Speculation On Apple's Next Big Thing: A Home Entertainment Center [View article]
Maybe your comment is a joke but I will take it seriously as it gives me a chance to make my point more clearly. FOX news has crappy and misleading if not dishonest reporting. The Wall Street Journal started to go down that path until Ruport Murdoch, who also owns FOX, and his son got called on the carpet for their bad behavior in England. I am glad to see the WSJ coming back a little as I am and still remain a daily reader.
Aha, I see this guy has a Blog listed on his profile -- looks like this person is trolling for customers. I have to assume Seeking Alpha received some advertising fees for allowing this article -- otherwise how could it have gotten through their screening process which is supposed to include checks for in-depth research?
Is Apple the 'Short of the Century'? [View article]
Short Apple at this point in time??? OK maybe for some day trade reason like the Steve Jobs health rumor. But let's step back and ask ourselves what is really going on here. This type of thing happens everyday in the pundit, newsletter, stock brokerage and analyst community. Why would someone get up on CNBC and say such a thing?
First of all the entry price for being able to speak on CNBC is pretty low. It has more to do with what attracts attention and what can keep viewers glued to the screen through all the mind numbing commercials than the dissemination of reliable actionable information. Always keep in mind that this is the priority biasing the broad-casted output and not providing its audience with useful information that might be trade-able. Integrity of the content is not what CNBC is about.
Now as to the so-called pundits, of the type living in the environment named above, these folks also have multiple agenda's and giving good advice to investors, or clients for that matter, is often way down the list.
If you wanted attention, if you wanted to get your name out there, if you wanted to try to snag a few new clients, if you wanted to make it seem like your were someone knowledgeable you would see that citing something about Apple is what will get people's attention. It doesn't necessarily matter what you say. You also know that the memories of many are short when it comes to this kind of thing.
Apple happen's to be one of the most famous brand names in the world and at this point is one of the most famous companies in the investment community, not only currently but by comparison to any other famous company that has ever existed.
OK now the next question is what do you get up and say to get the most attention and distinguish yourself from all the noise, and I might add responsible commentary?? Some of these folks have seen, at least in the short term, that you might want to say something that is truly outrageous or out of the norm. Responsible individuals with integrity will care about their long term credibility and image and would not damage this image. Unfortunately a lot of the pundits, which I often call talking heads, are out for the short term attention or notoriety associated with the shocking or the extraordinary, whether they believe what they are saying or not. The short term gain is seen as worthwhile or at at a minimum, at least helps pay the current bills.
I would add to this by noting that media folks and analysts are paid to come up with something to say almost everyday. If they do not have new legitimate news or new analytical results that they believe in they are put in the position of having to make something up. If you take a look around with this in mind I think you will see lots of evidence of this phenomenon.
One of my favorite examples, and also pet peeves, is the Apple analyst, who works for a very famous money management firm, who is always putting lots of public pressure on Apple to pay dividends. If he is as smart as he pretends to be, I have to wonder if he really believes what he is saying. High growth companies like Apple do not pay dividends for very good well known reasons. For one they do not to generate additional investor returns by paying a dividend -- investors are already being rewarded quite handsomely by long term reliable stock appreciation that shows no sign of ending. It is more important for Apple invest its cash in locking in more of their supply chain, delivering a home entertainment system and building more server farms some of which they are doing already. This will pay off much more handsomely for investors than any dividend payment that could reasonably be made at this point in time, i.e. 2-5% short term taxable gain vs.an average of 60% appreciation potentially long term taxable gain for each year for the last 4 years. Hello! Save the dividends for pumping up the stock when the company growth slows down.
All investors should always question the possible motivation behind a given pundit and talking head pronouncement before they give it credibility let alone make investment decision on what may be babble. If you ask me, this is one of the top ten rules of successful investing and it is near the top of the list.
My estimate of Apple's December quarter earnings is $6.50/share using the simple assumption that Q1 will be up at least 40% vs. Q4 2010 . This is a conservative estimate versus the Q1 2010 to Q4 2009 comparison in which earnings per share were up 37%. Q-Q gain but of course AAPL did not have the iPAD contribution at that time.
Using a forward average run rate $6.50 per quarter and a very conservative price to earnings ratio of 20 to 1, the stock can be expected to go to $520 per share in the next 12 months. This of course ignores the likelihood that Apple will continue to grow its earnings at a rate that it has in the last couple of years.
Growth engines with significantly increasing momentum include Apple's penetration in the enterprise (businesses) and its increasing sales worldwide, particularly in Asia.
