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Well lets hope price don't go up anytime soon.

Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)

This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.

A lot of what GW say in their report is BS for investors who don't understand how the wargames market works.

To be fair to GW, the wargames market is so tiny, and so fragmented between dozens of small companies, that it isn't possible for anyone really to know how it works.

That said, anyone who can read a financial report can see that if sales are declining continuously for years, despite whatever measures the management takes to increase them, there is a problem.

Even if no-one can say what it is.

There is only one other industry, business, group, etc. that I know of that spends so much energy on finding new clients and so little focus on retaining them – and that would be caretakers – but that’s only because they literally can’t sell anything else to their customers.

Superscope wrote:There is also a point of incoming video games based on their IP.

Both Space Marine and DoW: Retribution are shaping up rather nicely.

Those two games should generate a healthy amount of royalties.. Which hopefuly funds the next generation of GW products and their quality.

Dont forget dark millennium in the next few years.

Gr3y wrote:

Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)

This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.

It's not a barrier to entry for customers...

GW raises the barrier for new customers every year, but this was not what that quote was talking about.

theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.

When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?

I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.

Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!

Grot 6 wrote:Thats kind of a blanket statement, seeing as we have this conversation at least three or four times a month, consistantly. And as for informed ,Osbads had some pretty good conversations, as well as other people who are in the trenches, living the dream, firsthand. Of course it would be nice that the Sky would fall, but in point of fact, even if it were, GW would be the last ones to hear it from. You have to remember that they are a bonified business, and even hints of doom and gloom hit them where it hurts.

Just one Grot's opinion....

No, it isn't a blanket statement, to be a blanket statement I would have to state that all internet posts are always wrong, or something like that. Instead, I said that information on the internet is unreliable, and shouldn't be taken at face value. Which is pretty damn hard to argue against. Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong.

And no, conversations among staff don't count as informed on the overall state of the business, they're certainly interesting and useful information, but filling out stock orders just does not tell you the overall health of the company. And no, the idea isn't to wait until GW's annual report says 'we're boned', the idea is to wait until someone has actually undertaken analysis of the company's health and long term viability, by studying a full range of indicators, only a handful of which can be gathered through the annual report.


Automatically Appended Next Post:

sourclams wrote:I would recommend charting out GW's share price versus the S&P500 index to get a more market-anchored impression of GW's financial performance. From an investment perspective, it's not just about what a stock does, moreso about what it does in relation to everything else.

You've misunderstood my point. I said that it was categorically wrong that GW's sales had declined every year for a decade. And that's completely true. You're trying to turn that into some kind of analysis of GW as an investment option, which is something I never commented on.

I agree with you, GW is a poor performing stock. I think you were very generous in calling GW a safety stock, when personally I wouldn't advise anyone to buy in, as profits and projected future profits just do not justify the current stock price.


Automatically Appended Next Post:

fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.

I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.

If you have produced the last one, then by all means I'd love to read it. And no, simply noting sales trends is not a complete analysis of the future viability of the company, and as a financial analyst that's something you should know. Because you'd know that companies can take a reduced share of market and remain profitable.

I have never believed GW was in trouble until now - this set of results, if not arrested during the rest of the year, has all the hallmarks of the beginning of what is in slang terms a death spiral which takes years to actually happen. the trouble is, as with anything in life, no one extreme works. A focus on the costs with out a focus on revenue retention (and hopefully growth!!) has to go hand in hand. Often, a focus on only cost can lead to a drop in revenue that outstrips cost savings. The one man store is a perfect example - less cost but less revenue and less growth equals few new customers and as current customers drop off who is going to replace them - hence the need to focus on growth at same time to avoid the death spiral.

I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative. Surely it would start with a consideration of the impact of recent market entrants and the growing second hand market?


Automatically Appended Next Post:

JOHIRA wrote:...communicated to me that he's more interested in protecting GW from criticism than in seriously attempting to understand why this financial statement has generated 5 pages of mostly critical opinions about the way GW does business.

Then you've misread me terribly, and so badly I have to wonder if you ever even bothered to read what I was saying. I've got no interest in defending GW from fan criticism.

My only interest is keeping the conversation focused on known, and calling out the wild speculation where it exists.

In most industries, a body of disgruntled former-customers this large and going to rival companies products would normally be cause for concern, don't you think?

In most industries, yes. But it's very important to understand not all industries are the same, and one should be very wary in applying the general rules to specific cases. GW has not only survived, but flourished despite their being a constant stream of embittered former customers, something that was observable two decades ago.

As such, I'd say that whatever GW's problems may, embittered former customers are not one. I know it sucks to realise that you don't matter, but there it is.


Automatically Appended Next Post:

carmachu wrote:And this is why we do anaylsis, as do other people, with more knowelege then you. Your looking at the gross sales, which is fine. What your NOT doing is looking at the real indicator, which is unit sales- how many units moved, which has been in decline since 2001(with the exception of If I recall, 2004 was a bump up, then slide back down). With cutting costs and a few other things the numbers your showing hide the underlying problems- less units sold at a higher prce, which is eventually unsustainable. When that point is reach is a debatable point.

No, I wasn't looking at anything. I was informing people in this thread that a claim made was, in fact, completely wrong.

You are right that units sales are an important indicator. You are quite wrong in claiming unit sales are the real indicator, as both unit sales and total sales revenue are both important indicators, along with up to a hundred other possible indicators that might matter.

