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Dialectical Materialist

Dialectical Materialist
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  • Apple: Mac Sales To Grow In Enterprise [View article]
    Cincinnatus, I agree that artificial distinctions are drawn that skew the picture, and sometimes these artificial distinctions are made intentionally to allow the data to paint a certain picture.

    What I don't know, though, and maybe you do, is what the sales numbers are for these 2-in1's or detachables or whatever you'd like to call them. How many are being sold? Is there a place to find this number or at least a place to get started on how to figure it out?
    Oct 15, 2015. 06:47 PM | Likes Like |Link to Comment
  • Silver Fever Is About to Break [View article]
    Thanks for revisiting this. Call up a chart of silver from 2000 to 2015 and you have a pretty classic bubble picture, with the minor bump, bear trap, major bump, and the bull trap all clearly visible. The only thing it didn't do (apparently) is overcorrect to the downside.
    Oct 14, 2015. 10:51 PM | 1 Like Like |Link to Comment
  • Silver Fever Is About to Break [View article]
    Something happened on the way to $80 silver. It had to make a stop at $15. But it's above $16 now, so look out.
    Oct 14, 2015. 10:48 PM | Likes Like |Link to Comment
  • Apple: Mac Sales To Grow In Enterprise [View article]
    "that some percentage of folks held off buying Windows x86 PCs in Q3."

    That's a good point, I think. I know I have held off buying a new Windows machine for the last ten years... ;)

    No seriously, I do think that some amount of demand was deferred. Not unlike the q3 iPhone sales for Apple. There must have been some portion of folks who would have bought a PC but held off for the next gen Windows OS and the new chips. In the next quarter we'll see those sales.
    Oct 14, 2015. 07:04 PM | 1 Like Like |Link to Comment
  • Netflix: Time To Stop The Cash Flow Burn [View article]
    "when has a slight price change of a product ever instantly increased the intrinsic value by 10% of any company"

    Not too different from when folks explain international expansion into places such as Japan is a justification for NFLX's apparently high valuation, and then when the announcement is made that Netflix is launching in Japan, the shares surge AGAIN. It's like good news is never priced into the stock, it is always new good news and another reason for a price increase.

    The pricing power of Netflix has long been part of the story of why it is not overvalued. And yet on the announcement that Netflix may be exercising some of that pricing power, a new surge. It is just fascinating to watch.

    Watching how NFLX stock moves is every bit as entertaining as the shows they offer. I can see how so many people never tire of hearing that register ring. But all good things must come to an end.
    Oct 14, 2015. 02:20 AM | 3 Likes Like |Link to Comment
  • You Missed The Boat On Netflix [View article]
    Bio, I pretty much agree with what you are saying. But a world that is crowded with streaming choices where people subscribe to Netflix but also other services would have one potential impact on Netflix: it could reduce their pricing power. I'm not suggesting they'd have to cut their prices by any stretch, but everyone assumes that Netflix will become more expensive over time. The only thing I can see that would prevent current users from paying a great deal more for Netflix would be if they were actively subscribed to other streaming services. So competition in this sense means competition for the total streaming wallet as much as for each individual customer.
    Oct 12, 2015. 08:49 PM | Likes Like |Link to Comment
  • Apple Is Undervalued, And Offers 2 Alternative Ways To Earn Extra Income [View article]
    giofls, well said. Thanks for a concise clarification.
    Oct 12, 2015. 01:03 PM | 1 Like Like |Link to Comment
  • You Missed The Boat On Netflix [View article]
    iTunes was available on Windows. And it seems Apple Music for Android is in private beta. It is not a stretch to think if Apple were to get in the streaming video space that their service would be available universally. Eventually.
    Oct 12, 2015. 12:50 PM | 2 Likes Like |Link to Comment
  • Netflix Price Increase: A Repeat Of 2014, Not 2011 [View article]
    Sounds like the author made a mistake. Unless he learns from it, of course...
    Oct 12, 2015. 12:46 PM | 1 Like Like |Link to Comment
  • Apple Is Undervalued, And Offers 2 Alternative Ways To Earn Extra Income [View article]

    I think you give a great example for how cc's can be used to augment gains. But if you assume the price in your example spikes to 140, you have actually made less money than if you were not "short" AAPL at 120 (which is effectively what a covered call is, a short position at a certain strike).

    I agree that no stock goes up forever and you can certainly make money using covered calls. This is really just about the semantics of what "bearish" and "bullish" and "short" and "long" mean. I don't think it's terribly important to the overall sense of the strategy you are describing. The important thing is that you establish a strategy that works for you and that you fits your comfort level.

    I don't want to get into a semantic debate because it's not terribly important to the idea you are describing, which I agree is an effective strategy. You basically get to make money on the stock's rise, and make more money if the stock doesn't rise too far (or mitigate your loss on a decline of course). It's a smart move, I think, as long as the strikes are chosen wisely and not too close to the share price. AAPL can move in either direction quickly and it can be a pain in the butt to keep chasing it as you role the calls out further and further.

