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Robert McDonald

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  • Apple: A Low-Risk Bet On $130B Of Earnings Within 10 Years [View article]

    Great article. Thanks. Nice to see a well balanced analysis of Apple's prospects. Such articles are hard to find.

    Jul 18 05:15 PM | 17 Likes Like |Link to Comment
  • It May Be Apple Harvest Time [View article]
    Matthew and Mr. Blair,

    The sales numbers were officially filed with the SEC in an 8-K on Sept. 23, 2013. It is in violation of SEC rules to falsify such documents. It is also unwise to mislead in such documents as that can lead to a troublesome SEC investigation.

    Too bad analyst statements, pontifications and prognostications are not held to the same standard.

    Sep 25 11:25 AM | 17 Likes Like |Link to Comment
  • Dear Apple Board, This Is How You Defend The Share Price [View article]
    Lets not try to fix a broken stockmarket with bandaids that Apple comes up with. We have manipulation going on in spades. If Apple's earnings report next week beats the street, the commentary that is supposedly coming from the supply chain which is under confidentiallity agreement will seen to be the cuprit plus option market makes given OPEX on Friday

    I for one and I have many friends who are pacing inquiries with the SEC on this matter; Here is how you get access to the form on teh SEC website. Maybe we can snowball, get your investor friends to do the same.

    You can also report fraud if you believe it is occurring on the same website.
    Jan 15 03:03 PM | 17 Likes Like |Link to Comment
  • The Reason Behind Apple's Beating [View article]
    I am surprised that it is legal to change margin requirements for a particular stock that is not having any financial difficulty. Is this speculation or is this reality? And if so is it a one-off? Is this in itself one more successful effort to manipulate Apple stock price? If this is true, one more time the free market is being undermined by Wall Street traders . Time to give the traders a beating and not Apple.
    Dec 5 11:39 AM | 17 Likes Like |Link to Comment
  • Young Users Will Drive The Next Stage Of Mobile Devices [View article]
    Most Fortune 500 companies would love to have Apple's performance in the market place and would die to have their financials. Five facts:

    1. It is not necessarily good to dominate market share if it requires selling products at a loss or less than optimum margins.

    2. An optimum margin is one that continues to give the company critical market share while maximizing earnings. Critical market share being defined in this case as the market share required for continued domination of the high end market and of market trends. Others then get the lower margin leftovers.

    BMW presents an example of one of the most successful automobile manufacturers in the world that has declined to pursue market share in favor of dominating the high end luxury sporty sedan market. .

    3. Many, including this author draw conclusions ignoring the fact that the high end and middle range wireless device market is very cyclical. The newest products drive the greatest market share growth at any moment in time. The western holiday season (Oct-Dec), Asian Golden Week and Chinese New Year superimpose periods of huge sales peaks on the peaks caused by new product introductions.

    4. Apple is just now entering its yearly sweet spot with the added benefit of new high margin iPhone 5S and C models and the innovative iPad Air introduction. These new products are not only getting rave reviews and are thought to be very innovative by many but have already demonstrated the ability to outsell last years very popular models. In addition a mini iPad with retina display is expected later this month and it is expected to significantly outsell last years very successful mini iPad model. And all of these introductions are occurring at a time when the peak holiday seasons lie just ahead.

    5. And to add to Apple's extraordinary sales successes, China Mobile, the largest wireless carrier in the world by far, is expected to be added to its list of carriers sometime over the next 6 months. There are very strong rumors that this addition will be included in the announcement of China Mobile's 4G network on Monday, 11/11/2013..

    As if that were not enough to drive increasing revenues and earnings, Apple is building major momentum in the enterprise and education markets. We are in the early days of this relatively uncontested build out.

    Everything I have said ignores Apple's ecosystem lockin, related iTunes sales, its increasing PC market share and a likely introduction of an iWatch and an iTV over the next year.

    I repeat, these are success examples that most if not all Fortune 500 companies would love to have and I would add that this includes Microsoft.