Because the important thing that really needs to be stressed in this thread is that you can project a long term decline in sales and not have a doomed company, provided there is a point where the decine will plateau, and that the company can remain viable at that new level of sales.

At which point we're left with a lot of things up for debate, can we predict long term sales decline?, if there is long term sales decline is there an end point or will it fall forever?, and can GW continue to operate profitably at a lower level of sales?

Given no-one here has undertaken into any actual analysis of any of those questions, I think it's fair to say any comment on their long term future is wild speculation.


Automatically Appended Next Post:

Gr3y wrote:This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.

You need to read the quote more carefully. GW didn't even mention pricing in their quote, so I have no idea how you interpreted that. GW said they have to primary advantages that give them an advantage over competitors (a barrier to other company's taking GW's market share), and those are the appeal of their defendable intellectual property (I'm personally dubious over this, as their setting is not that original nor are its strengths difficult to emulate) and their network of stores in bringing in new customers (this is a tremendous strength).

Nagashek wrote:

theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.

When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?

I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.

Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!

lol, The Simpsons

GW needs to change their business strategy, else they will soon "run out of ice."

Sebster, while I am glad to see the effort you are putting into this discussion, I fear that have been led to make at least one elementary error, either through accident or by zeal, which serves to undermine your points rather dramatically.

sebster wrote:

Grot 6 wrote:Thats kind of a blanket statement, seeing as we have this conversation at least three or four times a month, consistantly. And as for informed ,Osbads had some pretty good conversations, as well as other people who are in the trenches, living the dream, firsthand. Of course it would be nice that the Sky would fall, but in point of fact, even if it were, GW would be the last ones to hear it from. You have to remember that they are a bonified business, and even hints of doom and gloom hit them where it hurts.

Just one Grot's opinion....

No, it isn't a blanket statement, to be a blanket statement I would have to state that all internet posts are always wrong, or something like that. Instead, I said that information on the internet is unreliable, and shouldn't be taken at face value. Which is pretty damn hard to argue against. Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong.

And no, conversations among staff don't count as informed on the overall state of the business, they're certainly interesting and useful information, but filling out stock orders just does not tell you the overall health of the company. And no, the idea isn't to wait until GW's annual report says 'we're boned', the idea is to wait until someone has actually undertaken analysis of the company's health and long term viability, by studying a full range of indicators, only a handful of which can be gathered through the annual report.

...
Automatically Appended Next Post:

fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.

I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.

...

Then you've misread me terribly, and so badly I have to wonder if you ever even bothered to read what I was saying. I've got no interest in defending GW from fan criticism.

My only interest is keeping the conversation focused on known, and calling out the wild speculation where it exists.

...

Automatically Appended Next Post:

carmachu wrote:And this is why we do anaylsis, as do other people, with more knowelege then you. Your looking at the gross sales, which is fine. What your NOT doing is looking at the real indicator, which is unit sales- how many units moved, which has been in decline since 2001(with the exception of If I recall, 2004 was a bump up, then slide back down). With cutting costs and a few other things the numbers your showing hide the underlying problems- less units sold at a higher prce, which is eventually unsustainable. When that point is reach is a debatable point.

No, I wasn't looking at anything. I was informing people in this thread that a claim made was, in fact, completely wrong.

You are right that units sales are an important indicator. You are quite wrong in claiming unit sales are the real indicator, as both unit sales and total sales revenue are both important indicators, along with up to a hundred other possible indicators that might matter.

It's quite clear that you feel strongly about the point regarding the "claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong"; this, unfortunately, only serves to reduce the quality of your other points, as you will see. The problem lies in that this is (at least appears to be) a re-iteration of a point made in response to a statement of my own, here...

sebster wrote:

Buzzsaw wrote:Again, with due respect, it's my impression from other posters on these boards that GW's sales have been in decline for the better part of a decade. At what point, exactly, does that become a "trend"?

They haven't been in decline for a decade. That's just more stuff that people on the internet are throwing about. Sales in 2001 were about £90million, and they grew every year until the high water mark in 2004. They declined for two years, stabilised at around £110 million before spiking in 2009 then dropping back in 2010. Seriously, the internet is full of lovely people but they are very imaginative, and I really wouldn't take anything they say at face value.

For those inclined to read quickly, the problem is that the statement was made "GW's sales have been in decline for the better part of a decade", to which Sebster replied that "They haven't been in decline for a decade". Sebster's statement is true, it' simply is irrelevant to the original statement, because (either through zeal or misunderstanding), Sebster has confused "for the better part of a decade" with "a decade". For those unfamiliar, the phrase "for the better part of" means the most of, the the majority of a thing. As has been pointed out, GW turnover has been in decline since 2004, nearly 7 years, certainly "the better part of" a decade. Thus the original claim, pace Sebster, is in fact, correct*.

Now, this error originally appeared in a post with little meat otherwise objectionable, so I didn't feel that it merited much discussion; however, the originally small error has been compounded upon in the post above several times, morphing into "Especially given the claim in this thread that GW's sales have declined every year for a decade, which is absolutely and categorically wrong." So enamored of this rebuke that Sebster makes it into one of the three legs of the stool on which he sits, claiming "I am completely right in three things" (bold and underlined above).

As is pointed out above, the claim that this is a refutation of an earlier statement is incorrect, leaving him standing with two legs in his stool, and his stool all in disarray. What a mess! All of this is by no means to be an exhaustive critique of the errors in the aforementioned post, but it is certainly the easiest instance of what is either a misrepresentation or misunderstanding; repeated literally again and again and again.

