Seeking Alpha

Options2Wealth's  Instablog

Options2Wealth
Send Message
I used to run a limited partnership, boutique hedge fund in the 90s. Retired in 2000 and moved from New York City to Toronto, Canada, got married, raised a family and basically settled down. After a few years in Toronto, my wife got tired of the city’s 8 months of cold weather and insisted that... More
My company:
DonorNation.org
  • Apple's Chief Executive Officer Is Now Also Leaker-In-Chief 0 comments
    Jan 13, 2013 1:34 PM | about stocks: AAPL

    This past week, Apple's CEO, Tim Cook was in China...

    In an interview with the local media, Sina Tech, Cook revealed that he met with the Mr. Xi Guohua, head of China's largest mobil service provider, China Mobile Ltd. Incidentally, unlike Mainland China's other mobil service providers, the behemoth China Mobile does not offer the iPhone as part of its subscriber packages to its 700 million customers. Geez, their subscriber base is 2x the size of the entire US population...

    A spokesman for China Mobile confirmed to CNBC that the talks took place, and said the two sides discussed "matters of cooperation." No further details were given, as a confidentiality agreement was reportedly signed.

    Let me put this news in some context...

    Apple's stock has been in somewhat of a freefall the past few months, having dropped almost 30% from its September 2012 high of $705. Cook is under a lot of pressure from Apple shareholders to stop the slide...So for him to be in China in the same week as the CES in Las Vegas and 2 weeks before Apple announces its first quarter, 2013 earnings, is, in my humble opinion, quite significant...

    Being a history buff, I also like to take my cues from history books whenever I can to gain an advantage in the markets...I remember all too well how evasive the former US Secretary of State, Henry Kissinger was, especially with the press, when he made the secret trip to China 40+ years ago to meet China's Chairman Mao and Premier Zhou EnLai...

    (Two brief summaries of the secrecy surrounding Kissinger's trip, literally under the cover of darkness, can be found here:

    thediplomat.com/china-power/kissingers-v...;

    china.usc.edu/ShowArticle.aspx?articleID=2483 )

    In other words, when leaders representing important countries, or for that matter important companies, are in the midst of delicate negotiations that could have far reaching implications for their respective nations or businesses, they keep those discussions secret. They certainly don't want to embarrass themselves should their talks fail. So for someone as important as Tim Cook, whose stature in today's business world is no different than the stature(s) Henry Kissinger and Richard Nixon enjoyed 40 years year ago on the political stage, goes to China and then of his own free volition, leaks to the press that he met with the head of China's largest mobil telecommunications company, I cannot help but believe that he must have an agreement in his pocket for him to leak the news of his meeting with Chairman Guohua.

    If the above is not enough proof, in yet another interview, this time to China's Xinhua News Agency, Cook was quoted as saying, "China is currently our second largest market. I believe it will become our first. I believe strongly that it will."

    I also find it interesting that China Mobile's spokesman, when confronted with Cook's leak, admitted that his boss met with Apple's CEO. This spokesman then goes on to reveal that the 2 companies have signed a confidentiality agreement...hmmm...

    And, let's not forget, that on Thursday, January 11th, Apple stock was up more than $11 on more than 2 million shares traded in pre-market...That's more than $1 billion in buying! I am betting that the reason for that frenzied buying was that the news of an impending agreement between Apple and China Mobile had leaked out...

    I believe that Apple will announce the news of the agreement on Monday, January 21st along with their first quarter results.

    Based on all of the above, I felt comfortable enough to make a significant bet on Apple by buying an option position in my personal portfolio. As I had stated earlier in my blog's intro post, the $10,000 trading portfolio that I have opened up here for public viewing is a 6 month experiment that basically mimics, for the most part, my personal portfolio's holdings. To ensure that this public portfolio closely represents my holdings in my personal portfolio, I will therefore use up the portfolio's $800+ cash position to buy Apple's February $655 Strike price options that are currently trading around a $1.

    I must admit that my ramblings on Apple are nothing but pure speculations...and in less than 10 days I will find out if my bet in Apple's February options (relatively small bet when compared to my portfolio's current market value) will hit pay dirt, or, will end up in a cloud of dust...

    We shall see...

    kp

    DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you.

    Disclosure: I am long AAPL, FSLR, S, SPWR, WFR.

    Stocks: AAPL
Back To Options2Wealth's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.