Gal Appelbaum http://galappelbaum.com Computer Scientist Wed, 02 Jul 2014 20:17:44 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 This is Why Brazil HAS to Win the World Cup http://galappelbaum.com/2014/07/brazil-win-world-cup/ http://galappelbaum.com/2014/07/brazil-win-world-cup/#comments Wed, 02 Jul 2014 20:17:44 +0000 http://galappelbaum.com/?p=440 It’s not a secret that I am a Brazil fan… I was a Brazil fan before I even knew what futbol was… My mom spent a good few years in

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719px-WC-2014-Brasil.svgIt’s not a secret that I am a Brazil fan… I was a Brazil fan before I even knew what futbol was… My mom spent a good few years in Brazil before marrying my dad so the love for Brazil in our family comes from before the family existed. Thankfully throughout my life I’ve had the opportunity to live in Brazil during two different periods of my life (lower school and 3/4 of high school). Those who know me personally, know that I like to blend in, learn local languages, cultures, mentality, etc… And even though it may sound corny, while living in Brazil I was the most Brazilian foreigner most people ever met. It would shock people when I told them I wasn’t Brazilian. Why am I saying this? Because It’s easy for someone to criticize something from the outside, but I’m not “on the outside”. I’ve seen almost all of what being a Brazilian means, for better and for worst.

When you hear Brazil being the country of parties, it’s no joke. The Brazilian people (even the poorest of the poor) always find a way to celebrate anything and be happy… They’re happy people (at least most of them).

When Brazil was elected to host the 2014 World Cup, I knew things we’re going to get VERY bad… Brazil has a funny way of getting things done, the “jeitinho Brasileiro” (the Brazilian way), is a mixture of corruption and goal oriented actions. The people know how corrupt their country is… most are just as corrupt… But what happened a year before this world cup (and from then until even now) is a story that most of you will think I made up, but I (as well as MANY others) saw it coming for miles…

Most countries have a bidding process when it comes to new construction (like stadiums, apartment complexes, etc.) that’s being funded by the government. This process is made so that the government can get the best they can get for the least possible… But that’s not how it works in Brazil. It was clear that the same move that was made in the Pan-American games was going to be made again: The government waits until the LAST possible second to start construction, then declare a “state of emergency” (or something of the sort) which allows them to bypass the whole process in order to “save time” and get the construction going quickly… The result of that is that every politicians family relative (from son to brother to 2nd or 3rd or 5th cousin) becomes a “construction worker”. Money that through the bidding process would transparently exchange hands, goes under the table in order to get things done… And even then, the stadiums were BARELY done, and there are still allegations of terrible grass on the field as well as many incidents reported by guest teams.

Besides that, the government created many different taxes and “temporary” laws giving FIFA so much power, that for example, allowed them to file over 200 trademark applications on PORTUGUESE words that can be a little related to the world cup, without paying any fees on expediting the process

But that’s not even the tip of the iceberg… The government and FIFA figured out MANY different ways to embezzle money into all sorts of pockets… All but the pockets that needed it most: The people.

Brazils government says that the tourists that fill the hotels, dine out, buy junk, get drunk and find different pleasures are the way the people will profit from the World Cup… But what they didn’t say is the obnoxious taxes they imposed (like transmission of games in public bars – yes, bars pay a tax that depends on their size to be able to transmit the games…), or the fact that all “World Cup” related sales (beer, tickets, official gear, etc.) goes to FIFA, not the country… Lets put it this way: The people weren’t happy.

Riots broke out, political cartoons, and many other protests to the World Cup “threatened the peace” in Brazil, and the government wouldn’t have it. The fact that parties are going on, and Brazilians are cheering for their team is because as I mentioned in my previous post, Brazilian DNA has soccer patterns… They CANNOT boycott their team. BUT the moment their team is out of the cup, what then?

I fear for the World Cup… Because the moment Brazil’s out, there’s NOTHING stopping the people… small protests and riots are already happening every day, but IF Brazil are disqualified, there won’t be ANYTHING holding the people back. Did Brazil buy the World Cup? No clue, but I hope they did… Not because I want the 6th star, but because I have a VERY BAD FEELING about what can happen.

It’s not because the Brazilians are “sore losers” or something like that… The world doesn’t understand the kind of oppression and robbery the people went through for this event, and the ONLY thing that allowed this cup to actually happen was the fact that the CBF would win the cup. If Brazil wins the cup, all the problems will go away… at least until the Olympics… BUT again, if Brazil are disqualified, the riots are not going to be for the loss, but for the disgusting robbery that was this World Cup to the Brazilian people.

Vamo Brasil!!

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Washed Out Goalkeeper You Said? http://galappelbaum.com/2014/06/whos-got-anything-say-julio-cesar/ http://galappelbaum.com/2014/06/whos-got-anything-say-julio-cesar/#comments Sun, 29 Jun 2014 06:43:49 +0000 http://galappelbaum.com/?p=421 Ever since I can remember Julio Cesar, he never disappointed… Even though he was placed as reserve to Dida and Rogerio Ceni, Julio Cesar (for me) was never a disappointment.

