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Loss Leader or Value Creator? Deconstructing Amazon Prime
I am an Amazon Prime member and have been one for a long time, and I am completely hooked. Not only do I (and my family) use Amazon Prime for items ranging from tissue paper to big screen televisions,...
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The Bitcoin Boom: Asset, Currency, Commodity or Collectible?
As I have noted with my earlier posts on crypto currencies, in general, and bitcoin, in particular, I find myself disagreeing with both its most virulent critics and its strongest proponents. Â Unlike...
View ArticleBitcoin Backlash: Back to the Drawing Board?
My last post on Bitcoin got me some push back and I am glad that it did. I would rather be read, and disagreed with, than not read at all. I have been told that I know very little about crypto...
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January 2018 Data Update 1: Numbers don't lie, or do they?
Every year, since 1992, I have spent the first week of my year, paying homage to the numbers gods. I collect raw accounting and market data from a variety of raw data providers, and I am grateful to...
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January 2017 Data Update 2: The Buoyancy of US Equities
If you were an investor in US stocks, 2017 was a very good year for you. Faced with a wall of macro economic and political worries, the US equity market proved more than up to the challenge and...
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January 2018 Data Update 3: Taxing Questions on Value
If you have read my prior posts on taxes, you already know my views on the US tax code, especially as it relates to corporate taxes. Without mincing words, the US corporate tax code, as it existed in...
View ArticleJanuary 2018 Data Update 4: The Currency Conundrum
There is perhaps no more mangled nor misunderstood part of financial analysis than the handling of currencies, and globalization has only made the problems worse. From the laziness of assuming that...
View ArticleJanuary 2018 Data Update 5: Country Risk Update
In my last post, I looked at the currency confusions that globalization has brought into financial analysis, and how to clean up for them. In this post, I discuss the other aspect of globalization...
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January 2018 Data Update 6: A Cost of Capital Primer
I have long described the cost of capital as the Swiss Army Knife of finance, since it shows up in so many places in finance, albeit in different forms. In corporate finance, it is not only the cost of...
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January 2018 Data Update 7: Growth and Value
I have spent the last few posts trying to estimate what firms need to generate as returns on investments, culminating in the cost of capital estimates in the last post. In this post, I will look at the...
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January 2018 Data Update 8: Debt and Taxes
In the United States, as in much of the rest of the world, and as has been true for most of the last century, the tax code has been tilted towards debt, rewarding firms that borrow money with tax...
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January 2018 Data Update 9: Dividends, Stock Buybacks and Cash Holdings
If success for a farmer is measured by his or her harvest, success in a business, from an investors' standpoint, should be measured by its capacity to return cash flows for its owners. That is not...
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January 2018 Data Update 10: The Price is Right!
In my first nine posts on my data update for 2018, I focused on the costs that companies face in raising equity and debt, and their investment, financing and dividend decisions. In assessing those...
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Testing Times: Market Turmoil and Investment Serenity
The last week has been a roller coaster ride, though more down than up, and investors have done what they always do during market crises. The fear factor rises, some investors sell and head for the...
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Interest Rates and Stock Prices: It's Complicated!
Jerome Powell, the new Fed Chair, was on Capitol Hill on February 27, and his testimony was, for the most part, predictable and uncontroversial. He told Congress that he believed that the economy had...
View ArticleDamodaran Online: There is an App for that!
My posts over the last two months have been heavy, dealing first with my data update from January 2018, and with the market and its volatility in the last few weeks. I felt like taking a break and...
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Stream On: An IPO Valuation of Spotify!
In the last few weeks, we have seen two high profile unicorns file for initial public offerings. The first out of the gate was Dropbox, a storage solution for a world where gigabyte files are the rule...
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Spotify Loose Ends: Pricing, User Value and Big Data!
In my last post, I valued Spotify, using information from its prospectus, and promised to come back to cover three loose ends: (1) a pricing of the company to contrast with my intrinsic valuation, (2)...
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Come easy, go easy: The Tech Takedown!
If there is one thing that I have learned about markets over the years, it is that they have a way of leveling egos and cutting companies and investors down to size. The last three weeks have been...
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The Facebook Feeding Frenzy: Time for a Pause!
In my last post, I noted that the FANG stocks have been in the spotlight, as tech has taken a beating in the market, but it is Facebook that is at the center of the storm. It was the news story on...
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