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Thomas H. Kee Jr., is President and CEO of Stock Traders Daily. The Stock of the Week Strategy offered by Stock Traders Daily may be the best performing strategy on the market since December, 2007 (before the credit crisis), and "The Investment Rate" is arguably the best measure of the... More
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  • Forward-Dated Emails Expose Flaw In Google's Android OS

    By Thomas H. Kee Jr., Stock Traders Daily

    An overlooked but potentially extremely important operating flaw exists in Google's (NASDAQ:GOOG) Android Operating system that can cause businesses and individuals to miss important emails. Thus far nothing has been done to correct these operating errors, a Verizon Manager (NYSE:VZ) who cannot be named investigated this issue within the past 30 days, he checked all available technical channels and concluded that it was the first they have heard of this problem too, but the problem could have been going on for over a year.

    Here is what happens:

    Unless you are unlike the rest of us you get tons of spam every day, and these spammers have been getting better and better at getting you to read their emails. One of the ways some of them have been doing this is to change the received date that displays on your device when you receive the email. I call this forward-dating because they make the received date sometime in the future. I have seen it as long as one entire week in the future, but they are usually less than that. For example, if they want their email to be on the top of the list of emails you have for an entire hour they could reasonably change the received date on their spam email to one hour from now. This causes problems for some operating systems, but not all of them.

    Specifically, Google's Android sorts email based on date/time stamped on the email (something the spammers have learned to manipulate), so the spammers are taking advantage of that. Android puts the newest email at the top of the list, and that keeps forward-dated emails at the top of the list even though they may have come in at an earlier time, but Android does more than just sort by the spammer's received date. Android also restricts the system from checking the server for email received before the most recent email in the system. If that most recent email is a forward-dated spam email Android will not bring in new emails until such time as the received date on the next email on the server is greater than the received date of the spam email. When this type of a system is used and the last received email date is an hour from now all of the emails that might otherwise have been received between now and an hour from now will not pass through, and that is bad enough, but there is more.

    Android does check for emails that may have come into the server earlier, but the OS seems to limit the back-checking to one hour. Android will compare current time and check for any emails that have come into the server between now and one hour ago, or up to the last received email, whichever is less. This has something to do with their 'email check' features, this can help prevent missed emails too, but that is not enough. Because the system does not check emails that are on the server past one hour ago the email software can miss emails completely if the forward-dated email is not corrected, and if users rely on Android only they can miss important emails completely too. If one hour goes by and nothing was done to fix the date on the spam email with the time/date in the future the emails that would have come through on the handheld will not make it.

    Real World Example:

    This happens every day, I see it clearly all the time, but it is most pronounced at night. Here is an example. Last night I received a spam email with a manipulated received date/time that was four hours ahead of the actual time it was received ( I will explain how I know this below). Then, the next email I received on my handheld came in almost four hours after that (after the received time stamped in the spam email). Upon investigation I realized that over 20 emails had come in during that four hour gap (the dark space), but none of them showed on my handheld device. Most of these emails were spam, but one was an invoice from Verizon for $1000, and had I not known about this problem I could have missed that email altogether.

    Luckily, all of us who still own PCs and Laptops and run email programs like Microsoft (NASDAQ:MSFT) Outlook, which sounds archaic in this era, do not have this same problem. I checked my Outlook, which sorts email based on when they come in, not the received date falsified by the spammers, and it caught every email that came through our servers. There is where I discovered that twenty emails had not made it to my handheld, and it is there that this Verizon Invoice was also found. If I had only relied on Android I would have missed this critical email.

    Reasonably this problem is not easily identified by most people. In fact, it might not be noticed at all by people who use Yahoo, Gmail, or any other public email service, but those who have private email servers that are managed by them or the companies they work for can have this problem. Even so it may be hard to identify this problem, but imagine the consequences.

    Worst case scenario:

    Imagine expecting an email from your boss, who was traveling in China, so when you woke up the first thing you were going to do is check for his email and get your new task. You sleep comfortably, wake up, check your email, but there is nothing from your boss. When he returns he asks, 'did you get that project done for me?' You scratch your head before responding, but you have no clue what he is talking about. He says he sent you the email he promised, but you never received it, and it was all due to this operating flaw in the Android Operating System.

    Later you discover that a spam email came in at midnight, it was forward-dated to five hours from the time it was actually received, and that prevented all other emails from coming through. Your boss sent the email at 1 AM, but because it was in the 'dark space' it never got to your handheld, you missed the assignment, and your boss is not happy.