*While even excluding the upturn in 2009 the conditions are still met, for those looking to 2009 as a year that bucked the trend, a cautionary codicil is raised by Osbad in his post addressing the matter; "Bear in mind that 2009 and to a lessr extent 2010 included a large amount of "tunrover" that was purely due to exchange rate gains in sales demonitated in non-sterling currencies following the collapse of the £."

prime12357 wrote:

Nagashek wrote:

theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.

When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?

I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.

Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!

lol, Futurama

GW needs to change their business strategy, else they will soon "run out of ice."

Fixed

Buzzsaw wrote:For those inclined to read quickly, the problem is that the statement was made "GW's sales have been in decline for the better part of a decade", to which Sebster replied that "They haven't been in decline for a decade". Sebster's statement is true, it' simply is irrelevant to the original statement, because (either through zeal or misunderstanding), Sebster has confused "for the better part of a decade" with "a decade". For those unfamiliar, the phrase "for the better part of" means the most of, the the majority of a thing. As has been pointed out, GW turnover has been in decline since 2004, nearly 7 years, certainly "the better part of" a decade. Thus the original claim, pace Sebster, is in fact, correct*.

Ah, thankyou on picking out my error, I did misread the original comment. My mistake.

As is pointed out above, the claim that this is a refutation of an earlier statement is incorrect, leaving him standing with two legs in his stool, and his stool all in disarray.

That has an unfortunate other meaning...

What a mess! All of this is by no means to be an exhaustive critique of the errors in the aforementioned post, but it is certainly the easiest instance of what is either a misrepresentation or misunderstanding; repeated literally again and again and again.

It was a mistake, not a misrepresentation. And 'decline' doesn't represent GW's overall sales position. It is a fair descriptor of GW's sales position in adjusted historic price, from 2004 until today, that I will agree.

So we can probably agree on the statement 'GW's overall sales position, adjusted for price equivalence, have declined in five of the last six years'. We can then proceed to argue all day and night on the other issues, such as whether GW this decline is likely to be permanent, if there's likely to be a floor to the decline, and whether GW is a sustainable entity at a lower level of unit sales. To all of which I will continue to say "I don't know, and I'm pretty certain none of you lot do either"

prime12357 wrote:

Nagashek wrote:

theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.

When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?

I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.

Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!

lol, The Simpsons

GW needs to change their business strategy, else they will soon "run out of ice."

FOR SHAME! Its from Futurama

plastictrees wrote:

Gr3y wrote:

Statement: Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall. While our 382 Hobby centres which show customers how to collect, paint and play with our miniatures and games provide another barrier to entry: our Fortress Moat. We have been building our Fortress Wall and Moat for many years and the competitive advantage they provide gives us confidence in our ability to grow profitably in the future. (emphasis mine)

This is not a real quote right? Like, no toy company sees high prices and high barrier to entry as a good thing, do they? It just seems... stupid. Really, really stupid and short sighted.

It's not a barrier to entry for customers...

Blarg! Speed reading is not my forte.

But do they really think that their stores are going to slow down the competition? I don't know of any GW stores in my area (we had one years ago but I think they closed due to... something). However we have a plethora of indy stores that do swift business in all sorts of games.

Jaon wrote:If prices lowered, even by $10 dollars, I would buy twice as much gak as I usually do.

Same here, tbph

ChocolateGork wrote:

prime12357 wrote:

Nagashek wrote:

theHandofGork wrote:So the pattern goes something like:
Sales go down, cut costs & increase prices to compensate.
Now repeat year after year.

When do we hit the point when this cycle will no longer work, that is when there are too few costs left to cut and the price has exceeded what the market will bear?

I've heard plenty of nay-sayers over the year claiming that GW has finally hit the point of instability. I'm at the point where I just don't care any more. GW isn't the only dealer in town anymore.

Documentary Narrator: Fortunately, our handsomest politicians came up with a cheap, last minute way to combat global warming. Ever since 2063, we simply drop a giant ice cube into the ocean now and again.
Suzie: Just like daddy puts in his drink every morning. Then he gets mad.
Documentary Narrator: Of course, because the greenhouse gasses are still building up, it takes more and more ice each time, thus solving the problem once and for all.
Suzie: But...
Documentary Narrator: Once and for all!

lol, The Simpsons

GW needs to change their business strategy, else they will soon "run out of ice."

FOR SHAME! Its from Futurama

Whoops......
Thus is the curse of those who watch both, and possess a very bad memory of such things.

Gr3y wrote:Blarg! Speed reading is not my forte.

But do they really think that their stores are going to slow down the competition? I don't know of any GW stores in my area (we had one years ago but I think they closed due to... something). However we have a plethora of indy stores that do swift business in all sorts of games.

They do, yes. In fact, all those stores are the cornerstone of their business model. And it's a business model that makes a lot of sense, in a lot of ways. Most gaming stores are hidden away, in the dingier part of town. GW puts its stores right in mainstreet, and this means greater awareness for anyone passing by, and it means the company and hobby looks a lot more reputable (very important to the parents who will be investing in the hobby for their kids). It also means there's staff on hand to teach kids how to assemble and paint miniatures, something the competition can't guarantee. But more than anything, its a specific community and likely social group for people, all centred around GW games.

