First, do you know that Microsoft does break out its various segments?
Yes, but I haven't seen the newest data so I don't feel that I can discuss it intelligently. I'll look into it in the next couple of months, when I actually have some money to invest:)
Wal-Mart has a profit margin of 3.5% against Microsoft’s 28% - what does that tell us? Not much. 3.5% is stunning for retail, less so for technology.
Agreed, but - in general - retail stocks command less of a premium than higher-margin industries. Microsoft already has a low P/E for a tech firm, and I suspect margin pressure to be one culprit. Ironically, their low P/E is one reason I keep looking at them - I tend to look for beaten-down stocks.
It is not that margin et. al. is unimportant. It is that they cannot be used in isolation. They are just one input as you try to forecast future revenue.
100% agree. The same thing can be said about revenue. To use an absurd, extreme example... GM could increase revenue by selling every car at a loss... until their cash and credit dry up. But you'd be a silly investor if you bought based solely on the revenue increase. You obviously want to keep an eye on margins as well. On the other hand, you have growth players like Amazon. They reinvest almost every penny of their revenue into their business. Their operating margins are decent enough for retail, but they don't make any money. The market has rewarded them handsomely for this strategy.
You want to focus on future revenue growth, not on margins.
Maybe for a startup, but MSFT is a big old mature company. They are almost a conglomerate, really. I think you need to analyze their hardware and software businesses separately. Like I said, I'd be thrilled that their hardware business is starting to perk up, but losing revenue in the higher-margin software business is something that I'd be very concerned with. I agree with most of your points, except that you seem to think that margin is unimportant - it is certainly not the only thing to look at, but at the end of the day margin factors heavily into the return on capital equation. It's going to be very, very hard to match the cash cow that they have with Windows/Office. Lower-margin revenue must grow much faster than high-margin revenue shrinks if they want to maintain value.
I'm not currently a MSFT stockholder, but if I were this would make me happier. Still, I'd be concerned that their high-margin businesses seem to be declining while their hardware businesses are on the increase. Their current stock price is supported by margins over 70% - going mainly hardware will push them down, if they are lucky, to Apple-like levels of 30%, or Dell levels much lower than that if they go for the low end. In other words, revenue HAS to increase simply to maintain income as they see more hardware business.
The funny thing about this is I Googled the post and it matches exactly an Eve Online discussion forum post from 2009, but nothing else. I thought for sure it was lifted from a usenet discussion somewhere.
I also recall it costing almost as much as the machine itself, and only running on their super-expensive machines. I like to putter around in unix, but I was lucky and always had access to a Solaris machine (either at work or school) while Mac was pre-OSX. I was running OSX as soon as it was available.
Heading back to my original thesis - that your typical Princeton student will be fine no matter where they go... not only are they probably very smart and hard-working, but they probably come from some means and their family is likely to be well connected. You are absolutely right that they are buying a head start, but it is a head start among an already extremely privileged peer group. I know that people of more modest backgrounds also go to Princeton, and to them I say congratulations!
That's great, but who is more likely to be at the top of their high-school class and go to fancy private schools so that they have a leg up on Princeton's admissions criteria?
While it is true that the Princeton grad will have the superior resume, that really only matters for the first job out of college. While I'm sure someone here will point out exceptions, work experience quickly eclipses education on the resume.
I was using it where one of the directories was mounted over the network, so I didn't want to read the files unless I had to... a directory listing is a pretty cheap operation. One problem that I ran into was that Macs can add resource forks to some files, so if one of the folders was on a Mac you could have weird file sizes. For photos and pdfs and such, the resource fork is disposable so it was driving me nuts... some "unique" files were not unique at all.
I have another solution, written in Python. It is pretty efficient but very limited. It walks two folders, sorting files into bins according to size. If any bins match between the two folders, it does a hash once on each file in each bin and then compares them. That way, the files are not read repeatedly and hashes are only done if necessary. It could be sped up further by only doing partial file matches, but it worked fine for me. Reply if you want it.