    Fix the Problem:

    There is nothing an end user can do to fix the problem other than to watch out for forward-dated spam emails and delete them when they come in. If you delete them normal emails will flow regularly, but if these forward dated spam emails are left in the Android OS normal new emails will not flow until the received date on the new emails is greater than the forward date of the spam email. That means you need to monitor the email through Android carefully, and so long as you delete each one you have nothing to worry about. That sounds like work, but it is doable during our waking hours, but what about when we sleep? This is where the risks run high of missing important emails.

    Aside from adjusting your server to reject forward-dated emails there is nothing an end user can do to prevent this problem from recurring. Google's Operating system continues to have this flaw and that poses big risks to small businesses that have begun to rely on any Smartphone operated by Android.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: By Thomas H. Kee Jr., Stock Traders Daily, and neither Mr. Kee or Stock Traders Daily receives compensation from the companies mentioned in this article for writing this article.

    Dec 12 12:17 PM | Link | Comment!
  • IT Looks Overvalued Without Apple

    Apple (NASDAQ:AAPL) has retreated significantly recently, the rationale for the decline has been debated, but something that cannot be debated is its influence over the technology sector (NYSE:XLK). To quantify this relationship I have used the earnings and revenue tool from Stock Traders Daily to understand exactly how influential Apple has been over the IT sector during both the second and third quarters of 2012. This relationship is important when assessing future earnings and revenue growth for the sector.

    First, Apple is flirting with clear support near $520, but if this level breaks the stock could fall by another hundred points quickly. The technicals show a broken pattern, the up channels no longer exist, and the risk of material decline is high.

    Taking this technical approach is often criticized even though the decisions of smart money, who are the ones that usually know best, can be identified by price movement. If our intention is to determine what will happen in advance we can observe what Smart Money does with their pocketbooks to get an understanding of what they might know about the future. In this particular case there are still a large number of emotional investors in Apple who refuse to believe that Apple may actually have become a completely different company this year.

    Importantly, I have said before that I expect a material shift in growth in 2012, we have not yet seen this show up in either earnings or revenue from Apple, but if it does the valuation of the IT sector will be scrutinized extensively. That all starts with an evaluation of Apple's influence in previous quarters.

    Starting with the second quarter of 2012 the EPS growth rate for the information technology sector was 6.89%. That compared to a growth rate for all of the stocks reported in the second quarter of 4.13%. Revenue growth for the IT sector was 4.69% and that too looked good against all companies whose revenue growth was 2.39% in the second quarter of 2012. However, when we remove Apple's influence from the IT sector the EPS growth rate for the second quarter drops to 0.53% and the revenue growth rate drops to 1.55%. Without Apple, the growth rate of the IT sector would have been much lower than the growth rate of the market itself.

    In the third quarter the IT sector grew EPS at about the same pace as the market, 4.09%. Revenue outpaced the market coming in at 2.82% versus 1.94% for all of the stocks reporting. However, like last time, when we remove Apple the growth rate looks considerably different. EPS growth rates are reduced to 1.39%, considerably below the market average, and revenue actually contracts, declining by 0.46% for the information technology sector overall.

    The purpose of this article is to take a look at Apple's influence and engage a discussion about valuation accordingly. I do not know exactly how Apple's earnings and revenue growth rates will change, but I do know that the information technology sector would be lagging the market considerably without Apple, and smart money has already begun to make a decision with their pocketbooks. The question is if Apple's growth rate slows significantly will the information technology sector fall out of favor?

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: Written By Thomas H. Kee Jr. President and CEO of Stock Traders Daily. Neither Mr. Kee or Stock Traders Daily receives any compensation from the companies mentioned in this article for writing this article.

    Dec 12 11:46 AM | Link | Comment!
  • Webinar On Saturday.

    Webinar on Saturday (June 23, 2012):

    I am hosting a Webinar on Saturday, covering one of my flagship strategies, and you should attend.
    Stock of the Week (a strategy everyone can use)

    • Compound return (since inception): +214.50%
    • # Trades: 1.43 trades/week on average (simple conditional orders)
    • Concept: Prepare on the weekend and let the strategy work during the week.
    • Anyone can use this strategy effectively.

    Annual returns:
    • 2007: +24.56%
    • 2008: +80.98%
    • 2009: +12.09%
    • 2010: +1.26%
    • 2011: +23.75%
    • 2012: TBD (to be determined)
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    Posted By Thomas Kee

    Or visit our website: www.stocktradersdaily.com

    Tags: Webinar
    Jun 19 8:03 AM | Link | Comment!
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