Now, the effectiveness of that model is going to vary from market to market, depending on the state of local hobby stores, and the demographic of the hobbyists in those locations (a more mature market is going to find less value in a mainstreet GW store). But given GW's success over more than two decades and their one real point of difference to the competition, those mainstreet stores, it's pretty safe to say they've been a major point of success.

There's is still plenty of scope for wondering if they will continue to be, or if they might become a huge expense hanging around GW's neck. The primary success of GW was in the UK, which is a different market to Europe and the US, where there's plenty more independant gaming stores. And more than that, the internet has expanded massively and can now freely provide much of the feeling of community the stores used to offer (the world of gaming was a pretty lonely place in the 90s, and it was great to know there were stores full of people playing the same games you were... but now with the internet that's just not the case).

sebster wrote:

fullheadofhair wrote:also, sebster, I am afraid you are more than likely wrong. If you go back through the results and chart sales/ revenue and then start thinking about the LOTR bubble, currency and the rapid increase in BL sales over the last 10 yrs you will soon see that the core part of the business (40k and WFB) has been in decline continually. a friend and I did just such a thing 2 yrs ago I believe - both of us are what you in the UK would describe as F. analysts.

I am completely right in three things; (i) GW have not had continually declining sales for a decade despite that claim being made in this thread, and (ii) people have been predicting GW's imminent demise for a twenty years and the exact opposite has happened, and (iii) no-one in this thread or any other I have seen have produced anything near an actual analysis of business performance that indicates GW is in long term trouble.

If you have produced the last one, then by all means I'd love to read it. And no, simply noting sales trends is not a complete analysis of the future viability of the company, and as a financial analyst that's something you should know. Because you'd know that companies can take a reduced share of market and remain profitable.

That was a couple of years ago. You are making the mistake of comparing revenue. I am not interested in revenue. In a niche market with several competitors from similar entertainment industries competing for the same customers $ revenue (whilst important) isn't the key factor. Number of units sold is a better indication of that. What we did was strip out approximate price rises, currency fluctuates, impact of the black library big increase in sales over the last five years (based on comments made by management from several sources) and strip out the potential impact of LOTR bubble (harder, but based again on comments form several sources). There were a few other things we did to ensure we were comparing like with like but memory is a little foggy and obviously it was rough and ready but from it you could see a defintely flattening and/or decline of sales. From that one could then draw the conclusion that unit sales must be flator declining all other things being equal.

As a analyst, which you say you aren't, a decline in units sold is not a trend I would like to see. Short term increases in profitability from declining sales is a glaring warning sign if you are looking for a growth stock or simply a safe place to put your money.

fullheadofhair wrote: have never believed GW was in trouble until now - this set of results, if not arrested during the rest of the year, has all the hallmarks of the beginning of what is in slang terms a death spiral which takes years to actually happen. the trouble is, as with anything in life, no one extreme works. A focus on the costs with out a focus on revenue retention (and hopefully growth!!) has to go hand in hand. Often, a focus on only cost can lead to a drop in revenue that outstrips cost savings. The one man store is a perfect example - less cost but less revenue and less growth equals few new customers and as current customers drop off who is going to replace them - hence the need to focus on growth at same time to avoid the death spiral.

sebster wrote:I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative. Surely it would start with a consideration of the impact of recent market entrants and the growing second hand market?

Again you are, as you say, not an analyst and that is why you don't understand and said what you said. Cost saving programs can affect revenue in multiple ways - it is analysis 101. The traditional example often used is switching to a cheaper material that reduces costs but then over the longer term then reduces revenue as people don't like the reduction in quality and switch to a competitor.

For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....

There is also a possibility of not attracting more new customers thant those who leave the GW Hobby because it takes time and effort to attract and persuade new hobbyists - one man stores open 37.5 hrs a week cannot do it as affectively. The old saying is it costs more to get a new customer than retain the ones you have. Hence my comments about how you cannot focus purely on the cost side - you have to focus on both. There is a simple saying "no one extreme works". Life and business isn't about extremes - it is about balance.

You say you aren't an analyst. If you are going to argue at least look at what an analyst does first. With out that it would be like me arguing with the lawyers on this forum about IP without researching what IP laws actually are. I wrote about cost saving iniative because it is a fun little nugget that amuses me.I have analysed and produced reams of reports on potential costs savings from putting in $10 million high speed manufacturing lines - I do have just a tad bit of experience behind me. As I am not being paid for this and writing for fun on a silly little forum I started where I felt I wanted to start - you want to pay me $90 per hour and pay for 10-15 hrs I will give you and 8-10 page analysis of that report with research taken from other sources accompanied 8-10 years worth of trend analysis and then you can tell me where you would like me to start.

@Fullheadofhair

I'm a commodity analyst, specifically ag commodities, so retail-based equities may as well be the moon as far as my experience base is relevant.

If I'm reading you correctly, the cost savings initiative is actually a revenue bubble? There's short term benefit as overhead on stores drops and customer base remains relatively unchanged but over time customer recruitment declines to a point that cost cutting cannot compensate for?

Seems that at best GW is a 'hold', and the speculator would be looking to sell.

sourclams wrote:@Fullheadofhair

I'm a commodity analyst, specifically ag commodities, so retail-based equities may as well be the moon as far as my experience base is relevant.

If I'm reading you correctly, the cost savings initiative is actually a revenue bubble? There's short term benefit as overhead on stores drops and customer base remains relatively unchanged but over time customer recruitment declines to a point that cost cutting cannot compensate for?

