Yeah, that's one of my "other reasons that doesn't create shareholder value" that I mentioned in my earlier post. Technically, in addition to what you mentioned, buybacks also decrease the dillution to other shareholders. If the buyback is only being used to prevent dilution, then essentially it's the cost of a management compensation scheme.
Also note that they had planned to repurchase up to $40 million worth of shares but it looks like instead they're opting to acquire SGI. What that means to you day traders and quant fund managers, who knows?
Well, I'm not an expert, but I've taken some finance and valuation courses. In general, stock buybacks are a way of returning cash back to investors, i.e., it's kinda like a really huge dividend. There's a couple reasons for doing this: (1) the managers think that the company is worth more than what the market values it at, or (2) the company doesn't have any available projects where it can invest the $40million. In the first case, they buy back the shares now at a cheap price, and then issue more later at a higher price. In the second case, they say "Well we're not doing anything useful with the money, you shareholders go spend it yourselves". There's other reasons for buybacks, but they're questionable as to whether they actually produce value for shareholders.
Going back to March 30, the company was only valued at $120million. It had $170 million in cash on hand, and no debt. I think it's pretty obvious that the company thought their company was worth more the market was valuing it at, i.e. it's stock was cheap, so they wanted to buy back their shares. Offhand, holding a huge amount of cash isn't very useful, since it's not a return-producing asset. Some for liquidity, yes, but not a huge amount. It's probably a good thing that they're spending it in some way.
Looking at the SGI deal, it's pretty obvious that Rackable thinks that their $25million investment is going to produce value than a stock-repurchase. They're acquiring all of SGI's assets, and they're not going to have to take on all their debt. Without looking at all the numbers, it sounds like a decent plan.
Final note, I don't follow this stock, my analysis isn't rigorous at all, and anything I say should hardly be taken as a fact. I'm just a random dude on the internet, and I'm not giving you investment advice.
> 3) and are NOT exercising Fair Use I am excercising Fair Use which _I_ defined.
"Committing a crime" I dont consider it to be a crime
I won't state my personal opinion, but philosophers such as Rawls would argue that by being part of society you don't have the right to do "whatever you want". You have implicitly agreed to a social contract and if the rest of society thinks that it is a crime, then what you personally consider it to be doesn't matter.
Of course, there are other philosophers who don't agree with social contract theory. I'm not sure they'd stand behind you though.
The Statue of Liberty (French: Statue de la Liberte), or, more formally known as, Liberty Enlightening the World, was presented to the United States by the people of France in 1886... The copper-clad statue, dedicated on October 28, 1886, commemorates the centennial of the signing of the United States Declaration of Independence and was given to the United States to represent the friendship established during the American Revolution.[6] Frederic Auguste Bartholdi sculpted the statue[7] and obtained a U.S. patent for its structure.[8] Maurice Koechlin - chief engineer of Gustave Eiffel's engineering company and designer of the Eiffel Tower - engineered the internal structure.
Re:Seriously.. has no one read Atlas Shrugged
on
Toward the Open Company
·
· Score: 3, Informative
Getting really offtopic, but I thought I'd share this interesting Economist article regarding Atlas Shrugged.
Atlas felt a sense of deja vu Feb 26th 2009 The economic bust has caused a boom for at least one author
BOOKS do not sell themselves: that is what films are for. "The Reader", the book that inspired the Oscar-winning film, has shot up the bestseller lists. Another recent publishing success, however, has had more help from Washington, DC, than Hollywood. That book is Ayn Rand's "Atlas Shrugged".
The premise that "some people are geniuses, and this special-ness is a necessary requirement for certain theories to be discovered" isn't quite as self-evident as you make it out to be.
