"i speak to young chinese engineers" - is great for your personal phone decisions, but horrible for decisions about investing in a company that is penetrating into a market with 1.35 billion people. apple is a behemoth with the #1 brand in the world and 67% Y/Y growth in China. these are facts. it's not like Apple is about to just disappear because a couple of "young chinese engineers" don't like Apple.
Your whole thesis here is "if everyone is selling, sell too. if everyone is buying, buy too! Past performance is a good indicator of future losses. Sure.
Funny that you compare AAPL to BBRY. Using your "past performance" logic, BBRY should continue to be the most hated stock on the street. Basically in a year we could be looking at an article from you that says "Apple outperformed BBRY by 140%! Buy Apple!"
i think the first mistake you made is that you assume very low linear growth. if that were the case, i wouldn't want to see what your model looked like in 2009 when companies cut back on production. you place much reliance on very little support. if you want to build a more realistic model, i'd build a bottom-up unit x price model - but of course that is much harder to do. i don't think anyone will take you seriously if you just assume 1% growth over the next x years. i mean that in a constructive way.
The Struggle Of Former Leaders: Is Apple One Of Them Now? [View article]
Your comparison to Nok and RIMM is a poor choice as they sell hardware only, while at the heart of Apple's hardware is an ecosystem, something Nok, RIMM, Samsung don't have. Switching costs from Nok/Rimm are low. Try to convince current Apple users to leave their Apple products. Now add significant China growth to that ecosystem and your comparison is weak. The problem with most fundamentalists is that they use historic growth to forecast future growth and you seem to take their forecasts at face value. Segmented growth should be segmented even further geographically and then you might have a more precise picture of what Apple growth looks like. Your growth is not going to be in a linear decline as some of the fundamental research might suggest. It might be more choppy. If you're an investor who understands the value of stocks, you don't sit there blindly predicting what EPS will be like or how far the price will drop. You try to understand what is truly driving value.
Apple's Financials: Polished Exterior but Check the Oil [View article]
Tech, I don't trade on news, so I am not sure what you mean by "price rises blindly every day"... There are many types of strategies out there, some short-term, some long-term, some day-trading, some buy-and-hold. Then Apple is traded heavily by high frequency traders. You can short all you want, but you better buy yourself some OTM calls for protection because their growth continues to be explosive. Read my article for some segmented analysis: seekingalpha.com/artic...
I respect your analysis, but part of the reason Apple plunged most recently is on fear that wasn't justified. That created higher short interest, more "noise", ridiculous valuations from horrible analysts, etc. The company's a great value play and more people are jumping on board. Will it pull back? Stocks always do - there are profit takers, etc. But I don't think you'll see a massive pullback as your article may imply.
I was honestly so shocked to see Apple trading at $390 - rarely do opportunities with such inefficiency exist - I'm not at all surprised by the recent spike.
You mention that AAPL is trading at a higher valuation, but why should it be trading at a deep discount to comps? I also believe the comps you picked are absolutely horrible. Why is Apple like INTC or CSCO? That makes no sense. In terms of its valuation, it doesn't matter if it has a "higher valuation" - the question is whether the valuation is correct even at its current levels. I argue absolutely not. It should be at least at 14x-15x 2013 EPS.
Is Apple Using Share Buybacks To Support Its Stock Price? [View article]
I am disappointed that the author hasn't responded to questions about his claims. This is a very controversial piece - without any sort of evidence. Writing articles like these shouldn't be treated like a game - people read them and make decisions based on them. If there is no actual underlying data suggesting that Apple is buying back shares to "support" its stock price, then the author is doing the market a disservice by submitting pieces like these.
"We believe that Apple (AAPL) will launch the iPhone 5S at China Mobile (CHL) this July, as it launches the next iteration of the iPhone globally," writes Wedge Partners' Brian Blair, without elaborating on his sources. The remarks come a little less than 3 months after Apple and China Mobile signed a confidentiality agreement. Blair sees a 5S model supporting China Mobile's TD-SCDMA 3G network likely entering production in May. (WSJ report) [View news story]
I think a good analogy to understand what the author did here would be to picture a house that is worth $400,000 today with $137,000 cash inside it and he's betting that the house is basically worth $250,000 because someone dumped some trash on the front yard. I mean, what we have here is insanity playing out, in my opinion. This article excites me because if someone is willing to sell me that house for $250k, I will lever up at the low rate, buy the house, and laugh the guy who sold it to me out of the room. Inefficiency is a good thing, ladies and gentlemen.
Facebook's Surprise Attack Against Netflix [View article]
GolGappe, I actually did mention that in the article.
"The extreme risk that I've warned about in the past is the suppliers' ability to forward integrate in this space."
I am not sure how familiar you are with forward integration, but what you said is actually worse for Netflix than you can imagine.
Here is an example. Let's say you, the supplier, sell 20 widgets to a distributor for $20. The distributor then sells the widget for $2/piece and has a $20 profit. Now here is the important question. Wouldn't you reach out to the audience without using the distributor if you possibly could, thereby earning you an extra $1/widget. If Warner Brothers is "just using an app" like you say, isn't that what they are in essence doing - getting around Netflix?