Not forever. Think main frame computer companies before PC's, Think discreet transistor companies before integrated circuits. Think tube companies before transistors. AAPL and Google are bringing extraodinaryily relevant new technologies and new ways of doing business into the world economy. I should mention that Facebook, My Space etc. are bringing new ways of doing business and socialization as well. These folks are doing things that are fulfilling what the dot com boom started out to do 10 years ago. But the leaders then did not have the vision to see this direction which is per historical precedent. It is interesting to see that one leader persevered and become a leader in the second wave as he had been in the first, Steve Jobs. I am hoping we will be getting a pop out of MSFT stock valuation after the next earnings report and have some added Jan effect. I will be selling the remaining MSFT shares I own with this expection. I hope I do not see a need to sell sooner. I have carried these shares since the 90's always expecting a recovery that never happened. It has been obvious since the early days that MSFT lacked customer orientation and quality control in their products. This is also reflective accompany management that lacks the necessary insight to be successful in the longer term. I should have known that this is symptomatic of a company that can stay in a leadership just only so long, let alone drive its stock valuation in way that warrants a long term commitment. A lesson learned.
Apple (AAPL) files a S-3 shelf registration for the issuance of debt. The details are few, but the company indicated at its last earnings report its intention to take on debt to fund capital returns. Shares +0.8% premarket. [View news story]
Apple is far from first reputable US company to borrow money in order to buy its stock back - see Microsoft and Cisco actions over the last several years.
One of the next big things is how much money Apple is going make by buying its depressed stock back at the current low interest rates. The stock will appreciate way more than the interest paid and dividend payments go down.
The very presence of a buyback is inherently likely to raise the stock price. If you reduce the stock float by 15%, there is that much less stock available for investors to buy. This means that the price per share of stock will have to go up by 15% to maintain the same market cap due to the buyback alone.
Interested investors may want to read this article from Saturday's Barrons:
Borrowing money to complete the buyback is much more tax efficient than repatriating offshore cash due to America' stone age tax system, especially at today's low interest rates.
America's tax system unfortunately indirectly pays American companies not to bring cash home to fund US business expansions, new factories and new jobs. If an American company brings money home for any purpose, even investment in American jobs, they will be taxed on it whereas if the leave the money offshore, no taxes are due.
On the good side of still having humongous amounts of offshore cash, Apple has lots of money to fund offshore retail stores, manufacturing operations, data centers etc.
I would recommend that folks like those that posted above who don't understand these business fundamentals keep their money in a bank insured savings account. You have no business buying stocks if you don't do something about the ignorance you exhibit.
This is why Intel needs to humbly get into bed with Apple. They are not going to get Samsung's business. They are going to be relegated to the second tier unless they solve whatever problem is in the way of an Intel-Apple partnership.
An Apple partnership would cement Intel's credibility in the mobile chip world and potentially give Apple a cutting edge state of the art low power 14nm Trigate SOC that integrates processor and LTE baseband modem. Or alternatively in an Intel manufactured multichip module (MCM), with an SOC to follow later. That combo potentially beats Samsung at its best and brings jobs and $'s back to America.
Ashraf, One more time you build a house of cards on extrapolations based on shakey simple statements when the world is much more complex than your words portray.
Sure Intel has wonderful dreams of full fabs by end 2013 but this makes an assumption that they are going to be hugely successful in two new business areas, the foundry business and mobile web integrated circuit sales.
At this point they only have two small beacheads in these areas, with the possible exception of this weeks Altera foundry deal. They have less than 1% of the worlds mobile chip market at this point in time. You are assuming huge successes that are going to be very difficulat even for a company like Intel. Earlier Intel efforts at Foundry and ASICs went nowhere.
To draw the conclusions that Intel is not going to want to sell their state of the art foundry process technology to Apple and possibly even partner their mobile chips of their own design into Apple phones in the longer term is a very big jump based on your anecdotal information.
The issue might be that Apple finds that it can meet all its needs more cost effectively by using other foundries and chips of its own design.
I do not think any of the conclusions you draw can be drawn reliably at this point in time. It is going way to far out in time on very little data. You are making a prediction of the future that has many more alternatives than you acknowledge.
Its easy to write loose words, but much harder to have a defendable position.
Short Sellers Are Covering: An Update [View article]
I believe that we have manipulation of Apple stock going on in spades. Today is the worst example yet. If Apple's earnings report next week beats the street, the commentary that is supposedly coming from a supply chain which is under confidentiality agreement, will be seen as not only flawed but a major source of the current inappropriate selloff. Another additional possible culprit may be option market makers given that we have OPEX on Friday. Google Apple MaxPain if you are not familiar with this possibility. Others have also commented widely on the latter.