I'd use that, but I haven't seen it cheaper than canola oil. I think soy oil has an even hotter smoke point, but there's something funny about it. Safflower oil is the gold standard, but it is pricey. Avocado oil is good, too - but the taste is weird (and I like avocados).
You are absolutely right - there is almost no way they will get everything included, much less balanced out right. That said, I like that they are willing to throw their bodies at this stuff to see what happens... just like the British Navy, we'll probably learn something. Who knows? If enough people volunteer their health maybe they'll someday succeed. The difference between the Royal Navy - or the government in the Soylent story "Make Room, Make Room" - and this guy is that he isn't forcing anyone into his experiment.
As you said yourself, if the only reason people liked beer was for the alcohol, they would be better off with distilled spirits. Beer comes in all sorts of varieties and it is quite fun to sample and find your favorite. The same can be said of wine, whiskey - or for that matter coffee or tea if that is your preference. If people disagree with your preference, that is normal and just means you are dealing with flavor.
It was never scientific. _T_echnology _E_ntertainment _D_esign. It is entertaining and thought-provoking, but as you say full of egos and full of promotion. I still enjoy some of the perspectives coming out of it, even if I disagree with it.
Yes, I agree. From the manufacturing perspective, I can see the benefits of a single board. Even if it costs $200, it replaces several other individual units that might collectively add up to the same amount anyway and reduces the number of parts and connections. But as a customer, it sucks. I'd much rather replace the single $30 electromechanical part than have to deal with the entire (now marked up to $300) board.
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First, do you know that Microsoft does break out its various segments?
Yes, but I haven't seen the newest data so I don't feel that I can discuss it intelligently. I'll look into it in the next couple of months, when I actually have some money to invest :)
Wal-Mart has a profit margin of 3.5% against Microsoft’s 28% - what does that tell us? Not much. 3.5% is stunning for retail, less so for technology.
Agreed, but - in general - retail stocks command less of a premium than higher-margin industries. Microsoft already has a low P/E for a tech firm, and I suspect margin pressure to be one culprit. Ironically, their low P/E is one reason I keep looking at them - I tend to look for beaten-down stocks.
It is not that margin et. al. is unimportant. It is that they cannot be used in isolation. They are just one input as you try to forecast future revenue.
100% agree. The same thing can be said about revenue. To use an absurd, extreme example... GM could increase revenue by selling every car at a loss... until their cash and credit dry up. But you'd be a silly investor if you bought based solely on the revenue increase. You obviously want to keep an eye on margins as well. On the other hand, you have growth players like Amazon. They reinvest almost every penny of their revenue into their business. Their operating margins are decent enough for retail, but they don't make any money. The market has rewarded them handsomely for this strategy.
You want to focus on future revenue growth, not on margins.
Maybe for a startup, but MSFT is a big old mature company. They are almost a conglomerate, really. I think you need to analyze their hardware and software businesses separately. Like I said, I'd be thrilled that their hardware business is starting to perk up, but losing revenue in the higher-margin software business is something that I'd be very concerned with. I agree with most of your points, except that you seem to think that margin is unimportant - it is certainly not the only thing to look at, but at the end of the day margin factors heavily into the return on capital equation. It's going to be very, very hard to match the cash cow that they have with Windows/Office. Lower-margin revenue must grow much faster than high-margin revenue shrinks if they want to maintain value.
It's definitely gone up, but I just checked and the undergrad rate is still under 4%.
I'm not currently a MSFT stockholder, but if I were this would make me happier. Still, I'd be concerned that their high-margin businesses seem to be declining while their hardware businesses are on the increase. Their current stock price is supported by margins over 70% - going mainly hardware will push them down, if they are lucky, to Apple-like levels of 30%, or Dell levels much lower than that if they go for the low end. In other words, revenue HAS to increase simply to maintain income as they see more hardware business.
My Google-fu was weak. I had a cup of coffee and recovered. Original is an old troll meme that I had forgotten.