In Pratchett's "The Science of Discworld 3: Darwin's Watch", there is a chapter that deals specifically with this issue. The author argues that there is a "time" when the mass of previous evidence and research will result in the theory being "created". See this guy's summary:
"They also show how it's not enough to have an idea, but the idea has to fit in at the right time. The example they give is the steam engine which they show was invented and re-invented on a regular basis since the days of Hero of Alexandria. They argue that James Watt's genius was not inventing the steam engine, but in seizing the time and making the steam engine relevant. Watt showed why steam engines were useful devices. Similarly Darwin's Natural Selection did not come out of nowhere, but the reason we look to Darwin as the father of Evolution rather than Alfred Russel Wallace is the sheer work and mass of evidence Darwin compiled. Darwin was able to show his ideas fitted in beautifully with other facts which were becoming known like the immense antquity of the Earth." link
So, yes, geniuses help develop ideas, but arguably if they didn't come up with their theory, then another genius would have come up with the same theory soon after.
I think that table you linked is only for short-term treasuries. Check out this table: http://www.treas.gov/tic/shlptab1.html. My link shows that China holds some 1.2 trillion dollars in total debt and equity. Who knows how accurate this is though, since China may have entrusted a third-party country such as Switzerland to hold some of the instruments.
I admit that my "trillions" comment was a bit overstated, but the actual amount is still almost 10% of the total outstanding U.S. government debt. $1.2 trillion is also approximately 32% of China's GDP. That's hardly insignificant.
Here's an Economist article from back in November. There have probably be more details released recently, but I haven't done that much research into it.
Much remains unclear about the implementation of the stimulus plan-even its size. According to Sherman Chan, a Sydney-based economist with Moody's, the real size of the package may not be as large as the government has described. "Some of the measures announced in the stimulus package appear to have been already introduced or even implemented earlier. Hence, the size of this stimulus package-which is expected to be in the form of additional spending- may have been overstated," Chan wrote in a research note.
I will often use the pointed tip of my knife to "stab" a food item if the food (like, say tomatoes) resists my initial slice attempts (e.g. looks like it's going to squish instead of slice cleanly).
You should probably sharpen your knives more often.
Also, little known fact: sharper knives are safer than dull knives; less chance of slipping and cutting yourself.
In China, they're using this slack time to upgrade the infrastructure, closing down old inefficient factories and building new ones with government CASH. Who's winning this round?
Not the millions of migrant chinese workers who have lost their jobs, which will probably also cause civil unrest. Also, the Chinese holding trillions of dollars in U.S. treasuries will also be slightly annoyed when the U.S. government inflates away their debts.
Finally, the vast majority of China's stimulus package was already announced before this major recession. You have the order backwards.
Witness the CBC's abysmal ratings and lack of standout series for the past many years.
Provide some evidence for that. My personal experience is that the CBC produces exceptional content. Their news coverage is excellent compared to, say, CTV, or ANY american news station. CNN, Fox, etc make me want to retch.
Not saying I agree with the RIAA, but it seems to me that it'd be hard for them to compete.
Benefits provided by pirating from private torrent trackers: 1. Free 2. Huge selection, high quality 3. Fast downloads
Benefits provided by theoretical customer-friendly RIAA approved sites: 1. Good selection, hopefully high quality 2. Hopefully fast downloads
Even if they can match the selection, quality, and download speed of the private torrent trackers, they can never compete with free. What other aspect can they provide which the private trackers can't? Other than being unambiguously legal of course.
Sweet, I love to hear from people who know more than me. Yeah, I already knew intuitively what you're saying, but I definitely couldn't have articulated it like you did. Thanks.
You might think that if you have three investments with a 10% risk of losing £1,000,000 the chances of all three of them losing £1,000,000 is 0.1*0.1*0.1 = 0.001 or 0.1%.
No, no-one who actually calculates and uses VaR thinks that. Anyone who has done any statistics, like all finance quants, will correctly take into account covariances. The actual problem is the interpretation of the "correct" VaR, and relying on it too heavily.
