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Dialectical Materialist

Dialectical Materialist
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  • Apple Reports A Stellar Quarter, Outlook Also Solid [View article]
    >>> Instead of addressing its discounted valuation multiple, Apple CFO, Luca Maestri, has doubled down on a “Borrow and Squander” policy of his unceremoniously replaced predecessor, Peter Oppenheimer. [...] Luca Maestri has increased debt from $0 to $35 Bil <<<

    How can the "borrow and squander" policy be said to belong to his predecessor if debt was at zero when Maestri took over? This ridiculous assertion exposes this analysis for what it is -- a bunch of nonsense.

    The fact is Maestri is transitioning Apple gradually into a much more aggressive use of its cash. They are taking on debt to leverage foreign holdings, they are buying back billions in stock, and the are actively hedging to mitigate currency volatility. Some folks seem to think wisely managing $190 billion dollars is easy. Like wisely managing $19,000 only bigger, or something.
    Apr 29, 2015. 10:24 PM | 1 Like Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]
    What I meant, of course, was, "I wonder what JM Manness thinks about this?"
    Apr 29, 2015. 01:22 AM | 2 Likes Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]

    You heard the exact same thing I did. My ears perked up at that sentence. I think it is probably the most important information Apple could give about its future plans. That they think the present share price is a bargain and that they are buyers at this level tells me all I need to know about whether I should sell, stand pat, or buy more.
    Apr 28, 2015. 06:09 PM | Likes Like |Link to Comment
  • Apple: The Bull Comes Back [View article]
    Sami, if you invest in two and one doubles and the other goes to zero, you've taken on a lot of risk and broken even for your troubles.
    Apr 28, 2015. 01:16 PM | Likes Like |Link to Comment
  • Apple Q2 FY2015 Preview: iPhone Momentum Expected; Focus On Software And Capital Return Program [View article]

    I think you're right about this. I think it would take a strong beat, like EPS 2.44 AND either great guidance or some huge (15%) increase to the dividend to get this stock moving. Numbers that are "merely great" will not do much to stem the downward pressure this stock will have from the perception that the second half of the year is when iPhone 6 sales will be winding down.

    I think a blowout beyond what is even expected is possible, but it seems very much less than a sure thing. Apple could have their second best quarter in history and see the stock little changed or even lower in after hours.

    But the long term investor needs to remember not to read too much into this. Strong numbers will eventually win out. Apple mints money and that takes the stock higher over time.
    Apr 27, 2015. 10:52 AM | Likes Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]

    I assumed maybe he had had some negative experiences fending off attacks from bullies at the country club. I pictured his previous watch breaking as he tried to block the swing of some angry golfer who insisted he was taking too long at the tee.
    Apr 26, 2015. 12:57 PM | 1 Like Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]
    Frabjous, I'm surprised you managed to take a bearish interpretation of my comment.

    Replacement cycles do not grow markets (by definition). The only thing that can grow markets is adding users. Given global populations, I think it is obvious that the largest growth in the smartphone market is complete. And if you missed the thrust of my comment it was to suggest that there is still some growth left.

    I honestly did not expect anyone to take my suggestion that the smartphone market is finite to task.

    Please re-read my comment and see if you still think I'm being unreasonably bearish. I said I expect hundreds of millions of new smartphone users in the coming years.
    Apr 26, 2015. 12:45 PM | 2 Likes Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]

    If Apple's moat fails stop intruders, they can rely on their huge wall of cash to protect them.

    To be specific, they have enough money to buy up disruptive ideas. Presently, they may not look like they are eager to engage in large buy-outs, but that is largely because they are under no immediate threat. If someone starts eating their lunch, they'll buy a new restaurant.

    Apple could use some decent competition. It would help fan the flames of their creativity. Apple has enough money to swing at a few wild pitches. They won't all be home runs, but it only takes one. Right now they are sitting on the lead, and I think that is probably not when they are at their best.
    Apr 26, 2015. 12:35 PM | 2 Likes Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]
    Allen, I had just a few shares a long time ago. I sold them for what I thought was a decent profit in 2005. Please learn from my example so I can think that something good came from my stupidity.
    Apr 25, 2015. 07:09 PM | 10 Likes Like |Link to Comment
  • Apple: Bear Case From A Bull [View article]
    The smart phone market is certainly finite, but I wouldn't assume its growth is done. There are still hundreds of millions of feature phone users, many of whom will eventually become smartphone users. The market is nearing the end of its growth, but there is still room for Apple to grow iPhone sales with existing market share.

