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Star Scientific, Inc. (CIGX) Message Board

  • chipper4747 chipper4747 May 2, 2013 4:42 AM Flag

    Master of Misdirection gets is all wrong about Regression

    How is the MS of BS taking you down the primose path with intentionally misguided statements?
    Let's count the lies in Tivo's latest attack:

    1) Every quarter I have presented a forecast for STSI's revenues, including the process for having done so. Guess that just slipped right by him (intentionally, of course).

    2) Order tracking is designed for one primary purpose, which I have stated ....oh, probably 20 times ... on this board: To determine if possible the change in the trend of orders; to determine if the recent linear growth of Abloc orders is declining or rising. The only reason the longs are here is to ascertain if/when Abloc gets off the ground and into the medical community. Tracking daily orders over time WILL do that. REGRESSION WON'T. Ever.

    3) Regression is pointless to use for determining the most important characteristic of Abloc: the reception of the product by the general public. Regression assumes that the future looks IDENTICAL to the past. "Got linear growth in the past? Great! You'll have it forever in the future." Try using regression to forecast the increase in Abloc orders when the Flint study comes out. I will laugh at Tivo when he can't do it. Only the daily orders help.

    4) When is regression useful? That's easy: when the future is expected to look like the past. When you assume the underlying data isn't changing (I could get technical by discussing distribution of error terms but Tivo wouldn't get it). But guess whaf? The data IS CHANGING: where we once had one revenue stream (basic $99 Abloc), we now have at least 10 that I count: basic mint flavored Abloc, unflavored Abloc, 6-pack of Abloc (mint and unflavored), 12-pack of Abloc (mint and unflavored), GNC mint flavored Abloc, GNC unflavored Abloc (I think), facial creme, and now the latest: facial serum.. And what does regression do? It IGNORES the addition of new revenue streams, and simply says "STSI cannot change its future." Period.

    Cont...

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    • That's very interesting Tiger_Joseph, oops I mean chipper.

    • Your anger and disgust is evidence that you too my friend have discovered the truth ... The product is wonderful but management must go before we are all left with nothing but sorrows .....

      Sentiment: Hold

    • Wow. Chipper is flat out Dumb. Calling things he disagrees with "lies". And quoting things that he makes up as if I said them. What an #$%$.

      I never the Flint study would have no impact. But it won't be the gamechanger.

      As I suspected you have no alternative and intentionally misquote me. I actually said that I expect the linear regression to not hold over the long term. But the next few quarters should be more accurate than your estimates because you are making HUGE #$%$umptions compared to me. Longer term, I expect sales to level off not accelerate. If you've studied business models and product launches you would know something. Your comments make you sound like a kid.

      And as far as reception... a lot of the public is trying ABloc via free trials and not repurchasing in large number for paid bottles. That's what regression analysis tells you.

      • 2 Replies to tivonomo
      • Wait till all athletes start to use it. You are in for a big surprise. And the former statement is small potatoes to what is going on.

      • " I actually said that I expect the linear regression to not hold over the long term."

        And where did Tivo say that? Certainly not on this board. Perhaps Tivo will kindly point us to the date where he stated that premise. Why don't I believe him? Because he used regression to forecast 7 quarters out to the end of Dec 2014, indicating the SAME trend. With no changes. And no supporting text to condition the forecasts out to Dec 2014. It was there in black and white in your April 4th post on IV.

        Now suddenly, Tivo is claiming it won't hold over the long term. That, folks, is what's known as "walking an argument back". When you know you're wrong, and you need to fix your position. So Tivo now gives us this new statement. Why does he forecast out to Dec 2014 if "regression won't hold over the long term"?

        One again --- another intentional misdirection, this one suggesting that 7 quarters from now, nothing will change.

        Pay attention, folks. Here's the gist of the short versus long positions:

        On the short side:

        1) Regression ignores the 10 different revenue streams and assumes they behave as one.
        2) And that the total revenue stream will not change in the future.
        3) Well, now it's just the near future. Nope. Wait, I'm wrong. Tivo says the trend will go from linear growth to simply flat level sales --- meaning no growth in sales whatsoever. And that Flint and other studies won't have an impact.
        4) The latest tactic: to suggest that Abloc is just another run-of-the-mill new product with predictable life cycles. This is the same tactic as using the regression model, just in different words.

        On the long side:

        ....continued in the reply to this post....

        That is the difference between Tivo's approach and mine.

    • 5. As to the useful of the daily order data itself: It clearly showed the take-off of Abloc during its first 12 months on the market. We would have had no idea what was going on without that information. Especially since management doesn't communicate with shareholders. So we are forced to rely on the only thing available to us: daily orders.

      6) In making forecasts using the daily order data, several posters have come very close (within $100K) of the total revenue for a particular quarter. I recall I was spot on in one quarter, then overestimated in the latest quarter. (My prediction for the quarter ended March 2013 will be in the next post). In coming up with our forecasts, we had to make assumptions about ASPs, number of bottles per order, number of freebie orders, GNC margins, etc. At least now we know that GNC contributes about half of total revenue.

      So, Tivo --- don't tell us the order data is useless. I and other board members have proven otherwise.

      7) By the way, Tivo, let's see your regression analyses for estimating prior quarters' revenue. I'm assuming of course that you ran one regression for each quarter, yes? (Certainly you didn't use a single regression with 6 quarters of data to forecast quarters 3, 4, and 5. If so, you are and your degrees are a fraud).

      In conclusion:
      1) Daily orders are useful.
      2) Regressions assume the future is the past, even though the revenue streams are expanding with different products.
      3) The shorts are here to try and make you believe Abloc will never see expanding sales due to published medical studies.
      4) Finally .... I AM a brilliant SOB! Thanks, Tivo, for tossing that compliment my way.

      • 1 Reply to chipper4747
      • "So, Tivo --- don't tell us the order data is useless. I and other board members have proven otherwise. "

        But it is. Maybe it was ok when there were no free trials polluting the website data and when GNC was a small portion of sales but it isn't valuable now. Too much volatility. Meanwhile, past revenues have trended very predictably and should continue that trend the next quarter or two before leveling off.

        "(Certainly you didn't use a single regression with 6 quarters of data to forecast quarters 3, 4, and 5. "

        With 4 quarters of data you could reasonably forecast 5 and 6 within 100K without having to pour over incomplete sales data and making unreasonable assumptions to fill in the blanks as you did last quarter (as well many others) causing errors of 20%++.

        Your past data that you use doesn't predict the future at all since you are unwilling to admit that there is a clear trend in sales that is supportable. If you understood how product life cycles run you would understand the legitimacy of my predictions. And you would understand how the trend is speaking out against the effectiveness of ABloc. Successful products would be accelerating sales growth right now... not slowing down. ABloc must not work for many.

        Sentiment: Strong Sell

      • Why give to short info that help them?When star have changed bottle contents;when its no clear the quantities linked to the on line order or the free order.Or facial creme order o whatsoever.
        when 10 k use gaap account that include marketing expense and not only revenue?

 
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