    I haven't been happy enough with the current premiums to sell any cc's right now. When I look at Nov 20 $120 calls for 1.75, I'd rather not sell, because for a measly $175 per contract I am betting that AAPL won't go up to 120 after earnings...? I'd rather wait on that one. But when AAPL is on a tear, selling out of the money cc's is a great way to augment your return.
    Oct 11, 2015. 05:38 PM | 3 Likes Like |Link to Comment
  • Apple Is Undervalued, And Offers 2 Alternative Ways To Earn Extra Income [View article]
    Fanboy?, one way to look at it is what the stock has to do in order to make the optimal returns. As you said, if the price drops, your CC's do best. Expiring out of the money is what you want from any option you sell because you get to pocket the cash. So since selling covered calls works best when share price drops or stays below some target level (i.e. the strike you sold at), it is considered a "bearish" strategy.

    It doesn't have to mean you're bearish on the stock. When I sell covered calls I usually pick a strike that is so far out there that if my cc's are in the money, I am not upset, I am partying. But selling a call is always a "bearish" position, the same way selling a put is technically a bullish one (because you are hoping the stock stays above the strike you sold at).
    Oct 11, 2015. 01:49 PM | 3 Likes Like |Link to Comment
  • Analysts Are Bearish On Apple - Should We Be Bearish Too? [View article]
    And another thing I've noticed...

    I have been on the lookout for Apple Watches ever since I bought one and read the media headlines that suggested I must have been the only one.

    So I have been paying attention to people's wrists. And I have to say, that myth that "people don't wear watches anymore" is entirely wrong. I see watches on all kinds of people of all ages. There are lots of folks who don't wear watches, it's true, but there are plenty who do. The younger crowd seems to wear sportier watches and fitness bands, the older men who are wearing watches are generally wearing show piece watches, and women of all ages are wearing fashion watches of all kinds.

    I see many more normal watches than smart watches, and I've even seen a few android smart watches. I am certainly not suggesting that the world is wearing Apple Watches. But when I started to look for Apple Watches I had taken it on faith that people aren't wearing watches these days. After a few weeks of paying attention, I have to say it's simply not true.

    This suggests that there is a large market for smart watches even just among those who are already comfortable with wrist watches.
    Oct 11, 2015. 12:01 AM | 2 Likes Like |Link to Comment
  • Amazon's Apple TV Ban Was Not About Hardware Sales [View article]

    Your profile makes reference to the dangers of blindspots. This is interesting, given your obvious blindspots about Apple.

    Let me first admit the Apple is not perfect. Not everything they do is world crushing. But there are some serious errors in your analysis which, when corrected, might change your conclusions. I encourage you to consider your own blindspots.

    Apple has powerful brand power. If that means people who purchase Apple's "overpriced" products are brain dead, so be it. A sale is a sale. And Apple sells a lot to its hard core (and very satisfied) customers.

    The Apple Watch has already made Apple more than a billion in revenue. Most companies wish they could fail so hard. And we really need to wait to get actual paid subscription numbers before we can judge Apple music, but over 11 million users were using the free service, so this sounds to me like Apple was able to give it away just fine.

    The Apple TV has already sold over 25 million units. Many of these Apple TV owners will be upgrading. The resulting sales revenue and continuing services revenue from such sales is again, something most other businesses would envy.

    Finally, you are mistaken in your description of Apple's cash pile. Tax evasion is illegal. Tax avoidance strategies, on the other hand, are practiced by any intelligent person either individually or for their company. Paying more taxes than you are legally obligated to is not good money management. If you don't believe me, when you do your taxes next year decide to forego a hefty deduction (it is legal not to claim everything you are entitled to claim). See if that feels right to you or if it feels like poor money management.

    More importantly, if Apple repatriated all its cash tomorrow it would owe up to 35% on these funds. But Apple would get to deduct the taxes they already paid in each region where the money was earned. For some regions this is a minor amount but for others it is a larger percentage. The resultant tax would be nowhere near 35% much less the 39% you cite.

    Blindspots are a real problem in investing. On that you and I can probably agree.
    Oct 10, 2015. 11:44 PM | 3 Likes Like |Link to Comment
  • Apple Is Undervalued, And Offers 2 Alternative Ways To Earn Extra Income [View article]
    There is a net decrease in shares outstanding due to Apple's buyback program. A substantial net decrease.
    Oct 10, 2015. 04:31 PM | 18 Likes Like |Link to Comment
  • Analysts Are Bearish On Apple - Should We Be Bearish Too? [View article]
    Beach, I live in a pretty small town in the northeast and I have seen four Apple watches on my customers in just the last week. And no, I don't work in an Apple Store. We don't even have an Apple Store in our area. I'm pretty sure if I see four in a week in a small town, you just aren't looking too closely in LA.
    Oct 10, 2015. 03:09 PM | 2 Likes Like |Link to Comment