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Andy Zaky

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  • More Proof That Analysts Can't Predict Apple [View article]
    I wasn't aware that I sold my long position. That's news to me.
    May 10 02:37 PM | 4 Likes Like |Link to Comment
  • FOMC Day: Near Term Top Is Likely In [View article]
    Obviously it's impossible to reason with you so I'm done here. People can change their outlooks when the facts change. It's clear that you are either incapable or unwilling to understand this. A lot can change in two weeks. Especially when we see a record all time high print of option buying on equities. But what is futile is discussing this issue with someone who significantly lacks knowledge with respect to the short term.
    Dec 21 11:13 AM | 4 Likes Like |Link to Comment
  • A Huge Rally for Equities Coming in 2011 [View article]
    Yeah there's more to this than technicals. I just no longer waste my time giving a basis to my arguments. I just state my conclusion and move on. I let my track record speak for itself. I'm sick of writing 25 page dissertations because (a) no one spends to the time to read them and (b) even if they do, they almost never understand them.
    Nov 6 03:43 AM | 4 Likes Like |Link to Comment
  • How to Protect Apple Profits Ahead of Earnings [View article]
    Ok. Again. I'm probably one of the biggest bulls on Apple. I've been following the company for ages. I'm also very proficient at understanding how the market operates.

    So two things. (1) the point of this article is to describe how mitigate a large variety of risks. Some of those risks are tiny but would have profound consequences on the stock while other risks are moderate enough to be concerned about and will have moderate consequences. For example, Steve Jobs dying would have profound consequences. Even if the risk is low, the consequences would be huge. Apple coming in-line on earnings is not an outrageously low risk. The consequences wouldn't be that big of a deal and short term in nature. This article is about hedging against those risks.

    (2) My point of perception versus reality should be apparent enough. But I guess it isn't. Here's what I mean. Just because Apple might be growing at 60% a year, it doesn't mean the market is aware of this fact. Most fund managers probably have absolutely no clue how much cash Apple has, their actual growth rate, what they'll probably earn next year. Hell most probably don't even know off hand what their P/E ratio is.

    Instead, what these fund managers see, like Karen Finerman on Friday, is that Apple's stock has risen 30% in two months, has a $315 stock price and is approaching to become the largest company in the world in terms of market capitalization. To them, they think Apple is getting "pricy" (even though it "really" isn't) based on their perception of Apple's growth rate. Not based on any type of reality.

    I don't really want to try and make this point any longer. Its COMPLETELY obvious to any somewhat advanced market participant.

    Everything runs on perception - not reality. Look at AMZN and look at RIMM. RIMM is growing faster than Amazon but the perception that RIMM is struggling to sell blackberries is enough to give it a PEG ratio of .5 while Amazon continues to run on the perception that Kindle sales are going well giving them a 2.5 peg ratio. So Amazon is technically 5x richer in valuation than Research in Motion despite the fact that Research in Motion is a fundamentally stronger company.

    But yea. Don't really want to debate this anymore. Its so boringly obvious.
    Oct 17 06:40 PM | 4 Likes Like |Link to Comment
  • Apple Surpasses My October $300 Price Target: What's Next? [View article]
    AH means After Hours when Apple reports. Q2 2010 was the last time Apple was halted due to unusually strong earnings. The stock opened up $20.
    Oct 15 01:59 PM | 4 Likes Like |Link to Comment
  • Apple Surpasses My October $300 Price Target: What's Next? [View article]
    Yeah that's exactly what I'm thinking. Big pop on earnings, grind up for a few days and then sell-off by Wed/Thurs. This has been the norm with Apple for a while. Go look at the past 4 earnings reports. This is exactly how things panned out.
    Oct 15 01:55 PM | 4 Likes Like |Link to Comment
  • Apple: One Last Pullback and Then It's Up, Up and Away [View article]
    Yeah. I'm neither a permabull or permabear. I'm neutral as to the markets. If the facts change, so do I. I've been bullish on the markets since September 1.

    Now guess what. The facts *might* change again. I'm expecting a moderate pull-back this week. Yet, if the selling pressure is just horrendous, my perspective on the markets might change again.

    My perspective on the market is constantly in flux. If instead of selling off this week, we break above 1130 on the S&P and shoot to 1150, I'll probably remain bullish on the markets for some time. I think that this type of move in the markets portends to a move to at least 1220 on the S&Ps.

    Alternatively, a steep sell-off this week which brings us below 1100 would probably get me bearish on the markets again.

    What got me very bullish on September 1 was the weakness of the selling pressure at the 1040 mark. The markets simply show tremendous strength at 1040. So after seeing this strength you think I should just remain bearish???????

    That's how people lose their ass in the markets. I personally will never be a permabull or permabear. You'll never be able to fit me within one of those categories.

    Here's big problem with 95% of traders and investors in the market. They're all either bullish or bearish. Huge mistake.

    Bears will tend to stick to the idea that the market is always headed down. They'll make money in down moves in the market, but won't change their perspective and lose their asses in rallies.

    Bulls on the other hand, will never take profits. They'll always have a long perspective and get slaughtered in times like the Financial Crisis or in the April to July 20% correction.

    Instead, what people should do is allow the evidence guide their perspective. If the facts change, traders need to be nimble enough to change their perspective on the drop of a dime. Here's an e-mail I sent to Elmer-DeWitt on September 1. You can confirm with him if you please:

    September 1, 2010 9:42:24 AM PDT
    "The market is out of the woods. Today is a major day for equities. I think we're headed much higher. Apple is going to break $300 very soon. A lot sooner than people think. The party starts today. I've become bullish on equities. Apple might sell-off on the iPod event today, but that will be short lived. I think we could see $300ish by November-December."

