Thursday, August 31, 2017

Blockchain Believer

Bitcoin was born in 2008. I watched it with mild fascination when it was an infant and remember the milestone of being able to buy pizza with bitcoin. But I was never persuaded that bitcoin was more than a curiosity. I had seen early attempts at digital currency come and go as far back as the early 1990s. Maybe it gained some traction because it was born out of the ashes of the 2008 mortgage fraud crisis, aka the Great Recession. It has survived many scandals, online exchange thefts, a dirty reputation as a currency for criminals, and a recent hard fork (with another one probably coming up at the end of the year). It also gave birth to a thousand copy cats, some with new and improved features.

This was the first year that my curiosity and the skyrocketing price nudged me into really researching it. I am still not persuaded that bitcoin itself will be more than a launchpad, but do believe that one of the technologies used in bitcoin, the blockchain, is destined for greatness. The way the distributed ledger works and the problems that were solved and proven over many years is genius. How it eventually evolves is hard to predict, but I am believer in blockchain technology and the promise of distributed trustworthy applications in the future.

Here is a great short intro video on bitcoin technology:

And here is a longer more technical intro from the same author:

Disclosure: I have a small wager on ethereum and own some ether coins.

Tuesday, March 28, 2017

Cullen Roche's Biggest Myths in Investing

Cullen Roche is currently my favorite financial blogger for many reasons not worth elaborating. He published a list of investing myths that really covers a wide swath of the investing world and I thought worth repeating. Grab a cup of coffee and see if you agree. Good Stuff!

Biggest Myths in Investing

Wednesday, March 22, 2017

She sells shares by the Sears store

According to Reuters, Sears warns of 'going concern' doubts. If you hold Sears shares, that isn't reassuring. It smacks of Chapter 7, turn out the lights and go home.
The warning comes less than six weeks after the company announced what it called the "next phase of its strategic transformation," in which it hoped this year to reduce costs by $1 billion and cut its debt and pension obligations by at least $1.5 billion.
Oh, my. Sears (SHLD) was down 12.3% today and another 3% after hours.

Monday, January 30, 2017

Calculated Risk Comment Site Nuked

During and after the Great Recession, I used to hang out quite a bit on the CalculatedRisk Blog site. The comment section was a separate web site filled with an eclectic, but generally bright mix of people from all walks of life. Each had a different view of the elephant that is our financial system. Over the years, I drifted away, but would still occasionally read the blog posts.

On January 25, the comment site administrator posted that the comment site was shutting down indefinitely.

The last time I visited the comments, some of the old regulars were still there, but there were also some active trolls, doing what the Internet does -- turning everything into Boaty McBoatface. A long time ago, it was useful resource, but it had become a toilet and finally got flushed. Good call, Bill.

Thursday, December 29, 2016

NES classic supply vs demand

A strange thing happened with the launch of the Nintendo classic console that had an MSRP of $60. This box was released mid-November in time for the Xmas season, but was almost never in stock anywhere. All units shipped were sold out within a couple of days and immediately listed online at scalper prices. The first scalper prices on Amazon were in the $250 range. Even now, four days after Xmas, the scalper price has only dropped to $180 and units are still out of stock everywhere. You can't order one from Amazon or Target or Wal*Mart.

I am in touch with Buddha on this item and have absolutely no desire to pay more than $60 for it, even if I never get one. The skewed supply situation has caused me to really examine what this box is worth and by the time they ship enough to kill the scalpers, I may no longer desire one at any price. Either Nintendo really messed up their demand projections or there is something else going on I don't understand. Good luck, Nintendo. I hope your accounting is better than your marketing, and better than Toshiba's.

Thursday, November 10, 2016

Leonard Cohen R.I.P.

We are living in a Leonard Cohen afterworld.
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
-- Leonard Cohen, Everybody Knows
I'm sentimental, if you know what I mean
I love the country but I can't stand the scene.
And I'm neither left or right
I'm just staying home tonight,
getting lost in that hopeless little screen.
But I'm stubborn as those garbage bags
that Time cannot decay,
I'm junk but I'm still holding up
this little wild bouquet:
Democracy is coming to the U.S.A.
-- Leonard Cohen, Democracy

Thursday, October 27, 2016

Twitter Fritter v.11

The losses at Twitter have stabilized at around $100 million per quarter. 3Q2016 showed a net profit of -$102 million. Twitter likes to focus on non-GAAP numbers like eyeballs/tweet, impressions/stock option, and so forth. There was great excitement last quarter as tech heavy hitters sniffed around and acquisition rumors were rampant. Alas, they all found the nearest exit when they found the building was on fire. With no white knight, Twitter says they are going to layoff 9% of their work force. 3.64 million new shares of stock were issued this quarter to keep the company running.

Updated fundamentals:
1/8/2013 - twitter IPO stock price $41.65
1/3/2014 - twitter high stock price $69.00
1/13/2016 - twitter closing stock price $18.69, 682.95 million shares outstanding
5/11/2016 - twitter closing stock price $14.59, 694.85 million shares outstanding
7/28/2016 - twitter closing stock price $16.31, 696.57 million shares outstanding
10/27/2016 - twitter closing stock price $17.40, 700.21 million shares outstanding

Twitter stock price change from IPO price: -58%

Dividend: zilch
EPS: -0.60