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Amazon’s penultimate Draw | Advantage O’nomics

Holiday sales took fourth Quarter performance to $9.52 billion and they also upped Q1 forecasts to $6.45bn to $7 bn

Amazon seems quite ready to open the war front with iPad, but as of now it is fair for both companies to hedge their bets with Kindle choosing a 70% commission on each sale over a smaller base than the $10 plus billion in real books, while the iPad would like to be compared with Samsung and Nokia,”part of the iPod and iMac family?” This is probably the penultimate fr Amazon to draw but it has one more fight in it to get to $100 billion

Amazon’s Operating Margins YOY growth does not mean much but the margins are healthy at 5% with net income of $384 mn at 4.03% based on the use of cash to drive down costs and get more volumes online. It mustt be remembered that Black Friday was beaten by Cyber Monday again this season. Amazon’s Warehousing and delivery modelling is a treat to watch in liquid motion.

The $2 billion buy back should keep the Amazon investors happy while the Kindle franchise develops more lung power in the market place. Kindle recently reworked its commission structures to 50% for the Author/Publisher

WE WILL WAIT for the content library on the iBook store to be updated for a more valid comparison, Amazon’s market development strategy is economically more powerful in the new digital footprint, while Apple is great at marketing. Amazon is also getting better at publisher deals, so it is a fun game for consumers and subscribers..It’s tempting to get everyone to plan a subscription model in the digital media game, but it hasn’t worked, with or without paywalls. Also an idle mind starts wondering if they can get to Facebook and Twitter to use as a backbone for the next digital age effort?

To reiterate our stand, Amazon has single handedly done more to bring this economy out of recession than the others in the Top 100, tech or mobile or even Media

High speed trains, lower Job claims, the ‘uprising’ is here and USA won’t be number 2

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We hate to see you go!

SOCIALONE.INFO is consolidating site addresses at advantages.us, however we like the wp.com platform and will keep it updated. O’nomics and all things American here will move with us to http://onomics.advantages.us by new author pseudonym

Also, we will update relevant tags to retail.advantages.us and deals.advantages.us

Bluehost will continue to give some issues for a time so stick arnd here for quick facts and then know the archives are in place at ADVANTAGES.US? We will listen to any solution you have too…

What’s the deal with Cadbury?

It get’s wierd(er). I am flummoxed. Let me bite into a little late night chocolate. Searing hot.

One would have thought, esp the fat cat bankers and the Bens, that Cadbury’s needed a richer valuation. As the story unfolds however, there seems to be more than what meets the eye.[picapp align=”right” wrap=”false” link=”term=FUDGE&iid=5140001″ src=”d/4/9/6/closeup_of_a_3b19.jpg?adImageId=9179782&imageId=5140001″ width=”120″ height=”120″ /]

Nestle backing Kraft did not bring extra cash from Kraft and with Buffet watching, nothing more is likely to happen. However the counter offer for 790p or $12.80 as mentioned by Hershey’s today shows a rather bankrupt chocolate bank. I thought only one would be Charlie’s Willy Wonka. All the players are strapped for Cash, the market is growing, the health foods market is not hurting the Chocolate segment, i don’t see where it needs Willie wonka to save Charlie Cadbury.

But Cadbury is obviously out-of-pocket and cannot fund itself through a Management buy out, neither are the numbers interesting enough for PE. It seems like PE funds are passing on this one maybe because they do not read their stuff here. More chocolate dinners for them please. Transformers? Anyone? with a nice movie to curl up with , of course..[picapp align=”left” wrap=”true” link=”term=Chocolate+production&iid=5255854″ src=”3/c/f/1/Close_up_of_6a46.jpg?adImageId=9179945&imageId=5255854″ width=”120″ height=”120″ /]