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julio cesarEver since I can remember Julio Cesar, he never disappointed… Even though he was placed as reserve to Dida and Rogerio Ceni, Julio Cesar (for me) was never a disappointment.

His career might not be the gold shinning star you’d expect, but even with the struggles, he’s always managed to establish himself as the teams first-choice goalkeeper anywhere he went.

Yesterday in the first game of the “Round of 16″, Julio Cesar made a mistake that cost Brazil their lead and while the commentators egged on him, every reporter had their headlines all geared up to smear and bash him, the truth was that it wasn’t solemnly his fault… After all, there was another mistake that led to his mistake.

For some reason, the soccer world (especially Brazilians) loves being VERY UNFORGIVING when it comes to mistakes made by Brazilian professionals… Win or loose, words like “washed out” are used left and right without giving it a second thought. From coaches to midfielders, defenders, strikers, subs, goalkeepers, when the Brazilian National Team looses, someone’s head is going to spin… Even when the team wins, someone gets criticized and scrutinized negatively (while someone else becomes a hero)… In yesterday’s match, If anyone’s head should have rolled, my vote was on Fred (who’s done NOTHING VALUABLE this world cup so far).

Yesterday’s game was won by a miracle… I’ve no idea what Fred or Oscar or Paulinho were doing on the field at all.. Or why Brazil decided that long passes are the way to go… Or how the best team in the world had only 2 players above 80% complete passes… But the bottom line was that after the first goal, Brazil just forgot they’re still playing, and seemed to put the pressure on Julio Cesar to keep them ahead.

When Brazil conceded the tying goal, all I kept hearing is about Julio Cesar’s mistake… Where was his defensive line? Or for that matter, where was the midfield or the strikers after that tying goal? Why is it that because they scored ONE they thought that’d be enough? Chile had a VERY STRONG team, and anyone who doubts that doesn’t know what they’re talking about. 2-3 players on Neymar at all time and Brazil found themselves lost… And instead of pushing forward, quick passes, taking their time, they just seemed to not give a damn… And while that happened, EVERYONE WAS BASHING JULIO instead of this GARBAGE forward named Fred whose only goal in this world cup was this:

fred offside

Translation: “He wasn’t offside”

And then it came down to Penalty kick shootout… I sat there with my roommate and kept repeating “Julio Cesar doesn’t deserve this…” as he cried out of frustration and nerves… He didn’t deserve the pressure his team put on him. He didn’t deserve being called “weak” and “Emotionally distressed”… After all, It was up to him to hold the HOSTING NATIONS hopes on his shoulders! A nation who’s DNA code has soccer patterns, a nation who’d execute him in public if he couldn’t pull a miracle off…

For the world, the first block was unbelievable… While I screamed at the TV, crying uncontrollably… All of a sudden, he’s not “washed out” or “weak” or “emotionally distressed”, but he was a HERO who created the only chance for Brazil to win… Then he blocked another one… And in return for his UNBELIEVABLE work, Willian hit it wide and then Chile blocked one.

Thankfully, the miracle did happen, and Brazil made it through. By the end of the game, all journalists and commentators around the world were swallowing their words… Because the BOSS goalkeeper that I knew Julio Cesar to be, shined on the field when it mattered. Tomorrow’s headlines quickly changed from “zero” to “hero”, from “washed out goalkeeper” to “man of the match”.

In my book, Julio Cesar has been a hero since 2006… Anyone that feels differently can suck it, because when it counts, I have yet to see Julio Cesar disappoint.

Vamo Brasil!

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Hard Drives, A Stable Investment In An Unstable Market http://galappelbaum.com/2013/10/hard-drives-stable-investment-unstable-market/ http://galappelbaum.com/2013/10/hard-drives-stable-investment-unstable-market/#comments Thu, 24 Oct 2013 23:02:40 +0000 http://galappelbaum.com/?p=409 In this technology driven world, everything’s about data. Either on the cloud, personal devices or other storage devices, everything is stored somewhere. This somewhere in most cases is a hard

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In this technology driven world, everything’s about data. Either on the cloud, personal devices or other storage devices, everything is stored somewhere. This somewhere in most cases is a hard drive, which are most likely made by Western Digital (NASDAQ: WDC) or Seagate Technology (NASDAQ: STX). For a few years now the two companies have competed for the reign of the electronic storage products, and in the process, they haven’t really “taken each other out”, but rather both saw very healthy profits and growth. In terms of an investment however, STX has the upper hand.

A bit of background

Seagate Technology (NASDAQ: STX) designs manufactures and sells electronic data storage products. It has a wide variety of products in the sector including hard disk drives, solid state hybrid drives and solid state drives. These products are designed for enterprise servers, mainframes, workstations (Both desktops and laptops) as well as many other end user devices like cameras, gaming consoles, portable external storage devices, personal back up drives, etc. The company also provides data protection and recovery solutions for small and medium-sized businesses as well as a new product named “Rescue + Replace Data Protection Plan” which is a recovery service for data loss that was caused by physical damage, accidental deletion or corruption, and with the data recovery comes a drive replacement (if needed.).

