Calvin's Views

The NC House approved a lottery bill by a vote of 62-58 today.

As a native North Carolinian, I think this is a sad commentary on the continued moral decline of our residents. Surely there is a better way to fund education than through state sponsored gambling.

What will happen in a few more years when there is another $1bn budget shortfall? Will we have government run crack houses and brothels?

Removing tax loopholes and providing incentives for new business development is a much better answer.

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I recently visited the great country of Australia. Here are a few random observations from my time there:

- The night sky is absolutely stunning. I've never seen so many stars.

- The number of attractive girls is high and most of them seem to have narrow hips.

- They drive on the left which means when you're walking around people tend to want to pass by you on the left as well!

- Kangaroos look like huge overgrown rats up close.

- Netball is a much less physical blend of basketball and ultimate frisbee.

- The form of rugby played here is also less physical, but still a pretty brutal sport.

- Beaches here are incredibly beautiful, but you have to beware of Bluebottle jelly fish

Why are some people naturally louder than others? Is it a genetic thing or are people conditioned to be this way? I was just sitting in a restaurant trying to enjoy my meal while an incredibly loud lady proceeded to tell the entire restaurant about her wedding plans. Her dinner companion couldn't have been more than 3 feet away from her, but she still felt the need to project her voice so that other people 30 feet away could hear!

This is not an isolated incident. I think there's even a Dilbert character for the extra loud office worker. The question is what to do about it? Is it appropriate to lean over and ask these people to quiet down? Should the restaurant owners put a stop to it? Clearly, something must be done!

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Google ended the week at $187.90. In the short-term, my assessment of Google's value was clearly way off! I wish I'd gotten some IPO shares now. Not a bad return!!

What's even more interesting is Google's value relative to the other "Internet" stocks. It's currently trading at 93x EV/EBITDA vs. 72x for YHOO. There's no way that can continue.

So, after extensive research and weighing all the options, I bought a Sirius Satellite Radio receiver for my Dad for Christmas. I hope he likes it. I also purchased a car mounting kit and a home mounting kit. This will enable him to take the receiver from the car to the house and vice versa. I view these as essential accesories. I almost wasn't able to find a receiver for sale. I finally found a nice one at Circuit City in the mall. All of the Best Buys and other Circuit City stores were sold out of the Sportster and Audiovox receiver models. Apparently these manufacturers underestimated the demand. All retailers had plenty of the XM receivers. I'm not sure what to make of this. It's hard to tell if the XM folks did a better job of estimating the demand or if the demand for Sirius is that much stronger. I guess we'll see when both release their new subscriber numbers.

Even with outstanding Christmas sales, I can't see how Sirius can be valued at over $10bn. That's an awfully high valuation for a company that only has sales of $47mm and continues to lose money.

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It's frustrating that personal technology isn't where it should be yet. Here's a list of simple things that I think would be popular and aren't yet available or common:

1) Voice command for my home. Lights, TV, Stereo, etc. I should be able to say, "Stereo, play Sting, Roxanne" and have it turn on and start playing.

2) Internet control of my cable DVR (does Tivo offer this?) Frequently I am online and think of a show I'd like to record. Why can't I control my DVR while online?

3) Ability to seamlessly play my music collection on my computer, stereo, car, and MP3 player.

I guess what I'm hoping for one day is to have complete integration between my computer, stereo, TV, house, and car. Why is it taking so long and who is leading the charge?

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Went to Best Buy today. They are selling craploads of satellite radios. In fact, they were completely sold out of the Sirius radios. For now, they certainly seem to have the edge over XM. So, the big question then is why does XM have 3X the number of subscribers?

Thinking of getting one for my dad and really torn about which one to get. ACC Sports is a big attraction for XM. Basically, NPR vs. ACC Sports. The consumer really loses in this proprietary game.

Best Buy Salesman quote: “Once I tell people they can only get NPR on Sirius, it’s all over.”

Points of interest:

Sirius:
Over 800k subscribers
Now part of QQQQ ETF
$12.99/month or $499 lifetime
$70 device (after $30 rebate)
Unlimited free online usage
Daimler Chrysler, BMW, and Ford partnerships
Exclusive content:
NPR
Howard Stern
NBA
NFL
NHL
English Premier League Soccer
Spotty college b-ball coverage
All Elvis channel
Eminem

XMSR:
Over 2.5mm subscribers
Already part of QQQQ ETF
$9.99/month or 5 years for $499 (no lifetime plan)
$80 device (after $10 rebate)
Online usage for $3.99/month
GM partnership
Exclusive content:
MSNBC
MLB
ACC Sports
PAC-10 Sports
Big Ten Sports
Nascar
MTV
VH1
Snoop Dogg

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I put in my bid for shares of Google today. I bid well below the indicated range of $108 - $135. In my view, I just can't justify giving Google a premium valuation over more entrenched companies like Yahoo! and eBay. There has been a ton of discussion on various valuation methods appropriate for Google, but I find that the simplest way to value the company, and the one most likely to be used by investors, is to look at the other large-cap Internet stocks. Here's a simple table based on today's prices:

EBAY: $51.1bn
YHOO: $37.4bn
IACI: $15.7bn
AMZN: $14.7bn

At the end of its IPO auction, Google will have 271,219643 total shares outstanding. At a price of $108 per share, that would give it a market cap. of $29.3bn. Given the above table, I think a price around $55 per share or a market cap. of $15bn is more reasonable.

Some interesting numbers:
Revenue CAGR (1999 – 2003): 803%
99 – 00: 8,585%
00 – 01: 352%
01 – 02: 408%
02 – 03: 233%

CapEx is growing:
01: $13.1mm
02: $37.2mm
03: $176.8mm
04: $300.0mm+

Other thoughts:
Microsoft is entering the market.

Revenue is primarily from paid search which may not grow as rapidly in the future given increased competition from Yahoo! and MSN and the resurgence of content-rich online advertising mediums.

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Welcome to Calvin's Views. Here you will find my most up-to-date thoughts on topics ranging from sports to politics to life in general. My goal is to share my unique perspective on the world with others in order to spark debate and conversation.

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