I think the like of Bronson Point are obviously busy with bigger prey, but there are others who can help Philip Cadbury out of this predicament and continue growing the market. They were a very happy lot after announcing results in the local India office, esp as India and China continue to recruit in MNCs so we can be happy when things don’t move and we can get on with selling. I’m still waiting for the next offer myself.. I need that job for growing India’s brilliant consumer economy.[picapp align=”center” wrap=”true” link=”term=Cadbury%27s&iid=7312398″ src=”3/f/0/6/Cricket_Field_at_0be5.jpg?adImageId=9179974&imageId=7312398″ width=”120″ height=”116″ /]

But, as of now, Ben applied first and Warren Buffet does like fudge. coming back to PE front, no, emerging market desks here are unlikely to be interested because there is so much in infrastructure and IT, so much in existing brands that need to grow 2-3X from a large established base at ITC, Unilever and P&G apart from Pepsi and Coke. And Britannia, Fonterra, Kraft itself with the unhurt Nestle and the OTC pharma specials from the big 4.

And the issue was..cash. Of course, they might even need more cash to counter the Diamond Foods campaign in the Superbowl, and Irene wouldn’t overspend. Hershey’s is too small to play with Cadbury, but it shows how much Kraft is under-spending when cottage industry players like Hershey’s that have a niche like Swiss Cheese, no go on this deal.

Tortoise wins race for best U.S. city for business – MarketWatch

It’s no fluke in the pan either. Spokane (WA), Phoenix (AZ) and Boise(ID) have been consistent scorers, because you can get the same quality of life for much less than a crushing load on your pockets. And your favorite banks and ATMs have not been taken down either. Your favourite super retailers are there right till Nordstrom, I’d say do it now. Figure out where you want to live in that new pay cap, and your office will do it for you. Come to Iowa, Come to Nebraska. Come in your own plane. That is why your bonus is in the best stock you could own, your employer. Try it!

We all know the fable of the tortoise ultimately winning his painstakingly measured race against the hare.

Apply that to today’s economy and it’s relatively easy to come up with a winner for MarketWatch’s third survey of the best U.S. cities for business. This year’s victor is the subdued terrapin of regional economies: Des Moines, Iowa — population 556,230.

via Tortoise wins race for best U.S. city for business – MarketWatch.

Is this the new sponsoring club for American retail? | Reuters & Bronson Point

Two hedge fund veterans who worked at SAC Capital Advisors, LP and Pequot Capital Management, long considered among the industry's most successful, are launching their own firm next month, people familiar with the matter said on Monday.

Larry Foley, who had been a senior portfolio manager at SAC from 1994 to 2008, and Paul Farrell, a member of Pequot's executive committee and co-portfolio manager of its Scout Fund Group, plan to open Bronson Point Partners on January 1, 2010.

Foley and Farrell’s pedigree will likely prompt many hedge fund industry investors to give the pair a close look. But how much money the men will actually manage to raise remains unclear at a time when investors are becoming ever pickier about where they commit their capital.

To woo potential clients, Bronson Point’s principals said they have committed at least $25 million of their own money and promise a “disciplined approach to fund-raising, organic growth and risk management.” They will concentrate on U.S. stocks, running a so-called long/short equity strategy.

Investors traditionally want to see fund managers invest part of their own fortunes, with plans to expand the fund in a measured way.

To get into Bronson Point, investors need to put down $1 million, an average figure for most small hedge funds. It will charge a 2 percent annual management fee plus an incentive fee of 17 percent to 20 percent, depending on how long investors agree to leave their money with the new firm.

Bronson Point in its brochure promises to use an “opportunistic approach combining fundamental research and active portfolio management.” The team, which also includes ex-SAC trader Jonathan Marcus, said retailer Bed Bath & Beyond (BBBY.O) and regional sporting goods store Hibbett Sports (HIBB.O) are among the fund's core holdings.

Read our analysis here The American Lifestyle Economy needs something drastic | Our Seeking Alpha zyaada | The investment blog

via Ex-SAC, Pequot managers to launch hedge fund firm | Reuters.