STX has deals across multiple business lines with multiple big name companies such as backup drives through Samsung, among others. The company was founded in 1979 and is headquartered in Dublin, Ireland and has a market cap of $17.28B with shares trading just shy of $48.50 as of the time of writing.

The numbers

As mentioned above, with a market cap of $17.28B, STX is well placed in its industry, with an enterprise value of $18.44B and revenue(ttm) of about $14.35B. The company has also a very modest amount of debt, even though it’s debt to equity ratio is a bit high at 0.79, it’s not uncontrollably high.

In the past few years, STX has been over-performing both the industry average and S&P 500 as well as being undervalued in comparison to both (shown below.).

Return on equity(%)
Year STX Industry avg. S&P 500
Q4 2013 52.58 29.86 13.75
Q4 2012 81.84 35.48 13.93
Q4 2011 20.74 33.42 14.22
P/E Comparison
STX Industry avg. S&P 500
10.10 17.17 19.06

With a high return on equity, STX have been able to give back quite a lot to its shareholders with a 3.13% yield and a dividend history that’s consistently increasing for the past few years.

Comparison to the competition

The biggest competitor with STX is WDC, who just like STX are very well established, and are viewed positively by investors and institutions across the market. However, the reason STX is a better investment than WDC (in my opinion) is in the numbers.

STX vs WDC
Metric STX WDC
P/E 10.10 17.72
Market Cap(million) 17,302 16,617
Net Sales (million) 14,351 15,351
Net Income 1,838 980
Div. Yield(%) 3.00 1.40

Interestingly enough, WDC sells more than STX, with about a million more in net sales, however their net income is half of STX. On top of that, in terms of valuation, STX is more than fairly valued and can even use a bump, considering companies in the industry are trading at much higher P/E ratios, like SanDisk (NASDAQ: SNDK) at 18.36, WDC at 17.72, EMC Corporation (NASDAQ: EMC) at 18.77, Datalink Corporation (NASDAQ: DTLK) at 20.81, etc. On top of all that, STXs yield is more than two times higher than WDC and all that while WDC is 45% more expensive than STX.

The Street have a target price of $63.60 on STX, which is about 30% above current level and estimate EPS of 5.43 for 2014 and 5.98 for 2015. Even with these great estimates and pretty good numbers lately, EPS has been going down since Q3 2012 and the latest quarter shows an EPS if $1.20 which is about half the EPS from a year earlier(Q4 2012 – $2.41). With Q1 2014 earnings coming up on Monday (10/28) and the expectation is of about $1.30, STX has a chance to assure investors that the company is in a good earnings position.

In every store there are two sides.

While The Street have a relatively generous target price S&P Capital IQ have a more conservative target price of $52, which doesn’t leave much growth space. On top of that, Luczo Stephen J who is the Chairman, President and CEO of STX sold 214k shares at $50.01, which raised a red flag in the market since after all, what kind of CEO sells such big stake if they believe (and usually know) they can get more buck for their stock. With shares trading about 10% above the 50 day moving average and a bit more than 10% above the 200 day moving average, there are some red flags in terms of the technicals.

With the desktop market slowly dying, the companies that want to survive need to be able to adapt to new markets. Hard drives are still required in data centers, “cloud” services, enterprise systems, etc. and as long as STX are able to adapt and stay ahead, they’ll be successful.

The bottom line

Year-to-Date Chart of STX

Year-to-Date Chart of STX

While STX is a great investment, it’s moved about 20% upward in the past two months, and is about 50% higher since January, so the question is how much longer is this run going to last? there are a lot of analysts out there saying it’s still a great buy, others say it’s a hold more than a buy. If you’re on the fence, you can wait for after earnings, but you might miss its gains… However just like you can miss those gains, you can also avoid potential losses and have a better price to get into.

Unfortunately with the weekend coming up, if you’re interested in getting in, time to spend some late night hours researching and making up your mind.

For the Record

Believe it or not, as much as I’ve said STX is a better investment than WDC, WDC has more analysts favoring it than STX. So I would recommend looking into WDC just as much as STX, however in my opinion STX is the better choice.

Disclosure: I have no position on any stock mentioned in the article above, nor intend to start a position anytime soon (no funds). If I had the capital, I would have started a position in STX within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with the company whose stock is mentioned in this article.

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CIM, a good money holder with high returns http://galappelbaum.com/2013/10/cim-good-money-holder-high-returns/ http://galappelbaum.com/2013/10/cim-good-money-holder-high-returns/#comments Wed, 16 Oct 2013 23:21:10 +0000 http://galappelbaum.com/?p=404 I feel like lately I’ve been on a high yielding binging spree… First I recommended LINN Energy, and now comes another semi-controversial company who’s been on my radar for a

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I feel like lately I’ve been on a high yielding binging spree… First I recommended LINN Energy, and now comes another semi-controversial company who’s been on my radar for a few years but I’ve always feared getting into: Chimera Investment Corporation (NYSE: CIM).

