writser Posted March 23, 2014 Share Posted March 23, 2014 I like how I sometimes get shown Salesforce ads on CoBF when browsing this topic. Link to comment Share on other sites More sharing options...
tombgrt Posted March 25, 2014 Share Posted March 25, 2014 Lucky so far so decided to lower exposure and use parts of my current profit for a higher leveraged bet. Sold my ITM 55 '15 puts (25% of total position) and decided to use half (about the value of the profit) to buy more far OTM '15 puts (strike $35, also own $40 and $45). Link to comment Share on other sites More sharing options...
tombgrt Posted April 3, 2014 Share Posted April 3, 2014 Salesforce.com Announces New Industries Strategy http://seekingalpha.com/pr/9462623-salesforce-com-announces-new-industries-strategy "As we look to grow to $10 billion and beyond, our new industries strategy is a huge opportunity for salesforce.com (CRM) to expand our footprint within existing customers and reach new enterprise customers," said Keith Block, president and vice chairman, salesforce.com . "Companies across all industries are turning to salesforce.com to help them transform their business models and connect with their customers in new ways." Industry Solutions for the Internet of Customers The world is becoming completely connected. Every day, millions of new products, apps and devicesfrom every industryare connecting to the Internet. By 2020, there will be more than 50 billion connected things, from smartphones and wearable smart devices to jet engines and cars. And behind every product, every app and every device there is a customer. It is the Internet of Customers, and customer relationship management has never been more important. bla bla bla... What was their internal growth rate again, not to mention FCF/share? Link to comment Share on other sites More sharing options...
tombgrt Posted April 3, 2014 Share Posted April 3, 2014 WDAY -5%. I have been contemplating going short this one as well (given that the valuation is even much higher than CRM) but with a 10%+ put position (2015) in CRM I figured I probably have enough. Seems like there growth still has plenty of momentum as well and that there are less potential accounting problems. The CRM put position (and others) is also more than enough to let me stay aggressive on the long side of my portfolio. Link to comment Share on other sites More sharing options...
jschembs Posted April 3, 2014 Share Posted April 3, 2014 WDAY -5%. I have been contemplating going short this one as well (given that the valuation is even much higher than CRM) but with a 10%+ put position (2015) in CRM I figured I probably have enough. Seems like there growth still has plenty of momentum as well and that there are less potential accounting problems. The CRM put position (and others) is also more than enough to let me stay aggressive on the long side of my portfolio. I'm short WDAY as well. CRM and WDAY are my only two short positions. I think WDAY has much more honest management than CRM (compare the way Bhusri describes their performance and future opportunities vs Benioff), but WDAY's addressable market isn't all that large, and at ~35x trailing revenue, there's no set of future outcomes that get you anywhere near the current stock price. Link to comment Share on other sites More sharing options...
tombgrt Posted April 4, 2014 Share Posted April 4, 2014 Thanks for your insight jschembs! Full disclore: I bought some otm puts at opening for wday seeing it pop up 2%. More speculation that we might finally see decent reversal to more normal levels and it also helped to make me feel better about buying more gncma. :D Not that they correlate all that well... Link to comment Share on other sites More sharing options...
tombgrt Posted April 12, 2014 Share Posted April 12, 2014 http://www.bloomberg.com/news/2014-04-11/salesforce-tower-rents-said-to-set-san-francisco-record.html http://seekingalpha.com/news/1671393-salesforce-spending-690m-on-hq-gets-naming-rights-thrown-in Sorry, I like to post these tidbits... Can't help myself! Link to comment Share on other sites More sharing options...
tombgrt Posted April 23, 2014 Share Posted April 23, 2014 http://seekingalpha.com/article/2156773-salesforce-in-the-red-for-now-but-not-forever If you looked at Salesforce.com's (CRM) trailing year return on equity, assets or net margin, you wouldn't be convinced that it was a good investment. However, the company has delivered share price growth of nearly 30% in a year. Had it not been the decline (see graph below) that started after Salesforce announced its fourth quarter result at the end of February this year, the gain on investment per annum would've been more than 50% on share price alone. Yeah, that's a valid valuation method. Only one correct response: Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 Well he's right, people have been making the same argument as you for years now, and there's only one way CRM's stock has moved: up. There are no points for "sound" valuation when the stock price goes the other way. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted April 23, 2014 Share Posted April 23, 2014 Holy shit why did I ever learn about business valuation if it is that easy :D Link to comment Share on other sites More sharing options...
Phaceliacapital Posted April 23, 2014 Share Posted April 23, 2014 Prediction: Stock corrects to proper price ($10) and Oracle buys them in the most unholy of smug press conferences where Larry is talking and Marc is counting his billions and thinking about his next venture where he fools the masses once again that he cares about shareholders. :D Link to comment Share on other sites More sharing options...
tombgrt Posted April 23, 2014 Share Posted April 23, 2014 Well he's right, people have been making the same argument as you for years now, and there's only one way CRM's stock has moved: up. There are no points for "sound" valuation when the stock price goes the other way. Hu what? What are you doing here then? Don't call yourself a value investor if you game is momentum. Meanwhile I'll add to my option shorts in these POS's. I can wait a few years and still strike it big, no worries! Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 Don't call yourself an investor if you don't realize that your return depends on the ending price. Link to comment Share on other sites More sharing options...
