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Robert McDonald  

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  • iPhone Surging, iPad Collapsing - Apple May Be Near Its Peak [View article]
    Hi Willy,
    I lost a lot of money on those April 2013 calls. That was a bad mistake on my part. I learned one more time that the market is not rational and the overreaction to Android market share gains resulted in a way oversold Apple. We now know that Android is indeed crapware and the world is finally figuring this out.

    Here is just one of many examples of how bad it is:
    The Tablets mentioned in this article are the kind of tablets contributing to what some are claiming is increasing Android market share. Well sales of this kind of junk are just one more reason that people are finding out it is better to pay more for Apple products so you have something that really works and is free of malware.

    Samsung is going down and Xiaomi is condemned to the mid and low range market as a result of Android's failure in enabling production of quality bug free products.

    We also now know that buying LEAPs and shorter term options during that 2013 dip was a very good investment that is paying off handsomely now.

    Now that I have burned off all my 2013 losses with short term gains this year I am starting to feel the tax bite too. When I gave my accountant a summary of my gains for this year he informed me that I now have a 5 figure tax bill for 2014 due April 15, 2015. As a result I have stopped selling until January and just switched back to holding the LEAPs I still have for longer term capital gains, a number which are up over a 100%. Now that's a nice problem to have.

    I also again believe that a longer term hold on in the money Apple LEAPs is again a fairly safe investment.

    I trust you know that you can exercise a LEAP before it is eligible for long term capital gains treatment and if you hold the stock for an required period of time you qualify long term treatment. The time you hold the LEAP before exercising counts in full as part of the capital gains holding period. At least the IRS has never questioned this when I did this technique several time in the past (beg for forgiveness or check with your accountant just to be sure).
    Nov 27, 2014. 01:50 PM | Likes Like |Link to Comment
  • iPhone Surging, iPad Collapsing - Apple May Be Near Its Peak [View article]
    Hi Willy,
    Glad it is working our for you. Buying Apple LEAPs when Apple was sold off has been a very profitable enterprise. Apple stock is now at the equivalent of $823 pre 7:1 split with $1000/sh a fairly easy shot at this point.

    Now lets see. If you shorted Apple stock at $400 dollars/share back when Blair was telling you he thought it was a good idea, you would have lost $423 per share by now. And that's ignoring all the carrying cost and lost opportunity. If you had bought Jan 2015 Apple LEAPs back then, you would be up on the order of 9X what you paid or 900%. That's the enormous leverage of being right and using LEAPs.

    I for one no longer hold a LEAP or long term options when they have over a 100% return. I sell them, take some profits and rebuy the equivalent of the same amount shares or even a few more further out in time at a higher strike price compounding the result several times over. I have discovered that out of the money 6 mo calls and LEAPs pay a higher rate of return than at the money strike prices.

    This is a very nice tax problem to have.

    Maybe we should take a collection up for Blair so he can find a better paying line of work.
    Nov 24, 2014. 12:15 PM | 2 Likes Like |Link to Comment
  • iPhone Surging, iPad Collapsing - Apple May Be Near Its Peak [View article]
    PS: As to the temporary iPad decline, you might want to take a look at what the IBM-Apple partnership is about to do in the enterprise where enterprise is the business world in case you were wondering.
    Nov 18, 2014. 11:17 AM | 20 Likes Like |Link to Comment
  • iPhone Surging, iPad Collapsing - Apple May Be Near Its Peak [View article]

    Ugh, you reminded me of how your shorts must be doing before I had my cup of coffee. Take a look here:

    And here:

    But I suppose you like seeing things the way they look in your world. Everyone to their own misery if that's the way they choose to have it.
    Nov 18, 2014. 11:08 AM | 13 Likes Like |Link to Comment
  • Did Apple Pay Just Lose Billions? [View article]
    The hacking could not happen to a more deserving set of companies. These folks have no ethics and are out to exploit their customers including what should be private information regarding purchased prescriptions and other health care products. You can tell way to much about a person's private interests and other matters. And yes Google has the same problem which is one reasons Android users are migrating to the Apple ecosystem
    Oct 29, 2014. 12:56 PM | 16 Likes Like |Link to Comment
  • Stop The Insanity: Apple Doesn't Have An 'iPad Problem' [View article]
    RIGHT ON ROCCO! Unfortunately Analysts have to publish something on companies they cover regularly or perish! Their paycheck is dependent on being a talking head whether what is being said is relevant, accurate or whatever. And then we have all the stock price manipulation going on like the recent BS pronouncement by the CEO of Micrchip:

