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  • To The Moon Tuesday: Damn The Torpedoes! [View article]
    Wow! Just wow! That Andy Zaky article is something else and it outlines the danger of giving too much credence to "celebrity" Seeking Alpha authors. However I have always found Phil Davis extremely reliable, honest, and lacking in self delusion and would recommend his weekly newsletter to anyone.
    Mar 5 09:39 PM | 6 Likes Like |Link to Comment
  • Apple - Why We Are Changing Our Stance From Bearish To Bullish [View article]
    Apple is a great company that makes great products and is efficiently run, so what is not to like?

    I think the great fear is that Apple has succeeded in making abnormal profits by selling its iPhone in North America and in some other developed markets via two-year contracts with the financing provided to the end consumer by the carriers in a manner that partially conceals the true price of the device.

    This has been possible because public demand for the iPhone has been so great that the carriers have been forced to provide them at a greatly subsidized price, albeit at the cost of making monthly payments for phone calls and data in the US, Apple's primary market, much higher than in most countries, and higher than most middle class customers in most world markets would or could afford to pay.

    When the iPhone market expanded from just AT&T to include Verizon and then Sprint, sales at these massive margins exploded, generating billions in profits, while at the same time selling in huge numbers to the most affluent few percent of customers in overseas markets.

    The question now is whether the explosion can continue to explode or whether cheaper competition plus market saturation for $700 devices will slow down growth in profits, or even move into negative growth and if so, by how much. No one can really answer these questions, so there is a great deal of uncertainty at the moment.

    It is not inconceivable that when quarterly earnings are announced again in April, that if they are at all disappointing, there will be a further slump in the stock price, though if the report is good or exciting news is released, the stock could easily burst through the $500 level and move up towards $600.

    At the present time I am very happy to sell $400 puts and put spreads, because even if the stock goes below $400 and these trades lose me money, I would be delighted to roll them forward to lower prices at longer dates, and if that fails, to load up on the stock at substantially less than $400.

    However I don't think that will happen. My prediction, for what it is worth is that we will see AAPL at $500 before we see it at $400. If this is correct, I will make a lot of money, and if I am wrong, I will be delighted to load up on AAPL stock and go overweight at less than $400.

    Looks like win-win to me.
    Feb 15 12:25 PM | 6 Likes Like |Link to Comment
  • Nokia's Lumia Strategy Will Pay Off Nicely [View article]
    I agree with this, because I too have no use for a smart phone, at least not at the cost of another utility bill, when I have my laptop and a regular cell phone, and I can't really see the smart phone being an effective replacement for the laptop.

    However for younger people in the dating age group, there is no doubt that their sex lives are immeasurably enhanced by Facebook and many other Web sites, especially if the smart phone is paid for by a parent! The smart phone is also a valuable tool in many kinds of business, especially where prompt notification of shipments received is crucial.

    It is interesting, though, that when you look at the lists of the most popular Apple apps, you find that there is a huge preponderance of children's games in the top 100, some of which might be used by adults old enough to pay for a smart phone subscription, but the majority of which were probably downloaded to keep children quiet.
    Feb 12 07:16 AM | 6 Likes Like |Link to Comment
  • Nokia: The Turnaround Story Continues [View article]
    Here's something interesting from the WSJ. It quotes a man called Scism who owns 600 Verizon dealership stores:

    “Mr. Scism says Microsoft has gained traction with
    its effort to reenter the mobile market. He said that
    the Nokia Lumia 822, which runs Microsoft's
    smartphone operating system, garnered 17% of sales
    at his stores the weekend after Christmas, thanks in
    part to a price cut."

    The interesting part is that Verizon does not yet have the top of the line Nokia phones, yet Nokia is starting to make some inroads.
    Jan 27 08:11 PM | 6 Likes Like |Link to Comment
  • Waiting For Godot: Time To Sell Nokia Stock [View article]
    This article is a reasonable summary of the short side argument for Nokia, although like many short side arguments it tends to use rather emotional language. Why is it almost impossible to present a short side case in purely objective terms?

