The Internet Junkie

NY Giants 2008 Schedule

If you haven't yet, you should definitely check out the NY Giants schedule this season. In fact, if you're a fan like me, use the "Schedule of MS Outlook" link at the bottom of the page (link below) to import calendar reminders so you're always on top of things.

Dates/games of note include:

• 8/28 (pre-season) @home vs. Patriots
• 9/7 @home vs. Redskins
• 10/26 @ Steelers
• 11/9 @ Eagles
• 12/7 @home vs. Eagles
• 12/14 @ Cowboys

Link: Schedule 2008 - Giants.com.

Best Beach Week, Ever

I took the week off last week and spent it at the beach with my family, several of my in-laws, and a few friends. It was a great time - excellent beach weather, and lots of great laughs and food. This trip has become a regular annual event, and I'm so looking forward to next year...

Value vs Growth

Bloomberg ran a story yesterday (8/12/08) that captured my (investing) attention. In it, writers Michael Patterson and Eric Martin make a compelling argument (though the analysis could be much deeper) that now is a good time to shift your equity allocations to value and away from growth. They cite how value has beaten growth over the long term, and how that trend has reversed itself in 2007 and again this year (value strategies/funds under-performed growth for the first time this decade in 2007 (by 4.5%) and are trailing by 15% this year -- the widest margin since 1980). The authors imply a reversion to the mean is likely at some point, but hedge themselves by saying growth could continue to out-perform value for as much as another two years given woes in the financial sector (many value funds are still long/over-weight financials, and some energy/commodity stocks).The story discusses recent fund under-performance by the value-investing "gods" like Bill Miller (Legg Mason), Martin Whitman (Third Avenue), David Dreman (DWS Dreman) and Buffet (Berkshire Hathaway). Value investors/funds typically look for stocks trading at low valuations relative to cash flow and earnings.

Gotta Get Gizmo-Squeezebox Duet

If you like music and use web-based music services (e.g., iTunes, Last.fm, Rhapsody, etc.), like most people today do, you gotta check out Squeezebox Duet from Logitech. CNET did a review of Duet at CES this year (click here). I just pre-ordered the Duet online here. It’s expected to ship later this month. I’m going for just one controller and one receiver for now, but expect I’ll be getting another set for upstairs too. I’m an active user of Rhapsody and have wanted to get either a Squeezebox or Sonos setup ever since my good buddy who works at Rhapsody demo’d them both to me. The final straw came just recently when the Duet was announced in January with the cool new controller. Also, my wife has been asking for a better music setup for upstairs. This will be perfect.

The Week Ahead 2/11/08

I spent most of last week in the Bay Area meeting w/ several very interesting private and public Internet/digital media companies, VCs and institutional investors. In total, 15 meetings in 3 days. This week includes more earnings reports (GLUU, NILE, TTGT, VCLK, GSIC, BIDU, PCLN), a meeting w/ one of the top NYC-based VCs, an initiation of coverage on a new company, the opening of U2-3D (on Friday) and, of course, V-Day on Thursday.

The Longhorns' Test Against Kansas Tonight

I’m a Texas Longhorn grad. UT is obviously a major college sports school, and highly competitive in a number of sports (basketball, football, baseball, etc.). The UT BBall team started the year w/ 12-straight wins but then went through a shaky period before rebounding of late — they’ve won their last 3 games and 6 of their last 7. The Horns are currently ranked #11 by the AP, with a 19-4 record. Their biggest test to date is tonight at home against #3 ranked Kansas (23-1). Should be a great game! [Update: The Longhorns won, and it was a great, close game.]

A lesson for public company CFOs

comScore (SCOR) shares sold off 17% on Friday, and now trade near the low end of their trading range since the IPO, and are 45% below the 52-wk high of $42 (which was reached in large part due to positive comments by Jim Cramer on Mad Money late last year). The reason for the sell-off was confusion over earnings guidance for 2008 (given on the 4Q07 earnings release Thursday evening). I’ve seen this story too many times in my 10+ years on Wall St. One memorable situation exactly like this happened to AQNT a couple of years ago. 

Sell-side analysts rely on CFOs for a lot of guidance, often too much, but it’s inevitable that things like tax expenses are complicated and justifiably require some guidance. Some background first…For companies that have historically reported pre-tax losses (and, thus, build up large stock-piles of NOLs, or net operating loss carryforward) and then turn the corner and begin to consistently report pre-tax profits, there will come a time when the company will reverse all or a portion of the large tax valuation allowance they have accumulated (i.e., they will record a one-time large non-cash gain) and then record a full tax rate on their P&L going forward (even though on a cash basis the company usually pays little or no cash taxes as it still has NOLs to offset pre-tax income). When this happens reported/FirstCall EPS is negatively impacted, but there is no impact of free cash flow (the true measure of EV, or enterprise value). The problem w/ SCOR last week, and others like it before, is that this change in tax rate is not anticipated (but should have been). This occurs sometime when companies do not prepare analysts for this accounting change ahead of time (i.e., guiding them to expect a full-tax rate in a future period and, thus, having them model EPS as such). Instead, investors and traders assumed that comScore was issuing 2008 EPS guidance that was substantially below analysts’ estimates, even though it was in-line when adjusted for this non-cash tax difference. In fact, the impact on the stock from this confusion was so great that comScore had to issue this press release during intra-day trading just to try to clarify the situation. The lesson is to pay close attention to you analyst’s estimates and the details of what they have assumed in them. This is fairly easy to do. Make sure to limit any surprises, especially technical accounting and/or non-cash items that can be anticipated. Even if you’re not sure of the exact amount/impact or timing, I’ve seen many CFOs discuss the possible changes ahead of time — elimiated or at least reducing negative situations like this.

Best NBA Season Ever?

I like basketball (both playing and watching), but like many people prefer college over pro ball. But after watching some NBA highlights over the weekend and catching up on team records and rankings I began thinking how this might be one of the most competitive seasons some time. Ironically, later that day Mark Cuban, owner of the Dallas Mavs, posted this blog entry asking the exact same question. No conclusive data to answer either of our questions, but it nonetheless should be interesting to watch teams down the stretch and match-ups in the playoffs.

The Week Ahead (1/27/08)

Earnings season is now in full force, and while eBay kicked it off last week for the Internet sector (and Vistaprint was a nice report on Thurs), earnings seasons really gets going this week with Yahoo! on Tuesday, Amazon on Wednesday and Google on Thursday (all after the close). Also reporting Thursday are Digital River and Getty Images, which recently announced that it has hired an investment bank to explore a sale. Other companies reporting this week that could shed light on the health of the consumer are Starbucks (SBUX) and MasterCard (MA). I’ve also schedule several interesting meetings around the AlwaysOn OnMedia conference, and will be spending time with investors and the management team of Vistaprint on Monday and Tuesday. The stock market this week will likely be most influenced by the FOMC meeting on Tues and Wed. Investors expect another rate cut. Fed funds futures are pricing in a 52% probability of a 25bp ease and a 48% probability of a 50bp cut.

Wal-Mart Cutting 1000 Magazines

The fact that Wal-Mart has decided to stop distributing some of the best known magazines in the U.S. is a real sign of the future of not only magazines but of print media in general. Article here. The Internet has been the primary beneficiary of ad dollars moving out of print, and this is certainly another positive datapoint for Internet media.