Are Samsung’s Glory Days Waning?

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Oct. 04 (Bloomberg) -- Keith Woolcock, Founder of 5th Column Ideas, discusses both the coming IPO from Twitter and whether or not Samsung has seen its best years. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

Smoothly?

I haven't got the faintest idea.

I would hope so.

You would think that they wouldn't screw up twice.

The chances are they're going to go onto the new york exchange.

You'd think they would get this one right.

Facebook, the problem was when it went public it was a giant.

It should have gone public a year or two earlier.

Now, facebook is booming.

Would you invest in twitter?

I think i would, yeah.

It is interesting -- this relates to samsung.

If you look around the world, internet stocks are blooming everywhere.

It is always good to look for anomalies.

That is one of the things we do at the fifth column.

One of the glaring anomalies has been china, for instance.

A lot of the other asian markets.

How really difficult e live years china has yet the internet stocks are blooming.

In this country, internet related things, they are blooming.

The probability is, i think twitter is a great service quite honestly.

The difference between a quitter -- if you look at google, when google went public, it was already making a lot of money.

It had a great rate twice the level of twitters.

Twitter is not in the premier league.

It is not making money.

That was my next question.

Does that matter?

No.

eventually, it will make money.

This is a company that's the great thing about winter is that -- twitter is that it is highly optimized.

70% of the ad revenue is coming off of mobile phones.

I think twitter is highly likely to make a lot of money eventually.

So that is what i am buying.

A probability.

When you buy tech -- i know i get screamed at for this -- people focus on the valuation they are looking at.

That is not the way to look at it.

I don't buy samsung because it is on seven times earnings.

I buy it because the probability is it is on three times earnings are 10 times earnings.

The probability with twitter is that it will make a lot of money.

I can make that for certain but -- how will it do that?

Through advertising.

Sponsored advertising.

The other thing which you can never -- it is very hard to discount with these fast growing companies in an ecosystem that is evolving quickly, you don't know what the next product is going to the.

Any guesses?

It could come out of anywhere.

It could be something to do with media but you don't know.

These companies are evolving all the time.

Look at google.

Google bought this business called youtube which people at the time said, you are paying $1 billion for youtube?

You must be mad.

Within five years, youtube will be a huge part of the profits owned by google.

It is only just started to happen.

Let's talk about samsung.

Why is this the last hurrah?

90% of the profits made in mobile phones are made by high- end phones.

Samsung's high-end phone business is disappointing.

Analysts have downgraded the unit numbers for the s-4. that is starting to turn down.

If you go back to the beginning of september, august, the forecast for samsung was 10.5 to 11 trillion.

Everyone is leaving around saying how well they have done.

The profits have been downgraded.

The chip business is now driving samsung.

When ever is that good news?

This was supposed to be -- exactly.

The chip business has had a huge boost.

The major competitor had a fire so chip prices have gone up 50% or so in the last month.

Samsung is a terrific company.

It is always cheap.

It is selling on about seven times earnings.

Probably 1.5 times -- that is where it has always been.

Go back to probabilities.

The probabilities are that samsung has seen its best years.

This is a company that spends more on marketing than coca-cola and toyota.

When they launched that galaxy s-4, i haven't seen so much hype since nuremberg 36. they haven't shifted it.

Back to apple, i think apple is in the ascendant.

When i came on the last time, the thing that apple can do -- it came out with a new phone, it has a 64-bit processor.

Samsung will come out with its next phone with a 64-bit processor.

So what?

The so what is, the moment apple does that, they upgrade the operating system and right away, several hundred million people get a new operating system and new applications.

The applications developers switch back to apple.

Samsung will come out with this new phone and it will go on about how powerful it is but until the android operating system is written with a new instruction for 64-bit processors, it is a lot of hype.

He will come back later.

I want to dig into htc as well.

We will get into that later.

He is going to stay with us.

We will be back later this hour.

Up next, what else have we got for you?

Too hot to handle.

Executives meet to talk about the world cup in 2022. we discussed the debate over summer temperatures and why that is heating up the story surrounding qatar.

We will be back a little later.

?

This text has been automatically generated. It may not be 100% accurate.

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