26-10-2001 20:28									#91
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Well, there are some American companies that have a ton of cash lying around, but we can't pick them up on the cheap. For, instance MSFT has $36 billion lying around, but their p/b is 7. Expensive cash!

INTC has $9 billion on hand, but a p/b of 5.

Really VOD is in the same boat as MSFT and INTC, because they have $160 billion in intangibles. I can't imagine those intangibles are worth that much.

	26-10-2001 20:34									#92
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Well that at least makes me feel good to see that the big boys have some cash laying around.

Did Sony show up in your cash screen? They are NEVER cheap though.

	26-10-2001 20:58									#93
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Dan, how do you look at cash reserves?

My impression was that the street is pretty cognizant of this. (already factored into prices). For instance not valuing a company less than cash unless there are large liabilities...or for growth companies like Novartis, applying a little bit of a penalty (both because the cash is not the best return compared to the general business and because excess cash makes the company harder to acquire hostiley and makes it easier for the management to make poor acquisitions, etc.

	26-10-2001 21:01									#94
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Sony has $7 billion on hand and costs $37 billion. For comparison, Matsushita has $10 billion on hand and costs $26 billion.

GP: yes, the market is generally cognizant of this item, but in select circumstances gets it wrong. Right now, I view cash as a boon for some companies--it should allow them to make strategic acquisitions on the cheap. That's part of the reason I'm buying COMS--they are in a market in which they should be able to use their cash to very good effect and which should tide them over to better times. Cash for some companies (MSFT) is an almost irrelevant item. In still others, it may be detrimental. MC looks like it is putting a lot of money into low performing, but liquid assets, when it would be beneficial to them to diversify their customer base worldwide. I just can't figure out some of these Japanese companies. MC should be doing the X-Box, not MSFT!

Anyway, to summarize, cash is only good if you can spend it wisely.

Last edited by DanS on 26-10-2001 at 21:21

	26-10-2001 21:05									#95
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Thanks DigitalS.

	27-10-2001 04:35									#96
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Don't just look for huge cash at big companies. Look at smaller companies with some cash in tech, biotech, etc. If they play their cards right, they can offer much more bang for the buck in using their cash to make good acquisitions.

	27-10-2001 05:20									#97
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quote: Originally posted by pchang Don't just look for huge cash at big companies. Look at smaller companies with some cash in tech, biotech, etc. If they play their cards right, they can offer much more bang for the buck in using their cash to make good acquisitions.

Why are you so taken with this? I would much rather have companies concentrate on core operations and only do acquisitions for good reasons. There is plenty of cash out there to acquire companies. You don't need to have it already in the coffers...and conversely, this may not be the best place for that money to sit (natural owners). Little biothechs have a cash pile to see tthem through the trials. If nothing pans out, they go home. They need to concentrate on thier core mission, not be distracted by acquiring neighbors.

	28-10-2001 22:09									#98
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Dan, I’m surprised you can put this together in the evenings with a partner, I thought you’d need a fully-fledged team for it these days.

Are you searching for a distributor or will you handle orders yourself?

Regarding cash, you ought to consider short-term liabilities as well. For instance, having a billion or five in cash means nothing if the firm has tax liabilities of the same amount that has to paid in a month or so.
In short, you’d better look at the current ratio (current assets minus receivables at long term divided by short term liabilities) or quick ratio. (current ratio minus inventories divided by sort term liabilities)

IMO a firm with a lot of excess cash isn’t necessarily a good firm to invest in, because it could point to a lack of ambition or imagination and because there’s a meagre return on cash.

	29-10-2001 00:21									#99
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quote: Originally posted by Colon IMO a firm with a lot of excess cash isn’t necessarily a good firm to invest in, because it could point to a lack of ambition or imagination...

Or serious business risks on the horizon that makes management very nervous about not having dollars.

Strength of the dollar is demonstrating international conviction that the US is still the safest place to be in business and will recover quickest from this "little" pause in hyper growth. (not that I am cynical about it.) It is unusual to have this much strength when we are growing cash levels so quickly, but it just shows how slow the velocity of money has become recently. All of the cash in the world won't make a difference if it isn't being used and turned over. As is the case right now.

	29-10-2001 18:45									#100
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"Why has the Dollar proven so strong versus the Euro? Everybody's predicting a meltdown, but it hasn't done it yet. Explanations?"

