CIA Hack to Get Window 8 For Free

As a Microsoft (MSFT)shareholder, I hope the company demands a full accounting of the CIA and NSA to make sure every workstation that has Windows software paid for the license.  
From a WikiLeaks tweet yesterday: 

"Don't want to pay for Wndows? The CIA's hackers have a pirate guide to skip product key activation https://t.co/ogJJWUZ2Hg"

"The default MDSN Windows 8 installation requires Product Key Activation in order to setup.  The following steps are useful in editing the MSDN iso to enable the Skip button during the install."

Hell, over 30 years ago when I was at HP and it was easy to get and install illegal, pirated software, having it on a work computer without the proper license was something that would get you fired and walked out the door.  
It is "interesting" as Mr. Spock would say that there is no warning on this hacked document that doing this is illegal.

Perhaps  Microsoft will get a huge revenue boost by going after the CIA and NSA to get paid for the stolen software.... This could be a nice, special dividend for us shareholders!

Santa Clause Rally!

Below are several charts showing the "Santa Clause Rally" that seems to be gaining steam. 

After buying the big decline a few months back, some stocks are already very, very close to taking profits already!

Santa Clause Rally! $SPY $SPX $LRCX $MSFT $GOOGL $INTC ChartsI sure hope nobody is missing out on all the fun as we are creeping back towards record highs again. Here comes Santa.....
Posted by Kirk Lindstrom's Investment Letter on Tuesday, December 1, 2015

This is my buy alert for LRCX on the most recent decline below $65.

ARMH: Jim Cramer likes Arm as "The Next Intel"

Update 7/29/13:

• Jim Cramer's "Action Alerts Plus" Charitable Trust Portfolio Performance: 2013

Calling ARMH "the next Intel" Jim Cramer Likes Arm Holdings

Yesterday on Jim Cramer's Mad Money TV Program Cramer called Arm Holdings (ARMH Charts) "the next Intel" (INTC Charts) because its microprocessors are more energy efficient than Intel's. Cramer said ARMH is in 95% of all smartphones and MP3 players. Jim said Arm gets 75¢ in royalties for every iPad sold which makes it a great play on Apple (AAPL Charts).

Click chart for full size image courtesy of stockcharts.com

What Cramer didn't say is they are "more energy efficient" because they are slower and don't do as much. The new Intel "core i7" powered desktop computer I am writing this on has hyper threading and four cores so it effectively has eight processors working at the same time on up to eight different tasks. Of course this will use much more power than an MP3 player that just plays one song or video at a time.

Mariam Metsinger reported:

Arm Holdings had an amazing analyst day last month when it reported its total addressable market is expected to double to 29 billion chips in 2014 from 15 billion in 2009. The company could get significant pin action from Microsoft (MSFT charts), as its next generation of Windows is likely to operate on ARM-based processors. ARMH is also diversified into other areas, and its technology is used in sensors, smart meters and hard drives.


While ARMH's multiple is 31, this is reasonable, considering its growth rate is 22%. Cramer would buy the stock when it pulls back 2 points from where it was Monday to $10.

A PE of 31 with a growth rate of 22% is a PEG of 1.4.   I would not call it "a good value" (good value is when growth rate exceeds PE for a PEG under 1.0) but this PEG is not "unreasonable"  as long as growth continues above 20%.  It is easy to grow a small market but once it is large, growth slows as others want a piece.

I would think once the market is large enough, Intel could enter with its own low power chip such as its low cost Atom processor now used in low cost netbooks. Also, as the market matures, Apple could design their own chips and have them made at a foundry so they could keep the profits themselves rather than give them to ARMH. In fact, I would not be surprised to see Apple eventually go to a foundry build their own chip around Intel's atom processor where I believe the license fee to Intel could be less. They may use this to pressure Arm to lower prices. One thing for sure, it can be dangerous investing in companies with few products and customers as a large customer could go elsewhere for lower prices or more performance.

Finally, as users demand more functionality and multitasking from their portable devices, this will favor Intel and AMD with their multiple processors on a single slice of silicon. As the market for these devices get large enough for Intel to notice, I expect to see Intel (and probably AMD) release versions of their microprocessors optimized for low power rather than blazing speed. ARMH may continue to do well for years, but it is not without its risks.

More information:

• Arm Holdings, plc: ARMH Charts
• Apple: AAPL Charts
• Intel: INTC Charts
• Microsoft:  MSFT Charts
• Jim Cramer Fan Club
• Mariam Metsinger: Cramer's Mad Money - The Next Intel

Disclosure:  I own Intel and Microsoft in my personal portfolio.  I purchased Intel and Microsoft in 1993 at $3.67 and $2.43 per share, respectively.  I also cover both in K"irk Lindstrom's Investment Letter" and currently hold positions in both for the "Explore Portfolio."

Microsoft and Yahoo! Agree to Terms for New Search Agreement

Terms of Search Agreement Between Microsoft and Yahoo!