Lets start with a quick introduction…

CIM is a mREIT (mortgage REIT) that’s externally managed by Fixed Income Discount Advisory Company (FIDAC) which is owned by Annaly Capital Management (NYSE:NLY). The whole purpose behind CIM really is to allow NLY to invest in riskier instruments that aren’t guaranteed by government equities or groups like Freddy Mac or Fannie Mae (such as residential mortgage-backed securities, residential mortgage loans, real estate-related securities, etc. rather than physical real estate).

The parent company

Annaly Capital Management (NLY) owns, manages and finances a portfolio of real estate related investments in the United States. Even though it had a dividend cut earlier in the quarter, there aren’t many REITs left out there that aren’t cutting their dividends… With interest rates moving higher and taper possibilities, these investment vessels are facing some rough times. However, this is a company with a market cap of about $11B and an enterprise value of over $93B trading at around $11.50 with an EPS of $3.48(ttm) and thus P/E of 3.34(ttm). Even after the dividend cut, it’s dividend is around the 12%.

With the announcement of Janet Yellen as the new Fed chairwoman (sounds weird but cool non-the-less) NLYs position changed dramatically. Yellen is a better communicator, a bigger believer in the slow progression of things which almost guarnatees the FED won’t taper anytime soon, and even if it does, Yellen wouldn’t allow the “taper panic” to happen by being more transparent (hopefully) and thus helping companies like NLY and CIM to take measurable steps.

Year-To-Date Chart of CIM

Year-To-Date Chart of CIM

How I see this stock

Even though it’s had to leap over a few hurdles in the past few months, ever since I started following this stock back in 2010, It sat on the same range, around the $2.90-3.10. As crazy as it may seem, if you look at this stocks past, it’s consistently maintained itself around the $3-$4. Back in 2012, the stock took a serious hit after a year long investigation by the SEC found inconsistencies in earnings reports due to different interest rates in different loans and mortgages. CIM made it all the way under $2, but even then bounced right back.

with a $3.11B market cap, CIMs current EPS (ttm) is $0.11 with a P/E of 27.55. While the P/E is relatively high, this is the kind of company you don’t expect profits from by the increase in value of the company, but rather the high 12% annual yield, which is why I called it a “money holder”. The likely hood of it making any serious profit by increase in value isn’t very promising, however as long as it stays as stable as it has been in the past few years, it’s an easy 12%.

The sketchiness

Yes, this company has a few sketchy red flags… There was a time where they hadn’t released a single financial document including quarter reports and annual reports. It almost got kicked off the NYSE for not complying with the publishing of these financial documents… and honestly, the main reason I didn’t get into this stock three years ago was exactly because of this. However they always seem to get their things in order when they really have to.

Yes, it’s just not good practice to invest in a company that’s not only as speculative as this but also as badly managed and the lack of transparency here and there is definitely a big red flag. However, the growth opportunities this company has now that the it seems like the taper isn’t going to happen anytime soon, CIM has an opportunity to raise yield rather than lower it.

The bottom line

If I had some more capital to invest, I would increase my position in CIM. Especially if it happens that the stock finds itself in a dip under the $2.90s. Either way, for three years the dividends levels were very consistent, and even with dividend cuts, the balance between the stocks price and the dividend yield stayed consistent. As far as stock price, it’s also maintained a strong $3 position, and The Street even has a price target of around $3.70s, a 20%+ increase, so where can this go wrong?

Disclosure: I am long on CIM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with the company whose stock is mentioned in this article.

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LINN Energy, a hidden money well http://galappelbaum.com/2013/10/linn-energy-hidden-money-well/ http://galappelbaum.com/2013/10/linn-energy-hidden-money-well/#comments Thu, 10 Oct 2013 14:41:47 +0000 http://galappelbaum.com/?p=400 For a few weeks now I’ve been looking into LINN Energy (NASDAQ: LINE), trying to figure out if this double digit yielding company who’s stock took a serious beat a

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For a few weeks now I’ve been looking into LINN Energy (NASDAQ: LINE), trying to figure out if this double digit yielding company who’s stock took a serious beat a few months ago and hasn’t recovered since. While I’m no expert, it became very evident based on the few reports I got my hands on that this is a name worth getting into.

The negatives

As general practice, I’d like to lay out the negatives first, because there are always negatives… The stock took a serious hit back in July 2013 after an SEC inquiry regarding LINE’s accounting practices. As a response, LINE Energy filed a S-4/A disclosing some major accounting irregularities around September 2013. Curiously enough, the fact that the SEC was looking into the company caused a serious dip, but the actual disclosure of some irregularities didn’t have as big of an effect. The SEC hasn’t disclosed anything about their investigation as of now. On top of this, LINN Energy announced in February the attempted acquisition of Berry Petroleum (NYSE: BRY) but hasn’t started the merger mainly because the SEC is taking its time with the paperwork of the deal, which is all tied into this investigation.