Seems that at best GW is a 'hold', and the speculator would be looking to sell.

Basically yes. But more of a Gross Profit/ Margin bubble. If recruitment declines and fails to keep up with those leaving the GW Hobby it will start to put pressure on the margin as revenue drops but fixed costs remain fairly stable. Personally, I don't get GW's approach - it isn't how you usually run retail and as a I said earlier (as have others I am sure) a pure cost focus never works.

What I don't get is GW's revenue increasing strategy seems to be just to produce great looking models. As I am sure you know, a revenue strategy is comprised mainly of having the right product, at the right time, in the right market/ segment and for the right price point. I think the "wave strategy" is not working (right time). We can debate pricing until cows come home but a decline in revenue with a major release of of WFB that should feed into these figures means one of two things:

1) Despite what GW says their product is showing elasticity and that is being exacerbated by the economy
2) Pricing strategy is wrong.

Both points should be worrying for an investor because either point means management don't understand a) their product b) the customer and c) the market in which they operate.

So if I was advising anyone, I would say hold until you see their plan to maintain and then grow revenue at the product/ store level. Sell if you don't have the nerve. Definitely don't buy. The next 2 years are going to interesting as we see the full impact of the one person store strategy grow.


ps, ag commodities. Sounds fun, especially with the recent up swing in world wide food prices.

Superscope wrote:There is also a point of incoming video games based on their IP.

Both Space Marine and DoW: Retribution are shaping up rather nicely.

Those two games should generate a healthy amount of royalties.. Which hopefuly funds the next generation of GW products and their quality.

And, more far off, we have a massive money generator: Dark Millenium Online.

fullheadofhair wrote:What I don't get is GW's revenue increasing strategy seems to be just to produce great looking models. As I am sure you know, a revenue strategy is comprised mainly of having the right product, at the right time, in the right market/ segment and for the right price point. I think the "wave strategy" is not working (right time).

Again, I deal in fungible goods so any marketing plan reliant upon premiums paid for significant differentiation is somewhere over on the moon relative to my expertise, but the "wave" strategy makes no sense to me, either, and seems completely counterintuitive.

Monolithic releases seem to cause demand rationing; consumers arguably want to buy everything released but at high price points must cherrypick among the options available. That sort of internal competition results in fewer total sales before the initial hype period wears off, which wouldn't occur to the same extent if GW released fewer kits but more consistently. Maybe I'm way off base here, but it seems GW invites volatility with its marketing schedule.

ps, ag commodities. Sounds fun, especially with the recent up swing in world wide food prices.

It's been a good year.

fullheadofhair wrote:That was a couple of years ago. You are making the mistake of comparing revenue. I am not interested in revenue. In a niche market with several competitors from similar entertainment industries competing for the same customers $ revenue (whilst important) isn't the key factor. Number of units sold is a better indication of that.

As I've explained several times in this thread, number of units sold is an indicator of future financial activity, one of many dozens of indicators that needs to be established.

No-one has attempted to gauge any of those other indicators, or even flesh out the range that would be appropriate to assessing GW's health. In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability. I really don't know how much more clearly I can say this.

As a analyst, which you say you aren't, a decline in units sold is not a trend I would like to see. Short term increases in profitability from declining sales is a glaring warning sign if you are looking for a growth stock or simply a safe place to put your money.

It's not a good sign for GW, but it is far from the only possible indicator. Companies can maintain profitability with lower sales levels, this is standard in any mature industry facing new market entrants (so the business strategy shifts from expansion to market retention and cost control). Building a full and complete range of indicators will tell you how likely GW is to survive and produce profits into the future, whereas simply staring at unit sales trends will not.

Which is a thing I've now explained many, many times. It is a thing, that if you had any practical experience in analysis you would know.

Again you are, as you say, not an analyst and that is why you don't understand and said what you said. Cost saving programs can affect revenue in multiple ways - it is analysis 101. The traditional example often used is switching to a cheaper material that reduces costs but then over the longer term then reduces revenue as people don't like the reduction in quality and switch to a competitor.

Obviously cost savings can impact sales. The problem here is not my level of financial understanding (I have an extensive financial background, I just don't have direct practical experience in analysis) so don't spend any time explaining stuff from first year business school. Instead, spend time reading the thread. Specifically, read the part where I stated "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"... note that I specified GW's cost savings initiative?

That's because we're not talking about the theory of cost savings iniatives, which might impact sales... we're talking about GW's cost savings initiative. It's an initiative which began after the downward trend in sales. It's an initiative primarily focussed on warehousing and distribution savings, which do not impact sales. In short, "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"

For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....

This is incredibly speculative, and as I said before not a sensible starting point to explain GW's decling in unit sales (especially when everyone acknowledges the cost savings measures began after the decline in sales).

Hence my comments about how you cannot focus purely on the cost side - you have to focus on both. There is a simple saying "no one extreme works". Life and business isn't about extremes - it is about balance.

Why are you quoting business cliches at me? I've been arguing this whole thread that a proper review of GW would require an analysis of dozens of differenet points of performance, that merely looking at sales was a terriblely simplistic approach.

And now you're coming back and trying to tell me you need to look at more than one thing, that you actually need to look at two things? No. It's still dozens of things that need to be studied.

