forecast Last Year and Clearly Demonstrated This Year, Research in Motion's Problems Are Far From Over). It's business model of "less than free" is literally beyond contagious, and if not checked will easily become (actually, it already is - in less than three years time) the dominant ultra mobile computing platform.

Google has succeeded in transforming itself into an entity that goes far, far beyond search and internet ads. Despite this transformation, many in the sell side simply seem not to understand the tremendous value locked within, and with the market about to correct very hard, a sigifinicant buying oppurtunity for the longer term investor may be manifest,

Did A Blog Best Wall Street's Best of the Best In Guaging The True Value of Google? We Have To Think More Like An Entrepeneur & Less Like A Wall Street Analyst

First of all, congratulations to all BoomBustBlog subscribers that have recieved windfall profits on their researched Google positions for the second time in less than a calendar year. Google traded down to a 4 handle as recently as a couple of weeks ago and the January 880 calls (which I kept in inventory) were trading as cheap as 5 cents each. As I type this, those same options last traded at $1.40 each (now down to 1.05)- that's a 21x-26x return! 

Google's latest quarterly results should lead many - if not most - to believe Reggie Middleton and his team at the BoomBust bests ALL of Wall Street's sell side research. For previous examples (a lot of them), reference Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?

It is now well known that Google has once again knocked the ball out of park with their performance. Those who follow my blog know that I have been bullish on Google since the spring/summer of last year, with signfiicant profits being taken along the way. Many on the Street have turned rather negative on Google despite some of the most positive results and promising actions of its history, and in the industry! Why is that? How did I see so much value in Google while the Street was remiss, only to be taken totally and utterly by surprise? Let's take a historical traipse of my take on Google, but first we peruse the "short term-ities", looking forward only three months at at time mentality of Wall Street to ascertain why only Reggie Middleton's BoomBustBlog screamed on the The Gross Misvaluation of Google. [Subscribers, please follow along with the subscription documents - Google Q1 2011 earnings review - Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google and the subscriber forensic analysis (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional).]

....

Has Google given investors a reason to believe in Page's diatribe?

Reference the BoomBustBlog post, A Realistic Look At The Success Of Google's Investment History

As promised, I am presenting historical justification of the logic behind my call of absurdity in the drastic drop in share price after Google announces a redoubled effort in investment and marketing of its nascent businesses. I went into the logic in detail via our Google Q1 2011 earnings review - Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google. The following pages are excerpted the subscriber forensic analysis (63 pg Google Forensic Valuation, to plug in your own assumptions see Google Valuation Model (pro and institutional).

To begin with, Google apparently realized early on that it could better realize returns by investing shareholder capital through acquisitions. It has actually been quite acquisitive, making 88 purchases over the last 13 year. Last year was Google's most acquisitive year, ever!

While many of the referenced acquisitions have been to bolster existing products, several have literally become home runs - rising to the top of their respective categories and even threatening to go farther in that hey have the distinct potential to creatively destroy the status quo of several multi-billion dollar industries. Let's walk through a sampling.

Doubleclick + Youtube + Google TV (organically grown)

This combination is probably the closest thing to a direct replacement for TV as we know it. Even if Google TV does not succeed, YouTube is currently the most watched video site, by far and Doubleclick (for monetization, along with adsense style ads) is the 2nd largest display ad entity. Again, the potential to reconfigure the TV industry. Google is already seed funding original content and cutting licensing (streaming rental) deals with the large established studios. The ability to threaten TV as we know it was purchased for just over $1 billion. A pretty good investment, no? Would the NY Times parent co., Fox, Disney, NBC/Universal have considered this a wise purchase?

Admob and Android

For a mere $250 million (plus ongoing support and development costs and investments), Google now commands the largest global footprint of mobile phone OS, the fastest global mobile phone OS growth rate, the largest (by a very, very wide margin) mobile ad presence, and inarguably the most disruptive force in mobile computing. What tech, media, telecomm or strategic investment company would NOT by the Android/Admob combo now for 10xor eve 15x what Google paid for it? Microsoft, Nokia, Apple, Samsung, LG, RIM, Oracle, IBM, HP, anyone???

The list of strategic acquisitions that have paid off in spades goes on, as well as the requisite flops that go along with a high volume strategy.

So, assuming that Google has done a good job at spending its shareholder's money and sprouting several billion dollar businesses to assist in the diversification away from pure web search advertising - and realizing that last year was Google's most acquisitive to date, and realizing that Google is dumping more money into research, marketing, headcount and acquisitions now than in any time in its existence (including last year), should you be bullish on the stock? Three or four more Androids, YouTubes, Admobs and Doubleclicks to disruptively take over 5 or six more multi-billion dollar industries is a reason to lop 15% off of this stocks price (which currently barely accounts for just the search engine potential)???

