Over the past few weeks Apple (AAPL) has lost around 15% of its stock value. That makes this a good time to buy, and buy big. Apple is a bit price, its around $88/share, but when the market gets back to fundamentals it will climb up over $115/share.
Right now AAPL has 25 billion in the bank, and that is a nice stockpile to fund its research and development operations. While speculation continues about Steve Job's future role in the company, he has created an anti-establishment, anti_Microsoft juggernaut. Some of that R&D money is already paying dividends, like the improved iPod Nano. The new Nano has a great screen, better backlight, and an improved interface.
The other big news out of AAPL is the fact that they are now selling iPhones for less than $200 at Walmart. We believe that if Apple's push into Wal-Mart stores goes successfully, it will be creating a situation "to sell a relatively complex piece of computing to folks who may never have touched a computer, or who didn't think they'd ever want to carry one around with them." Further, this could drive a wedge between Apple and competitors Research In Motion and Palm, as the latter two have so far had a tough time selling their smartphones to non-corporate consumer types, a market which, for the most part, is dominated by Apple.
All of this is bad news for Blackberry and even worse news for Palm. The new Palm Centro has had a big marketing push over the Holidays, but it wont matter. The lack of push technology makes its too inefficient.
Also, a recent demographic shift in smartphone users from corporate users to individual consumers has created a margin issue at Research In Motion. As more than half of RIM's new subscriptions are now coming from consumers, the company now sees its gross profit falling from 45.6% to in the range of 40-41%.
Shares of Research In Motion are now down nearly 3% this week alone. Elsewhere in the sector, shares of Palm are down 3.4% to $3.10 and Nokia stock is also down 3.4% to $14.93. Meanwhile, shares of Apple, which initially traded up as much as 2%, are now up about 0.5% to $86.23.
Tuesday, December 30, 2008
Wednesday, December 17, 2008
stay bullish
Yesterday was not real. Goldman Sachs Group Inc., the securities firm that reported its first quarterly loss yesterday, fell 2.7 percent in Germany, while
International Business Machines Corp., the world’s largest provider of
computer services, dropped 2.9 percent.
I am bullish on GS, mainlly because it is over-valued, and not by a small amount, y at least 25%. If you can take a short position on the stock.
Futures suggested the S&P 500 will decline after a 5.1 percent rally
yesterday spurred by the Fed’s move to cut its benchmark interest rate
to as low as zero. The central bank’s decision came after simultaneous
recessions in the U.S., Europe and Japan dragged the S&P 500 down
almost 45 percent from its 2007 record.
Following interest-rate cuts you always see an initial reaction and
then you get back to your senses. All the structural indicators, such as the economic cycle and profit outlook, remain negative.
International Business Machines Corp., the world’s largest provider of
computer services, dropped 2.9 percent.
I am bullish on GS, mainlly because it is over-valued, and not by a small amount, y at least 25%. If you can take a short position on the stock.
Futures suggested the S&P 500 will decline after a 5.1 percent rally
yesterday spurred by the Fed’s move to cut its benchmark interest rate
to as low as zero. The central bank’s decision came after simultaneous
recessions in the U.S., Europe and Japan dragged the S&P 500 down
almost 45 percent from its 2007 record.
Following interest-rate cuts you always see an initial reaction and
then you get back to your senses. All the structural indicators, such as the economic cycle and profit outlook, remain negative.
Friday, December 12, 2008
GM?
The collapse of the automobile bailout plan raises the prospects of bankruptcy for General Motors and Chrysler.
The Dow Jones Industrial Average tumbled 135.96 points (1.59 per cent) to 8429.13 in opening trades and the Nasdaq composite fell 14.45 points (0.96 per cent) to 1493.43.
The broad Standard & Poor's 500 dropped 13.43 points (1.54 per cent) to 860.16. ANd guess which stock is actually up, General Motors. AFter taking a beating early this morning, GM bounced back up, almost as if the market knew that a bailout (in some form) was on its way. Sahers should have taken a big hit, but they didn't, why? If GM were in Illinois I would assume corruption, but this time I think it is more global, simply put - speculation.
The White House said on Friday it would consider tapping a $US700 billion ($1.04 trillion) financial rescue fund "to prevent a collapse of troubled automakers" after lawmakers failed to pass an alternative.
On Wednesday Sen. George V. Voinovich, Ohio Republican and a leading supporter of the emergency measure, said that the bill didn't have the necessary Republican votes to pass Congress. And he was right.