I'll give you the actual definition of VaR. If you calculate the VaR(10 day, 5%) to be $100,000, this means that there is a 5% chance that the loss on your portfolio over a 10 day period will be larger than $100,000, or that your profit will be larger than $100,000 assuming a symmetric distribution. It's when people think "Oh that's great, we can ONLY lose $100,000" when you have a problem. The actual loss could be ANY value larger than $100,000.
It's hardly a perfect statistic, since there are still many assumptions involved. However, it's still a decent estimator and it's better than making a wild guess based on gut feelings. Despite what most people currently believe, a lot of brainpower has gone into developing financial theories and some stuff is pretty damn good. The financial industry deserves some bashing, but it frustrates me when people spread incorrect information; at least complain about the right things.
"Just about everyone can agree that if an increase in tax rates leads to a decrease in tax revenues, then taxes are too high. It is also generally agreed that at some level of taxation, revenues will turn down. Determining the level of taxation where revenues are maximized is more controversial."
Pecorino, Paul (1995), "Tax rates and tax revenues in a model of growth through human capital accumulation", Journal of Monetary Economics
My point is that the original post was assuming we're on the "high-tax" area of the laffer curve, which is what he hasn't provided any evidence for.
You're assuming elasticity of movement to tax rate is high. Can you cite some papers and experts who have validated this claim?
I could easily claim the opposite: lowering taxes will only attract companies in the long term, if at all, resulting in lower taxes in the short run and large budget deficits leading to financial distress due to lack of liquidity and even more costs. I'm not providing any evidence either, so who should people believe?
Well you may not have problems with your hardware, but that doesn't mean others don't. Since we're giving personal anecdotes, I'll give you mine.
To give you an idea of my computer skills, I've installed Linux on three of my computers over the last 5 years, though I never really used it too much. I'm "fluent" with Windows. I have some experience with C++, so using the shell and so forth doesn't bother me too much. I'm not a developer or anytihng like that though. In other words, I'm pretty much the "best-case" inexperienced user.
That said, every time I tried to install Linux, I ALWAYS have problems. The first time it took me literally two days of frustration before it was in a usuable state. I define usable as "being able to reliably hit the power button, boot with no problems, log in, and surf the internet". It would take too long to go through all the problems I had.
More recently, I just installed Linux on my laptop two days ago, and it took me over four hours to get my wireless internet to work correctly. I figured out how to use ndiswrapper on one of my previous installs, but it didn't solve the problem this time around. Eventually I figured out the problem had to do with the order of drivers being loaded. That's right, to surf the internet I had to learn about crap like modprobe, how to run scripts at startup, etc. All the sysadmins here probably think it's easy, but it's nearly impossible for inexperienced users like me to learn. The worst part was finding a well written bug report on the ubuntu tracker which listed my exact problem, but was closed with the reason "This is a well known problem, just google it"... like I hadn't been doing that for hours.
Anyway, my point is that even though Linux is mostly awesome and everything mostly "just works", there are still some stuff that doesn't. You can blame broadcom or whoever for the problems, but if those few things still exist and are frustrating enough to turn off a dedicated and best-case-inexperienced user, then it still needs more work if you want everyone to use it.
I just wanted to say that the provided "Eddie Haskell" link is completely unreadable; it looks like some of the spam I get. Couldn't you find anything better?
Sure, the salvage value is extrinsic in that you can find the net present value of the future salvage value. I was just being very imprecise about the word "intrisic"; I just meant that the salvage value is usually a non-explicitly considered value that is part of the whole purchase transaction. I suppose it some cases you would explicitly consider it, such as the college textbooks example below this post.
I agree. If you're about to buy a book, you're fixated on receiving the book now, not getting rid of it in the future. I believe that option to resell is more of an intrinsic value.
Slashdot Mirror
Yeah, that's one of my "other reasons that doesn't create shareholder value" that I mentioned in my earlier post. Technically, in addition to what you mentioned, buybacks also decrease the dillution to other shareholders. If the buyback is only being used to prevent dilution, then essentially it's the cost of a management compensation scheme.