    The author is correct, too, that anyone who wants a conservative investment should get out of Nokia. Interesting, though, that although the author says that Nokia is doomed to bankruptcy, he does not confess to being short Nokia himself and seems to be passing up easy money.
    Oct 27 07:58 AM | 6 Likes Like |Link to Comment
  • Nokia's Lumia 920 AT&T Exclusivity Is A Huge Mistake [View article]
    "I was planning to buy a Lumia 920. I'll now be purchasing a Samsung Galaxy S III."

    1. You could switch to AT&T, but what is wrong with the phone you have now? Is it out of contract?

    2. Anyone can buy an unlocked GSM phone and use it with the GSM provider of their choice. If the cost is too high, it can be bought with a credit card and amortized over a few months.

    3. I would imagine that AT&T would be willing to invest in promotion and advertising in exchange for a period of exclusivity.

    4. A lot will depend on how much commission sales persons are paid to promote the Nokia Lumia 920. With the high cost of the phone come very large margins, some of which may be returned into sales commissions and promotions.

    5. Nokia may have learned a lot from the launch of the Lumia 900.

    6. There may be technical aspects to producing a CDMA version of the Lumia phones.

    7. The iPhone debuted exclusive to AT&T.

    8. The exclusivity to AT&T is only in the US. It may not be permanent, and the phones may be rolled out to other providers down the road.
    Oct 7 03:08 PM | 6 Likes Like |Link to Comment
  • How Many Lumias Can Nokia Sell At These Prices? [View article]
    I don't know how many they sell per year, but they are widely used as taxis in Europe. Mercedes also make a wide variety of commercial vehicles. See links below.
    Sep 28 10:00 AM | 6 Likes Like |Link to Comment
  • Nokia's Genius Move: Was It Wrongly Viewed As A Catastrophic Mistake? [View article]
    Judging by the number of Nokia articles in Seeking Alpha over the last week or two, Nokia has done an excellent job of bringing attention to its forthcoming phone.

    Its main competitor is more likely to be Samsung than Apple, especially in the USA.

    Incidentally, where is the actionable investment advice in this article?
    Sep 15 07:12 AM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Jobs, Jobs, Jobs! [View article]
    The Donald Marron article is interesting. Certainly in my experience of working with doctors, nurse, psychologists, pharmacists, and health care technicians of various stripes, I cannot ever remember talking to anybody who displayed any degree of financial savvy, and even those who traded their own stocks worked mainly on the "hunch" theory and would ask questions like "Do you think Ford is a good company" and say things like "If I buy Fannie Mae today for 10 cents and it goes to 15 cents tomorrow, I could make 50% overnight." (The retort to this is obvious.)

    This makes the general move away from defined benefit pensions towards defined contribution pensions all the more pernicious, because in my experience even when public sector employers provide access to investment advice, the relationship is clearly designed to financially benefit the advisors at the expense of those advised.

    At least if collective funds are in large pension funds there is some hope that professional managers will work on behalf of those who are invested in the fund and that even if grossly incompetent (or maybe just victims of crime), like the Florida managers who dumped a huge sum into Enron just before it collapsed, they will probably do better than individuals would.

    To me it seems a pity that neither of the political parties seems inclined to take up this issue, but Wall Street is hardly likely to pay them to do so, so where would the funds to pay the politicians come from?
    Sep 2 09:45 AM | 6 Likes Like |Link to Comment
  • Will Bing Sink Nokia And Windows Phone? [View article]
    When I typed in "pubs near me" both Google and Bing produced the same or similar results. Neither showed any pubs near me.
    Jul 16 12:38 PM | 6 Likes Like |Link to Comment
  • Bears Say Nokia's Products Are Obsolete; Consumers Disagree [View article]
    No, in terms of the market for smart phones, iOS phones and Android phones are now the incumbents, and Windows Phone is the insurgent newcomer. The question is about whether there can only ever be two types of smart phone ecosystem, or whether more newcomers can enter the market.

    And the question remains, how did Honda and Hyundai get market share when there were well established incumbents from before World War II? Clearly there was sufficient overall demand for automobiles that more manufacturers could get market share.

    Smart phones is not like U-Haul vs Ryder, because practically the whole population of the planet is the potential market for cell phones over the next few decades.