Yesterday Microsoft (MSFT Charts) and Yahoo! (YHOO) announced they reached an agreement for search advertising collaboration. Note that "search" includes Microsoft's AdCenter which is similar to Google's AdSense that I have on this blog and my web pages where I am compensated by Google when people click ads.

For this collaboration to be successful, Microsoft and Yahoo! will need to offer pay-per-click rates high enough to get content providers from The Wall Street Journal to bloggers like me to choose or switch to their platform. The only way they can do that is to increase scale to reduce overhead so they can pay a higher percentage per click.

Microsoft will now power Yahoo! search while YHOO will become the exclusive worldwide relationship sales force for both companies' premium search advertisers.

The key terms of the agreement are as follows:

• The term of the agreement is 10 years;
• Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
• Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo! sites. Yahoo! will continue to use its technology and data in other areas of its business such as enhancing display advertising technology.
• Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process.
• Each company will maintain its own separate display advertising business and sales force.
• Yahoo! will innovate and “own” the user experience on Yahoo! properties, including the user experience for search, even though it will be powered by Microsoft technology.
• Microsoft will compensate Yahoo! through a revenue sharing agreement on traffic generated on Yahoo!’s network of both owned and operated (O&O) and affiliate sites.
• Microsoft will pay traffic acquisition costs (TAC) to Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s O&O sites during the first 5 years of the agreement.
• Yahoo! will continue to syndicate its existing search affiliate partnerships.
• Microsoft will guarantee Yahoo!’s O&O revenue per search (RPS) in each country for the first 18 months following initial implementation in that country.
• At full implementation (expected to occur within 24 months following regulatory approval), Yahoo! estimates, based on current levels of revenue and current operating expenses, that this agreement will provide a benefit to annual GAAP operating income of approximately $500 million and capital expenditure savings of approximately $200 million. Yahoo! also estimates that this agreement will provide a benefit to annual operating cash flow of approximately $275 million.
• The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.

In the Microsoft Press Release Microsoft Chief Executive Officer Steve Ballmer said the agreement will provide Microsoft’s search engine, Bing, the scale necessary to more effectively compete, attracting more users and advertisers, which in turn will lead to more relevant ads and search results.

The agreement does not cover each company’s web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses. In those areas, the companies will continue to compete vigorously.

The companies have established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement.

Disclaimer: I own GOOG and MSFT in my personal portfolio. I also cover GOOG and MSFT in "Kirk Lindstrom's Investment Letter." I may buy or sell all or some at any time without public announcement beforehand.

NASDAQ Short Interest - Largest Positions and Changes

Yesterday Reuters reported short interest on the Nasdaq rose 4.1% in mid-July, reflecting an increase in bearish sentiment in the stock market.

Below are data and charts for the five Nasdaq stocks that experienced the largest increases and decreases in their short positions in the first half of July. Also included are data and a chart for the five largest NASDAQ short positions as of July 15, 2009.

FIVE BIGGEST INCREASES:
COMPANY                   July 15     June 30  NET CHANGE  %CHANGE
-------------------------------------------------------------------
E*Trade Financial(ETFC) 135,357,993  95,942,774  39,415,219  41.08
Cell Therapeutics(CTIC)  31,428,479  14,244,326  17,184,153 120.64
Evergreen Solar  (ESLR)  30,912,624  22,979,653   7,932,971  34.52
Applied Materials(AMAT)  54,661,221  47,382,033   7,279,188  15.36
Starbucks Corp   (SBUX)  48,176,793  41,999,418   6,177,375  14.71

Click Chart courtesy of stockcharts.com for full size image

FIVE BIGGEST DECREASES
COMPANY                   July 15     June 30  NET CHANGE  %CHANGE
-------------------------------------------------------------------
Sirius XM Radio  (SIRI) 146,038,635  194,820,020 -48,781,385 -25.04
Sanmina-SCI Corp (SANM)   1,771,396   11,172,618  -9,401,222 -84.15
Intel Corp       (INTC)  79,599,664   88,709,534  -9,109,870 -10.27
Level 3 Comm Inc (LVLT) 101,482,009  109,950,552  -8,468,543  -7.70
Finisar Corp     (FNSR)   1,200,475    8,521,489  -7,321,014 -85.91

Click Chart courtesy of stockcharts.com for full size image

FIVE BIGGEST POSITIONS:
COMPANY                   July 15     June 30  NET CHANGE  %CHANGE
-------------------------------------------------------------------
Sirius XM Radio  (SIRI) 146,038,635  194,820,020 -48,781,385 -25.04
E*Trade Financial(ETFC) 135,357,993   95.942,774  39,415,219  41.08
Level 3 Comm Inc (LVLT) 101,482,009  109,950,552  -8,468,543  -7.70
Microsoft Corp   (MSFT)  80,868,407   86,848,410  -5,980,003  -6.89
Intel Corp       (INTC)  79,599,664   88,709,534  -9,109,870 -10.27

Click Chart courtesy of stockcharts.com for full size image

Questions for the SEC and Congress:

1. Why is there a nine day delay in making the data public?
   
   
2. Why is this data not made available in real time or at the end of each trading day?
   
   
3. Who has access to this data before the public and are they allowed to trade on this undisclosed to the public information?
   