You say you aren't an analyst. If you are going to argue at least look at what an analyst does first. With out that it would be like me arguing with the lawyers on this forum about IP without researching what IP laws actually are. I wrote about cost saving iniative because it is a fun little nugget that amuses me.

I know what an analyst does, and I respect the profession enough to point out that what is being done in this thread falls miles short of anything close to proper analysis.

This thread is the equivalent of people arguing over the very basics of IP law, and you, me or anyone else coming in to say I'm not an IP lawyer but I'm pretty certain none of you are either, and I know IP law is a lot more complicated than what's going on in this thread.

I have analysed and produced reams of reports on potential costs savings from putting in $10 million high speed manufacturing lines - I do have just a tad bit of experience behind me. As I am not being paid for this and writing for fun on a silly little forum I started where I felt I wanted to start - you want to pay me $90 per hour and pay for 10-15 hrs I will give you and 8-10 page analysis of that report with research taken from other sources accompanied 8-10 years worth of trend analysis and then you can tell me where you would like me to start.

I have ten years experience as a management accountant, in a variety of companies. I've produced countless reports on the operating efficiencies of minute and company wide processes. I know the depth of knowledge required to gain a decent understanding of a company's core strengths and weaknesses.

All that experience has taught me, as expertise in any field will, how many areas of finance I do not know, and couldn't know without first hand practical experience. It's taught me to appreciate the scope of things I don't know, and couldn't every understand until I've done them myself

And $90 per hour is a bargain. If that's the price you're honestly asking, I can get you a whole load of work.

sebster wrote:No-one has attempted to gauge any of those other indicators, or even flesh out the range that would be appropriate to assessing GW's health. In short, as I've said repeatedly, no-one has attempted the grunt work needed to begin to build an informed opinion of GW's future sustainability. I really don't know how much more clearly I can say this.

ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again.

sebster wrote:It's not a good sign for GW, but it is far from the only possible indicator. Companies can maintain profitability with lower sales levels, this is standard in any mature industry facing new market entrants (so the business strategy shifts from expansion to market retention and cost control). Building a full and complete range of indicators will tell you how likely GW is to survive and produce profits into the future, whereas simply staring at unit sales trends will not.

duh.

sebster wrote:Obviously cost savings can impact sales. The problem here is not my level of financial understanding (I have an extensive financial background, I just don't have direct practical experience in analysis) so don't spend any time explaining stuff from first year business school. Instead, spend time reading the thread. Specifically, read the part where I stated "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"... note that I specified GW's cost savings initiative?

That's because we're not talking about the theory of cost savings iniatives, which might impact sales... we're talking about GW's cost savings initiative. It's an initiative which began after the downward trend in sales. It's an initiative primarily focussed on warehousing and distribution savings, which do not impact sales. In short, "I don't see how any sensible review of GW could begin with the idea that the decline in sales is due to the recent cost savings initiative"

and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?

sebster wrote:

fullheadofhair wrote:For GW, by focusing on one man stores that are only open in cheap not so visible places, open very limted hours for 5 days a week with only one person in the store is a big cost saving. To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong. IOften a lost sale doesn't come back. Having to shut a store because a staff member is ill is dumb. Shutting down the stores for a conference in LV is also dumb. Lost sales ....

This is incredibly speculative, and as I said before not a sensible starting point to explain GW's decling in unit sales (especially when everyone acknowledges the cost savings measures began after the decline in sales).

The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.

I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.

Perspective of fun is what you are missing. I bet a casual chat gun control in a bar is not your forte in life.

For the record, I've found this thread vastly more informative than I had initially thought it would be.

I'll also state, at risk of being told I'm not keen on marketing affairs, I feel the wave strategy to be a failure. I'll even add to that by stating that GW's marketing/model strategy is not a strategy at all, else they would at least produce first wave models that will be in demand....so either their creative studio is out of touch or they have little say in model production.

Take the Nid dex for example. Venomthrope was quickly released....yet here Nid players sit months later with no Tervigon kit. I know upon first reading of the codex, I was 'amped' that they had that Venomthrope model available over the more lackluster Tervigon.

AgeOfEgos wrote:For the record, I've found this thread vastly more informative than I had initially thought it would be.

I'll also state, at risk of being told I'm not keen on marketing affairs, I feel the wave strategy to be a failure. I'll even add to that by stating that GW's marketing/model strategy is not a strategy at all, else they would at least produce first wave models that will be in demand....so either their creative studio is out of touch or they have little say in model production.

Take the Nid dex for example. Venomthrope was quickly released....yet here Nid players sit months later with no Tervigon kit. I know upon first reading of the codex, I was 'amped' that they had that Venomthrope model available over the more lackluster Tervigon.

Tervigons? I'm still waiting for space wolf tcav...

fullheadofhair wrote:ummm ... why would they. This is a gaming site not a financial site. Hence why people are picking on elements of the report and not doing a full size analysis. I did it a couple of years ago when bored contracting at Microsoft and I am not going to do it again.

They don't have to, obviously. No-one here is under any obligation to put any work into studying GW's financials, which is why no-one has done it (even if they wanted to, they'd lack expertise and access to information). It's what is needed, though, if anyone is going to do anything more than speculate wildly. And given that all I've done is point out that people are speculating wildly, it's good to see you agree with me.

And no, you didn't do a full analysis. By your own statements you broke down the unit sales of GW products, which is a very small part of the overall picture of GW's financials.

duh.