Also note that they had planned to repurchase up to $40 million worth of shares but it looks like instead they're opting to acquire SGI. What that means to you day traders and quant fund managers, who knows?
Well, I'm not an expert, but I've taken some finance and valuation courses. In general, stock buybacks are a way of returning cash back to investors, i.e., it's kinda like a really huge dividend. There's a couple reasons for doing this: (1) the managers think that the company is worth more than what the market values it at, or (2) the company doesn't have any available projects where it can invest the $40million. In the first case, they buy back the shares now at a cheap price, and then issue more later at a higher price. In the second case, they say "Well we're not doing anything useful with the money, you shareholders go spend it yourselves". There's other reasons for buybacks, but they're questionable as to whether they actually produce value for shareholders.
Going back to March 30, the company was only valued at $120million. It had $170 million in cash on hand, and no debt. I think it's pretty obvious that the company thought their company was worth more the market was valuing it at, i.e. it's stock was cheap, so they wanted to buy back their shares. Offhand, holding a huge amount of cash isn't very useful, since it's not a return-producing asset. Some for liquidity, yes, but not a huge amount. It's probably a good thing that they're spending it in some way.
Looking at the SGI deal, it's pretty obvious that Rackable thinks that their $25million investment is going to produce value than a stock-repurchase. They're acquiring all of SGI's assets, and they're not going to have to take on all their debt. Without looking at all the numbers, it sounds like a decent plan.
Final note, I don't follow this stock, my analysis isn't rigorous at all, and anything I say should hardly be taken as a fact. I'm just a random dude on the internet, and I'm not giving you investment advice.
> 3) and are NOT exercising Fair Use
I am excercising Fair Use which _I_ defined.
"Committing a crime"
I dont consider it to be a crime
I won't state my personal opinion, but philosophers such as Rawls would argue that by being part of society you don't have the right to do "whatever you want". You have implicitly agreed to a social contract and if the rest of society thinks that it is a crime, then what you personally consider it to be doesn't matter.
Of course, there are other philosophers who don't agree with social contract theory. I'm not sure they'd stand behind you though.
The Statue of Liberty (French: Statue de la Liberte), or, more formally known as, Liberty Enlightening the World, was presented to the United States by the people of France in 1886... The copper-clad statue, dedicated on October 28, 1886, commemorates the centennial of the signing of the United States Declaration of Independence and was given to the United States to represent the friendship established during the American Revolution.[6] Frederic Auguste Bartholdi sculpted the statue[7] and obtained a U.S. patent for its structure.[8] Maurice Koechlin - chief engineer of Gustave Eiffel's engineering company and designer of the Eiffel Tower - engineered the internal structure.
More evidence from Wikipedia
Getting really offtopic, but I thought I'd share this interesting Economist article regarding Atlas Shrugged.
Atlas felt a sense of deja vu
Feb 26th 2009
The economic bust has caused a boom for at least one author
BOOKS do not sell themselves: that is what films are for. "The Reader", the book that inspired the Oscar-winning film, has shot up the bestseller lists. Another recent publishing success, however, has had more help from Washington, DC, than Hollywood. That book is Ayn Rand's "Atlas Shrugged".
http://www.economist.com/finance/displaystory.cfm?story_id=13185404
That link is from 2005. Here's a more recent link regarding a study done for Industry Canada in 2007.
The premise that "some people are geniuses, and this special-ness is a necessary requirement for certain theories to be discovered" isn't quite as self-evident as you make it out to be.