If you are an average investor stay away from GM right now, it is not trading on fundamentals, its more emotion. If you are looking to short GM, stay away from it, because you just can't tell what will happen next. If you are an options trader, avoid GM like Bird Flu, it is toxic.
The Dow Jones Industrial Average tumbled 135.96 points (1.59 per cent) to 8429.13 in opening trades and the Nasdaq composite fell 14.45 points (0.96 per cent) to 1493.43.
The broad Standard & Poor's 500 dropped 13.43 points (1.54 per cent) to 860.16. ANd guess which stock is actually up, General Motors. AFter taking a beating early this morning, GM bounced back up, almost as if the market knew that a bailout (in some form) was on its way. Sahers should have taken a big hit, but they didn't, why? If GM were in Illinois I would assume corruption, but this time I think it is more global, simply put - speculation.
The White House said on Friday it would consider tapping a $US700 billion ($1.04 trillion) financial rescue fund "to prevent a collapse of troubled automakers" after lawmakers failed to pass an alternative.
On Wednesday Sen. George V. Voinovich, Ohio Republican and a leading supporter of the emergency measure, said that the bill didn't have the necessary Republican votes to pass Congress. And he was right.
If you are an average investor stay away from GM right now, it is not trading on fundamentals, its more emotion. If you are looking to short GM, stay away from it, because you just can't tell what will happen next. If you are an options trader, avoid GM like Bird Flu, it is toxic.
Thursday, December 11, 2008
When do you shower?
It seems to me that those American's who take a shower before they go in to work, like bankers and stock brokers got a better deal than those who shower after they get off of work, like can manufacturers. The Banks got $700,000,000,000+ and it has not helped the average American taxpayer one bit.
For a total cost of $450 billion (a savings of 250b) the US government could have given EVERY household in America a $150,000 stimulus check. Additionally, they could have taxed that money at a rate of 30%, thereby generating a 135b in tax revenue. Additionally, they could have put restrictions on how the funds were spent. For example, they could have mandated that no less than 50% of the gross amount be spent on existing debt. If a person had no existing debt then they would be forced to place the money into a government savings plan for a period of not less than 2 years.
Had the US government done this, the majority of American's would be current on their mortgages right now, and there would be no foreclosure crisis. Additionally car repossessions would go way down.
The remaining 50% of the gross stimulus amount could be used as the Household saw fit. I am confident that many people would buy new cars. That would help boost the auto industry.
But my bright ideas aside, the automakers are forced to beg for 15b (400 times less then what the Banks got) and they have a new Car Czar. Where is the Bank Czar? I guess the fact that the auto industry employees 3x as many people in America as the banking industry was not factored into the equation. This is not just about the manufacturing jobs, or the nation's ailing steel industry, which relys on the Big Three, or the scientist who invent new technologies like new soy-based foam.
Its clear that the government did not do this to save the economy, but rather to save big business, nsamely the banking business. There is no reason why billions of dollars is being spent and people are still being forced out of their homes. And better yet, why dont the banks lend money to the car makers?
For a total cost of $450 billion (a savings of 250b) the US government could have given EVERY household in America a $150,000 stimulus check. Additionally, they could have taxed that money at a rate of 30%, thereby generating a 135b in tax revenue. Additionally, they could have put restrictions on how the funds were spent. For example, they could have mandated that no less than 50% of the gross amount be spent on existing debt. If a person had no existing debt then they would be forced to place the money into a government savings plan for a period of not less than 2 years.
Had the US government done this, the majority of American's would be current on their mortgages right now, and there would be no foreclosure crisis. Additionally car repossessions would go way down.
The remaining 50% of the gross stimulus amount could be used as the Household saw fit. I am confident that many people would buy new cars. That would help boost the auto industry.
But my bright ideas aside, the automakers are forced to beg for 15b (400 times less then what the Banks got) and they have a new Car Czar. Where is the Bank Czar? I guess the fact that the auto industry employees 3x as many people in America as the banking industry was not factored into the equation. This is not just about the manufacturing jobs, or the nation's ailing steel industry, which relys on the Big Three, or the scientist who invent new technologies like new soy-based foam.
Its clear that the government did not do this to save the economy, but rather to save big business, nsamely the banking business. There is no reason why billions of dollars is being spent and people are still being forced out of their homes. And better yet, why dont the banks lend money to the car makers?
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