I for one and many of my associates are now placing inquiries with the SEC on possible stock manipulation and possibly even fraud. The form is simple and only takes about 15 minutes. The recent WSJ supply chain story is highly questionable to be as nice as I can be. It is now being questioned by many credible sources. There have also been many other examples like this over the last few years. I have a living 300+ page word document made of examples like this that is growing by the day (from the media and many other sources). The document goes back to a well documented case where Goldman Sachs was caught red handed manipulating Apple.
Here is how you get access to the form on the SEC website. Maybe we can snowball it if you agree. Get your investor friends to do the same.
Apple - Fire Sale Ends December 31? [View article]
LEAP call options have expiration dates of Jan 2014 and Jan 2015. If you buy a 2015 LEAP with a strike price at the money (ATM) you will pay approximately 20% of the share price to lease the stock for one to two years. Big dips have usually never lasted more than a few months so if they do occur, you have plenty of time to recover and build your investment for the longer term, including the achievement of the long term capital gains rate by holding more than one year.
I routinely buy laddered long term call options and LEAPs several times a year and have had yearly profits of 50-300% on individual positions since 2009. Yes some of my positions are currently underwater due to the recent sell off but I remain convinced, that, just as in the past, all positions will be sold at significant profits long before expiration, at last in terms of my current LEAP holdings.
I do agree that trees do not grow to the sky but Apple has plenty of room to more than double in share pricing over the next two years. The mobile web rollout is still in its early stages and Apple's leadership position is still solid, certainly in terms of its ability to generate earnings. No other company is even close.
Remember that the current discount pricing may end on Dec 31.
View Apple By Seasons, Not By Quarters [View article]
Thanks again Robert for your thorough homework and balanced analysis. It puts some appropriate perspective into Apple's solid business prospects and current low stock price.
Intel Stock To Soar After AMD's Temporary Decline [View article]
By your own data, AMD's prognosis has very little to do with Intel at this point in time. The word "soar" is also totally inconsistent with the conclusions that can be drawn from your article. I have to assume it was chosen to draw readers vs. objectivity. How did all of this ever get by SA editors?
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
Your article is one of the soundest, well documented and balanced SA pieces published on Apple in the last few weeks. Thank you.
I have to say I almost did not read it because of the title. The title sounded sensationalist and like, oh no, another unfounded piece from the Apple bashers or Apple doubters that had not done their homework and didn't seem to care.
Why Isn't Apple North Of $600? It's The Volume, Stupid [View article]
PERSPECTIVE: $AAPL was flat to down Feb - July '11 (4 mos) and Aug to Mid Dec '11 (3+ mos.) in an up 40% year.
Patience in order folks. LEAPS turned 80% or better in 2011. More recently the share price grew 50% between mid Dec and early April, LEAP valuations grew >100%. Yes we have gone nowwhere since the runup and in fact down significantly as pointed out but the payoff is there. It just requires patience, consistency and being long. It is hard to keep that in mind with all the daily chatter and the frustration in the current stock pricing.
The 'Resolutionary' New iPad: A Disappointment? [View article]
Not exactly correct. Dictation, one of the useful features that Siri provides is on board. Siri is amazingly reliable and defect free when used to send messages. It is surprisingly good amazing my freinds in demos of the capability. This is the part of Siri that is working really well.
It is the interrogation and web search part of Siri that is obviously a work in progress. At times it is spot on but at other times Siri fixates on something that is totally incorrect and the only way you can get her back on course is to shut her down and start over. And sometimes it is just hopeless.she just can't past some programming mistake.
My take is that Apple did not want to proliferate Siri further until these problems are fixed. They can always retrofit Siri in a future software update which I am sure Apple is in process on. The decision to not proliferate Siri further until these issues are fixed are another example of Apple management excellence. Good going!
Speculation On Apple's Next Big Thing: A Home Entertainment Center [View article]
Why You Should Avoid Apple [View article]
Is Apple the 'Short of the Century'? [View article]
First of all the entry price for being able to speak on CNBC is pretty low. It has more to do with what attracts attention and what can keep viewers glued to the screen through all the mind numbing commercials than the dissemination of reliable actionable information. Always keep in mind that this is the priority biasing the broad-casted output and not providing its audience with useful information that might be trade-able. Integrity of the content is not what CNBC is about.