How WSJ thinks you can make $20 billion – Ha HaHa

It is the end of the year and crisis or no crisis sycophants and foxhole investors are back at what they do best..Witness this precious piece from Gregory Zuckermann in WSJ on John Paulson’s lessons. The ignorance and the lack of polish shines through in another woeful attempt by a media person and countless ‘investors’ or shadows thereof. So i felt bound to finally take the plunge and make matters right. You see, this is not how the Greatest trades were made. ( Link to the article is really superfluous, you can meet umpteen such articles in the financial media and even find ranches in Texas that would hold dinner galas spouting much the same philosophy.)

You see, this is not how the Greatest trades were made. ( Link to the article is really superfluous, you can meet umpteen such articles in the financial media and even find ranches in Texas that would hold dinner galas spouting much the same philosophy.) Also, the book is available from Amazon.com here Our comments are on Gregory Zuckerman’s ‘Lessons Learnt’ post in WSJ (Financial Adviser) The Amazon link with cover is also available on an alternative version of this post

1. Listen to your experts : And this is serious. The man who says the crisis teaches us to “Don’t rely on experts’, he s just taking time off to be a papa stooge. The experts not only have an edge on the information, they also have a ‘record’ behind them. But yes, don’t take one source for granted, be sceptical, trust your judgment

2. Bubble trouble – True. Everyone doing the same thing at the same time changes things. But the tectonic shift is not necessarily better always, or bad OR Black Swan either..and don’t ever use your nest savings..we are never even talking about it. Better still, for this take advice #1 and add to it..Dine with your experts..take an evening walk in the park with them, and don’t forge to be nice to them. This one also is not the excuse to shout and scream like Osama bin Laden, nor does that make you and your investments any better – or grade worthy – or worth selling low and buying high

3. The Contrarian point – is a studied viewpoint, not an allergic reaction to the expert’s makeup and Maria’s sartorial and travel lifestyle ( as ‘reported’ on CNBC. Drink it in with beer at dinner and wake up in the morning to drink another coffee..raving and ranting is counterproductive to gray cells..not the drinking

4. Focus on Debt Markets – That is a great lesson from this crisis. In fact that would even give us some breathing space when we try to avert the next crisis. There is an imperfect natural hedge there, and it saves us, esp when everyone starts thinking of OIL and GOLD too..those times or in a normal economy bubble or ultra mega size bubble, you need to see that the debt is at any time no less than 5 times the size of the entire Global Equity market investments and that is a lot, in fact what went out of equity went to bonds and then it will come back from there too..

5. Master new Investments – On the dot. Exchange Trading Funds are a good idea. Publicly traded debt in india, China and the N11, G8+3 not so much. So here, listen to more than one expert. Read us here. and don’t feel like Bruce Willis in Die Hard, Make the calls and ask around. That gets any thoughts of crises from developing, esp not overnight and not a crisis of the household budget

6. Use Derivatives to your advantage: Getting that safety net in place is harder to do with just CDs and real estate. You need to balance the equation more than once every year. Realign to a new fact or facts. Don’t sit on it. and then making a jump to new products is easier, and the ill-informed salesperson is unable to fool you into buying unsecured, unpayable. ETFs are a great place to start.

7. Reconstruction is the key. So is infrastructure. Keep your eyes open. 3 out of 5 ETFs are going to fail. Derivatives by their nature are going to leave someone stranded again. It will happen. So will real estate, and Lehman Bros. and in fact next time the cash buried in the backyard would not be safe either. Get used to a little higher risk. start small.

8. Experience counts. On the dot. But hero-worship kills, indiscriminately

9. Luck helps? See 1 to 4 above and redo the equation . Talk to us. Talk to your neighbourhood broker. All investment classes are inherently the same once you have figured them out. They make money if they are right. and if they are right they work for you. and your friends.

Paulson made his greatest trades after he had made a few winning trades every year. that is the only thing to learn, rest is the debate..and hating the experts is only handing America’s markets to the Osamas of the world..

Also if you are a corporate denizen, take a lesson from the lady that failed to catch Cadbury and her investment bankers..you go in with only one price and you come out empty handed.