In Pratchett's "The Science of Discworld 3: Darwin's Watch", there is a chapter that deals specifically with this issue. The author argues that there is a "time" when the mass of previous evidence and research will result in the theory being "created". See this guy's summary:
"They also show how it's not enough to have an idea, but the idea has to fit in at the right time. The example they give is the steam engine which they show was invented and re-invented on a regular basis since the days of Hero of Alexandria. They argue that James Watt's genius was not inventing the steam engine, but in seizing the time and making the steam engine relevant. Watt showed why steam engines were useful devices. Similarly Darwin's Natural Selection did not come out of nowhere, but the reason we look to Darwin as the father of Evolution rather than Alfred Russel Wallace is the sheer work and mass of evidence Darwin compiled. Darwin was able to show his ideas fitted in beautifully with other facts which were becoming known like the immense antquity of the Earth." link
So, yes, geniuses help develop ideas, but arguably if they didn't come up with their theory, then another genius would have come up with the same theory soon after.
I think that table you linked is only for short-term treasuries. Check out this table: http://www.treas.gov/tic/shlptab1.html. My link shows that China holds some 1.2 trillion dollars in total debt and equity. Who knows how accurate this is though, since China may have entrusted a third-party country such as Switzerland to hold some of the instruments.
I admit that my "trillions" comment was a bit overstated, but the actual amount is still almost 10% of the total outstanding U.S. government debt. $1.2 trillion is also approximately 32% of China's GDP. That's hardly insignificant.
Here's an Economist article from back in November. There have probably be more details released recently, but I haven't done that much research into it.
Much remains unclear about the implementation of the stimulus plan-even its size. According to Sherman Chan, a Sydney-based economist with Moody's, the real size of the package may not be as large as the government has described. "Some of the measures announced in the stimulus package appear to have been already introduced or even implemented earlier. Hence, the size of this stimulus package-which is expected to be in the form of additional spending- may have been overstated," Chan wrote in a research note.
Economist
I will often use the pointed tip of my knife to "stab" a food item if the food (like, say tomatoes) resists my initial slice attempts (e.g. looks like it's going to squish instead of slice cleanly).
You should probably sharpen your knives more often.
Also, little known fact: sharper knives are safer than dull knives; less chance of slipping and cutting yourself.
In China, they're using this slack time to upgrade the infrastructure, closing down old inefficient factories and building new ones with government CASH. Who's winning this round?
Not the millions of migrant chinese workers who have lost their jobs, which will probably also cause civil unrest. Also, the Chinese holding trillions of dollars in U.S. treasuries will also be slightly annoyed when the U.S. government inflates away their debts.
Finally, the vast majority of China's stimulus package was already announced before this major recession. You have the order backwards.
Witness the CBC's abysmal ratings and lack of standout series for the past many years.
Provide some evidence for that. My personal experience is that the CBC produces exceptional content. Their news coverage is excellent compared to, say, CTV, or ANY american news station. CNN, Fox, etc make me want to retch.
Not saying I agree with the RIAA, but it seems to me that it'd be hard for them to compete.
Benefits provided by pirating from private torrent trackers:
1. Free
2. Huge selection, high quality
3. Fast downloads
Benefits provided by theoretical customer-friendly RIAA approved sites:
1. Good selection, hopefully high quality
2. Hopefully fast downloads
Even if they can match the selection, quality, and download speed of the private torrent trackers, they can never compete with free. What other aspect can they provide which the private trackers can't? Other than being unambiguously legal of course.
Sweet, I love to hear from people who know more than me. Yeah, I already knew intuitively what you're saying, but I definitely couldn't have articulated it like you did. Thanks.
You might think that if you have three investments with a 10% risk of losing £1,000,000 the chances of all three of them losing £1,000,000 is 0.1*0.1*0.1 = 0.001 or 0.1%.
No, no-one who actually calculates and uses VaR thinks that. Anyone who has done any statistics, like all finance quants, will correctly take into account covariances. The actual problem is the interpretation of the "correct" VaR, and relying on it too heavily.
I'll give you the actual definition of VaR. If you calculate the VaR(10 day, 5%) to be $100,000, this means that there is a 5% chance that the loss on your portfolio over a 10 day period will be larger than $100,000, or that your profit will be larger than $100,000 assuming a symmetric distribution. It's when people think "Oh that's great, we can ONLY lose $100,000" when you have a problem. The actual loss could be ANY value larger than $100,000.