    The simplest counter argument to my claim is that anyone still using a feature phone is more likely to buy an inexpensive smart phone as opposed to an iPhone. I think this is true, but I expect that there will be a concurrent migration of many entry level smartphone users to more robust models. So as the market expands, it also shifts a bit.

    Calling the top on the smartphone market was a popular bear pastime in 2013, but this past year has shown the market is still growing. Eventually it will reach saturation, but a couple hundred million more users can make a big difference over the next few years.
    Apr 25, 2015. 06:54 PM | 7 Likes Like |Link to Comment
  •'s AWS Is Much More Valuable Than We Thought [View article]

    Apple and Amazon are surely two different companies. But if profits mattered in AMZN's valuation, we wouldn't be in this position.

    There are only two questions. Will profits ever matter, and will they be able to generate them when they do? Bulls argue profits don't matter yet and they will be produced when they do. Bears argue profits must matter eventually, should matter now, and they are unlikely to be able to produce numbers large enough to justify the present valuation once they do.

    But is is hard to make a case that profits matter at the present time.

    I'm sticking with my thesis that eventually profits will matter. And in so doing, I am so far no more right than Blair has been about Apple.
    Apr 25, 2015. 12:04 AM | 2 Likes Like |Link to Comment
  •'s AWS Is Much More Valuable Than We Thought [View article]
    Ptatty, it certainly has been a waste of money.

    I am starting to feel like the Michael Blair of Amazon, but I remain "short the name". A whole bunch of people have made piles of money on AMZN and I salute them for their courage or foresight or whatever it was that prompted them to invest. But the numbers just keep looking uglier to me. Which is a coincidence because my short position keeps getting uglier as well.

    Who knows, maybe someday the shorts will declare victory. You can not argue with the fact that this stock keeps climibing, though.
    Apr 24, 2015. 05:30 PM | 3 Likes Like |Link to Comment
  • Apple Earnings Preview: It's All About iPhone Sales Momentum [View article]
    Thanks for the chuckle.
    Apr 24, 2015. 05:22 PM | 16 Likes Like |Link to Comment
  • To What Extent Does The Apple Watch Affect FY 2015 Results? [View article]
    I didn't mean heart rate. I get why some fitness buffs would like that. I mean sharing your heartbeat. I have not heard of this on other devices and I guess I'm not sure of the appeal. It seems corny, like blowing someone a kiss.
    Apr 24, 2015. 05:16 PM | Likes Like |Link to Comment
  • To What Extent Does The Apple Watch Affect FY 2015 Results? [View article]
    182, it is my ambivalence about the watch that makes me eager to read what others have to say and why they do or don't like it. Sorry if I looked for a watch argument where there is none.

    I have defended the watch, because I think there is something there. At least I think wearables are the future of mobile. Some arguments against the watch I think are weak on the face of it. But I ordered my own watch not because I am convinced I will love it but more because I feel the need to experience myself and see what it does and does not do for me.

    If a restaurant I had invested in offered something new and possibly strange on the menu, I'd probably be inclined to stop by and try it so I could decide whether I thought they were on the right track. I suspect the watch can not logically be a flop in the way that the Newton was. There are just too many people who will enjoy it even if it has a marginal use case and too many others who are curious like me. But whether this really does grow into a must have device in its 2nd and 3rd generations is very much up in the air.

    I do like that Apple seems to get that there is a fashion component. That's something Google realized too late about Glass (and also that few people eagerly wear glasses). So props to Apple for bringing in some fashion sensibility to the Watch project.

    But I have seen the latest ads Apple has for the watch. I don't find them compelling. I think there may well be a killer app, and it may even be Apple Pay. But nothing in the ads leaves me feeling any more excited about getting my watch in a few weeks. I just don't get the heartbeat thing. Maybe I'm jaded. Micro sketches seem like they will get old fast. Just not sure about this, yet. Optimistic in the short run, but unconvinced that The Apple Watch is the defining model in the way the iPad and of course iPhone were.
    Apr 24, 2015. 03:16 PM | Likes Like |Link to Comment