[Tag Paulson, investing, US, Retail Lifestyle, Wealth]

John Paulson Doubles Bet on Cadbury | DealBook (NYtimes)

zyaada notes: Also do follow the Cadbury’s valuation stories at Advantage zyaada’s http://advantages.us

John Paulson, the hedge fund manager whose wagers against the United States housing market earned him billions last year, has doubled down on his bet on Cadbury, Bloomberg News reported.Mr. Paulson’s hedge fund, Paulson & Co., increased its stake in the British confectioner the same day that Cadbury rejected a $16.7 billion bid from Kraft Foods.According to a filing with Securities and Exchange Commission, Paulson & Co. now owns 28.5 million shares, or 2.08 percent, of Cadbury after buying 14.8 million shares at 759.59 pence each Monday.Mr. Paulson’s increased bet came as Kraft took its $16.7 billion bid for Cadbury directly to shareholders on Monday, after the board of the U.K. chocolatier rejected the offer as too low.Kraft declined to raise its bid, sticking with its original proposal from September, which offers 3 pounds, or $4.90, in cash and 0.2589 new Kraft shares for every Cadbury share. The offer values each Cadbury share at 717 pence, a 26 percent premium to the price before Kraft made its original proposal.The move by Mr. Paulson comes amid increased hedge fund interest in Cadbury. Eton Park Capital, for example, now holds 2.4 percent of the firm. However, Eton bought some of its shares at levels above 800 pence.

via John Paulson Doubles Bet on Cadbury – DealBook Blog – NYTimes.com.

Can Apple mark a Lifestyle return?

The Advantage zyaada analysis follows later

Here is the result and comparisons from Marketwatch.com

Apple Inc. on Monday reported a 46% increase in its fiscal fourth-quarter earnings as the company posted higher revenue than a year ago led by better-than-expected sales of iPhones, Mac computers and iPods.

Apple (AAPL 202.40, +12.54, +6.61%) said it earned $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. During the same period a year ago, Apple earned $1.14 billion, or $1.26 a share, on $7.9 billion in sales. Apple’s results topped the estimates of analysts surveyed by Thomson Reuters, who had forecast the company to earn $1.42 a share on revenue of $9.2 billion. [picapp src=”9/4/2/2/Apple_Launches_Its_ea1d.jpg?adImageId=6245466&imageId=4962215″ width=”500″ height=”324″ /]

The initial reaction to Apple’s report was strong enough to send the company’s shares up more than $12, or as much as 6.5%, in after-hours trading to $202.20 after earlier rising $1.81 a share in the regular market session. The company sold 7.4 million iPhones during the quarter ended Sept. 26.

It was the first full quarter of sales for the iPhone 3GS, Apple’s latest version of its touchscreen smartphone that starts at $199. Analysts were expecting iPhone sales of 7 million, on average. Apple also said it sold more than 3 million Macs during the quarter, thanks in part to the back-to-school selling season. Mac shipments increased by 17% from the same period a year ago. Analysts had been expecting Mac sales of 2.8 million. During the quarter, Apple released Snow Leopard, the latest upgrade to its Mac operating system.

With the revenue recognition norms giving it an additional fillip on the balance sheet by Q1 2010 when more of the iPhone sales recovered from customer will reflect immediately and increase EPS, Apple has the right denoument to a hectic decade and a brilliant last 5 years since the launch of the iPod.

With iPhone 3G an unqualified success at an affordable price point, it may even be the trailblazer for the telcos that have spent the revolution since the 90s largely deep in the red.

Tech platforms seem to have stabilized for a successful cohabitation across the planet using iphones + portable music plus Kindle plus the Web 2.0 meaning that lifestyle customers are no longer being penalised with features that are outdated in just three months and uncompetitive pricing and packaging that brought AOL and Netscape down (and perhaps even Sony)

The only clouds for Apple being Windows 7.0 which is as comfy as the Snow Leopard and the apple users remain people who look for discontinuous change when they switch! The only answer to that probably would be for Apple to get more vocal sponsors in the coming Crowdsourcing for retail lifestyle..