Because the dominant "market" perception is still that the US economy is fundamentally healthy. Well, it is, you just have to dig some percentage points into GDP to get to those fundamentals...

For us a steady euro in the 0.9-1 region would be perfect. Trouble is, once the slide starts in earnest, it will be brutal.

Btw, Sten: I heard or read that some non-US CBs are buying treasuries like crazy. Is that true ? If so, what's the reason ? Recycled dollars from the Fed flooding ?

Saras:

"=eventual closures.... even more problems at financial institutions... After this is over, US will be a beautifully deleveraged economy, hopefully having learned a lesson in Macro 101 ... "

Don't be so naive. You know that when the US is deleveraged, Wall street will start playing the game from the start.

"*runs towards Winkler Bunckersgesellschaft GmbH bunker*"

Now there's a solid business... bunkers...

Sten:

"Or serious business risks on the horizon that makes management very nervous about not having dollars."

Or having overborrowed due to fears the junk bond market will fold and they won't have access to funds later on.

"It is unusual to have this much strength when we are growing cash levels so quickly..."

Another btw, the Fed liquidity injection has pretty much moved out of M1, but it looks like it has transgressed into m2-m1 or m3-m2. Is this just coincidence ? I found it a bit surprising that after the withdrawal of extra funds, the larger aggregates didn't react at all...

	29-10-2001 18:46									#101
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GDP data out today.

Party at Roland's!!! Bring your own Bier!!!

Sten Stenish confused and still adjusting to the modern data.

	29-10-2001 18:50									#102
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US GDP ? I thought it was due wednesday ?

edit: yes, wednesday.

And what do mean with the Bier ? When I invite people I provide the beer. That's a matter of honour, you cultureless yank.

	29-10-2001 19:11									#103
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Come on! Kentucky Fried Chicken is culture! Everybody loves KFC, dammit!!!

Actually Bring Your Own Beer is something alot of younger Americans do when they have parties and they can't afford alot beer. (Or are too young to legally buy it).

Maybe I misheard the information then about GDP.

In other news, GM has agreed to sell Hughes DirecTV to EchoStar. News Corp (Fox) dropped the bid after getting pissed at GM for taking so long. I believe it's an all stock deal worth almost 26 billion.

My predictions of it actually being approved by the Feds? Not a chance in hell!

http://news.excite.com/news/ap/011029/05/gm-hughes

	29-10-2001 19:25									#104
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Bringing your own beer is a very good tradition. You ought to try it, Roland. For instance, we have "beers around the world" parties, where each person gets a letter of the alphabet and has to buy a beer whose name begins with the letter.

A good time had by all.

	29-10-2001 19:28									#105
	Lose 30 kilos (of popups)

We only do that with wine etc, but NOT WITH BIER!!!

	29-10-2001 19:32									#106
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hahahah

A CNN stock analyst just said this:

"Looks like we've gone from dot com to dot BOMB."

Which is true except for Boeing.

	29-10-2001 19:32									#107
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You're letting scruples get in the way of a good time, Roland.

LET THE GOOD TIMES ROLL! BYOB for everyone!

	07-11-2001 20:43									#108
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This thread needs to be revived.

Unfortunately for the perfectionist builder, Civ3 is not conducive to growth in the early game at the upper levels (Emporer and Deity). As the Romans, I've found myself needing to stake out territory in the early game by defeating my closest neighbor militarily. This buys a couple of millenia for you to grow and sometimes gets you a leader to complete a wonder. You're shooting for about a dozen full-sized cities. Push to Banking and Riflemen as quickly as possible.

"I’m surprised you can put this together in the evenings with a partner, I thought you’d need a fully-fledged team for it these days."

Colon: I think the main reason why we're able to do this is because we're keeping it really simple and only biting off as much as we can chew. For instance, we only build one part of the board, while importing the rest from Korea. This allowed us to bring the product to market in about 3 months--much, much less development time than a product would take normally. We tried to reduce our risk at every turn, but there's still a lot of risk.

"Are you searching for a distributor or will you handle orders yourself?"

We're handling orders ourselves. There are two factors that are helping us here.