    Russ Fischer did a nice job of explaining some of the background on that one:

    The really smart individual investors are the ones who do their homework and know better. They bet against these kinds of pronouncements. It is one of the best way to make big bucks on intermediate and long term call options (LEAPs) that I know of. I just made a tidy bundle by buying call options on Skyworks right after the CEO Microchip announcements.
    Oct 22, 2014. 12:52 PM | 2 Likes Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    if it was always for the watch, why did they need for GTAT to acquire so many crystal growing machines. And I would make the point that sapphire crystals will be just as brittle in watches, probably too brittle to be realistically used.
    Oct 15, 2014. 09:31 PM | 1 Like Like |Link to Comment
  • Why Is Apple Undervalued? [View article]
    Carl Icahn now gets it and that is a very good sign. He has come a long way in a year.
    Oct 14, 2014. 07:14 PM | 4 Likes Like |Link to Comment
  • Why Is Apple Undervalued? [View article]
    @BioAddicted: Thanks for your post on Deutsche Bank. No one that had completed a minimal amount of research would downgrade Apple stock at this point in time unless the agenda was stock price manipulation.

    @Ryan Jones -- Good premise but your over focus on financial data and history vs. the changing nature of the wireless web and it's expanding role and utility in daily life including the Internet of Things. As a result you have come up with very shortsighted conclusions. Apple is much bigger than a wireless phone company.

    Apple's technology, business model and ecosystem are in prime position to dominate profits of one of the most rapidly expanding business areas in the world. Any stagnation is temporary and is only happening because a majority of analysts, pundits, and investors have yet to understand this reality.
    Oct 14, 2014. 06:53 PM | 5 Likes Like |Link to Comment
  • Apple's iPhone 6: It's Not About The Specs, It's About Usability [View article]
    Samsung's over emphasis on specs has led to a serious mismatch between display and graphics processor capabilities leading to sub par graphics performance. This is what happens when products are designed for specs in an advertising piece vs actual device performance:

    "Samsung Galaxy Note 4 delivers poor graphics performance vs. Apple iPhone 6 Plus"

    Its like spending thousands of dollars on high fidelity sound equipment that goes beyond the ability of the human ear just to have higher advertised performance. It is waste of money for both the consumer and the manufacturer and it can lead to inferior products due to lack of focus on the right priorities. Never buy a product solely on claimed performance as measured by specifications. Always read reviews and understand what performance is of best in terms of benefit to you. The highest and best benefit is achieve by products based on device performance as measured by human experience, at least to the extent possible. Product reviews by experts like Walt Mossberg are a good starting point.
    Oct 12, 2014. 03:08 PM | 12 Likes Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    @J. M. Manness I like reading your articles a lot. They are very far sighted and credible. By way of one difference, I never said that anybody was swindled here, not even close. When companies push the state of the art with an immediate production goal, the risks are huge. In this case I would say they were monumental with the possible exception of using sapphire a watch crystal. However I would never buy a watch with a sapphire crystal until there was convincing evidence that the crystal would not shatter by what most would consider an accidental direct tap with a hard object like a belt buckle (that is how I managed to shatter my iPhone 4S display glass).
    Oct 12, 2014. 02:54 PM | 1 Like Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    Laminating layers of glass and sapphire for a commercial product sounds like wishful thinking and a university research project to me. This adds many additional layers (no pun intended) of complexity and opportunity for failure. I do need to say that I am not an expert in the advanced research in this area. In addition there are too many other great investment opportunities that need attention that would successfully compete with researching such a topic.