    Due disclosure: Very long Apple.
    Nov 10 09:40 AM | 16 Likes Like |Link to Comment
  • What iPhone 5 Discounts Could Mean [View article]
    There is always a big drop off in phone sales as new models are anticipated. Discounting the iP5 at this point makes all the sense in the world, is a good business strategy and is not a big deal. In fact since margins on this model will now be back to Apple's record highs it makes sense to maintain market share and to add new ecosystem members while raking in more earnings. The folks who buy now at discounted prices are not the ones holding out for the iP5S.
    Jun 25 01:14 PM | 16 Likes Like |Link to Comment
  • Revisiting A Humbling Investing Experience: Why I'm Selling Apple [View article]
    Apple is a different kind of company than Wall Street and Main Street have seen before. This undoubtedly adds to the low P/E and the outrageously low PEG valuations. It is just hard for these folks to believe that a company could grow this strongly and this rapidly could also keep up the trend. Many of the investors who drive the market and would normally drive this stock higher are still coming up to speed on Apple's potential value.

    There is also the fact that some do get it and have the tools and the leverage to manipulate stock pricing, even of a widely held stock like Apple. I refer the reader to the Fortune Tech Blog which has discussed this topic many times over the last year. I believe that this is responsible for much of the anomalous and seemingly senseless up and down stock pricing movements we have seen over the last couple of years. I would submit that the safest way to play the manipulation game is to do it by trading in a stock where one can count on an ever increasing underlying value. In other words where the traders have been given the benefit of trading in a stock that is moving in fits and starts for lots of reasons, but where ultimately the business fundamentals and the market price are on a strong upward trend.

    As a successful Apple investor, I have lots of evidence that water, or valuation as is the case here, will ultimately seek its own level and betting against this reality is not a good idea, certainly in the longer term

    In the first case I mentioned, why don't may Wall Street and Main Street investors still not get what is going on here? Here are some of the reasons:

    1. Apple is not a tech company or an internet company or a investment. It is a highly profitable powerful and unique business enterprise that has no equivalent or precedent. Their profits in the mobile world dwarf the competition. Again see the comparisons on the Fortune Tech blog.

    2. Apple is a successful business enterprise that has a number of integrated synergistic businesses that are as well managed as anyone could hope, with or without Steve Jobs as CEO. These businesses are all benefiting from the highest growth areas in the worldwide economy. These include mobile, the mobile web, mobile computing, the use of Aps (vs. software suite and web surfing), highly functional computing tools including PC's and Tablets, customer friendly and reliable software (vs. MSFT and ADBE for example), entertainment in the form of music and soon TV and video, games and not to be ignored, cloud computing services. Apple cloud efforts are focused on the consumer now but there is no reason they cannot move into the enterprise later. Doing the consumer first sets the stage for the latter as has already been demonstrated by the iPHONE (goodbye RIMM), the iPAD and the innovated MacBook Aire laptop PC (now one of Intel's strategic objectives is to produce chips for a clone of this concept).

    3. In addition they are a cutting edge retailer with marketing skills and innovative techniques, and they produce very functional products with Gucci like design features, functionality and reliability.

    4. As if this were not enough, the Apple enterprise, despite its size, is an unprecedented inventor of highly popular cutting edge products again noting the Gucci like quality and design features. Customers are standing in line to buy the latest gadget and want these products independent of place in the world or culture -- in some cases these have been products that people did not even know they wanted before they saw them for the first time.

    5. Don't forget the utility of iOS Aps in addressing consumer and corporate needs and their huge addition to the sticky ecosystem. I am finding that I spend more and more of my time in using Aps vs. "computer" activity involving the access and analysis of information and "internet surfing." I found my time in the Ap world to be more efficient and productive, at least where the right aps exist.

    For example, as an individual investor working at home, I has been carrying out my M-F, 3-5 hour/day investment research switching my computer screen back and forth between two Wintel desktop computers. Now I have significantly increased my productivity by adding an iPAD to the right of my PC screen that is displaying the latest quotes for the portfolio stocks I am watching and use CNBC Ap to do so. I similarly use my iPhone lying in front of the screen displaying the latest Tweets for key stocks using StockTwits.

    Both the iPAD and the iPHONE can be easily switched reliably to various other stock specific related or news or other Aps using the usual touchscreen buttons, all of which is highly complementary to the work I still do on the PC's. Using Aps and switching between them be done quickly, reliably and with none of the complications presented by web browsers and updated excel spreadsheets (manual update required with delayed quotes only, an update freature that Microsoft has dropped support for -- feature that).

    Once there are useful Aps available for my Macbook pro, it will surely replace one of the two Wintel PC's for the Ap world capability plus for other reasons. Will probably be moving to the Google world for a stock sheet that updates my latest stock and investment valuations, hopefully with live quotes.