Kudos to the AC.
The funny thing about this is I Googled the post and it matches exactly an Eve Online discussion forum post from 2009, but nothing else. I thought for sure it was lifted from a usenet discussion somewhere.
I also recall it costing almost as much as the machine itself, and only running on their super-expensive machines. I like to putter around in unix, but I was lucky and always had access to a Solaris machine (either at work or school) while Mac was pre-OSX. I was running OSX as soon as it was available.
Heading back to my original thesis - that your typical Princeton student will be fine no matter where they go... not only are they probably very smart and hard-working, but they probably come from some means and their family is likely to be well connected. You are absolutely right that they are buying a head start, but it is a head start among an already extremely privileged peer group. I know that people of more modest backgrounds also go to Princeton, and to them I say congratulations!
That's great, but who is more likely to be at the top of their high-school class and go to fancy private schools so that they have a leg up on Princeton's admissions criteria?
While it is true that the Princeton grad will have the superior resume, that really only matters for the first job out of college. While I'm sure someone here will point out exceptions, work experience quickly eclipses education on the resume.
If the government gives you a 3% subsidized loan that doesn't start accruing interest until you start paying it off, you take that thing.
The kids that go to Princeton would probably do just fine in life no matter where they go.
I was using it where one of the directories was mounted over the network, so I didn't want to read the files unless I had to... a directory listing is a pretty cheap operation. One problem that I ran into was that Macs can add resource forks to some files, so if one of the folders was on a Mac you could have weird file sizes. For photos and pdfs and such, the resource fork is disposable so it was driving me nuts... some "unique" files were not unique at all.
I'm replying to you because one of my two solutions has the same name :)
https://github.com/caluml/find...
I have another solution, written in Python. It is pretty efficient but very limited. It walks two folders, sorting files into bins according to size. If any bins match between the two folders, it does a hash once on each file in each bin and then compares them. That way, the files are not read repeatedly and hashes are only done if necessary. It could be sped up further by only doing partial file matches, but it worked fine for me. Reply if you want it.
I'd use that, but I haven't seen it cheaper than canola oil. I think soy oil has an even hotter smoke point, but there's something funny about it. Safflower oil is the gold standard, but it is pricey. Avocado oil is good, too - but the taste is weird (and I like avocados).
Yeah, I got married and had kids as well. Welcome to the club.
Buy a couple of acres of woodlands and some ammo :)
You are absolutely right - there is almost no way they will get everything included, much less balanced out right. That said, I like that they are willing to throw their bodies at this stuff to see what happens... just like the British Navy, we'll probably learn something. Who knows? If enough people volunteer their health maybe they'll someday succeed. The difference between the Royal Navy - or the government in the Soylent story "Make Room, Make Room" - and this guy is that he isn't forcing anyone into his experiment.
I buy rapeseed oil preferentially. My daughter has peanut allergies, so it is a decent alternative to peanut oil for high-heat.
Almonds are poisonous in "natural" form, as well. People get hung up on the funniest stuff.
Well, that is pretty hilarious, isn't it :)
Good exercise... now throw the Chinese numbers up and see what it looks like.
As you said yourself, if the only reason people liked beer was for the alcohol, they would be better off with distilled spirits. Beer comes in all sorts of varieties and it is quite fun to sample and find your favorite. The same can be said of wine, whiskey - or for that matter coffee or tea if that is your preference. If people disagree with your preference, that is normal and just means you are dealing with flavor.
It was never scientific. _T_echnology _E_ntertainment _D_esign. It is entertaining and thought-provoking, but as you say full of egos and full of promotion. I still enjoy some of the perspectives coming out of it, even if I disagree with it.
Yes, I agree. From the manufacturing perspective, I can see the benefits of a single board. Even if it costs $200, it replaces several other individual units that might collectively add up to the same amount anyway and reduces the number of parts and connections. But as a customer, it sucks. I'd much rather replace the single $30 electromechanical part than have to deal with the entire (now marked up to $300) board.