    I also totally agree that the Gorilla glass being used in iPhones is highly scratch resistant. Improvements here do not make any sense to me. The Apple watch however may be another matter. I have never ever had a scratch on any iPhones but I have had plenty of scratches on high end watches I have owned. I also have had two iPhone displays crack catastrophically due to my mishandling. I would not like anything that fractures as easy as sapphire in any iPhone I own unless some miracle of materials science research can be used to change what appear to be fundamental properties of this material.
    Oct 12, 2014. 02:41 PM | 1 Like Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    I believe Johnny Ives is the best consumer electronic device designer in the world bar none but I doubt he is in depth in the materials science issues raised here and I doubt Apple had in-depth experts on the problems in making large sapphire single crystals for iPhone displays. There are probably only a handful of people in the world who understand all the process challenges and technical details involved.

    I would submit Apple's investment in Liquidmetal has similar problems with the exception they have yet to be picked as a supplier for any parts in a production Apple device, at least that I know of. So far only their original investment is at risk. This far sighted Appleinsider article pointed out some of the concerns last June:

    And indeed I agree that Apple was attempting to trust the expertise at GTAT, but thay also knew they may be dealing with a management that was a little naïve and/or overly ambitious and thus the normal and maybe even more stringent business worthy contracts were put in place. And of course maybe GTAT should have renegotiated the terms or said no way, but they took the chance anyway. Unfortunately if there are fundamental technical problems that cannot be solved in the agreed to time, you can write all the contracts in the world but they cannot guarantee success. And unfortunately this is painful for investors and the business entities involved when failure occurs. No one wins except the lawyers.

    My advice to investors regarding high risk situations is to make a small play in call options that you can afford to write off. Venture caps know the rules here. You invest in multiple and different high risk situations that may pay off. The high leverage created by using this model can make for very high paybacks on a RELATIVELY small investment. However you bet wrong consistently or place to much money in one high risk situation, you stand to lose big time.
    Oct 12, 2014. 02:24 PM | 1 Like Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]
    It should be noted that glass is an amorphous material without any long range crystal structure. Simplistically, the components are melted, mixed and cooled under controlled conditions. The conditions are much more "casual" than for single crystal formation. Surface properties including scratch resistance and fracture toughness can be adjusted by the controlled introduction of certain species into the glass surface by using fairly simple diffusion techniques. This occurs at well below the glass melting point and usually requires a third relatively simple step commonly called heat treating. Duck soup compared to making single crystals.

    Making single crystal sapphire involves the use of a small single crystal seed that is brought into contact with the surface of a white hot high purity liquid Aluminum Oxide bath and gradually withdrawing the seed at a very controlled speed and closely controlled cooling rates under very specific atmospheric conditions. Keep in mind that aluminum oxide is a ceramic refractory material used in furnace linings that has a melting point of 3,762°F (2,072°C). If done properly, > 12" diameter defect free single crystals of silicon for semiconductor manufacturing are made this way.
    Oct 10, 2014. 05:54 PM | 11 Likes Like |Link to Comment
  • The GT Advanced Technologies Debacle: Where Does Apple Go From Here? [View article]

    Even at best, and despite its almost diamond like hardness, this material is very fragile. It is brittle just like a thin sheet of glass and upon any minor impact it will fracture . For example accidently hitting it lightly with a metal belt buckle while dressing will result in a trip to the Apple store to have the expensive display crystal replaced.

    Any notch or scratch introduced in phone production or usage significantly reduces fracture toughness. Even undamaged the fracture toughness of this material is well below Gorilla glass designed by Corning for this specific purpose.

    By comparison it is relatively easy to make small circles for camera lenses and fingerprint readers and much less costly per sq. cm. It is a leap of some consequence to go to watch crystal size pieces and a monumental leap to go to high quality iPhone 6/6+ size pieces.

    Another historical related footnote: Gorilla glass was made production ready as result of a meeting with Steve Job. He semi-politely told them they could do it. In Corning's case he was right but only because glass is a much more robust and easy to manufacture material. And beyond that Corning already had an experimental glass in R&D that gave them some existence proof that they could do it before they agreed to try and long before they signed any contracts. As far as I know they developed it at their own expense.
    Oct 10, 2014. 05:27 PM | 10 Likes Like |Link to Comment