Now as to the so-called pundits, of the type living in the environment named above, these folks also have multiple agenda's and giving good advice to investors, or clients for that matter, is often way down the list.
If you wanted attention, if you wanted to get your name out there, if you wanted to try to snag a few new clients, if you wanted to make it seem like your were someone knowledgeable you would see that citing something about Apple is what will get people's attention. It doesn't necessarily matter what you say. You also know that the memories of many are short when it comes to this kind of thing.
Apple happen's to be one of the most famous brand names in the world and at this point is one of the most famous companies in the investment community, not only currently but by comparison to any other famous company that has ever existed.
OK now the next question is what do you get up and say to get the most attention and distinguish yourself from all the noise, and I might add responsible commentary?? Some of these folks have seen, at least in the short term, that you might want to say something that is truly outrageous or out of the norm. Responsible individuals with integrity will care about their long term credibility and image and would not damage this image. Unfortunately a lot of the pundits, which I often call talking heads, are out for the short term attention or notoriety associated with the shocking or the extraordinary, whether they believe what they are saying or not. The short term gain is seen as worthwhile or at at a minimum, at least helps pay the current bills.
I would add to this by noting that media folks and analysts are paid to come up with something to say almost everyday. If they do not have new legitimate news or new analytical results that they believe in they are put in the position of having to make something up. If you take a look around with this in mind I think you will see lots of evidence of this phenomenon.
One of my favorite examples, and also pet peeves, is the Apple analyst, who works for a very famous money management firm, who is always putting lots of public pressure on Apple to pay dividends. If he is as smart as he pretends to be, I have to wonder if he really believes what he is saying. High growth companies like Apple do not pay dividends for very good well known reasons. For one they do not to generate additional investor returns by paying a dividend -- investors are already being rewarded quite handsomely by long term reliable stock appreciation that shows no sign of ending. It is more important for Apple invest its cash in locking in more of their supply chain, delivering a home entertainment system and building more server farms some of which they are doing already. This will pay off much more handsomely for investors than any dividend payment that could reasonably be made at this point in time, i.e. 2-5% short term taxable gain vs.an average of 60% appreciation potentially long term taxable gain for each year for the last 4 years. Hello! Save the dividends for pumping up the stock when the company growth slows down.
All investors should always question the possible motivation behind a given pundit and talking head pronouncement before they give it credibility let alone make investment decision on what may be babble. If you ask me, this is one of the top ten rules of successful investing and it is near the top of the list.
My Apple Estimates for Q1 2011 [View article]
Using a forward average run rate $6.50 per quarter and a very conservative price to earnings ratio of 20 to 1, the stock can be expected to go to $520 per share in the next 12 months. This of course ignores the likelihood that Apple will continue to grow its earnings at a rate that it has in the last couple of years.
Growth engines with significantly increasing momentum include Apple's penetration in the enterprise (businesses) and its increasing sales worldwide, particularly in Asia.
Microsoft: Really a Value Trap? [View article]
Disclosure: Very long in AAPL and GOOG leaps.
Apple (AAPL) files a S-3 shelf registration for the issuance of debt. The details are few, but the company indicated at its last earnings report its intention to take on debt to fund capital returns. Shares +0.8% premarket. [View news story]
One of the next big things is how much money Apple is going make by buying its depressed stock back at the current low interest rates. The stock will appreciate way more than the interest paid and dividend payments go down.
The very presence of a buyback is inherently likely to raise the stock price. If you reduce the stock float by 15%, there is that much less stock available for investors to buy. This means that the price per share of stock will have to go up by 15% to maintain the same market cap due to the buyback alone.
Interested investors may want to read this article from Saturday's Barrons:
For Patient Bulls, Apple's Day Will Come Again
http://bit.ly/14HBoRr
Borrowing money to complete the buyback is much more tax efficient than repatriating offshore cash due to America' stone age tax system, especially at today's low interest rates.
America's tax system unfortunately indirectly pays American companies not to bring cash home to fund US business expansions, new factories and new jobs. If an American company brings money home for any purpose, even investment in American jobs, they will be taxed on it whereas if the leave the money offshore, no taxes are due.
On the good side of still having humongous amounts of offshore cash, Apple has lots of money to fund offshore retail stores, manufacturing operations, data centers etc.
I would recommend that folks like those that posted above who don't understand these business fundamentals keep their money in a bank insured savings account. You have no business buying stocks if you don't do something about the ignorance you exhibit.
