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Dialectical Materialist

Dialectical Materialist
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  • Apple: Market Hero At The Crossroads [View article]
    Ben and Jerry are very rich after having sold their company to Unilever.

    But anyway, you misunderstood my meaning, no doubt blinded by your hatred for those ice cream hippies from Vermont. (Actually they were from New Jersey and merely settled in VT, but that's marketing for you.)

    There is nothing "PC" about allowing the buyers of Apple products to CHOOSE the charity OR entrepreneurial project they want to support with some of Apple's money. See, that is the power of how this works. If someone needs to reconcile his decision to purchase Apple products with his disdain for what he thinks about Apple's role in pollution or labor in China, well then there is a charity that he could devote some of those funds to. This is an automatic critic silencer. Apple gets to crow about how they provide a method for its consumers to "help them change the world".

    On the other hand if someone likes to think along futuristics start-up lines, the money could be used in good old fashion capitalist fashion. Heck, you could give your Apple dollars to the NRA if you so chose. There is nothing inherently "PC" about the notion of supporting a charity or small start-up.

    The fact that you automatically took this to a place you did not like is your own issue. Like it or not, their reputation does matter and it will impact on how well they do in the future.
    Jan 17, 2013. 08:43 PM | 3 Likes Like |Link to Comment
  • Apple: Market Hero At The Crossroads [View article]
    Apple should take a page from Ben and Jerry's (e.g. "1% for Peace") and make sure they protect and increase their reputation as a socially conscious and forward thinking company.

    The purchase of each Apple item should give the buyer some number of "Apple dollars". These dollars can be donated to charity or used on crowd sourcing sites like Kickstarter. The person just uses his apple id and the funds are paid by Apple to the cause or project of his/her choice.

    This would allow people who buy Apple products to make sure that some of the profit they are helping to generate goes on to support causes and ideas they believe in. It would do wonders to sustain good will among Apple's customers.
    Jan 17, 2013. 08:15 PM | 6 Likes Like |Link to Comment
  • Apple Earnings: Expect The Unexpected [View article]

    Compare this to last year. How much short interest was there going into earnings last January? I didn't see much evidence of any large short. Yet at the same time, the stock found buyers when results blew away the street. I think if the beat is large enough, the buying will start and that will be all it takes to convince others to pile in. Good news won't cut it. It would have to be great news.

    And you're right. If earnings disappoint, there will be free fall. That alone is enough to ensure there is some money on the sidelines waiting to buy, isn't it? By that I mean, they want to own AAPL but they are scared of how bad earnings may be. A healthy beat will allay their fears.
    Jan 17, 2013. 04:34 PM | 2 Likes Like |Link to Comment
  • My Once-A-Year Article On Apple [View article]
    So you were skeptical about the stock at 540 a year ago on its way to 700, but now that it is 500-ish (less than 10% lower) you think it deserves a look?

    I'm not sure AAPL is in a stronger place this year than it was last year. I fully expect anyone buying at this level will see it increase over the coming months, but then the same turned out to be true last year, didn't it?

    I look forward to your victory lap next year, talking about how you said it was worth a look at this level...
    Jan 17, 2013. 03:42 PM | 1 Like Like |Link to Comment
  • Apple Sure Looks Cheap [View article]
    You're in good company. Warren Buffet has called options "weapons of mass destruction".
    Jan 17, 2013. 01:51 PM | 1 Like Like |Link to Comment
  • Why Apple Will Beat The Street [View article]
    By far the bulk of Ford's revenue comes from Cars and Trucks.

    If you view smartphones and tablets as types of computing devices that will dominate the purchase of all computing devices for the next several years, then the iPhone and the iPad simply become members of this class.

    So if you are comfortable with the notion that hundreds of billions of dollars will be spent globally on items in this "mobile computing" class, the only question becomes whether the iPhone and iPad will remain important members of this class.

    It is a certainty that rival devices will also gain traction in this expanding market. But the idea that 75% of Apples revenue comes from sales of devices in this huge and growing market does not have to be any scarier than the notion that all Ford really does is sell cars and trucks. It's not what market they are tied to, it's how well they will do in that market.
    Jan 17, 2013. 01:27 PM | Likes Like |Link to Comment
  • Apple Sure Looks Cheap [View article]

    Right now the Feb 540's are trading at 9.90. Call it 10 for convenience. Each contract represents 100 shares so the cost for each contract is its price x 100. That means a 540 costs $1000. So you could get ten 540's for your $10,000.

    How much money could you make? Well the most important thing is that if you kept them till expiration and AAPL closed 540 or below, you would lose everything. If it closed at 550, the's each be worth 10 and you would break even. If AAPL went on a great run and reached 600, each one would be worth 60 (x100). So your $10,000 bet would be worth $60,000.

