tag:blogger.com,1999:blog-2503392532090682825.post5301088753155236068..comments2023-06-13T05:05:28.886-04:00Comments on Economics of Information: What would Buffett say for Garmin's future?Erik Brynjolfssonhttp://www.blogger.com/profile/01117552073319813366noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2503392532090682825.post-83853945849821790442010-12-01T18:59:32.438-05:002010-12-01T18:59:32.438-05:00Great thoughts on Garmin's potential and misse...Great thoughts on Garmin's potential and missed opportunities.<br /><br />I think the one big problem with Garmin is that they may not understand how quickly Google is commoditizing one of their biggest competitive advantages: location data.<br /><br />The interesting thing about the GPS device category is the experience. You can't really use your phone because it might ring with an important call. It seems like a GPS device should be dedicated. Once Garmin realizes that, they can focus 100% of their energy on the hardware and perhaps work with Google on the software.<br /><br />Of course, this is conjecture based on my limited knowledge of the company's financials and internal conversations, but it rings true to me.Kevin Kumarnoreply@blogger.comtag:blogger.com,1999:blog-2503392532090682825.post-41807762339742988812010-11-25T08:57:32.195-05:002010-11-25T08:57:32.195-05:00I don't think Warren Buffett would even buy Ga...I don't think Warren Buffett would even buy Garmin since he has stated that he doesn't buy tech stocks. This is due to the fact that he is a long term investor and technology changes so rapid, providing little visibility over long holding periods. However, this article has an interesting analysis. One of Garmin's key assets that isn't captured in their balance sheet is the intellectual property on their software. If Garmin decides to focus more on software and move out of the hardware business, their margins will get a big jump due to big decrease in cost of goods sold. However, I'm not sure the can maintain a competitive advantage into the near future. GPS technology is pervasive in a lot of gadget we use today so looking at the past performance of Garmin may not be a good indicator of its future.Amanda Alexnoreply@blogger.comtag:blogger.com,1999:blog-2503392532090682825.post-74338040484503894162010-11-22T11:43:45.587-05:002010-11-22T11:43:45.587-05:00I'm not a "finance guy", but can mak...I'm not a "finance guy", but can make a few comments...<br /><br />This is most likely a filtering algorithm - used as a means to exclude a stock from further consideration; rather than used as a reason to invest, it is used as a reason not to invest.<br /><br />If it was used as a reason to invest; I'm not sure I'd be comfortable... The financial information being analyzed is historical. It says nothing as to the determinants of what caused the performance that was measured - therefore, in order to use this a criteria for selection, you must assume those determinants will continue to be positive, and the context in which those determinants had effects will remain relatively constant and/or predictable. I'm not sure that is valid in any context, but even more so in an industry in relatively high fluctuation (the GPS industry in this case).<br /><br />BTW, I'm doing a presentation this week on non-financial metrics... some interesting stuff going on in regards to non-financial disclosure metrics ... it's evolving quite rapidly. Check out ESG 3.0. The recent economic downturn has opened the door for many of these types of discussions - if things stay low for long enough, many of these will get traction.Tim Smith Twitter@tim_c_smithhttps://www.blogger.com/profile/04185080038528214884noreply@blogger.com