Intel Can't Let Samsung Win [View article]
Samsung announces 8-core Exynos 5 Octa mobile chipset
http://bit.ly/13yherq
Galaxy S3 teardown reveals Samsung LTE modem
http://bit.ly/12G3YkB
Samsung Announces Milestone in Development of 14nm
http://bit.ly/13yhczP
This is why Intel needs to humbly get into bed with Apple. They are not going to get Samsung's business. They are going to be relegated to the second tier unless they solve whatever problem is in the way of an Intel-Apple partnership.
An Apple partnership would cement Intel's credibility in the mobile chip world and potentially give Apple a cutting edge state of the art low power 14nm Trigate SOC that integrates processor and LTE baseband modem. Or alternatively in an Intel manufactured multichip module (MCM), with an SOC to follow later. That combo potentially beats Samsung at its best and brings jobs and $'s back to America.
Intel Won't Build Apple's iPhone Chips [View article]
Sure Intel has wonderful dreams of full fabs by end 2013 but this makes an assumption that they are going to be hugely successful in two new business areas, the foundry business and mobile web integrated circuit sales.
At this point they only have two small beacheads in these areas, with the possible exception of this weeks Altera foundry deal. They have less than 1% of the worlds mobile chip market at this point in time. You are assuming huge successes that are going to be very difficulat even for a company like Intel. Earlier Intel efforts at Foundry and ASICs went nowhere.
To draw the conclusions that Intel is not going to want to sell their state of the art foundry process technology to Apple and possibly even partner their mobile chips of their own design into Apple phones in the longer term is a very big jump based on your anecdotal information.
The issue might be that Apple finds that it can meet all its needs more cost effectively by using other foundries and chips of its own design.
I do not think any of the conclusions you draw can be drawn reliably at this point in time. It is going way to far out in time on very little data. You are making a prediction of the future that has many more alternatives than you acknowledge.
Its easy to write loose words, but much harder to have a defendable position.
Short Sellers Are Covering: An Update [View article]
I for one and many of my associates are now placing inquiries with the SEC on possible stock manipulation and possibly even fraud. The form is simple and only takes about 15 minutes. The recent WSJ supply chain story is highly questionable to be as nice as I can be. It is now being questioned by many credible sources. There have also been many other examples like this over the last few years. I have a living 300+ page word document made of examples like this that is growing by the day (from the media and many other sources). The document goes back to a well documented case where Goldman Sachs was caught red handed manipulating Apple.
Here is how you get access to the form on the SEC website. Maybe we can snowball it if you agree. Get your investor friends to do the same.
http://1.usa.gov/107DTcK
You can also report fraud if you believe it is occurring on the same website
Apple - Fire Sale Ends December 31? [View article]
I routinely buy laddered long term call options and LEAPs several times a year and have had yearly profits of 50-300% on individual positions since 2009. Yes some of my positions are currently underwater due to the recent sell off but I remain convinced, that, just as in the past, all positions will be sold at significant profits long before expiration, at last in terms of my current LEAP holdings.
I do agree that trees do not grow to the sky but Apple has plenty of room to more than double in share pricing over the next two years. The mobile web rollout is still in its early stages and Apple's leadership position is still solid, certainly in terms of its ability to generate earnings. No other company is even close.
Remember that the current discount pricing may end on Dec 31.
View Apple By Seasons, Not By Quarters [View article]
Intel Stock To Soar After AMD's Temporary Decline [View article]
Apple After The Riot, Shortage, Strike, Etc.: Still A Buy? [View article]
I have to say I almost did not read it because of the title. The title sounded sensationalist and like, oh no, another unfounded piece from the Apple bashers or Apple doubters that had not done their homework and didn't seem to care.
Why Isn't Apple North Of $600? It's The Volume, Stupid [View article]
Patience in order folks. LEAPS turned 80% or better in 2011. More recently the share price grew 50% between mid Dec and early April, LEAP valuations grew >100%. Yes we have gone nowwhere since the runup and in fact down significantly as pointed out but the payoff is there. It just requires patience, consistency and being long. It is hard to keep that in mind with all the daily chatter and the frustration in the current stock pricing.
The 'Resolutionary' New iPad: A Disappointment? [View article]
It is the interrogation and web search part of Siri that is obviously a work in progress. At times it is spot on but at other times Siri fixates on something that is totally incorrect and the only way you can get her back on course is to shut her down and start over. And sometimes it is just hopeless.she just can't past some programming mistake.
My take is that Apple did not want to proliferate Siri further until these problems are fixed. They can always retrofit Siri in a future software update which I am sure Apple is in process on. The decision to not proliferate Siri further until these issues are fixed are another example of Apple management excellence. Good going!