It's hardly a perfect statistic, since there are still many assumptions involved. However, it's still a decent estimator and it's better than making a wild guess based on gut feelings. Despite what most people currently believe, a lot of brainpower has gone into developing financial theories and some stuff is pretty damn good. The financial industry deserves some bashing, but it frustrates me when people spread incorrect information; at least complain about the right things.
I use Vista at home, I use Vista at work. I have had absolutely no issue with it.
...and I use it on my new Dell XPS laptop, and it's NOT stable for me. Wireless is freaking awful too. Yay anecdotes?
Well yes. See this guy:
"Just about everyone can agree that if an increase in tax rates leads to a decrease in tax revenues, then taxes are too high. It is also generally agreed that at some level of taxation, revenues will turn down. Determining the level of taxation where revenues are maximized is more controversial."
Pecorino, Paul (1995), "Tax rates and tax revenues in a model of growth through human capital accumulation", Journal of Monetary Economics
My point is that the original post was assuming we're on the "high-tax" area of the laffer curve, which is what he hasn't provided any evidence for.
You're assuming elasticity of movement to tax rate is high. Can you cite some papers and experts who have validated this claim?
I could easily claim the opposite: lowering taxes will only attract companies in the long term, if at all, resulting in lower taxes in the short run and large budget deficits leading to financial distress due to lack of liquidity and even more costs. I'm not providing any evidence either, so who should people believe?
The Internet: where Men are Men, Women are Men, and 14 Year Old Girls are FBI Agents.
If we don't cough up, they are going to crawl out of their graves, and look for alternative income sources.
Starring in the next Evil Dead?
Well you may not have problems with your hardware, but that doesn't mean others don't. Since we're giving personal anecdotes, I'll give you mine.
To give you an idea of my computer skills, I've installed Linux on three of my computers over the last 5 years, though I never really used it too much. I'm "fluent" with Windows. I have some experience with C++, so using the shell and so forth doesn't bother me too much. I'm not a developer or anytihng like that though. In other words, I'm pretty much the "best-case" inexperienced user.
That said, every time I tried to install Linux, I ALWAYS have problems. The first time it took me literally two days of frustration before it was in a usuable state. I define usable as "being able to reliably hit the power button, boot with no problems, log in, and surf the internet". It would take too long to go through all the problems I had.
More recently, I just installed Linux on my laptop two days ago, and it took me over four hours to get my wireless internet to work correctly. I figured out how to use ndiswrapper on one of my previous installs, but it didn't solve the problem this time around. Eventually I figured out the problem had to do with the order of drivers being loaded. That's right, to surf the internet I had to learn about crap like modprobe, how to run scripts at startup, etc. All the sysadmins here probably think it's easy, but it's nearly impossible for inexperienced users like me to learn. The worst part was finding a well written bug report on the ubuntu tracker which listed my exact problem, but was closed with the reason "This is a well known problem, just google it"... like I hadn't been doing that for hours.
Anyway, my point is that even though Linux is mostly awesome and everything mostly "just works", there are still some stuff that doesn't. You can blame broadcom or whoever for the problems, but if those few things still exist and are frustrating enough to turn off a dedicated and best-case-inexperienced user, then it still needs more work if you want everyone to use it.
Not that I blame you for posting anonymously, but truth is the best defense against defamation.
I just wanted to say that the provided "Eddie Haskell" link is completely unreadable; it looks like some of the spam I get. Couldn't you find anything better?
Sure, the salvage value is extrinsic in that you can find the net present value of the future salvage value. I was just being very imprecise about the word "intrisic"; I just meant that the salvage value is usually a non-explicitly considered value that is part of the whole purchase transaction. I suppose it some cases you would explicitly consider it, such as the college textbooks example below this post.
I agree. If you're about to buy a book, you're fixated on receiving the book now, not getting rid of it in the future. I believe that option to resell is more of an intrinsic value.