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Varchild2008 (84.23)

Rick Munarriz gets Coal in his stocking (AMZN)

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December 28, 2011 – Comments (3) | RELATED TICKERS: AMZN , GME

Had you decided to put your money in (AMZN) at the beginning of 2011 instead of (GME) you would be doing exactly what Rick Munarriz kept telling investors to do.

Gamestop was going bankrupt due to digital dnloading of video games and social gaming and of course the competitive pricing of Amazon.com.  Ergo....Rick was bullish on Amazon while Bearish on Gamestop.

Yet....Year to date:

(AMZN)  DOWN for the year by %3.42

(GME) UP for the year by %5.14


So.....Rick Munarriz's  "Throw This Stock Away" article "come on down....Gamestop!!!!!" was absolutely wrong.

Perhaps he needs to write one of these articles for Amazon?  Just a suggestion here.

In all seriousness....  Amazon seems to be doing well as usual in terms of Sales.  No one can dispute that.   The issue has always been Profit Margin weakness + unexpectedly weak EPS growth and Income/Profit growth.

Gamestop will never achieve the kind of Revenue Stream Amazon enjoys....

But, Gamestop isn't the one with the ridiculously over inflated P/E ratio like Amazon.

The "I AM NOT AMAZON" story has already been built into Gamestop's price a long long long time ago.

Now we have Gamestop releasing news today about their IDevices program exceeding expectations.  Look... Gamestop is EXPANDING its line of businesses.

Sure....Some business will take hits here and there....Call of Duty Elite may cut into Map Pack sales for Call of Duty Games....   But, Gamestop is expanding into new businesses and expanding upon existing ones and those do offset these issues....  Digital Growth outside of the Call of Duty Elite story is quite strong still and will have some growth in the years to come.

I just do not see how Digital Growth "Crashes" simply because of the Call of Duty Elite story.  Not when there are other stories out there....

Like the recent announcement of Nintendo 3DS offering DLCs.  Of course, too early to know if there is any retail business for 3DS DLCs for Gamestop.  But, if there is then that business becomes available in the same year TREFIS is bemoaning Call of Duty Elite Map Pack sales for Gamestop.

It seems to me that for every NEGATIVE someone can find and dig up on Gamestop.... There are plenty of Positives out there....or possible positives....or etc.

Gamestop's future isn't Bankruptcy.... It's just a transition from Bricks to Digital and depending on how customers feel about Digital will depend on how quickly Gamestop has to adapt...to transition if you will....

The end result isn't Catastrophe....   When APPLE computer company was struggling everyone declared that it was going to be inevitable that APPLE declare Bankruptcy.   That was the news story of the day.  APPLE = BANKRUPT!!!!!!

Then of course Steve Jobs regains the C.E.O. position and greatly shifts APPLE's direction and you have a turn-around story.

If you are sitting there so busy *hating* a stock because for whatever reason....you will miss the turn-around story taking shape.  You will miss it.... You will....well...have COAL in your stocking.

3 Comments – Post Your Own

#1) On December 28, 2011 at 4:30 PM, Varchild2008 (84.23) wrote:

RED  Thumbing All Stars on Gamestop are slowly but surely pulling away their Red Thumbs.

Of course the Green Thumb #s aren't improving either...

Nonetheless, maybe All Stars are starting to realize that GME is actually an outperforming stock against the S&P 500.

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#2) On December 28, 2011 at 4:45 PM, TMFBreakerRick (81.99) wrote:

Varchild, I should probably be honored by this coal award, though I'm still scratching my head over where I pitted GME vs. AMZN for calendar year 2011.

You mention the "Throw This Stock Away" column where I tossed out GME. I have done it a couple of times over the years. The last time was on July 13, 2011:

 http://www.fool.com/investing/general/2011/07/13/throw-this-stock-away.aspx

GME's stock had closed at $24.81 the day before the article came out, so it's now trading 3% lower. To your credit, AMZN has fared even worse, but AMZN was never mentioned in that particular article.

In fact, AMZN was the subject of the "throw this stock away" column back in April:

http://www.fool.com/investing/general/2011/04/27/throw-this-stock-away.aspx

And, yes, AMZN has also fallen since it was the stock I suggested get tosses out then.

Given the choice, I agree. I would take AMZN over GME. I am not confident in GameStop's model in the long run. I can also point you to far bigger blunders that I have made. I make a lot of calls. I'm going to whiff badly on more than a few. However, I respect your opinion and appreciate you taking the time to express your bullish GME thesis. For that, I'll take the coal regardless of the circumstances.

 Rick

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#3) On December 29, 2011 at 10:22 AM, ShyCapIdeaFile (93.08) wrote:

Rick. I believe you left out the "T" on the man's bullish argument. There are so many things wrong with this post, one's mind warps reading it and cries out for the logic of North Korea.

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