Charlie Bottle

http://www.charliebottle.com
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    • Fri Oct 31st 11:00 AM | Rating: 0 0
      Commented on:
      Salesforce.com Worth Half Its Current Price
      GreyhairedFortraDevelo...

      Thank you, your input is highly valued. I'm often wrong. What is the revenue model for The Force exactlly?
      View article »
    • Wed Oct 29th 01:19 AM | Rating: 0 0
      Commented on:
      Salesforce.com Worth Half Its Current Price
      jnoneiliv,

      This article needs to be looked at in conjuntion with my previous one(seekingalpha.com/artic...).

      CRM is a mature $7 billion industry which will contract with the global recession. Salesforce is a second rate palyer in the space with a 10-15% market share competing against much larger players who have become annoyed with them. A price war has begun with Oracle's net suite offering 50% discounts to SF's customers. MSFT has decided to launch a copycat of "the Force", just in case.

      The only hype here is about "the cloud" and "software as a service" and "the Force", what's the big deal with offering applications over the internet? Everyone else is doing it anyway.

      you're right you can look at multiples of sale (3.1X) or book value (6.1X) the conclusuion is the same this is an overpriced stock.
      View article »
    • Wed Oct 29th 01:05 AM | Rating: 0 0
      Commented on:
      Salesforce.com Worth Half Its Current Price
      PenName Dave, yes I meant cash. The Company has negative working capital because they collect cash from customers upfront and provide the services and pay commisions over time (yearly or quarterly). If the revenue becomes flat (imagine new customers are = churn+reduction in prices to keep customers), this would mean deferred revnues would be flat and deferred comissions would either be flat probably decrease (as new sales would have decreased), so the positive cashflow impact would disappear (and possibly turn negative). Also I forgot to mention another big component taht adds to the difference between earnings and operating cashflow is stock based compensation which is dillutive to existing shareholder and therefore need sot be taken into consideration.

      Personally I think that revenues might actually decrease at some point in 2009. The CRM market will no longer be growing and they are competing with deep pocketed competitors. They will lose Exsiting customers to competitors (netsuite has just launched a 50% price cut for salesforce customers) and will decrease subs (because of layoffs) and pricing for the customers they retain.
      View article »
    • Mon Oct 27th 18:27 PM | Rating: 0 0
      Commented on:
      Salesforce.com Worth Half Its Current Price
      I meant it increased their operating cahshflow, not operating profit.
      View article »
    • Mon Oct 27th 17:17 PM | Rating: 0 0
      Commented on:
      Salesforce.com Worth Half Its Current Price
      PenName Dave, thank you. I'm very aware of their fiancials and looked at it from several angles. The company has negative working capital given that it receives ahead of providing the service (on quarterly or annual basis), as result of their growth this increased their operating profit. Given that I'm anticiapting a stagnating to decreasing sales this will disappear or even reverse. So lookin at EV/EBITDA multiple would be better to look at (right now it is about 20X compared ot 7X for MSFT). Still the company has recurring capex which I think it is not fair to exclude so I prefer to look at Earnings and P/E. Ben Graham was right.
      View article »
    • Fri Oct 24th 02:52 AM | Rating: 0 0
      Commented on:
      The Case for Shorting Long Dated U.S. Treasuries
      What type of upside and carrting costs do you anticiapte for such a trade with futures?

      I wrote a similar artcile 4 months ago (seekingalpha.com/artic...) I was clearly too early, and now think that although a valid trade at some point it shoudl still take a few months or even years before it makes sense. Inflation needs to pick up again or China and middle east need to be in real trouble to start dumping dollars (unlikelly in the short term).
      View article »
    • Mon Oct 20th 19:48 PM | Rating: 0 0
      Commented on:
      Why the CDS Market Didn't Fail
      No true. Let's runsome numbers:

      - Before the credit crisis LEH 5Y CDS was around 40 bps
      - The monday 9/08/08, the week prior prior to BK it was at 300 bps
      - The last day of trade bfore BK it closed at 700.

      This means a loss of about 13% of the principal insured by 9/08 and a further 20% loss during the last week of trade.Considering the wonderful recovery of 8 cents on the dollar,this means upon settlement, i.e. tomorrow a seller of CDS still needs cough up 59 % of the principal.

      Anyone who thinks this is a stable system is in serious denial. Bringing this market under a clearing house mechanism should be priority #1 for authorities.

      I've written an artcile that estimates the losses from the lehman debacle at over 200 billion dollars on the cash market and derivatives (this is probably a conservative estimate), check it at: seekingalpha.com/artic...
      View article »
    • Sat Oct 18th 16:43 PM | Rating: 0 0
      Commented on:
      Salesforce.com: Pricey and Coming Down Fast
      My previous posting was for buylowsellhigh (I hope he got it).

