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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (33646)	2/24/2009 9:05:29 AM
From: Jurgis Bekepuris	Respond to of 79172

COH is also cheaper at about 19% back-looking earnings/EV and about 23% expected return in my Buffettology model. While NKE only has back looking 9.5% earnings/EV and about 18% expected return. NKE is much more of a big brand though with wider moat. GRMN. OK, here's the positive scenario: they have to go down the ASPs and they have to invade developing countries. That's what Nokia successfully did in the last 8 years. GPS below $50 is a new ball game, where it is becoming affordable to everyone, even people who don't need it most of the time. Think "Main street" from "Gorilla Game", etc. Sure, it is harder to make case for GPS vs cell phone to Indian farmer or African day laborer, but the penetration vs cell phone is minuscule and the price may be even lower than cell phone's. If Garmin do that, they would have another huge leap up. If they try to maintain the high-end niche and leave the low end to no-name competitors, they will be squeezed up really soon ("Innovator's dilemma" and such). Cell phones are only somewhat competitive. Cell phones suck in cars: too small screens and non-dedicated interfaces. Smart cell phones with GPS cost much more than dedicated just GPS, making them not affordable to low income people. They are also very complicated, which again drives away some customers. Sure, some of the disadvantages will shrink, but some will not. OK, gotta run, more maybe later. :)