So you think my point that you need a wide range of indicators is very obvious... yet I've had to explain it to you several times before you finally stopped thinking unit sales analysis was sufficient. Well, you got there in the end, at least.

and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?

Hence my use of the word 'primary', which would indicate their might be other, secondary elements... Read.

The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.

The cost savings measures started two years ago. The decline in unit sales began several years before that.

At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.

It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.

I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.

And while doing so it is only sensible to recognise that it's very superficial analysis that won't assess the company in any meaningful way.

Perspective of fun is what you are missing. I bet a casual chat gun control in a bar is not your forte in life.

I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.

oh my dear god, you are now becoming almost amusing....

sebster wrote:

And no, you didn't do a full analysis. By your own statements you broke down the unit sales of GW products, which is a very small part of the overall picture of GW's financials.

Hello, anyone in there??? No-one is saying that. Time and time again I have said as this is a silly little gaming forum I have only concentrated on the bits that interested me.

I have read the financials and have done over the last 8-10 years. Just because I don't quote everything in my post doesn't mean I haven't read it, digested it, ruminated and cogitated on it. After 20 years I can read a set of financials to get the gist of what is going on with out formal analysis and just a scrap bit of paper. I think a gist is good enough for a fun discussion despite you attempts to suck the fun out of this thread.

Based on that reading I tried to speculate reasons/ drivers behind what may be going on. That is what all analysts do because HELLO {raps knuckles on forehead} no-one has the inside info. Everything you read in the newspapers is speculation - unless you have taken the CFO out and gotten him drunk to get the inside scoop.

sebster wrote:
So you think my point that you need a wide range of indicators is very obvious... yet I've had to explain it to you several times before you finally stopped thinking unit sales analysis was sufficient. Well, you got there in the end, at least.

No, "duh" because it is obvious and this place isn't appropriate to have a full depth discussion about the weaknesses in the balance sheet & multiple business indicators that have come and gone over the years. "duh" because you don't seem to get appropriateness and that not everyone is an analyst and wants to wade through pages of justifications and are therefore happy with some simple speculation for fun and that might just be all that is needed. If we were having this discussion in a financial forum that would be different.

sebster wrote:

fullheadofhair wrote:and moving to a one man store strategy away from the metro strategy isn't a cost saving initiative?

Hence my use of the word 'primary', which would indicate their might be other, secondary elements... Read.

No you are reaching to protect your position. Changing their entire retail structure and strategy from a metro to single person store and ripping out a layer of retail management (area managers) is this years PRIMARY element. You simply don't get more primary than that. The warehouse and distribution was last years I believe.

sebster wrote:

The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.

The cost savings measures started two years ago. The decline in unit sales began several years before that.

Now you are being dense. There has been a 4% drop in revenue this year v last (from memory). Last year they had a metro strategy of mall stores feeding smaller stores with multiple stores open 80-100 hrs a week with multiple staff members. Now they have small one person stores in cheaper locations. Decrease in revenue, decrease in cost this year v's last and obviously gives a margin increase - the question is whether or not it is a healthy increase in margin and is the increase sustainable is what I am thinking to myself and have vocalized.

sebster wrote:
At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.

sill boy, not what I said at all. The decline in sales over the last decade (which took fancy foot work for you to even admit that Mr Literal) isn't what I am putting down to a one man strategy that started 6months or so ago. For you to think that is just plain weird. It is possible to have two thoughts in a post. Sourclams read the same thing and he got the point - but then he is an analyst not just a management accountant with a finance background.

sebster wrote:

It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.

This almost amused me. Other than you, haven't really had anyone disagree to much with my thoughts. Of-course my suggestions could be wrong because they are obviously speculation - but based on what I know until someone can present a better argument or a set of logical alternatives and reasons that fit in with my knowledge of what is going one why would I change my position.

The only real posts against what I have said is your frankly pitiful posts that are devoid of reasons and logic or fail to offer a substantitve alternative explanation with supporting reasoning and explanation of the drivers of the business. Why would I even consider your point of view as valid?

As for sticking to ridiculous positions dare I mention the words "decline over a decade". Management accountant with finance background indeed.

sebster wrote:

I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.

yawn.

Dear Sebster; while I can appreciate the passions this discussion appears to have aroused, I think it may behoove you to take a moment, perhaps then to look at things with fresh eyes? Because, in all frankness, these last several posts seem to have less the look of reason and more the odor of your stool about them. In the interest of harmony, I'll attempt to isolate what these issues (I apologize in advance for referring to participants by full name, it is not my intent to be standoffish, but it seems the only efficient way);

sebster wrote:

fullheadofhair wrote:The report is until November. One man strategy has been going for several months. Mine changed in August - 4 months of the report. If you truely believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended. As I said many times, I am interested to see what their revenue plans are.

The cost savings measures started two years ago. The decline in unit sales began several years before that.

At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level.

It's clear that you really, really don't like the idea that your suggestion could have been very obviously wrong. But it happens. You put out ideas, they get shot down. You must have learned by now that you've just got to let the ego go, be man and admit you were wrong. It's okay, no-one cares that you suggested something that wasn't possible. But carrying on defending a wrong idea makes you look silly, and it makes talking to you tiresome.

Here, I fear, you're definitely making a mess of your stool again. What's so distressing is that, again, is that a statement that is either misunderstood or misrepresented is becoming the linchpin of a very direct attack, wholly unrelated in intensity to the original statement.

