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Stock Thread (43 Viewers)

Started half a position in Majesco (MJCO). They're basically moving the archaic insurance sector's systems to the cloud. Small cap, lightly traded, but counts MET Life as a client. They're unveiling a new brand next week at their conference so I may complete my position after that.  Looks like a decent shot at a long-term homerun ball.

 
Walking Boot said:
They're paying the cost of people who take Ubers. I mean, when you book a ride and they charge you $12, it's really a $18 ride and they're covering $6 of it. There are costs they pay out, to the drivers, to their staff, to the coders, etc.

But they know if they charge more, people won't take them (or, they'll be the same price as a taxi or lyft or another option). 

The more people that ride Uber, the more money they lose. 

Amazon operated like this for a while. Instead of having a single "loss leader" product, everything was a loss. Eventually, though, they turned a profit.

Uber is hoping to run the same model. They're hoping that they offer enough low-prices that they will kill off all of their competition, then they can charge $24 for the $12 ride and make $4 of profit instead of $6 in loss and that people will pay it because they're the only game in town.

Risks? That people won't be brand-loyal to Uber and switch to Lyft if the two get into a price war. And, that even if they do kill everyone else and are the only game in town, people won't pay $24 for a ride they usually pay only $12 for and stop using Uber and just get a ride somewhere else or take their own car.
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with the whole surge pricing concept, I hope they lose their ###.  

 
There is no ready substitute for Amazon but other retailers are chipping away at that edge. Is there a ready substitute for Lyft or Uber? Unless they find a way to put a majority of cab companies out of business, substitutes are plenty. And if you’re in an area where there aren’t those cab options, if Uber jacks up their prices, it would encourage others to join in the market for quick competition. The model fails due to the nature of the business.

 
Walking Boot said:
They're paying the cost of people who take Ubers. I mean, when you book a ride and they charge you $12, it's really a $18 ride and they're covering $6 of it. There are costs they pay out, to the drivers, to their staff, to the coders, etc.

But they know if they charge more, people won't take them (or, they'll be the same price as a taxi or lyft or another option). 

The more people that ride Uber, the more money they lose. 

Amazon operated like this for a while. Instead of having a single "loss leader" product, everything was a loss. Eventually, though, they turned a profit.

Uber is hoping to run the same model. They're hoping that they offer enough low-prices that they will kill off all of their competition, then they can charge $24 for the $12 ride and make $6 of profit instead of $6 in loss and that people will pay it because they're the only game in town.

Risks? That people won't be brand-loyal to Uber and switch to Lyft if the two get into a price war. And, that even if they do kill everyone else and are the only game in town, people won't pay $24 for a ride they usually pay only $12 for and stop using Uber and just get a ride somewhere else or take their own car.
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Thanks for the information.

Sounds like a stupid business plan to me.  The people I know using Uber on a regular basis would pay more.  So basically we have a business model where both the company and the employees (drivers) are losing money a good percentage of the time.

 
BassNBrew said:
Thanks for the information.

Sounds like a stupid business plan to me.  The people I know using Uber on a regular basis would pay more.  So basically we have a business model where both the company and the employees (drivers) are losing money a good percentage of the time.
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I don't get how the drivers don't get hammered on depreciation. They pay like a buck a mile.  They drive new ish cars.  Probably dropping 40-60c in depreciation every mile and another 20c in gas and another 5c in tires and other maintenance. It's a minimum wage job nearly at that point

 
pecorino said:
There is no ready substitute for Amazon but other retailers are chipping away at that edge. Is there a ready substitute for Lyft or Uber? Unless they find a way to put a majority of cab companies out of business, substitutes are plenty. And if you’re in an area where there aren’t those cab options, if Uber jacks up their prices, it would encourage others to join in the market for quick competition. The model fails due to the nature of the business.
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You don't think that Wal-Mart is not a viable threat to Amazon? If they ever figure out in store pickup correctly and set same day deliveries, they could take a slice out of Amazon. And of all retailers, Wal-Mart has shown that they are willing to take losses to kill competitors too.  Not saying that they are going to do it, but if they went for it totally balls out, they could hurt them. 