Believe it or not any accounting issue in a company, even an issue that’s legally acceptable, is one of the biggest nightmares for most investors. Accounting work is the basis of most technical analysis and small irregularities usually cause huge differences in projections. However, those that were scared by these irregularities aren’t looking beyond the initial scare… LINE has more than 3 trillion cubic feet equivalent of proved developed reserves and another 2 billion cubic feet equivalent of proved undeveloped reserves besides an insane hedge book, a gas plant and some other facilities which land them at around $10 billion worth of assets. On top of that, LINE has another 14 trillion cubic feet of unproved drilling inventory, which is estimated to be worth between $6.5 billion to $11 billion (and isn’t counted in the $10 billion mentioned above).

Now lets talk positives…

First of all, the Berry Petroleum merger. This is a company with over 3,000 producing wells that cover more than 202,000 acres of land. With BRY’s properties, LINE’s production could potentially increase anywhere around 20%-40%. On top of that, a good portion of BRY’s reserves are in oil (something like three quarters). To sweeten the deal, most of BRY’s assets are relatively low-decline in quality kind of assets (long-life assets), which LINE can benefit from quite a bit. Once the SEC are through with their investigations and clear this merger, I wouldn’t be surprised with a conservative 10%-15% increase in stock value on the same day of the announcement.

Besides the BRY merger, LINE also announced the acquisition of properties within the Permian Basin region. Once the acquisition is through, LINE intend to drill about 300 wells over the next 4-5 years. Their predictions are of net production of about 4,800 Boe/d. This acquisition is another addition into the massive amounts of assets LINE controls and can potentially be a huge source of oil in the near future. Even though prices of oil are declining, it’s because of companies like LINE who have increased the domestic production of oil to the point where the US is finally producing more oil than its importing.

LINE1

6-month chart of LINE

What the numbers say

The stock closed yesterday at $26.05, which is a P/E ratio of 17 based on the earnings from 2Q. When looking at earnings, the company broke out of a four-quarters streak of losses, posting a very healthy EPS of $1.46 in 2Q. When looking at revenues of 1Q and 2Q of 2013, they account for 73% of total revenues in 2012. While the company has piled up a significant amount of long term debt and liabilities, it also has a substantial amount of assets as well as hedging abilities in case they ever need them. The big number to take in account though is the last one I’ll mention which is the yield sitting at 11.6%.

Most peoples main argument is that this is an extremely high yielding company at a terrific price. While I cannot agree more on that, my main argument is that the two acquisitions mentioned above can be catalysts to an easy 30%-50% bump in value. Add that value in account and you’ll have a 15-17% yield on initial investment.

If we look at the chart above, the 200-day moving average still prices this stock around 14% above the current price and the 50-day moving average places the stock at around 27% above current price. On top of that, the stock hasn’t seen a substantial amount of trades, keeping volumes relatively low due to the “fear” of the SEC investigation. Another interesting couple of figures on the chart are the price channel values (200-days) that put the stock between $24.51-$39.28.

This is the kind of stock I like getting into for a few reasons: first of all, it’s closer to its 52-week low than 52-week high. Now obviously this is not a reason by itself to buy the stock, but when I look at a stock I try to catch it before a rally, not mid way. All the indicators point that the SEC just needs to finish their meddling, and once that happens the most likely outcome is a positive outcome for the company. BRY’s management have sand more than once that even with these SEC problems, they’re still committed to the deal with LINE. The second reason is the high yield. A company with a double digit yield at a right price that isn’t a REIT or mREIT isn’t easy to find, and with a possibility of 50%+ price increase in the foreseeable future, this double digit yield can get much sweeter than it already is.

Do I recommend buying the stock? it depends. The SEC is known for being notoriously annoying, and they could not allow the BRY merger to happen, or even find things in LINE’s basement we don’t know of… However, this kind of negative mentality can be applied every where in the stock market. LINE has massive amounts of valuable assets, produce a hefty amount of oil and gas, posted good numbers in 2Q and have a 4-5 year plan that once its settled, can be very profitable. If you look at an expanded version of LINE’s chart, you can see a steady value above the $35 mark for all of 2011, 2012 and some of 2013 up to the SEC situation. I believe that once the dust settles, the stock will make a comeback to those levels.

Disclosure: I have no position in LINE. Unfortunately, I am unemployed… and therefore have no capital to invest. If I had capital to invest, I may have initiated a long position in the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with the company whose stock is mentioned in this article.