Fullheadofhair said: "If you truely(sic) believe that my thinking that going from a store being open from 80hrs a week with several staff members down to 35 hrs with one staff member will impact sales is wild speculation then this conversation is ended." Now, if I were to phrase that same statement I would put it more as: 'It is not wild speculation to posit that a store going from 80 hours a week to 35 hours a week, concomitant with a reduction from several to a single member of staff, will impact sales; to suppose that it will not impact sales is unreasonable.' Indeed, that would appear to be an entirely unremarkable statement.

And yet, when we look at the reply, "At this point you are attempting to claim that a policy begun this year is responsible for a trend that started several years ago. It is, in short, an utterly ridiculous suggestion, and something you cannot seriously believe on any level." This reply is astonishing, as it seems to have almost nothing to do with Full's statement. Yes, the statement that cause can follow effect would be mad, and indeed I do not suppose that Fullheadofhair believes that; but I see little to no support for the interpretation that that is what Fullheadofhair is saying. On the contrary, his statement seems essentially pedestrian, yet the reply would seem to find quarrel with a straw.

I would refer to fullheadofhair's earlier post to further refine this point: "The one man store is a perfect example" and"To not even consider the possibility that the unseen cost of lost revenue isn't present is just wrong."

It would seem to me that the store austerity measures are but one straw in the broom fullheadofhair is using to brush off GW; yet it is treated as the alpha and omega of his analysis. Moreover, as before, an edifice is built upon this misunderstanding or misrepresentation that seems disproportionate and, even more unfortunately, distressingly offensive.

sebster wrote:

fullheadofhair wrote:I deleted the rest of you post instead of replying to it because I got bored. There is a big difference between throwing out a few thoughts for a friendly discussion and indepth analysis - there is nothing wrong with focusing on a few cost/ revenue drivers for fun discussion on business strategies so don't go sucking the fun out of it.

And while doing so it is only sensible to recognise that it's very superficial analysis that won't assess the company in any meaningful way.

I've learned a few things in my time. I've learned in real life that when someone starts protecting an obviously wrong idea like it's his first born child, that it's best to let it go.

I think the problem that is arising here is, at least the appearance of, a double standard on your part sebster: I will explain and illustrate by reference to an earlier post;

sebster wrote:

Buzzsaw wrote:Not to be confrontational, but it would seem rather... romantic, to describe consistently negative sales figures as "Sales growth isn't great". It seems generally agreed that the number of retail units being moved are consistently shrinking, while at the same time, aggressive price increases have only managed to keep the amount of revenue declining slightly.

No, 'isn't great' is about right. The sales position indicates to investors that GW is not going to be a growth stock, but it doesn't signal imminent demise. To make any better assessment we'd have to get a decent idea of what is really driving the sales decline, and where (if) the sales decline will stop. From there we'd need to establish if GW can be profitable at that

Without that information, all we've got is a company dropping sales growth in the midst of an economic downturn, and that's not really indicative of anything at all.

And for the record, back when GW actually recorded a loss and people were really declaring their imminent demise, I posted that a one-off loss is not really a big deal, they really ought to be more worried about declining sales growth.

Now, the phrase "it isn't great" is one where meaning is almost entirely dependent on inflection: this being type, we must go to context, and that context would appear to be that this is meant more as "it's good, not great", more then "it's not great, it's barely adequate". Which is to say, that this is a positive evaluation of GW, and I base that on what I think I can equanimously characterize as a fairly strident defense of GW's prospects.

Now, why does that occasion me to say there is the appearance of a double standard? The common theme found in all of Sebster's posts is an almost scientific instance that without proper data, we cannot draw conclusions, and also that we do not have adequate information; thus, no conclusions can be drawn. This idea has been applied consistently to those advancing the position that GW's current scheme may be to GW's corporate detriment. The double standard, however, becomes quite obvious on reflection: if we can draw no conclusions, why is the positive evaluate of GW that at least appears to be present in sebster's posts appropriate? If no conclusions at all can be drawn, then to remark that GW's sales position "isn't great" is, as I remarked it seems so long ago, "rather... romantic".

This is especially pronounced given the extremely binary constraints seemingly being imposed on evaluations by sebster: to wit;
A) there is sufficient information for a full and complete analysis and so conclusions may be drawn, or,
B) there is insufficient information for a full and complete analysis, so no conclusions may be drawn.

The problem with that is that, while it may be an appropriate standard for formal analysis in the lab when it comes to publication time, it ignores the reality that there are middle grounds, levels of information insufficient for formal analysis, yet enough to impute some useful analysis.

Here, for example, we do not have No information; we have several years of data gleaned from periodic annual reports. Now,what data we have would seem to support the generally pessimistic view of events. On this point, of course, there can be argument: the problem, as I've noted above, is that the impression being conveyed by sebster's posts is that he has a positive impression of events, but any positions contrary to that will be dismissed for lack of sufficient information for a formal analysis.

One of the foremost reasons I have remained unconvinced by sebster's points is that to say that we lack information for a formal diagnosis is no dispute of a tentative diagnosis. What we need to do is focus on facts that we have, rather then obsess over the inadequacy of the available data. That said, I do hope that I have avoided offense, and it's my intention not to belabor this point any longer. I have other things to say about points brought up, but the hour has grown far too late for such matters.

So, for the moment, ciao!

I think this thread demonstrates the old adage; that a little knowledge really is a dangerous thing...