jschembs Posted April 23, 2014 Share Posted April 23, 2014 Don't call yourself an investor if you don't realize that your return depends on the ending price. Palantir, what is your point with this and your previous post? Obviously he understands return depends on the price at which the asset is currently marked or ultimately sold. Does the fact that he (and I) have paper losses on a short investment in CRM, and because the stock chart has moved against us over the last year or two, mean we're not "investing" properly? If the facts and valuation arguments changed, and we did not alter our views, that would be one thing, but I'd tend to call someone who adjusts their view and portfolio based on what the stock charts tell them a trader rather than an investor. Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 So say tombgrt makes a great case for why CRM is overvalued, and the market responds by tripling CRM's price over the next five years. Was his analysis successful? Link to comment Share on other sites More sharing options...
jschembs Posted April 23, 2014 Share Posted April 23, 2014 So say tombgrt makes a great case for why CRM is overvalued, and the market responds by tripling CRM's price over the next five years. Was his analysis successful? If the case is truly great, in five years the market will have come to its senses. Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 ^So, your opinion of whether the analysis is great or not depends on the market price? Link to comment Share on other sites More sharing options...
jschembs Posted April 23, 2014 Share Posted April 23, 2014 ^So again, your opinion of whether the analysis is great or not depends on the market price? Cool. Your sarcasm is a wonderful addition to the conversation. All I'm saying is that being wrong over a year or two doesn't mean the analysis is wrong. Over 3-5 years, you must assume the market is correct. Link to comment Share on other sites More sharing options...
Liberty Posted April 23, 2014 Share Posted April 23, 2014 ^So again, your opinion of whether the analysis is great or not depends on the market price? Cool. All investing is a cash to cash transaction, so the end price always matters. But it doesn't mean that you can't make decisions based on fundamentals rather than other things (momentum, how charts look, etc). I think Tom is making his decisions based on fundamentals, and so trying to say that he's not an investor or whatever is unfair. That doesn't mean that he'll be proven right in the end, but none of us can be sure of that either. The market always has the option of being irrational. That goes for shorts as well as long. What if everybody on this board had bought BAC at $7 because of how the fundamentals looked and years later it was at $3? That's the same kind of thing you're saying. We have to be right on process because we control that while we don't control outcomes. Link to comment Share on other sites More sharing options...
Avyalake Posted April 23, 2014 Share Posted April 23, 2014 So say tombgrt makes a great case for why CRM is overvalued, and the market responds by tripling CRM's price over the next five years. Was his analysis successful? Is this not Outcome bias? http://en.wikipedia.org/wiki/Outcome_bias Isn't value investing about a process. Not every investment is guaranteed to be successful? Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 ^So again, your opinion of whether the analysis is great or not depends on the market price? Cool. Your sarcasm is a wonderful addition to the conversation. All I'm saying is that being wrong over a year or two doesn't mean the analysis is wrong. Over 3-5 years, you must assume the market is correct. Have you looked at CRM's performance since inception? Do you realize that the arguments made against CRM right now are the same as years ago, especially as you note that over 3-5 years the market is correct. Link to comment Share on other sites More sharing options...
jschembs Posted April 23, 2014 Share Posted April 23, 2014 We're not talking about short positions initiated 5 years ago, we're talking about short positions initiated in the last year. Link to comment Share on other sites More sharing options...
jschembs Posted April 23, 2014 Share Posted April 23, 2014 ^So again, your opinion of whether the analysis is great or not depends on the market price? Cool. Your sarcasm is a wonderful addition to the conversation. All I'm saying is that being wrong over a year or two doesn't mean the analysis is wrong. Over 3-5 years, you must assume the market is correct. Have you looked at CRM's performance since inception? Do you realize that the arguments made against CRM right now are the same as years ago, especially as you note that over 3-5 years the market is correct. I'm not disagreeing with you that shorting CRM 5 years ago would've been a horrible decision. Link to comment Share on other sites More sharing options...
tombgrt Posted April 23, 2014 Share Posted April 23, 2014 I have been short these kind of stocks for 3 months and on average I am in the plus. A period of 3 years would be short, markets can stay irrational much longer. In the case of crm I believe that various things can't keep up appearances for another 1-2 years and especially if the stock price slumps. Funny fact is that the market has been right about crm for a xouple of years now (or so it seems) exactly because the stock has been rising! Link to comment Share on other sites More sharing options...
Palantir Posted April 23, 2014 Share Posted April 23, 2014 ^So again, your opinion of whether the analysis is great or not depends on the market price? Cool. All investing is a cash to cash transaction, so the end price always matters. But it doesn't mean that you can't make decisions based on fundamentals rather than other things (momentum, how charts look, etc). I think Tom is making his decisions based on fundamentals, and so trying to say that he's not an investor or whatever is unfair. The market always has the option of being irrational. That goes for shorts as well as long. What if everybody on this board had bought BAC at $7 because of how the fundamentals looked and years later it was at $3? That's the same kind of thing you're saying. We have to be right on process because we control that while we don't control outcomes. To some extent I agree with you, but when you say that tombgrt is making an argument on fundamentals, how can you be sure that he really is fundamentally sound and the market is being irrational? How do you determine who is being rational? :) As you surely have noted, a significant section of stocks continually trade at very high valuations and have done so for years on end. At some point, isn't it worth wondering that maybe the process is not as ironclad as previously thought? Link to comment Share on other sites More sharing options...
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