    A greater danger, perhaps, is that phones will eventually become so cheap that no company will make much profit, rather like radio receivers today.

    Right now we are at a very intermediate stage of the information superhighway build out, which will not be complete until all the highly populated areas of the planet have 4g network capacity, which is many years ahead.

    Another example I like to point to is that Ford and GM components were already large scale operators long before the Interstate highway system was started in 1956, so you can't blame Microsoft for trying to muscle in on iOS and Android while the Internet is still quite young.
    Jul 15 01:27 PM | 6 Likes Like |Link to Comment
  • Why I Will Eventually Be Right On Salesforce [View article]
    This is a bit complicated, but here goes.

    1. Sell a call slightly above the current price of the stock.
    2. Buy a call at a higher price. This completes the spread. Since the call sold in 1. is higher priced than the call in 2., a premium is received. The higher priced call will set a limit to the maximum loss if the stock continues to go up in value.
    3. The premium is used to buy a larger number of out of the money puts, probably about 25% below the current price of the stock. If the stock tanks, these will increase in value several fold, creating a huge profit. The aim is not necessarily to hold these puts to expiration, as they may never get in the money, but to resell them for a profit.
    4. This can work well when the underlying stock is believed to be at the top of its range, but if the stock moves on up, it can get pretty hairy. The puts should be bought a few months out to give the strategy time to work.
    5. Do not try this with a stock like AAPL that might explode upwards. It may work best with high priced stocks like MA or PCLN that have many option prices when they are at the top or their range, or indeed with CRM.
    6. Best to implement strategy on a day that CRM is up sharply, perhaps with the wider market.
    7. Best to step into the strategy in more than one stage.
    Jul 2 11:12 PM | 6 Likes Like |Link to Comment
  • Is Microsoft Sabotaging Nokia? [View article]
    Whether Nokia will succeed with Windows 8 phones or not is a moot point, but I agree that all this crock of sh*t about Microsoft stabbing Nokia in the back is just made up by certain Seeking Alpha bloggers (or crockers) who seem to catch the meme from each other.

    I don't really know what the point of it is, but the lower Nokia stock goes now the better for longs if the stock rebounds later in the year.

    Right now deltawise I am only slightly long the stock, but if there is another sharp run to the south, I will be dumping a lot of my very profitable put positions and letting it ride on the long side. Likewise if the move is upwards.

    The more of these nonsensical, childish articles I see, the more convinced I am that there is a long side to Nokia, because otherwise what would be the purpose of writing them except a desire to influence people to sell their long positions?
    Jul 2 02:43 PM | 6 Likes Like |Link to Comment
  • Primer On International Investing - Part 2 [View article]
    Corruption in foreign jurisdictions, as in the US, is certainly an issue, and really you want to be sure that whatever corruption there exists, is working in your favor, not against you. The problem is that although you may be making money in a company that has huge margins and moats supported by corruption, continuity is not guaranteed.

    Where the US has the advantage is in corporate laws that guarantee that a corporation is a person who never dies and is not dependent on one individual.

    If Carlos Slim dies, the future of AMX might be less certain or less transparent, due to uncertainty about political influence necessary for his businesses to thrive, though even in the US we have the case of the almost immortal Warren Buffett. No doubt if Buffett decides to shuffle off this mortal coil and join the Investors Hall of Fame in the sky, there will be uncertainty among BRK retail investors, but the continuation of the company along the same lines is assured and if it took a turn for the worse, it would take many years to unravel.

    Corruption exists in the US, but it is of a different kind, with corporations using lobbyists to pay off legislators to enact laws that will favor their businesses and disfavor competition.
    May 5 09:02 AM | 6 Likes Like |Link to Comment
  • Why Liberals Should Invest Like Conservatives [View article]
    It might be a good idea to start up a socially irresponsible fund that would only invest in polluters and manufacturers of junk food, alcohol and genetically modified foods. Particular attention would be given to manufacturers who exploit cheap third world labor to produce luxury products for gullible consumers. Then again, it would probably just track S&P 500, so not worth the effort.
    Mar 28 04:04 PM | 6 Likes Like |Link to Comment