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Twitter and Facebook… Apples and Oranges, How Can You Compare? http://galappelbaum.com/2013/10/twitter-facebook-apples-oranges-can-compare/ http://galappelbaum.com/2013/10/twitter-facebook-apples-oranges-can-compare/#comments Tue, 08 Oct 2013 15:28:21 +0000 http://galappelbaum.com/?p=389 With Twitters IPO looming around the corner, analysts and financial experts won’t quit referring back and forth to Facebooks IPO and comparing the two companies. Unfortunately, those that make the

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With Twitters IPO looming around the corner, analysts and financial experts won’t quit referring back and forth to Facebooks IPO and comparing the two companies. Unfortunately, those that make the comparison don’t seem to understand or care that the two companies even at the most basic fundamentals are completely different.

fe74a65e7b605bf6f4a14173023726c81 As one of the most expected IPOs of the year, Twitter has been the center of attention in the financial world, and everyone wants to get a piece of the reporting action, including myself apparently. One thing that’s important to note is that I am not a professional reporter, but as someone with a bit of common sense I understand that the media loves stirring things up, making comparisons without real sense beyond trying to attracts peoples curiosity, since after all, the circus around the Facebook IPO can and will be used for years to attempt to gain ratings. But the bottom line (from a Computer Scientist and technology expert) is that comparing Facebook to Twitter is the same as comparing apples to oranges.

In terms of business model, Facebook has one purpose: connect everyone. Mark Zuckerberg has said it a million and one times, and the whole premise behind Facebook is a place where people can connect to old friends, family, new friends as well as businesses they like, bands, books, services, etc. Twitter on the other hand doesn’t care less who you’re connected to. As a matter of fact, Twitter very rarely finds your “friends” as suggestions to follow, but rather people/brands that make sense in the conversation. Twitter is a place where uploading random thoughts every 20 seconds isn’t a reason to block someone, but a reason to follow; It’s a place where the small thoughts lead to small conversations, exchange of information without overwhelming.

Unlike Facebook, Twitter is more personal. While some brands, sports teams and businesses have their own Twitter accounts that are ran by their marketing teams, the personalities on Twitter are more dominant than the “marketed accounts”. If you @ reply Lebron James enough, his phone will keep vibrating. The same can be said about hundreds of other athletes, actors, writers and even politicians, while the same people’s Facebook pages are ran by PR teams.

So how can you compare Facebook and Twitter? by saying they’re both websites, they both require an account and they’re both extremely popular. In terms of business models, the picture gets a bit clearer how the two are different.

While Facebook through ads can make a boatload of cash by targeting specific crowds and giving them what they want, Twitter has a bigger obstacle: How to incorporate the ads into the conversation? So far, the “promoted tweets”, “promoted trends” and “promoted accounts” are relatively successful, but Twitter is still a profitless company. So what can be done?

The trick about Twitter is that it’s a lot more of an “events right now” platform than anything, which is why journalists and activists love it so much. It’s a platform to communicate information very quickly, and just like that information is spread,the company can track the pace of spread, where it originates, how it originates, etc. Why is that important? the simple answer is data.

While companies like NBC, CNN, Warner Brothers, etc. Don’t really care what you think, they care about how many of us think it, and what makes us think it… A great example is TV shows. Twitter nowadays is a better analytic tool to measure TV ratings than television… I for once, don’t watch TV shows on my TV… but I am engaged just as much as those that watch on TV on Twitter. The same can be said about anything that requires the masses opinions… public opinions about bills (which will never happen but one can dream) can be taken in account through Twitter by governments… Companies can know what they’re doing right and wrong by just engaging in the conversation… and more often than on Facebook, companies get in touch with clients, asking for more information, helping and overall connecting more with the crowd.

Twitter is a platform for conversation, not memories. It’s a place where people exchange ideas in masses, and one idea can be spread, liked, or criticized by the masses in a matter of seconds. Athletes being fined for saying things or consoled for losses, political discourse, TV conversation, sports conversation, everything happens on Twitter, and that’s why they’ll be so successful.

In terms of IPO and business, it’s often thought that anyone that invests in a company that doesn’t make money is stupid… and yes, Twitter isn’t making money at the moment. But with revenues growing exponentially, I wish I had the capital to invest on Twitter. Why? because regardless of the technical jargon of stock trading, this is a company whose fundamentals are the same as the most basic fundamentals of human communication: conversation. As long as the conversation is going, and the people speak their minds, Twitter is bound to succeed.. Even if it takes them time to figure out the right formula for profits, the sheer fact that Twitter is a place where you follow people based on conversations and thoughts, not if you know them or not makes it a potential game changer (more than it already is), and all it takes is to figure out how to add the “promoted” content into the conversation in a way that makes it blend into the conversation, Twitter have a very bright future.

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TJU Problem 2123 Solution – Java http://galappelbaum.com/2013/10/tju-problem-2123-solution-java/ http://galappelbaum.com/2013/10/tju-problem-2123-solution-java/#comments Sun, 06 Oct 2013 01:18:37 +0000 http://galappelbaum.com/?p=387 Head or Tail is a simple counting problem… count 0s or 1s and output the final counts… code’s below. /* * Author: Gal Appelbaum * www.galappelbaum.com */ import java.util.*; public

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Head or Tail is a simple counting problem… count 0s or 1s and output the final counts… code’s below.

