Charlie Bottle

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    • My Top 10 Market Predictions for 2009
      Ed, thanks for sharing your views on such a broad rage of areas. One comment: I share your bearishness on China's Economy. In all likelihood it is already contracting. In any case no way you can be vindicated on your berishness as the offcieal figures will certainly not fall below 5%.
      Jan 02 10:20 am |Rating: 0 0 |Link to Comment |View article
    • Treasury Bonds: The Short of the Century
      Hausenpepper, thanks for the comment. For what it's worth, i don't think the time is right yet. For example there is still a decent chance we may see deflation this year, so the real reaturn of hodling these securities may still be positive for the next few months. There needs to be a catalist to jump stratrt downfall of treasuries but not clear what it will be and when itwill happen. when it does get ready for a stampede though.
      Jan 02 10:09 am |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com Worth Half Its Current Price
      GreyhairedFortraDevelo...

      Thank you, your input is highly valued. I'm often wrong. What is the revenue model for The Force exactlly?
      Oct 31 11:00 am |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com Worth Half Its Current Price
      jnoneiliv,

      This article needs to be looked at in conjuntion with my previous one(seekingalpha.com/artic...).

      CRM is a mature $7 billion industry which will contract with the global recession. Salesforce is a second rate palyer in the space with a 10-15% market share competing against much larger players who have become annoyed with them. A price war has begun with Oracle's net suite offering 50% discounts to SF's customers. MSFT has decided to launch a copycat of "the Force", just in case.

      The only hype here is about "the cloud" and "software as a service" and "the Force", what's the big deal with offering applications over the internet? Everyone else is doing it anyway.

      you're right you can look at multiples of sale (3.1X) or book value (6.1X) the conclusuion is the same this is an overpriced stock.
      Oct 29 01:19 am |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com Worth Half Its Current Price
      PenName Dave, yes I meant cash. The Company has negative working capital because they collect cash from customers upfront and provide the services and pay commisions over time (yearly or quarterly). If the revenue becomes flat (imagine new customers are = churn+reduction in prices to keep customers), this would mean deferred revnues would be flat and deferred comissions would either be flat probably decrease (as new sales would have decreased), so the positive cashflow impact would disappear (and possibly turn negative). Also I forgot to mention another big component taht adds to the difference between earnings and operating cashflow is stock based compensation which is dillutive to existing shareholder and therefore need sot be taken into consideration.

      Personally I think that revenues might actually decrease at some point in 2009. The CRM market will no longer be growing and they are competing with deep pocketed competitors. They will lose Exsiting customers to competitors (netsuite has just launched a 50% price cut for salesforce customers) and will decrease subs (because of layoffs) and pricing for the customers they retain.
      Oct 29 01:05 am |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com Worth Half Its Current Price
      I meant it increased their operating cahshflow, not operating profit.
      Oct 27 18:27 pm |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com Worth Half Its Current Price
      PenName Dave, thank you. I'm very aware of their fiancials and looked at it from several angles. The company has negative working capital given that it receives ahead of providing the service (on quarterly or annual basis), as result of their growth this increased their operating profit. Given that I'm anticiapting a stagnating to decreasing sales this will disappear or even reverse. So lookin at EV/EBITDA multiple would be better to look at (right now it is about 20X compared ot 7X for MSFT). Still the company has recurring capex which I think it is not fair to exclude so I prefer to look at Earnings and P/E. Ben Graham was right.
      Oct 27 17:17 pm |Rating: 0 0 |Link to Comment |View article
    • The Case for Shorting Long Dated U.S. Treasuries
      What type of upside and carrting costs do you anticiapte for such a trade with futures?

      I wrote a similar artcile 4 months ago (seekingalpha.com/artic...) I was clearly too early, and now think that although a valid trade at some point it shoudl still take a few months or even years before it makes sense. Inflation needs to pick up again or China and middle east need to be in real trouble to start dumping dollars (unlikelly in the short term).
      Oct 24 02:52 am |Rating: 0 0 |Link to Comment |View article
    • Why the CDS Market Didn't Fail
      No true. Let's runsome numbers:

      - Before the credit crisis LEH 5Y CDS was around 40 bps
      - The monday 9/08/08, the week prior prior to BK it was at 300 bps
      - The last day of trade bfore BK it closed at 700.

      This means a loss of about 13% of the principal insured by 9/08 and a further 20% loss during the last week of trade.Considering the wonderful recovery of 8 cents on the dollar,this means upon settlement, i.e. tomorrow a seller of CDS still needs cough up 59 % of the principal.

      Anyone who thinks this is a stable system is in serious denial. Bringing this market under a clearing house mechanism should be priority #1 for authorities.

      I've written an artcile that estimates the losses from the lehman debacle at over 200 billion dollars on the cash market and derivatives (this is probably a conservative estimate), check it at: seekingalpha.com/artic...
      Oct 20 19:48 pm |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com: Pricey and Coming Down Fast
      My previous posting was for buylowsellhigh (I hope he got it).

      Nicky, thank you for your comment. I think you may underestimate how much good Investing has to do with common sense and often casual observations which give you na hedge. I think it was Barton Biggs who said that specialists in a filed often undeperfom non specialists because often the odds tend to be with the simple and ovious outcome. Experts ofetn tned to have pet theories and look at complex webs of factors and get lost in it. I'm certainly not a specialist in CRM but am reasonably well informed and made a good faith effort to lay out my case based on facts and figures which I have provided here.

      You on the other end, provided absolutelly no basis for your statement that my article is poor and that I do not understand the business, would you please explain why you feel that way?

      Oct 18 16:43 pm |Rating: 0 0 |Link to Comment |View article
    • Salesforce.com: Pricey and Coming Down Fast
      The revolution will not be televised, will not be televised,
      will not be televised, will not be televised.
      The revolution will be no re-run brothers;
      The revolution will be live.
      Oct 18 12:08 pm |Rating: 0 0 |Link to Comment |View article
    • GLD
      Moorer, I have an artcile that discusses with detail and figures demand and supply for gold. Please check seekingalpha.com/artic...
      Oct 17 18:23 pm |Rating: +1 0 |Link to Comment |View forum topic
    • Salesforce.com: Pricey and Coming Down Fast
      Ikfhoo,

      Thank you for your comment. I'm an investor not a technologist and (though not particullarly smart), I'm pretty good at smelling rats. Whenever I hear the word "paradigm change", I start sharpening the knife. Not that I am complaining, it provides me with unique opportunites for profit through shorting as long as you time it well.

      Unwittingly, your comment realy bollsters my point - look at Java after 10 years...where did it get Sun? Absolutelly nowhere. How much should "Force" be worth to an investor? Absolutelly nothing.
      Oct 17 18:16 pm |Rating: 0 0 |Link to Comment |View article
    • Lehman's Loss: More Than $200 Billion
      CDS are markerd to market daily, however it really up to each buyer of CDS to request for additional collateral. I'm not aware of any guidelines by ISDA (although there may be and still be looselly applied by participants). So in a situtation like lehman where the credit spreads ramin tide until a few days before BK, the chances are that collateral posted is quite short.
      Oct 13 17:57 pm |Rating: 0 0 |Link to Comment |View article
    • Treasury Bonds: The Short of the Century
      My timing on this article was clearly off as it is now patently obvious and as pointed out by several of the comments (fxtrader07, djzvue and others). clerly inflation is of the table for a while and while the US government creditworthiness look even worst know with all the bailouts and the recession looking much worst, there are really not much safe alternatives to treasuries right now. There will come the day to short them but it is probably many months/year(s) off.
      Oct 11 18:05 pm |Rating: 0 0 |Link to Comment |View article

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