      Nicky, thank you for your comment. I think you may underestimate how much good Investing has to do with common sense and often casual observations which give you na hedge. I think it was Barton Biggs who said that specialists in a filed often undeperfom non specialists because often the odds tend to be with the simple and ovious outcome. Experts ofetn tned to have pet theories and look at complex webs of factors and get lost in it. I'm certainly not a specialist in CRM but am reasonably well informed and made a good faith effort to lay out my case based on facts and figures which I have provided here.

      You on the other end, provided absolutelly no basis for your statement that my article is poor and that I do not understand the business, would you please explain why you feel that way?

      View article »
    • Sat Oct 18th 12:08 PM | Rating: 0 0
      Commented on:
      Salesforce.com: Pricey and Coming Down Fast
      The revolution will not be televised, will not be televised,
      will not be televised, will not be televised.
      The revolution will be no re-run brothers;
      The revolution will be live.
      View article »
    • Fri Oct 17th 18:23 PM | Rating: 0 0
      Commented on:
      General Discussion on GLD
      Moorer, I have an artcile that discusses with detail and figures demand and supply for gold. Please check seekingalpha.com/artic...
      View forum topic »
    • Fri Oct 17th 18:16 PM | Rating: 0 0
      Commented on:
      Salesforce.com: Pricey and Coming Down Fast
      Ikfhoo,

      Thank you for your comment. I'm an investor not a technologist and (though not particullarly smart), I'm pretty good at smelling rats. Whenever I hear the word "paradigm change", I start sharpening the knife. Not that I am complaining, it provides me with unique opportunites for profit through shorting as long as you time it well.

      Unwittingly, your comment realy bollsters my point - look at Java after 10 years...where did it get Sun? Absolutelly nowhere. How much should "Force" be worth to an investor? Absolutelly nothing.
      View article »
    • Mon Oct 13th 17:57 PM | Rating: 0 0
      Commented on:
      Lehman's Loss: More Than $200 Billion
      CDS are markerd to market daily, however it really up to each buyer of CDS to request for additional collateral. I'm not aware of any guidelines by ISDA (although there may be and still be looselly applied by participants). So in a situtation like lehman where the credit spreads ramin tide until a few days before BK, the chances are that collateral posted is quite short.
      View article »
    • Sat Oct 11th 18:05 PM | Rating: 0 0
      Commented on:
      Treasury Bonds: The Short of the Century
      My timing on this article was clearly off as it is now patently obvious and as pointed out by several of the comments (fxtrader07, djzvue and others). clerly inflation is of the table for a while and while the US government creditworthiness look even worst know with all the bailouts and the recession looking much worst, there are really not much safe alternatives to treasuries right now. There will come the day to short them but it is probably many months/year(s) off.
      View article »
    • Tue Oct 7th 12:23 PM | Rating: 0 0
      Commented on:
      Big Troubles for the Euro
      David,

      Good article, altough I would disagree that there is no lender of last resort - the ECB has been playing that role providing liquidity for European banks - however agree that they are much more constrained in pursuign agressive out of the box solutions such as the Fed has had to pursue in the States (and rightly so in my opinion).

      It seems we reached a similar conslusion at he same time. Check out my article earlier today:

      seekingalpha.com/artic...
      View article »
    • Sun Oct 5th 11:58 AM | Rating: 0 0
      Commented on:
      Iceland: When Too Big to Fail Becomes Too Big to Rescue
      Very nice piece. The situation in Iceland while extreme it certainly serves as cautionary tale for all other countries including the U.S.. Clearly unless Iceland unlists subtancial help from other countries, which is unlikelly given that they have more than they can handle back at home (other than deposit guarantees on deposits held by Icelandic owned operations in their domestc markets, e.g. a Kaupthing subsidiary, the largest bank in Iceland, has about 150,000 depositors in the UK). The Country will be unable to nationalize all three largest banks and assume their liabilities without bankrupting itself. Besides what would is the point of using Iceland's tax payers money to safegard foreign creditors who should have know better? It should therefore focus on preserving deposits and assuming an interim credit provision role to the countires companies perhaps through Glitnir (whose liabilities represent perhaps about 100% of the GDP, having grown more than six fold in the last four years). It is noteworthy to point out that the fact that the government bought 75% of Glitnir does not necessarilly mean that the government is guaranteeing its debt (only implicitelly). It will be interesting (although regretful) to see how things unflod in Iceland.

      PS: Mr Bombadil, what you have here are a group of people exercising their first ammendement right to express their opinions. Besides I don't think anyone was celebrating Iceland's demise.
      View article »
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