/*
 * Author: Gal Appelbaum
 * www.galappelbaum.com
 */
import java.util.*;

public class p2123 {

    public static void main(String args[]){
        Scanner scn = new Scanner(System.in);
        int games = scn.nextInt();
        int currentGame;
        while(games != 0){
            int Mary = 0;
            int John = 0;
            while(games != 0 ){
                currentGame = scn.nextInt();
                if(currentGame == 0)
                    Mary++;
                else
                    John++;
                games--;
            }
            System.out.printf("Mary won %d times and John won %d timesn", Mary, John);
            games = scn.nextInt();
        }
    }
}

									

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TJU Problem 2001 Solution – Java http://galappelbaum.com/2013/10/tju-problem-2001-solution-java/ http://galappelbaum.com/2013/10/tju-problem-2001-solution-java/#comments Sun, 06 Oct 2013 01:14:10 +0000 http://galappelbaum.com/?p=385 Counting Sheep is a very straight forward problem, basic string matching. My solution’s below. /* * Author: Gal Appelbaum * www.galappelbaum.com */ import java.util.Scanner; public class p2001 { public static void

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Counting Sheep is a very straight forward problem, basic string matching. My solution’s below.

/*
 * Author: Gal Appelbaum
 * www.galappelbaum.com
 */
import java.util.Scanner;

public class p2001 {

    public static void main(String args[]){
        Scanner scn = new Scanner(System.in);
        int cases = scn.nextInt();
        int testCase = 0;
        while(cases !=0){
            int wordCount = scn.nextInt();
            int total = 0;
                String word;
                while(wordCount != 0){
                    word = scn.next();
                if (word.equals("sheep"))
                    total += 1;
                wordCount--;
            }
                System.out.printf("Case %d: This list contains %d sheep.n", ++testCase, total);
            if(cases != 1)
                System.out.println();
            cases--;
        }
    }
}

									

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The Day Brazil’s Citizens Stopped Faking They’re Blind http://galappelbaum.com/2013/06/the-day-brazils-citizens-stopped-faking-theyre-blind/ http://galappelbaum.com/2013/06/the-day-brazils-citizens-stopped-faking-theyre-blind/#comments Wed, 19 Jun 2013 19:38:08 +0000 http://galappelbaum.com/?p=361 Without a doubt in my mind I am who I am today because of what I’ve experienced in Brazil. As a foreign resident I’ve had the opportunity to attend both

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Protesto-Rio-de-Janeiro

Without a doubt in my mind I am who I am today because of what I’ve experienced in Brazil. As a foreign resident I’ve had the opportunity to attend both a Brazilian school for a few years in elementary school and the American School of Rio de Janeiro in high school.

Those that know me, know that I am a person that adapts really quickly to my environment and manage to “mask” myself as a local within a very short period of time. Unlike most foreigners I met in Brazil, I consider part of myself being Carioca. From going to the Maracana watch Flamengo play to the sambodromo for the “Desfile das Campeãs”, Globo na praia to the post-beach açaí to the crazy “night”, A I had the chance to experience a lot, meet all kinds of people, and the one conclusion I reached was that it seems that Brazil just doesn’t care.

Brazil operates mainly under one principle: “Jeitinho Brasileiro” translated purely means “the little Brazilian way”. What does it mean? many things… but among the things it means, some of the ways things happen are more known as corruption, thievery and selfishness.

 

Here are three basic cases of things I know as a FOREIGN individual (who’s mixed himself among Brazilians) which most citizens know about but do NOTHING:

  1. December is the time where you’ll get pulled over for anything just because the cops want a Christmas payoff.
  2. If you know a higher ranked in the army, you don’t need to worry about ANYTHING regarding your military duties, which exist by the way.
  3. Politicians hire even their newborn babies(exaggeration for any family member, friend, etc…) for bogus positions just to funnel government money.

A few days ago all of a sudden the boiling pot blew… This happened after a series of increase of bus fare prices, which in the past 3 years went up 40%! (Source) All of a sudden, those that were pilled in like sardines in buses decided they’re tired of it… Which then led a group of students to protest about other things, and with the Confederations Cup going on, World Cup and Olympics coming up, the people had tolerated more abuse than the usual, and they decided they’ve had enough.

There are THOUSANDS of videos out there (a few are linked below) explaining why everything is going on (in English as well), but my point isn’t to touch on the protests at all… my point is more in the realm of “You’ve made your bed, now lay in it.”

 

For DECADES the people let the little things slip. The careless relaxed life where the law can be bought, where the beach smells like multiple strains of weed, and if the cops patrol, they’re aren’t looking for those that are smoking but rather for those playing ball or paddleball right next to the water, because that’s illegal (dumbest law in Rio by the way). More people buy their drivers licenses rather than actually learn to drive and go through the proper process, which leads to disastrous road accidents. What does the government do? The same as the people… They’re just as selfish as the majority of the population… They make the process of getting a drivers license impossible, so they get paid. They sign off on building permits, cutting-corner documents, and more because they know ANY BRAZILIAN will allow them to do so, since ANY BRAZILIAN would’ve done the same. The police sell their weapons to criminals, get paid to not patrol certain areas, to allow the gangs to exist… These are just small facts that most Brazilians know BUT DON’T CARE!

