Apple: 7 Reasons Shorts Can't Sleep At Night [View article]
Current configuration: short interest ratio of 1, which is very low, but it has actually been even lower at times over the past two years (i.e., it takes one day's worth of average trading volume to cover all outstanding shorts). Put/call open interest ratio: 0.67 (67 puts outstanding for every 100 calls), which is actually lower than 90% of all readings over the past 52 weeks. Wall Street ratings: 32 'strong buys', 4 'buys', 2 'holds, zero 'sells' (this is dangerous, as it can lead to downgrades, see today's downgrade by Nomura, which helped drag the stock over 3% lower, breaking the $500 support level in the process). So the fact of the matter is that only very few people are actually betting on AAPL going down - they are vastly outnumbered by the longs, in both the stock and its options. And yet, the stock has clearly entered a strong downtrend. Having said that, the hurdle it must now climb on occasion of the earnings report is no longer as high as it once was, due to lowered expectations. So the earnings release could produce a bounce based on that consideration and the fact that it looks 'oversold'. Nevertheless, if I were long the stock (discl.: I have no position in it at all, neither long nor short), all these data points would worry me , because they indicate extremely stubborn bullishness in the face of very negative price action.
Investors Don't Understand Apple's Math - A Mistake [View article]
AAPL has one of the lowest short interest ratios in the tech sector. It has risen a bit lately, but still remains extremely low. Prior to the recent price swoon the short position was so minuscule compared to trading volume and the float you had to squint to see it. It is however held by well over 250 hedge funds as a long position - the stock with by far the biggest hedge fund participation. The options market is indeed important. In the short term, option positioning can magnify trends in the underlying. That is however not only true for AAPL, but for all stocks with active options. And it is quite natural that a stock that has trended up for a long time and has such a huge following will have an active options market.
Investors Don't Understand Apple's Math - A Mistake [View article]
'Apple's complicated math' - try analyzing an earnings report of a big bank then :) By the time you have arrived at footnote 637, you have a beard longer than Methusela's.
Why Apple Doesn't Care About Its Competition [View article]
The theory makes no sense to me either. I'm also considering buying a small tablet, and I am definitely comparing the various different ones that are on offer. It could be that the min-ipad ends up convincing me, but this is not a certainty.
Apple's iPhone 5 Is Already Outselling Nokia's Lumia Windows Phones [View article]
It looks like there are other reasons than the maps problem for customer dissatisfaction with Apple as well. Here is a recent account from a life-long user and fan of Apple products (iow, the charge that he 'doesn't even use it' can not be brought to bear in this case) -he notes that these products are 'no longer easy to use' and recounts his 'yellow goo' experience with the i-phone (the 'other' stuff that sometimes eats up all its storage): http://bit.ly/OBzevJ
Apple's iPhone 5 Is Already Outselling Nokia's Lumia Windows Phones [View article]
Apple is famous for not shying away from cannibalizing its own products. It is one of the company's widely acknowledged strengths. But it is a negative for Nokia?
3 Signs Apple Is Turning: A Rebuttal [View article]
I remember someone said the same to me in March of 2000 about the Nasdaq index. Almost the exact same words actually: 'the doomsayers all claimed it would go down, but it hasn't happened'. As it turned out, just because something hasn't happened yet, doesn't mean it never will. Please mind, I'm not commenting on Apple specifically, but on the thinking behind the sentence 'they said it would go down and it hasn't happened', several variations of which can be found in the comments section on every post on Apple. It is a comment on the past that has no bearing whatsoever on the future.
You are forgetting that these '10 year dogs of tech' were once the stars at which it was thought that nothing could possibly go wrong. Especially Cisco is worth mentioning in this context. I still recall that analysts breathlessly predicted in early 2000 that it would be the 'first $1 trillion market cap stock'. It sported annual growth rates in the 50% region at the time and every single acquisition it seemingly overpaid for seemed to work out just fine. Ten years ago anyone who suggested buying Apple instead would have been laughed out of the room. And I think that was the author's main, and quite valid, point.
In my opinion you err if you think further advances in the stock can be predicted based on 'fundamentals'. The price trajectory of AAPL since the 2002 low is an exact self-similar replica of the rise of CSCO's stock in the 1990's tech bubble. People may recall that at the top, Cisco was revered as the 'must have tech stock that could do nothing wrong'. Its fundamentals looked excellent. The problem was only, all of them and more had been priced in by early 2000. Arguably AAPL will face massive competition from 'me too' products in the tablet and smart phone space over the next few years - many of which will offer roughly similar features at a lower price (also, not everyone wants to be locked into AAPL's closed universe - some people prefer the open source stuff, so there is a limit given by this fact as well). So even the future fundamentals may not be as rosy as the past ones. Lastly, Steve Jobs is the man responsible for a large part of the secret of AAPL's success, namely the design of its products. Losing him is not a trivial matter for the company. Certainly AAPL was a buy at $10 , and even in the $80's after the 2008 crash. The case that this stock is a buy at $360, with its market cap exceeding that of Exxon is much more difficult to make. I have no position in the stock, but if anything, I would consider buying puts on it. It is one of the biggest long positions held by both hedge and mutual funds, and the short interest ratio is well below one (no-one dares shorting it). As far as sentiment goes, it could hardly be more lopsided.
Apple: 7 Reasons Shorts Can't Sleep At Night [View article]
short interest ratio of 1, which is very low, but it has actually been even lower at times over the past two years (i.e., it takes one day's worth of average trading volume to cover all outstanding shorts).
Put/call open interest ratio: 0.67 (67 puts outstanding for every 100 calls), which is actually lower than 90% of all readings over the past 52 weeks.
Wall Street ratings: 32 'strong buys', 4 'buys', 2 'holds, zero 'sells' (this is dangerous, as it can lead to downgrades, see today's downgrade by Nomura, which helped drag the stock over 3% lower, breaking the $500 support level in the process).
So the fact of the matter is that only very few people are actually betting on AAPL going down - they are vastly outnumbered by the longs, in both the stock and its options. And yet, the stock has clearly entered a strong downtrend.
Having said that, the hurdle it must now climb on occasion of the earnings report is no longer as high as it once was, due to lowered expectations. So the earnings release could produce a bounce based on that consideration and the fact that it looks 'oversold'. Nevertheless, if I were long the stock (discl.: I have no position in it at all, neither long nor short), all these data points would worry me , because they indicate extremely stubborn bullishness in the face of very negative price action.
Investors Don't Understand Apple's Math - A Mistake [View article]
The options market is indeed important. In the short term, option positioning can magnify trends in the underlying. That is however not only true for AAPL, but for all stocks with active options. And it is quite natural that a stock that has trended up for a long time and has such a huge following will have an active options market.
Investors Don't Understand Apple's Math - A Mistake [View article]
Why Apple Doesn't Care About Its Competition [View article]
Apple's iPhone 5 Is Already Outselling Nokia's Lumia Windows Phones [View article]
http://bit.ly/OBzevJ
Apple's iPhone 5 Is Already Outselling Nokia's Lumia Windows Phones [View article]
3 Signs Apple Is Turning: A Rebuttal [View article]
Apple: The Time to Buy Has Passed [View article]
Apple: A Baby-Boomer Stock [View article]
Certainly AAPL was a buy at $10 , and even in the $80's after the 2008 crash. The case that this stock is a buy at $360, with its market cap exceeding that of Exxon is much more difficult to make. I have no position in the stock, but if anything, I would consider buying puts on it. It is one of the biggest long positions held by both hedge and mutual funds, and the short interest ratio is well below one (no-one dares shorting it). As far as sentiment goes, it could hardly be more lopsided.