(1) The web is immensely useful in helping a geographically diverse startup business keep on top of things. For instance, we have a sign-up page at www.sdisilk.com which hooks into the main database. The main database keeps all of the customer and order information and in the future will be built out to handle all business functions. I could be in Tahiti running the show and no one would be the wiser.

(2) We are selling these as OEM parts to Do-It-Yourselfers and home theater computer manufacturers, such as www.cellarcinemas.com. We'll sell to anyone--even at 1x quantity--but we don't really provide support. This is only a known way of doing business in the PC hardware business. I daresay most other areas of the economy would feel uncomfortable working this way. This allows us to only answer e-mails--no telephone calls. Again, I could be in Tahiti...

"IMO a firm with a lot of excess cash isn’t necessarily a good firm to invest in, because it could point to a lack of ambition or imagination and because there’s a meagre return on cash."

I agree. With Matsushita, I think this might be what's going on. With COMS, I think it more likely that people looked too much at the short-term negatives of the business and started even to discount the cash...

	07-11-2001 22:05									#109
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how do you compare with http://www.applied-magic.com?

	07-11-2001 22:41									#110
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Different markets, products, ways of doing business, and price-point. We're doing SDI input. They're doing firewire input. We're going after video processing in a home theater, which is a fairly new field for PCs. They're going after people doing Non-Linear Editing, which is a mature field for PCs. They're making a closed box. We're enabling everybody else's closed or open boxes. We're selling a solution that comes in at about $2,000 with all the fixins (we sell only the cards). They're coming in at $4,000 with some fixins.

	07-11-2001 22:45									#111
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Well last week I went to Roland's after the GDP data came out. Well I tried to, showed up and nobody was there, no Bier, no nothing.

I thought you German people had this rule about never turning away guests!

Anyway, another rate cut. This sh1t needs to stop NOW.

	07-11-2001 22:57									#112
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Surely, you can't be serious?

	08-11-2001 13:56									#113
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I am serious, and don't call me Shirley!!!

	08-11-2001 13:59									#114
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Everyone called you Shirley at Macho Grande!

	11-11-2001 15:18									#115
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Now here's something interesting, this Aussie company, Epi-tan, holds the exclusive rights for the tanning pill Melanotan, a pill which has proven to increase melanin production in the skin. (Not only tans the skin but protects it from sun damage as well).

This was developed at the University of Arizona, but I believe the major side effect of the original pill that it couldn't go to market was that it was giving the men who took it hardons. They expect their Phase II trials to be done by late 2002. The company expects to have it in production for sale in Australia by 2005.

Well I guarantee there will be millions of marks, *ahem* excuse me EUROS, of the product sold in Deutschland once it comes out. Any place there are Anglos or Germans, you'll find HUGE sales. And being that those places also tend to be the richest places on Earth, well...

I would personally buy it, as my ass has been burned as a youngster way too many times...and staying in the office all damn day and not does not do one good for the complection...

http://www.epitan.com.au/index.asp

	11-11-2001 23:24									#116
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...or does Stryker need help keeping the bat wooden?

	12-11-2001 08:02									#117
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OK "Econ homies" (you too suntanned wooden bat guy),

Anybody know much (or willing to give their "take" on Ventana Medical Systems? Would appreciate the input...

	12-11-2001 12:29									#118
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Underwater Jockey,

My gun has more ammo in it than that slow flying thingie with the dual gatling guns that has been kicking Taliban ass lately.


I even have a name for it, "RAMBO".

	12-11-2001 12:51									#119
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"I am da law."

	14-11-2001 20:50									#120
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Teddybwoy, regarding Epitan’s product, I agree that Melanotan is a very interesting product. (with a god-awful name) However, don’t forget that from the investor’s POV what matters is not the sales and profits potential on its own but its relation with the costs of getting a piece of the action. Even first class companies can be and have been overvalued.

I’m surprised how little the R&D has cost, only $8 million while the global market is worth $1 billion pa according to them. (R&D costs for pharma products are usually in the $0.5-$1bn range IIRC)
Their finances seem strong to me, $7ml in cash, already $7.5ml in receivables, negligible debt while they intend to spend just $2.5ml this year. I’m sure they can get additional funds easily enough, particularly because pharmacy is popular after the tech bust. (at least it still was last time I checked)

GP, I don’t know Ventana Medical Systems but I hope their products have nicer names.