I think Netflix is a wonderful service. I think its management is brilliant. Unfortunately for them, they are fighting giants and they do not have the right tools to engage in this battle.
Pandora and the Folly of Targeting Customers Who Refuse to Pay [View article]
I feel like you're doing your Sirius buddies a huge disservice by only pointing out Pandora's flaws. Pandora does have a huge following and becoming a cheerleader for Sirius and bashing Pandora like it doesn't even exist just makes you a poor analyst. I am ok with the fact that you and your buddies came in and disrespectfully trashed my article, called me an idiot, said that I don't know what I am talking about, etc. - but your article is extremely biased and is actually not presented fairly at all.
You guys can continue to intimidate writers with different opinions, bash them, downvote them, and insult them, but until you start including "risk" as a part of your analysis, you're going to mislead yourself and your angry Sirius buddies into believing something that isn't entirely true.
Any sophisticated trader or portfolio manager will tell you to put emotions aside when making a trade or an investment. The fact that you'd never get out of your SIRI position should tell your readers just how biased you really are.
What Do You Get When You Buy Netflix? [View article]
Rob, for the record, that reply was meant for tj who is calling due diligence "MBA analysis" as if education is a curse.
I think we agree mostly about the company and how awesome their offering is and how capable their management is. My argument is that they're peaking on the curve and that investors should watch their growth when projecting multiples. Very few companies in history have had such rapid growth for so long which statistically speaking at least should raise some questions about the risks of owning too much NFLX in your portfolio.
Apple's Story: Only The Beginning? [View article]
Charting Apple's Relative Underperformance [View article]
Funny that you compare AAPL to BBRY. Using your "past performance" logic, BBRY should continue to be the most hated stock on the street. Basically in a year we could be looking at an article from you that says "Apple outperformed BBRY by 140%! Buy Apple!"
Apple Is Worth $265 [View article]
The Struggle Of Former Leaders: Is Apple One Of Them Now? [View article]
Apple's Financials: Polished Exterior but Check the Oil [View article]
There are many types of strategies out there, some short-term, some long-term, some day-trading, some buy-and-hold. Then Apple is traded heavily by high frequency traders. You can short all you want, but you better buy yourself some OTM calls for protection because their growth continues to be explosive.
Read my article for some segmented analysis:
seekingalpha.com/artic...
Apple: Too Far, Too Fast? [View article]
I was honestly so shocked to see Apple trading at $390 - rarely do opportunities with such inefficiency exist - I'm not at all surprised by the recent spike.
You mention that AAPL is trading at a higher valuation, but why should it be trading at a deep discount to comps? I also believe the comps you picked are absolutely horrible. Why is Apple like INTC or CSCO? That makes no sense. In terms of its valuation, it doesn't matter if it has a "higher valuation" - the question is whether the valuation is correct even at its current levels. I argue absolutely not. It should be at least at 14x-15x 2013 EPS.
Is Apple Using Share Buybacks To Support Its Stock Price? [View article]
Apple: Probably Going To Remain Painful For The Average Investor [View article]
"We believe that Apple (AAPL) will launch the iPhone 5S at China Mobile (CHL) this July, as it launches the next iteration of the iPhone globally," writes Wedge Partners' Brian Blair, without elaborating on his sources. The remarks come a little less than 3 months after Apple and China Mobile signed a confidentiality agreement. Blair sees a 5S model supporting China Mobile's TD-SCDMA 3G network likely entering production in May. (WSJ report) [View news story]
Apple Is Worth $265 [View article]
Research In Motion at Crossroads: Play It With Options [View article]
Facebook's Surprise Attack Against Netflix [View article]
"The extreme risk that I've warned about in the past is the suppliers' ability to forward integrate in this space."
I am not sure how familiar you are with forward integration, but what you said is actually worse for Netflix than you can imagine.
Here is an example. Let's say you, the supplier, sell 20 widgets to a distributor for $20. The distributor then sells the widget for $2/piece and has a $20 profit. Now here is the important question. Wouldn't you reach out to the audience without using the distributor if you possibly could, thereby earning you an extra $1/widget. If Warner Brothers is "just using an app" like you say, isn't that what they are in essence doing - getting around Netflix?
I think Netflix is a wonderful service. I think its management is brilliant. Unfortunately for them, they are fighting giants and they do not have the right tools to engage in this battle.
Pandora and the Folly of Targeting Customers Who Refuse to Pay [View article]
You guys can continue to intimidate writers with different opinions, bash them, downvote them, and insult them, but until you start including "risk" as a part of your analysis, you're going to mislead yourself and your angry Sirius buddies into believing something that isn't entirely true.
Any sophisticated trader or portfolio manager will tell you to put emotions aside when making a trade or an investment. The fact that you'd never get out of your SIRI position should tell your readers just how biased you really are.
Pandora Files for IPO: Potential Threat to Sirius XM? [View article]
What Do You Get When You Buy Netflix? [View article]
I think we agree mostly about the company and how awesome their offering is and how capable their management is. My argument is that they're peaking on the curve and that investors should watch their growth when projecting multiples. Very few companies in history have had such rapid growth for so long which statistically speaking at least should raise some questions about the risks of owning too much NFLX in your portfolio.