I read this article yesterday:
Newegg’s IPO Filing Reveals The Financials Behind A $2 Billion Electronics Retailer
Newegg had $2.1 Billion in sales last year, but do you know what their profit margins were? 1.4%. Holy crap. I didn’t realize that companies with profit margins so low could survive.
What shocked me even more was Amazon‘s 3.3% profit margin. Amazon usually has the best prices, very comparable to Newegg’s prices. Since I’m an affiliate of both companies, I know that Amazon has one of the best commission deals out there. They go up to about 8% on normal electronics purchases. Up to 20% on special items. From what I can remember, Newegg only offers 1 – 1.5% of sales to affiliates. I know that Amazon does not partner with cashback sites like Bing or Fatwallet or whatever, but Newegg definitely partners with these cash back sites.
What I’m getting at is, I am short 500 shares of Best Buy. I’m trying to justify my position by showing how low the profit margins of these online electronics retailers are. If Newegg is at 1.4% profit margin, and Amazon is at 3.3%, then I really don’t understand how Best Buy can compete with these guys, especially when their operating margins are probably much higher. I know that Best Buy marks up their prices due to the increase in operating margins, and I’m sure that their customer base is probably a little bit different than the online shoppers, but still, in my opinion, shoppers always gravitate towards lower prices. I haven’t bought anything from Best Buy in a long ass time. Not even a DVD. And especially not a LCD TV or something as expensive as that.
So, I think the verdict is still up in the air at the moment, as far as the market going higher or lower from here. The “good guys” that I follow are raising cash here, still net long, but definitely not going short. They are waiting for the next dip to buy, which may or may not come. The “bad guys” are as excited about the markets as ever, waiting patiently to “get some more”. Waiting to buy here after almost triple digit gains from the lows in a lot of stocks. Due to the bearish divergence in the McClellan Oscillator, I am expecting a near term pullback from here. No clue how long it will last, but from past history, it won’t be a quickie. I am still long a couple of names (AMZN & IBKR), but net short with GBP, EUR (currencies), TWM, QID, BBY, SBUX and I just added two oldies, but goodies today: FXP and SRS, 500 shares a piece. IF the market is going lower, I suspect that these battered names will surge higher, especially if there is panic. IF the market looks to get stronger from here, then I will just add to some of my longs. I’m looking at 7-Eleven (SE) and Apple (AAPL).
I hope that the market goes lower from here, but who knows, the market always seems to f*ck with peoples minds, including mine. Some people seem to have that sense of patience. I don’t. I’ve been holding onto this currency trade for a few months now and I’m only down a few hundos on the trade, but I am losing patience. It makes it a little easier when I am out playing golf and not watching the markets, but when I am sitting here watching, all I want to do is to tinker with my positions. Anyways, I’m gonna give my positions a little bit of space and time here, as I always seems to do better when time is on my side.
Kimbo vs. Roy Nelson on Spike TV tomorrow night. This has got to be the most hyped TUF fight ever. In a still picture which someone took from the promo video, Kimbo lands a straight punch right to Roy Nelson’s jaw, so who knows…maybe Kimbo makes more than just a “mean steak” on TUF.
Two female poker players on The Amazing Race this season. Maria Ho and Tiffany Michelle. I don’t normally watch this show, but I’m drawn to it now just because I want to see what these two “poker players” are all about. Same with Dancing With the Stars. My boy, Chuck Liddell, is on it, so the show is on my tivo. Kinda silly, but I can’t help, but watch.
Champion’s League games on today. I want to see the Barca game, but it doesn’t look like it’s gonna be on TV. I’m gonna have to hit up Channelsurfing.net to see if I can get it streaming to my comp.
Army Ten-Miler this coming Sunday. It’ll be my second time running it. I’m definitely not as prepared as I was last year, but I think I’ll be okay. I ran 8.5 miles on Sunday and I was HURT-ING. As a matter of fact, at mile 6, I was running along a path parallel to the potomac and a little kid, no more than 5 years old, was waiting for me to come up next to him, so that he could “race me”. I didn’t realize what he was doing at first, but as soon as I got next to him, he sped off to his dad, who was waiting by a bench about 50 yards down. I couldn’t catch him because I was really HURT-ING. I couldn’t catch a 5 year old kid. What a show. Next time, I will just trip him up and call it a game.
Last year, I ran a 7:57/mile. I think I’m just gonna try to finish it this year with an easy pace, but knowing myself, I’m probably gonna push myself as hard as I can. Unfortunately, I don’t know if my body will do what my brain wants it to do, so we’ll see. I’ll be very content with an 8:30/mile pace. Strugglin. I just created my playlist for the run:
- O.A.R. – Toy Store
- Iron & Wine – Love Vigilantes
- Pink – Please Don’t Leave Me
- One Republic – Come Home
- Silversun Pickups – Lazy Eye
- Weezer – Say It Ain’t So
- Jason Mraz – I’m Yours
- Joshua Radin – Brand New Day
- O.A.R. – About an Hour Ago
- Coldplay – viva La Vida
- Welbilt – Remedy
- Jason Mraz – Lucky
- Virginia Coalition – Johnny Wonder
- Danni Rosner – in the City
- Crred – One Last Breath
- breaking Ground – Sunburn
- U2 & Mary J. Blige – One
- The Speaks – High
- The Outfield – Your Love
- Journey – Don’t stop Believin’
- O.A.R. – I Feel Home
- Survivor – Eye of the tiger
- Big Audio Dynamite – The Globe
I know, some of these picks are little bit suspect, e.g. Pink, but I swear, I do not like men. At least I didn’t put any Taylor Swift on my playlist. I just need some music to keep my mind off of the running. You’re not even supposed to bring a music device with you, but so many people brought ipods last year, I’m saying F IT. It sucks running without music. All good, it’s ONLY 10 miles.