   
4. If anyone who is allowed to trade on the information, then what happened to enforcing Regulation FD that limits selective disclosure and insider trading?
   

If ANYONE has access to the data to make these calculations, then I think it is criminal that this data is not made available as soon as available to everyone.

Disclaimer: I own in my own portfolio and cover in "Kirk Lindstrom's Investment Letter" AMAT, FNSR, INTC and MSFT. I may buy or sell at any time without announcement beforehand.

Post and Read Comments

Warren Buffett Answers To Becky Quick's Questions

Today in a brilliant piece of reporting, CNBC's Becky Quick (see Anchor Women of CNBC) interviewed Warren Buffett live in Omaha, Nebraska asking questions as if she were some famous people.

As Fed Chairman Ben Bernanke: “Did I go far enough or too far with the last cut?”

Warren Buffett Answered: “I don’t think they need more rate cuts” then “if they get rates down too low they have a real problem” and “I think I’d quit now.”

As US Treasury Secretary, Henry (Hank) Paulson: Excuse me Mr. Buffett, do you think the stimulus package is enough or do we need to come up with a second stimulus package?

Warren Buffett Answered: “I don’t think the stimulus is going to do an enormous amount of good. In fact, most people should pay down their credit cards when they get it.” Buffett went on about how dropping money on people can cause problems with future inflation. “Anybody that is paying 15 to 18% on their credit card is out of their mind to not pay it down with the money.” Buffett said they need to be careful about the consequences on inflation from using this tool.

As GOP presidential hopeful John McCain: “Is there anything I can do that would make you think twice” about supporting Obama or Clinton.

Buffett indicated he might reconsider if McCain decided the tax burden should be shifted away from the middle class and poor to the super rich. Buffett went on to say he ‘votes on the issues” but it was clear from his response he was not going to change from a life-long Democrat unless the Republican candidate had a lobotomy and joined his party.

As Microsoft (MSFT) Chairman Steve Ballmer, Quick asked if deciding to walk away from the Yahoo! (YHOO) deal was that the right negotiating tactic or thing to do.


Warren Buffett Answered: “Well I don’t know if this is a negotiating tactic. I think he may have decided he may have gone as far as he can go. “Buffet went on to explain you have to have limits and know what they are for you when you go into a deal. Buffett said the shareholders of Yahoo! could come back to him in six months like Sees Candy did for him in 1972. Buffett said he means it when he walks away. He walked away from Sees when they wanted $30 million and he only wanted to pay $20 million. He walked away and fortunately they came after him.

Graph courtesy of BigCharts

As European Central Bank (ECB) Jean-Claude Trichet: “Am I doing the right thing to keep interest rates high?”

Warren Buffett Answered: “The interest rates in Europe are significantly higher and he may be worried more about inflation. He compared US Fed Chairman Ben Bernanke to Scarlet O’Hare from “Gone with the wind” by saying “I’ll worry about inflation tomorrow.”

Becky asked if there was a chance the ECB is “behind the curve” just like the Fed was too slow to cut rates?

Warren Buffett said Trichet could be wrong but he probably has his own set of data that indicates inflation in Europe is a problem and he’s seen how hard it is to put out run-a-way inflation once it gets started.

As JP Morgan Chase CEO Jamie Dimon: “Do you think I made the right move to step in and buy Bear Sterns.

Warren Buffett said “socially” the Fed made the right move. If they had not stepped in that Sunday then the following week may have been something like Wall Street has never seen.

Final quick questions from Becky Quick:

Quickie #1: Do you think the economy in the mid West is better off than other places?

Buffett A1: Yes because we didn’t have the housing bubble, there are jobs and our furniture business is booming.

Quickie #2: How much were Berkshire Shareholders spending at the annual meeting?

Buffett A2: They were buying 1.5 pairs of boots per minute and jewelry every nine seconds. Almost all the places selling goods at the annual meeting broke records and exceeded expectations.

Quickie #3: Is there a commodity bubble?

Buffett A3: I don’t know if it is a bubble but they moved up and there is a lot of inflationary pressure that has not got to wage pressure. When that happens then “the fun begins.”

Quickie #5: Comment on Barrons Cover speculating on who the next chief of Berkshire Hathaway.

Buffett A4: They don’t know but are having fun guessing.

Quickie #5: What about wind power? We hear you are investing in it in a big way.

Buffett A5: They are investing in wind all across Iowa like many other utilities.

Disclaimer: I own MSFT in my personal account and my “newsletter explore portfolio” with large gains. I may take profits should MSFT stock soar on the news Microsoft walked away from the Yahoo! deal.

Graph courtesy of BigCharts

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