 
Protesto-Rio-de-Janeiro2

I have met people that know the guy that runs all the illegal gambling in the city, others that knew the places to find the cheapest drugs, because they’re good buddies with the biggest kingpin in a certain slum… These people weren’t the “poor lower class”… Some were wealthier than you can even imagine. The funny part is that I am sure those of you reading this that have never lived in Brazil think I am exaggerating… think again. In my high school times I’ve seen and sat in more armored cars than my friends serving in IDF (Israels Defense Force) have.

 

Another big problem in Brazil is the media… Just like the rest of the world, the media isn’t necessarily the most unbiased source of news… but the again, it’s never been. It’s up to YOU to be able to think beyond what the TV tells you, and even more than that, it’s up to YOU to ensure that the information is correct, by using more than one source of news, informing yourself about important issues, educating yourself. But instead, the Brazilians up to now seemed to not care… not care that they’re being robbed and given wrong information, they prefer not to care that their tax money, import taxes, etc. are ALL funneled to private entities within the government and out of the government… the Brazilians prefer to curse the networks… They prefer generalizing that all reporters are paid off. The United States has just as much media problems as Brazil does, the difference is here people don’t buy everything they’re told.

 

Brazils problem isn’t the government.. it’s the people. Because the people vote… if the people weren’t as corrupt and deceiving as their government, they would’ve elected someone that’s like them. “But all the Brazilian politicians are corrupt”… THEN GROW UP AND BECOME A STRAIGHT POLITICIAN! There are THOUSANDS of those trying to make their way every year, but the system is made for corrupts… because that’s how THE PEOPLE made it. The only way Brazil will get better is if the PEOPLE get better… the epidemic is national, and the only way for Brazil to come back to life is by having everyone taking care of themselves and their surrounding, ensuring that people around them aren’t tolerant to these kinds of behaviors.

#ChangeBrazil isn’t that easy, there isn’t a quick solution… “kick the government and media out” is a temporary solution and a wrong one to the problem… The problem is in the core of the culture! Instead of going out to the streets protesting and destroying public property, next time you get pulled over, take the ticket and pay it rather than paying the cop off… it’s inconvenient I know, but to become a developed country Brazil has to pay its dues… the people need to pay their dues by each doing their part. “A developed country is not where the poor have cars, it’s where the rich use public transportation”

Videos:

 

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GOL… Double Your Money in a Year http://galappelbaum.com/2013/06/gol-right-now-double-your-money/ http://galappelbaum.com/2013/06/gol-right-now-double-your-money/#comments Wed, 12 Jun 2013 17:57:58 +0000 http://galappelbaum.com/?p=345 Gol Linhas Aereas, or Gol Air Lines (NYSE: GOL) in English is the largest low-cost and low-fare airline in Latin America which operates flights to South America, the Caribbean and

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Gol Linhas Aereas, or Gol Air Lines (NYSE: GOL) in English is the largest low-cost and low-fare airline in Latin America which operates flights to South America, the Caribbean and the US. Lately, GOL has been experiencing losses mainly due to landing fees in Brazil and fuel costs. So why am I predicting a 50% profit on the current price ($3.75)?

Gol’s Price History

 

Needless to say Brazils economy is going to experience two small boosts in the next few years (World Cup and Olympic Games). If we take in account each of these international events separately and look at them from Gols perspective, the numbers will make my point.

 

The World Cup is an international soccer tournament ran by FIFA and in 2014 Brazil will host the tournament. If you consider the average size of a soccer team, a conservative estimate is that a national team has about 30 people all together (players, coaches, assistants, etc.). With 31 teams (excluding Brazil) participating in the World cup, that’s 930 people flying into Brazil in the summer of 2014 and that’s just the tip of the iceberg. in 2010, 3.18 million people were at the World Cup! While I don’t mean to disrespect South Africa, Brazils love for soccer is about a million times bigger, which means it’s safe to say THOUSANDS of Brazilians will traver across their country to watch the matches and enjoy the World Cup vibe. Are you seeing my point already? if not, lets move on to the Olympic Games.

 

In 2012 the London Olympics around 9 million seat were sold!! and over ten thousand (10,562) athletes excluding Brazil participated in the competition. Just like the World Cup, this guarantees that there will be an extra 10,562 people flying into Brazil in 2016 (AT LEAST!!).

 

By this point, the numbers seem pretty convincing… but Why buy right now? With the lossesreported, landing fees and fuel going up, Gol dropped about 40%. With guaranteed increase of air traffic, it seems like a no-brainer. But if numbers don’t convince you, maybe the fact that Delta Air Lines (NYSE: DAL) and Gol are in a code-share agreement whereby the two carriers will maximize the connecting routes in the Brazil-US passage. What does that mean? well first of all, by the end of August all spots in Brazil that are operated by Delta will be incorporated into Gol’s network.

 

As shown in the figure above, the last time Gol was at such low point was back in 2008-2009 during the beginning of the market disaster and the economy isn’t as bad nowadays. So.. why not?

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