    In summary, I am not aware of any company that has so successfully integrated so many synergistic and successful businesses into a single enterprise under one management roof. They have established an ecosystem that has unprecedented customer friendliness and stickiness. In the past no one company has been able to pull this kind of thing off. What is also amazing is that customers love this and are not pushing back as they have in other computing systems where they have beed defacto trapped, e.g., IBM mainframes historically and Microsoft Windows and Office.

    .As if this were not enough to make Apple a screaming buy at a forward P/E of less than 15, then there is the possible Apple home entertainment/HDTV system with features that go way beyond TIVO and that will grow the sticky ecosystem in an even faster and stickier way, all of which has got to have major positive ramifications for ongoing revenue and earnings growth -- sell Netflix as I have said several times in my earlier postings, even at its current "sold off" pricing, and and buy Apple LEAPs.

    Apple Jan 2014 LEAPs went on sale September 12 which means you can acquire them before the next blowout earnings report!

    I say, take advantage and buy Apple while it remains undervalued and enjoy the ride. This is also a great stock for use of LEAP strategies and time weighted averaging techniques. Buy some now before it starts its usual end of year run and buy again next year when it is sold off between Jan and July. Consider yourself having been given an investment gift that only occurs a few times in an investment lifetime.
    Sep 18 01:14 PM | 16 Likes Like |Link to Comment
  • Apple Blossoms In The Spring [View article]
    Great analysis of the significant growth in the number of App Store users. As an Ap store user who also has some knowledge of what other Apple users are buying your 83M forecast may not as far fetched as some would think. Why do I say this? Because this analysis ignores all the people who may have upgraded and/or bought an iPad mini who already had accounts. That is a very large number.

    The point is that these people already had accounts and are not likely to create yet another account for cloud syncing and other reasons. This device upgrade and fanout to iPad mini is common to most of my friends who already had the iPhone 3, 4 or 4S. I would submit that the majority of the users who added accounts are also new to the Apple ecosystem and bought new devices IN ADDITION to the users who were upgrading or doing fanouts.

    Your analysis of this phenomena was the best news I have heard for several months. Thank you.
    Jan 21 12:57 PM | 15 Likes Like |Link to Comment
  • Apple's Drop Now Too Large To Ignore [View article]
    Andy Zaky, the indie blogger who is near the top of the pack and beats the pay for service analysts every time has made his analysis of how low Apple can go and we are there within a few bucks:

    Part of the selloff in Apple this week is to raise cash to buy the Facebook IPO. I know. I sold some Apple stock myself but kept my Jan 13 and Jan 14 LEAP calls. It is hard to beat a possible 100% one day return anywhere else. Unfortunately or fortunately depending on how you look at it Facebook is looking more like a flipper. Everyday there are news item which reinforce that the price by the end of the day is going to be way too high with a P/E approaching 200:1. So it is likely I will be putting the capital and the profits back into Apple soon enough.

    My other take is that the manipulators including the weekly option market makers via "MaxPain" will soon be losing leverage in driving up and down movements in the stock while they maximize the number of dollar investors will lose on the options.

    There has been a quiet period without much meaningful Apple business news but pending developments will soon change that again. These will drive the stock back up to former highs and possibly further while doing so in a consistent longer term upward direction. This will make it harder for manipulators to drive the stock back down controlling stock valuations and maximizing their profits.

    Some of these developments include the Apple World Wide Developers (WWDC) conference which begins on June 11. The bloggers are consistently saying that there will be a major MacBook Pro upgrade that well be announced among other new developments. This rumor mill says the new MacBook Pros will have the new Intel Ivy Bridge microprocessors on board which will be faster and lower power, they will be be much thinnier ala the MacBook Air and have the new retina display that created such a sensation on the iPad. You can see other possible Apple announcements here:

    Also China Mobile Chairman Xi Guohua confirms that they are in talks with Apple regarding adoption of the new iPhone 5 likely to be announcedin Sept or Oct. This will be the first Apple phone capable of running run on their network will use a new Qualcomm chip to do so:

    And if that were not enough hedge fund manager David Einhorn added his name to the many knowledgeable bloggers, investors, and analysts saying that Apple is going to $1000/share:
    May 16 07:40 PM | 15 Likes Like |Link to Comment
  • Why I'm Selling Apple [View article]
    Oh -- let's forget everything we ever knew about investing fundamentals and shuck Apple. How does anyone ever get editorial approval to post emotional wailing (garbage) like this on Seeking Alpha -- or is a way of getting reader attention like many talking heads do? If you use the name Apple right now it is a sure way to increase your readership.
    Apr 3 12:18 PM | 15 Likes Like |Link to Comment
  • After a Lost Decade, Is Microsoft a Buy? [View article]
    All of this discussion ignores Microsoft's developing failure in the marketplace. One should never invest in a stock unless they understand a company’s business model and its performance in the marketplace. This has to be continuously monitored as technology evolves and the competition changes. MSFT is an example of a company that has been highly successful in the past but has failed to innovate and develop new products in a rapidly changing and competitive environment.

    MSFT, after all this time, is still basically a two product company that is living off of past successes: Windows and Office. It is not only losing its monopoly status in these areas but has failed to innovate and develop products that address where its market is moving: the handheld Tablet, Mobile Internet, and cloud computing. Unfortunately even its core products are still customer unfriendly, unnecessarily complicated, buggy and of poor quality.

    Microsoft is not even a key player in the fast growing wireless and mobile internet areas -- the biggest potential growth area since the introduction of the internet and personal computers. As a result of these failures, competitors are now penetrating its core business areas, markets that it has owned in the past. Apple is taking market share in office and home computing. Google and others are threatening the success of its office products. Cloud computing, another area MSFT should have been the leader in, is now filled with competitors and MSFT is a minority player. There is no excuse for a company with the powerful resources it has at its command to be having these problems all of which will eventually significantly erode sales and profitably, and yes ultimately earnings and the dividend. It is a classic example of a management failure that is on the road to costing its investors dearly.
    As to what might look like current good revenue and earnings numbers, Windows 7 adoption rates are artificially high because of the failure of the Vista product. This is making it seem that MSFT is doing well when it isn’t.

    I made a lot of money in the early days by buying MSFT and still have a significant long position. I am planning on dumping my remaining shares at the peak of the Windows 7 driven earnings cycle. After that, in the absence of any major new products that are driving success in the market place, MSFT sales and profitability will be in a downward spiral.
    Sep 26 10:03 AM | 15 Likes Like |Link to Comment
  • Competitors Are Like Piranhas Chewing Up Apple [View article]
    If Mr Blair looked at the profits made by all Mobile device companies vs. Apple, his over promotion (or maybe fixation) with market share numbers in the highly bifurcated mobile device market would become obvious. See my comments on Mr. Blair's last overly negative Apple article:

    If you look at who gets the biggest part of the take home dollars, Apple is the Piranha. That's why Apple's cash and cash equivalents have grown to be 10% of all U.S. corporate cash holdings combined. Maybe Mr. Blair has consumed too much Blackberry juice.
    Apr 8 08:05 PM | 14 Likes Like |Link to Comment
  • It May Be Apple Harvest Time [View article]
    PS: Gene Munster is trying to cover his lousy calls by implying that that the sell-in did not sell through. Let's wait and get the real numbers before drawing conclusions.
    Sep 25 10:37 AM | 14 Likes Like |Link to Comment
  • Why Apple's China Mobile Launch Was A Flop [View article]
    The point is that SA has set editorial standards that contributors are expected to follow in order to have at least semi-professional, valid and useful articles posted. Inadequately documented and misleading material is not normally accepted.

    I think it is obvious that it is better for SA and SA readers if some minimum level of editorial standard is set, as I believe it has been. But it must be consistently enforced across all contributors. I submit that the latter has not occurred in this case.
    Jan 23 09:33 PM | 13 Likes Like |Link to Comment
  • Why Apple's China Mobile Launch Was A Flop [View article]
    SA editors responded to my concerns and wanted me to write my own article on Apple's China Mobile startup. They said they would supply editorial support. I suggested it was too soon to write an article with meaningful conclusions as these data are not out yet.

    I also suggested it was the job of SA's editors to remove this article and require a rewrite if it was reposted. The repost should only be allowed after a thorough review process and ditto for any future articles Mr. Blair writes. I suggested that Mr. Blair only be able to repost this article after appropriate rewrites with research having been done and documented such that appropriate backup for any conclusions is included in the article.

    These rules are obvious and I know they have been applied to other contributors by SA editors in the past, myself included. It does make me wonder what is going on here.
    Jan 23 09:20 PM | 13 Likes Like |Link to Comment