    Ok. So here's the thing now. This week is historically one of the most bearish weeks in the market. The week after September triple witching is nasty as hell. See here:

    In only 3 of the past 20 years was the market up after triple witching friday. Even last year, the year where the market rallied off the bear market lows the market was down 2.13% on the week.

    So I'm expecting a pullback based on the historically bearish post-September triple witching week. Now whether this pull-back is just a pull-back or whether it's the start of another correction will be determined by the level of selling pressure.

    If the selling pressure is meh, then probably just a pull-back. But if we start to see free-fall action, I'm going straight into the bearish camp again as it probably suggests that the market is ready to retest 1040. How many times will the market test 1040 and 1130 is anyone's guess. Those are the lines in the sand.

    The rally over the past few weeks suggested to me that this was a good shot at breaking 1130. There was some true buying pressure. The price action was very strong. But we haven't broken out yet.

    Please try not to place me in the bull or bear camp, and understand that when the facts change, so do I.
    Sep 19 01:08 PM | 4 Likes Like |Link to Comment
  • A New Bear Market Rally Is Likely to Begin [View article]
    An inverted head & shoulders is a very reliable bottoming pattern. It is in fact back tested to be reliable in 78% of cases. I would say that qualifies as pretty reliable to me.
    Sep 7 09:40 AM | 4 Likes Like |Link to Comment
  • At the Precipice: When Everyone's Fearful ... Sell? [View article]
    Oh don't worry about it. I will. I'll be sure to link to that over and over again once it happens. Just like I do about the April top or several other market calls I've made over the past few years. The list is getting very long and I'll probably have to keep a record somewhere.
    Aug 24 09:42 AM | 4 Likes Like |Link to Comment
  • Apple $400: A Look at Apple's Fundamentals (Part II) [View article]
    Why don't you define it differently than how its defined everywhere else in the world, and then we'll work with your definition. Since you want to change the meaning of a return on EQUITY i.e. the return on your investment. Again, I buy Apple for $250 billion, Apple returns to me $25 billion in the first year. Sure, you want to look at cash flow in order to back out certain non-cash expenses such as depreciation and amortization, but you get the basic idea. Especially with Apple where cash flow isn't a whole different than net income.

    So basically trying to change the definition of something that is so fundamental to the markets that even a 3rd grader would understand what it means to get a return on one's investment. Shareholder equity is my damn investment. Its my equity in the company and the return on that equity is how much Apple produces in net income. Please try not to overcomplicate an inanely simple concept.
    Aug 14 05:36 AM | 4 Likes Like |Link to Comment
  • Apple $400: A Look at Apple's Fundamentals (Part II) [View article]
    @384635 - That's nice. Next time I'll be sure to write a 350 page book covering all topics. Risk is something I'll get into in future articles. And yes, net income is the metric for return on equity from an investment standpoint.

    If I buy Apple at $200 billion dollars, what they return to me is my return on investment or return on equity. Return on equity is relative to the investor. Apple's return on equity is different than one purchasing a company outright. If Apple returns $20 billion a year, then I'm getting a 10% return on equity. Thanks for playing.

    ROE = net income / shareholder's equity
    Aug 13 03:35 PM | 4 Likes Like |Link to Comment
  • Why Apple Should Hold Off on Paying a Dividend [View article]

    Maybe you don't follow my argument because you have little understanding of how the market works. If you're going to be juggling these very basic and fundamental aspects of the market, you should try really understand what the most basic concepts are. I'm not trying to be mean but helpful.

    First, you need to learn the definition of market capitalization. Here's the basics. Market capitalization has nothing to do with paying dividends. So Apple paying dividends is not going to somehow shrink their market capitalization. In fact, the will grow their net market cap. Definitions:

    Market Captalization = Total Shares Outstanding x Share Price

    For the other concept, it's far too advanced for me to explain in a paragraph. Here's the conclusion - Apple paysa dividend before reaching $100 in cash will result in upside pressure to the stock price.
    Aug 13 11:53 AM | 4 Likes Like |Link to Comment
  • An In-Depth Look at Apple's September Quarter [View article]
    Good question. Probably (1) iPod sales being weaker than expected though i don't think that will materially affect Apple's overall results; (2) Gross margin being a little weaker than my forecast. That would have some impact; and (3) iPhone sales coming in a little weaker than expected as a results of not being able to meet demand on the quarter. That would materially impact these results.
    Aug 6 05:13 PM | 4 Likes Like |Link to Comment
  • An In-Depth Look at Apple's September Quarter [View article]
    I don't think their contract with AT&T would permit them to facility a breach of the agreement. Plus Apple benefits dramatically from its exclusivity with AT&T due to the major subsidy AT&T gives to its customers. So I don't know if they could do this without breaching their agreement. If Apple does in fact release an iPhone for Verizon this January, then I can easily upgrade my assessment of 2011. But I still think the logical time frame is for June.
    Aug 6 03:04 PM | 4 Likes Like |Link to Comment
  • An In-Depth Look at Apple's September Quarter [View article]
    Yea I think that's very possible. You know as we get into October, we'll have a more clear picture.
    Aug 6 02:02 PM | 4 Likes Like |Link to Comment