As excerpted from Google’s Q1 2011 Review: Part 2 Of My Comments On The Gross Misvaluation of Google:

For the quarter ended March 31, 2011 Google reported gross revenues (before traffic acquisition costs) of $8.58bn, an YoY increase of 26.6% and QoQ increase of 1.6% while net revenues (after traffic acquisition costs) increased 29.1% YoY and by 2.6% sequentially to $6.54bn. The YoY growth in gross and net revenues was the highest at least since 2008 demonstrating a increasingly momentum in the growth of Google’s digital ecosystem. The increase in net revenues (after TAC) was actually stronger than the increase in gross revenues, indicating that Google has not only packed in growth but lowered aggregate top line expenses.

 However, despite a strong set of results the stock took a severe beating and was down c8% as the results were short of analyst expectations. The market’s reaction to Google’s numbers clearly reflects the very myopic view of US public markets wherein a stock is dumped if it fails to beat consensus – even when this view clearly overlooks the broader picture.

Google’s adjusted earnings came in at $8.08 a share below the $8.17 expected by the markets. However, a closer look at the results reveals that the perceived shortcoming was not a result of a revenue miss or margin compression but on account of Google’s entrepreneurial (and quite applaudable – at least from this investor’s perspective) endeavor to invest heavily in future projects. The miss was principally due to higher research and development expenses as the company continues to invest in new emerging businesses like Display, Mobile and Enterprise. Research and development expenses (including stock based compensation expenses) grew 50% YoY to $1.2bn and was 14.3% of gross revenues in Q1 2011 vs. 12.5% in Q4 and 12.1% in Q1 2O10. Had research and development expenses at 12.5% of gross revenues, the earnings would have been $8.51 per share, a clear beat to consensus and stock would have seen a roller coaster ride – despite the fact that future prospects would have been a fraction of that they are now due to lower investment in the future. Google has proven that their investments yield superior returns to that of cash holdings, ex. Youtube, Android, Admob, Google Voice, Teracent, etc. Instead, the stock was pushed down 8% as the shorter term players in the market reacted. Players such as sell side analysts whose employers benefit from the shorter horizon churning of stocks vs. a longer horizon and outlook, and traders who act on price movement and not value, were(are) clearly tangled between web of OPEX (ongoing cost for running a product, business, or system) and CAPEX (expenditures creating future benefits).

You see, the Street has become so accustomed to playing the earnings management game with their favored companies that most of them have actually lost the ability to ascetain true value outside of quarterly accounting earnings!


Published in BoomBustBlog

After nearly a year of showing nearly incontrovertible evidence that Apple has seen its heyday, the mainstream media is catching on. First a quick overview of my thoughts...

  1. Look & Listen Closely As The Solitary Margin Compression Theory Slowly Bears Fruit: Apple to Drop Flagship iPad Prices?
  2. How Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall Street Will Enable This Without Sheeple Investor’s Having a Clue.
  3. Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof!
  4. Is The Evidence For An Apple Margin Collapse Now Incontrovertible?
  5. I Absolutely Dare Anyone To Read This And Still Not Consider The Probability (Not Possibility) Of Apple Suffering From Margin Compression
  6. Looking at the Results of Google's "Negative Cost" Business Model Employed Through Android

Now an excerpts from the Mainstream media:

CNBC: Japan Woes Force Scrutiny of Apple's Margins

Monday, 18 April 2011 11:18 PM ET
Apple may provide the first signs this week that the Japanese crisis is pressuring margins, clouding what should otherwise be another dazzling second quarter for the makers of the iPad and iPhone

The Street.com: 8 Knocks on Apple's Stock

Tech stocks in general have not enjoyed much appreciation from Wall Street in 2011, but Apple, a long-time favorite in the group, has had an unusually rough ride. June has been particularly hard for the tech giant, whose shares are down 8% so far this month.... Here are some of the highlights from the checklist of bearish themes on Apple.

  • Product Vacuum

    Oppenheimer is the latest shop Tuesday to warn that the next iPhone will be later than expected. And as first reported by TheStreet, the upgrade this year is minor with the fully-powered 4G LTE iPhone in development for next year.

  • It's the Economy

    The U.S. may or may not be in a double-dip recession and Greece's debt continues weigh heavily on European economies. "I believe investors are scared of a European recession," said MKM Partners Tero Kuittinen, who points to a slowdown in first-quarter phone sales in Europe.

  • It's Technical

    Some technical analysts have studied Apple's charts and found that the stock has fallen through key support levels. For these chartists, the patterns point to continued drops until the stock reaches a price where buyers have been willing to move in before.

  • Google's Android

    While Apple has been selling year-old weakling iPhones, Google Androids have muscled-up with dual-core processors and 4G LTE wireless connections.

    "The Android camp had a huge May in Europe -- Samsung in particular is coming back in a big way, threatening to undercut the aging iPhone over summer months," said Kuittinen.

  • Facebook Apps

    Apple's iron grip on iPhone and iPad apps may have been broken with Facebook's development of its own Web-based programs. Buying Facebook apps from Facebook using an iPhone threatens to remove Apple from the transaction.