    The possible returns are why people get trapped into doing this. But if it really would pay 6 to 1, one has to ask what the odds are that it will really happen. Yes, you can get lucky and make a killing buying out of the money options. I never have. Any decent money I have ever made in options has been with far dated deep in the money calls. This time could be different. With AAPL set to have a blowout earnings and the market seeming to expect total failure, the price could move quickly. But it also may simply entice people to cash out quickly as well, capping the possible run.
    Jan 17, 2013. 01:16 PM | 5 Likes Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    Indeed, in fact everyone being in the same boat is much of the problem.

    You're of course correct that it isn't "cash". That is just lazy shorthand. That is why I often use "cash and prizes" but of course the technical term would be cash and short and long term marketable securities.

    The bond market crash will be an interesting event. It could be a total collapse or it could simply be a matter of prices coming down and rates going up. There will be concerted effort to keep the market from collapsing, you can count on that. In the end, if the efforts at orderly decline are fruitless, companies like Apple will be in great shape. They owe nothing. They may not get everything they are owed, but among the wreckage they will be goliaths. There will be easy pickings and their $7 billion in actual cash will go far.

    Companies like Apple may not be entirely liquid, but they have a great deal of dry powder to make deals and purchases in the event of market collapse.

    Again, their conservative approach to money that everyone blasts them for is only effective if there is a crisis. So the worse the crisis (assuming we all still know what money is) then the better off they will be relative to all the rubble around them.
    Jan 16, 2013. 05:23 PM | Likes Like |Link to Comment
  • Is There A Worm In The Apple? [View article]
    Have you seen the video where Cramer admits that hedge funds have fed bogus negative Apple stories to the media in order to drive the price down? This is easy, he says, because they know Apple won't comment. By the time the dust clears and the truth is known, the damage is done.

    I am not one to worry about "manipulation" every time the market does not see what I see in a stock. But in the case of Apple you have a former hedge fund manager admitting to intentional manipulation of Apple.

    When the news stories all over the web are that two people are standing in line at the Apple store in Beijing and the iPhone is a flop, but it is later revealed that Apple sold 2 million in a weekend what do you think that suggests?

    When earnings are released and it becomes well known that the iPhone 5 turned out not to be the flop we were told it was, who will be asking for explanations about how the media have jumped all over this "disappointing demand" story?

    Spreading FUD (fear, uncertainty, doubt) is a well worn tactic by those who would like to see a stock or a company take some heat. There is no reason to believe that the most watched company on the planet would somehow be immune from this kind of manipulation. Quite the opposite, given the hunger media have for anything Apple that will help drive eyeballs, it is uniquely suited for these type of shenanigans.

    But I do agree that in the end the price is the only thing that matters.

    "For quite some time, the bulls have been dead wrong."

    No, actually by your own definition, the bulls have been right for quite some time.
    Jan 16, 2013. 11:17 AM | 1 Like Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    ... including 2 billion in certificates of deposit and 2 billion in commercial paper and 20 billion in Treasuries...

    There is a great picture here:

    But I simply don't find the idea that they have zero debt and at least 7 billion in very liquid assets to be a problem. Of course in an utter collapse of the system some of their money would be harder to get to and some would fall in value -- that applies to everyone in a crisis. The critical component is that unlike many companies in a liquidity crunch, they would not need to worry about getting paid by others in order to stay afloat. Having zero debt with a wad of money in your pocket is a fantastic situation during a liquidity crunch.
    Jan 16, 2013. 10:22 AM | Likes Like |Link to Comment
  • Apple: 7 Reasons Shorts Can't Sleep At Night [View article]
    I didn't read your comment, but I'm pretty sure you're wrong.
    Jan 16, 2013. 01:30 AM | 3 Likes Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    Yeah, I agree with your point then. And every hardware tech company in the world is just one major Chinese earthquake from a 50% haircut. I like that Apple has no debt and a pile of cash and prizes, though. Because they would be among the companies that could weather a long crisis. They might not come out unscathed, but they could at least survive. In a massive global market shock, that would be worth something.
    Jan 15, 2013. 04:02 PM | Likes Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    Yes, Luke, it's frankly incredible how inept the congress is proving to be.

    But not only does Apple not have all their money in these vehicles, but it is hard to imagine that their value will go to zero. Furthermore it is hard to imagine what a safer bet would be. Don't forget that the last time we went down this road there was a great deal of global uncertainty in the markets because of the debt ceiling brinksmanship. And the place global markets fled to for safety when US debt was downgraded? US Treasuries!

    I can think of many better places for return on the dollar, but I can think of no safer place to be for protecting your capital. Please no one say, "gold" because $100 billion in gold could just as easily be $125 billion or 75 billion next year at this time.
    Jan 15, 2013. 03:57 PM | 1 Like Like |Link to Comment
  • Is There A Worm In The Apple? [View article]
    Anyone doubting demand for the iPhone has not been paying attention. Next Wednesday will demonstrate what the demand has been.
    Jan 15, 2013. 02:44 PM | 14 Likes Like |Link to Comment
  • Is There A Worm In The Apple? [View article]

    Perhaps they changed it, because it is saying 2pm PT Wednesday Jan 23rd now.
    Jan 15, 2013. 02:40 PM | Likes Like |Link to Comment