gamesinvestor
19 Jan 2017
Still believes ...... [link] :-""""‘There are so many potential ways to teach English that Pearson now competes not only with conventional textbook companies, but with free open educational resources (OERs) – otherwise known as massively open online courses or MOOCs. This risk of commoditisation to Pearson’s core content has been a critical concern amongst other investors."""">>> So if an open source approach can harness this, like Linux did to Unix in the software world, could Pearson become less relevant? """""Why then, are we excited by Pearson? Well in addition to its raw content we identify other attributes that are harder to quantify but critical to the depth and permanence of its moat. Compared to any of its competitors (traditional or otherwise) Pearson has greater scale, more experience – and a reputation that supports deeper customer relationships.>>> This greater scale (people and support) comes at a greater cost. I wonder if that has been factored into Nick Train's thinking?""""""Most importantly Pearson has the trust of its customers. News Corp’s Amplify (perhaps the highest profile of all the competing edtech start ups) failed not because its courseware content was no good, but because it didn’t command the confidence of its intended new customers."""""">>>> Does it though? -- There have been numerous examples where Pearson has jeopardised this trust by not delivering and hence losing contracts I believe. I can't quantify this, but can search old articles where Pearson has under-delivered on certain customers.I wonder what Nick Train's response will be this time. After Brexit, he invested more money into this and more into Burberry -- will be invest more in Pearson this time or risk serious questions from his customers?Games -- maybe it will all come good in the loooong term!!
Hardboy
18 Jan 2017
Re: You cannot say you were not warned "no one wakes up in the morning and suddenly realises that market expectations for the next 2 years are unlikely to be met."It isn't market expectations that will not be met, it is the board of directors' declared expectation of profits that they now tell us will not be met. That is why shareholders should be ready to wield the sword. What is even worse in my book is that 6 months ago they were confidently telling us what profits would be in 2018. Now, 6 months closer, they won't tell us what they expect. Maybe they have lost control and have no idea. As for their strategy which is getting widely panned here. I will defend them in so much as they had diverse businesses in their ownership and large debts, so it made sense to focus on more cohesive business sectors; and sell off other businesses, to reduce debt and set a clear focus. On the face of it, selling print businesses which are mature and have little scope for growth; and concentrating on digital with large growth potential seemed sensible. I'm not saying it was the right thing to do, specially with hindsight, but there was a certain strategic logic there.
numberbiter
18 Jan 2017
Re: Selling Media You have four racehorses, but have got heavily in debt to buy them. One of the four wins good races, two also do their share of winning, but the fourth is a dead loss. But you have faith in the dead loss horse and invest heavily in new trainers and vets. The bills rack up and still the poor horse cannot win races. Debt has now piled up and the banks are getting concerned, so you sell your best horse and debt comes down. But your bad horse is gobbling up the cash and debt goes back up again. So you sell your next best horse. But your bad horse continues to cripple your Balance Sheet.This is where we currently are with Pearson; they have promised to sell their last winning horse and concentrate on getting the bad horse to win a race, despite the closure of many of the courses he might potentially win on. What this is called in spending good money chasing bad.If Pearson were selling their failing education businesses and concentrating on what they had left and planned to slowly build up again, I would buy at today's low price of 586p, but this way round there is not a great deal of hope for long term survival.
gamesinvestor
18 Jan 2017
Selling Media [link] group pinned its hopes on online and virtual courseware, and in 2015 sold off assets such as the Financial Times and The Economist newspapers to generate the cash to hold the dividend steady through the transition.“Those sales don’t look too smart now. pressing on and selling its final media asset, publishers Penguin Random House, chief executive John Fallon is seriously testing investors’ faith that it’ll be alright in the end.”"""""""""They didn't look too smart back then either!!Games
Punilux
18 Jan 2017
Re: You cannot say you were not warned Clearly something very odd has happened at Pearson - no one wakes up in the morning and suddenly realises that market expectations for the next 2 years are unlikely to be met.. My main shareholding is WMH and I have been very surprised how little information they can directly impart. It is becoming a really futile exercise trying to establish what the (unannounced) "Bad News" is by subtracting the (announced) good news from the (announced) bottom line.. At AGMs and Analyst events no one (except me) has ever asked why dividends are rising when profits are falling but borrowing is on the up. Clearly these experts are trained as to how to select shares in a completely different manner from many private investors. If they can transact billions of their client's money without being provided with cogent, accurate figures it is hardly surprising that most trades are now instigated by computer programmes.
gamesinvestor
18 Jan 2017
Re: You cannot say you were not warned "This is why I ignore them; they know very little and are in reality are simply poor journalists."number - probably very wise -- you have to think for yourself indeed !!Games
II Editor
18 Jan 2017
NEW ARTICLE: Why Pearson shares crashed to 2009 low "When LSE
SONearson issues a profits warning, they tend to be pretty savage. A big red light 15 months ago, shortly after it agreed to sell the FT to Japan's Nikkei, caused the share price to almost halve in less than three months.Now, a ..."[link]
numberbiter
18 Jan 2017
Re: You cannot say you were not warned Games, most fund managers cannot read published accounts, so they blindly believe what companies tell them. This is why I ignore them; they know very little and are in reality are simply poor journalists.
LK Hyman
18 Jan 2017
Re: You cannot say you were not warned Games,"steady there number - no one likes it rubbed in the old fizzog."Oh absolutely, m8. Especially when there was another poster (I name no names) who provided a strong sell rec back on 24 July 2015.It's all very well to advise a sale a mere month ago but, for real prescience, one has to have given the sell rec 18 months ago. Fallon! Fallon! Fallon! Out! Out! Out!LKH on the flybridge jaysus this puppy is really takin' it in the slats tod
gamesinvestor
18 Jan 2017
Re: You cannot say you were not warned steady there number - no one likes it rubbed in the old fizzog.There's plenty of "top" fund managers out there that got this wrong.Games - I usually avoid people who describe themselves as "top" or "expert" -- as I don't consider many to be such in most fields, especially when it comes to predictions -- and especially about the future -- unless you have a time machine or your name is Emmett Brown.
numberbiter
18 Jan 2017
You cannot say you were not warned See my previous posts starting last December. Shown as a 'strong sell' twice, with reasons given both times.
gamesinvestor
18 Jan 2017
Re: No surprise LK -- Nick got this one right :-[link] is where my Pearson money went. 48% up with 4% of my wad lodged in it ---- innit!!Games -- I do love these Chav brands!!
gamesinvestor
18 Jan 2017
Re: No surprise "I thought he was supposed to be smart?"LK - To be fair, he has done very well on the vast majority of his stuff, and he's up there with the best. Woody has been clobbered on Next now, as well as Capita and all the other big falls in the last two/three years.Games -- Woody does pick a lot of heavily indebted companies.
Akis1999
18 Jan 2017
Re: No surprise " It chust goes to show that these so called gurus have got feet of clay "I remember my son's extended project in ecomonics a few years ago and there was a section where there checked the performance of a number of fund managers (I believe based on their bonuses year on year) and they could not find a statistical significance between consecutive years. Meaning your fund manager may win on the one year and lose on another. Random.
LK Hyman
18 Jan 2017
Re: No surprise Games,"Nick Train must be well miffed"I thought he was supposed to be smart? It chust goes to show that these so called gurus have got feet of clay like the rest of us. I still haven't forgiven Woody for Circassia though Terry (my hero) seems to be going from strength to strength with his sensible investment approach.LKH etc