 
The Big Guy said:
You don't think that Wal-Mart is not a viable threat to Amazon? If they ever figure out in store pickup correctly and set same day deliveries, they could take a slice out of Amazon. And of all retailers, Wal-Mart has shown that they are willing to take losses to kill competitors too.  Not saying that they are going to do it, but if they went for it totally balls out, they could hurt them. 
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The way I've heard it is like this. 

If Amazon shoppers leave amazon they do it for Target.  

The shopping dollar overlap between amazon and Walmart is really tiny.  

 
The Big Guy said:
You don't think that Wal-Mart is not a viable threat to Amazon? If they ever figure out in store pickup correctly and set same day deliveries, they could take a slice out of Amazon. And of all retailers, Wal-Mart has shown that they are willing to take losses to kill competitors too.  Not saying that they are going to do it, but if they went for it totally balls out, they could hurt them. 
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Walmart isn't a threat to Amazon unless they have a way to crack AWS.

 
Chadstroma said:
IRBT has done real well for me over time and even more so recently. I was worried when they sold their military/security business and thought about selling but their consumer business is just booming. Glad I didn't sell. Second best return in my portfolio from strike (only behind BAC when I bought at near bottom of it's pricing) but I suspect actually the best annualized.
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Geez, I love this stock. Annual percent growth rate of 47% since I bought it in 2008. 618% return on my investment total over that time. 

 
Don't Noonan said:
I did too last week when NFLX dropped because of Disney announcement of their new streaming platform.
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Man... Disney + is going to hit them hard. I know for myself, I plan on dropping Netflix and getting Disney +. Sure, could I pay for both? Yes. Many may. But why? I can catch up on my Peaky Blinders, The Last Kingdom and Narcos stuff with a borrowed sign on. The original series that I really liked with them was the Marvel series that they had and now killed because of this. 

Disney + has Marvel, Star Wars, and the Disney brands.... and Fox. Between me and the kids that is the majority of the stuff we get excited about. I can miss out on a lot of the stuff Netflix has originally produced, I can't miss out on those brands. 

 
33% bump for our old friend Cobalt Blockchain today.  Still not back to where I bought it, but might be a chance to just move on.  Unless @General Malaise suggests it's actually time to double down, of course.

 
1932 after hours. Nice little run. A little mad I sold some a couple months ago, but very happy it seems to be on its 2000 track again. Got another 20 shares recently so it’s a nice day.

Life will be nice if we can sell the rest over the next couple years at this level. Anything higher is gravy. 

 
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CVX earnings call should be interesting tomorrow.  Profits should look quite good.  Stock got whacked when they announced Anadarko acquisition (despite the compelling price they negotiated), then whacked again when it looked like Occidental may take it away, despite the 1B breakup fee.  Lots of interest on whether they will enter into a bidding war or let it go and collect the free billion.

You know, a free billion doesn't sound too bad...

 
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stbugs said:
1932 after hours. Nice little run. A little mad I sold some a couple months ago, but very happy it seems to be on its 2000 track again. Got another 20 shares recently so it’s a nice day.

Life will be nice if we can sell the rest over the next couple years at this level. Anything higher is gravy. 
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Bro these things are paying for my college football tour the country RV 17 years from now. 

 
pecorino said:
Wow, for a novice, those are two bold (risky) choices. Both of those companies have some real questions—you sure you don’t want to start more slowly?
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Hmmm. I can throw a stop loss on them. It's in the "fun money" part of my 401k rollover, so I can tolerate short term volatility. 

 
Plorfu said:
CDW reported this morning and beat by $0.13 and beat on revenue. This is all they ever do. I love these freaking guys. Div is at $0.21 now which they'll likely raise in August. 
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This is my seemingly annual post to come in here and talk about what a studly beast CDW is. Reported this morning, beat and raised. In the two years since I first asked about them here, they've become my second biggest holding (and that's only because Disney went nuts in the last couple weeks.) And I don't really see them slowing down and it feels like nobody is really paying attention yet.

On a broader note, and it's one data point, but it's certainly not a BAD sign that they raised their guidance since it most likely means businesses are spending money upgrading their tech.

 
Got a letter that indicates I'm part of a class-action lawsuit against TWTR. I eagerly await the check for $1.20 I'll get two years from now.

 
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