  • J.C. Penney's Gain

    Apple's retail brainiac Ron Johnson is off to turn J.C. Penney's(JCP_) business around as its new CEO in November. The departure could threaten the continued success of Apple's retail unit,which boasts $3.2 billion in annual sales and 90% growth.

  • Steve Jobs

    Apple's CEO is on his third medical leave since his bout with pancreatic cancer, but, as he proved earlier this month at Apple's developers' conference, Jobs is still very much around. This proved once more that Jobs, the inspiration behind Apple, remains both ill and irreplaceable.

  • De-Risking

    Fearing those great Apple gains over the years could vanish, investors are cashing in their positions and banking their proceeds. Given the uncertainties of the market, and how strong Apple has been, people aren't eager to risk it.

And there you have it, logic and common sense. Lower prices will lead to lower margins. For those that are paying attention, it is evident that it is already happening. Let's reference the model behind the subscriber document File Icon Apple - Competition, Cost Structure and Forensic Valuation and go through the basic fundamentals, step by step for the iPad and iPhone (together nearly 80% of Apple's profits) are very strategic segments for both Apple and the industry. The Apple short called in the beginning if the year has not been a blockbuster, but was a profitable call nonetheless. If things go as planned, Apple's stock will see some dramatic downside movement at the same time Google moves to take over hte mobile computing space sans legal or regulatory hurdles.

Now, I've told you before, and I'm telling you again, and I'll probably have to tell you several times in the future...

It Should Now Be Common Knowledge That Goldman’s Investment Advice Sucks???

I'm not going to bother to mention that Goldman advised clients to by European banks in direct contravention to my Pan-European Sovereign Debt Crisis research (hopefully, you see how that ended). An equally egregious offense is daring to go against the BoomBustBlog grain on Apple...

Of course, that doesn't necessarily mean that there is any credibility in said proclamations, though. Reference this priceless nugget in light of the links above...

Fear not, oh ye deprived consumers of the truth! Subscribers can access unfettered, unbiased analysis on Apple's situation and prospects, by the numbers: File Icon Apple – Competition and Cost Structure Forensic Analysis and accompanying Apple iPhone Profit Margin Scenario Analysis Model – suggested use with Apple Earnings Guidance Analysis

Published in BoomBustBlog

In "Goldman Seems to Trust the Chinese Economic Reporting a Tad Bit More Than I Do!", "It Doesn't Take a Genius to Figure Out How This Will End" and "He Who Bloweth the Bubble With Wet Lips Should Stand Back Lest Spittle and Saliva Spray Upon Ye Face" I not only declared my opinion that China appears to be enthralled in a massive bubble, but Chinese economic reporting cannot be trusted. There have been a few comments stating that the "new and improved China is not the China of 1989 Tiananmen Square".

It appears that the recent flap with Google security and the censoring of searches sheds light on this debate.

In "Goldman Seems to Trust the Chinese Economic Reporting a Tad Bit More Than I Do!", "It Doesn't Take a Genius to Figure Out How This Will End" and "He Who Bloweth the Bubble With Wet Lips Should Stand Back Lest Spittle and Saliva Spray Upon Ye Face" I not only declared my opinion that China appears to be enthralled in a massive bubble, but Chinese economic reporting cannot be trusted. There have been a few comments stating that the "new and improved China is not the China of 1989 Tiananmen Square".

It appears that the recent flap with Google security and the censoring of searches sheds light on this debate.

Wednesday, 05 August 2009 20:00

Here comes the next paradigm shift in telecomm

I just got this from Google...
You are invited to open a free Google Voice account. If you haven't already heard about it, Google Voice is a service that makes using your current phones much better!

Here's what it offers:
  • A personal phone number that rings all of your existing phones when people call
  • All of your voicemail in one inbox with unlimited online storage and free voicemail transcripts sent to your phone and email
  • Low-priced international calling to over 200 countries and free SMS
  • Other powerful features like the first phone spam filter to protect you from unwanted callers, the ability to ListenInTM on your voicemail messages while they are being left, conference calling and more
To learn more about Google Voice before registering, visit: http://www.google.com/voice/about

Please note that Google Voice is only available for sign up in the US.

We hope you enjoy Google Voice,

The Google Voice Team
Wednesday, 05 August 2009 20:00

Here comes the next paradigm shift in telecomm

I just got this from Google...
You are invited to open a free Google Voice account. If you haven't already heard about it, Google Voice is a service that makes using your current phones much better!

Here's what it offers:
  • A personal phone number that rings all of your existing phones when people call
  • All of your voicemail in one inbox with unlimited online storage and free voicemail transcripts sent to your phone and email
  • Low-priced international calling to over 200 countries and free SMS
  • Other powerful features like the first phone spam filter to protect you from unwanted callers, the ability to ListenInTM on your voicemail messages while they are being left, conference calling and more
To learn more about Google Voice before registering, visit: http://www.google.com/voice/about

Please note that Google Voice is only available for sign up in the US.

We hope you enjoy Google Voice,

The Google Voice Team
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