[picapp src=”3/0/2/c/environmental_issues_8911.JPG?adImageId=6245570&imageId=6725321″ width=”234″ height=”139″ /]However, Coke kept falling for the third successive quarter with the largest volume drop. Despite lower revenues it however managed to post the same profit of 81 cents from $8.04 billion. Meanwhile, case volume grew 37% in India and 15% in China ( here)

Kraft, Cadbury in Bournville – DealBook

Kraft Foods’ $16.7 billion hostile offer for Cadbury has gotten plenty of attention today (even with the United States markets closed for Labor Day).

zyakaira notes: Bournville, where Cadbury’s originated and Cadbury’s rejected the bid which sent traders hankering for cjhocolate and made the stock rise 40% in anticipation. This is the first Billion dollar deal tabled in 2009 with Toblerone maker Kraft bidding for Cadbury’s across the pond. Hershey’s and Nestle can’t be white knights because of Anti trust regulations while others seem small fry. Kraft offers only 300p  (48c) in cash and 0.26 shares of Kraft per Cadbury share, leaving the UK based giant short changed. It also recommends that the integration of distribution etc will save the combined company a further $1 billion

But many are questioning how one investor in particular feels about the proposal: Nelson W. Peltz, the billionaire who holds sizable stakes in both Cadbury and Kraft.

Mr. Peltz’s investment vehicle, Trian Fund Management, owns a little over 3 percent of Cadbury shares and about 0.63 percent of Kraft stock, according to regulatory filings.

Long known as an activist investor, Mr. Peltz pressured Cadbury to dispose of its soft drinks unit, which the company finally did by spinning off what is now the Dr Pepper Snapple Group last year.

Mr. Peltz bought up a stake in Kraft two years ago, again applying pressure to the company’s management to boost performance. Since 2007, Kraft has sold off a variety of businesses, including its Post cereals unit to Ralcorp for $2.6 billion. (Kraft’s chief executive, Irene Rosenfeld, cited the company’s strengthening of its core food business in a conference call earlier today.)

It’s unknown whether Kraft or Cadbury has consulted with the investor. A spokesman for Mr. Peltz declined to comment.

via Kraft, Cadbury and the Peltz Factor – DealBook Blog – NYTimes.com.

Tweets from the Market – July 24, 2009

Do remember to validate picks at http://socialpicks.com/zyaadakairaada/portfolio $AMZN is down 8% as we speak

Facebook at 77 million visitors, Amazon 64 m, Craigslist at 47 m, WordPress at 26m and Twitter at 20m compared to Goog at 157m in June09
about 2 hours ago from TweetDeck

So $AMZN makes $1.75 bn per month from 64 million visitors
5 minutes ago from TweetDeck

That is more than $27 from every single visitor! $AMZN
3 minutes ago from TweetDeck

If Twitter made 10% of that they would have sales of $54million to start with ( based on June comscore)
2 minutes ago from TweetDeck

China’s new loans may surge to a record 11 trillion renminbi ($1.6 trillion) this year as the government refrains from tightening lending rules to protect economic growth
just now from Tweetdeck

Goldman /Blankfein paid a 23% return on the govt’s TARP investment, paying $1.1 billion for the warrantshalf a minute ago from TweetDeck

Also Buffet sold a third of his stake in Moody’sjust now from Tweetdeck

China’s state construction giant raised a $7.3 billion in IPO4 minutes ago from TweetDeck

(Green Shoots?) Both American Express (AXP) and Capitol One (COF) reported earnings that were quite weak (seekingalpha dot com)2 minutes ago from TweetDeck

$CIT looks in line to become smaller, selling its comml business and most likely losing its aviation lending and rail finance biz profitablyhalf a minute ago from TweetDeck

BTW, we continue to be short on both $AXP and $COF and bullish on the market ( same as before act. results came out @zyakairahalf a minute ago from TweetDeck

<-> twitter @blrmoneytalkz