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Dialectical Materialist

Dialectical Materialist
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  • Apple: The Ultimate Value Play At $520 [View article]
    I said ".7" billion, which is 700 million, as you suggest, or 1 million shares at 700.

    No I get your point, and I don't think you are far off (if at all). Max pain on AAPL for January options is 550 right now. I fully expect AAPL to be around that level on the day of earnings. But depending on the news, the powers that be may have their work cut out for them. They are powerful, but not omnipotent. For example there is no way they could keep the stock from crashing if a series of meteors took out a bunch of Foxconn plants in China and the Apple headquarters in Cupertino. Real world events will move the price regardless of what the big money wants. Similarly, very big news from Apple would make it hard to keep the price down. And the nice thing about the market is that there is always someone willing to outsmart everyone else. Trying to get out in front of the upward move will be the self fulfilling prophecy that drives the price higher in the weeks after earnings, in my estimation.

    I could be wrong. It wouldn't be the first time.
    Jan 12 03:22 AM | 2 Likes Like |Link to Comment
  • Apple: The Ultimate Value Play At $520 [View article]
    wiesje,

    I appreciate your analysis. I do wonder about one point though. The idea that there is no one left to own Apple is oft repeated. By my question is who were the ones selling when the price dropped 25%? If it was some of the big funds, then those folks trimmed their Apple exposure and by definition have room to get back in. This is especially true since they presumably made money and now the percentage ownership would be a piece of a larger pie.

    To use crude and simple numbers, a 70 billion fund with 1% in AAPL would have .7 billion in AAPL or 1 million shares at $700. If they sold their position near the peak, they'd still have 70 billion. And a 10% portfolio limit would now constitute room to purchase 1.33 million shares @ $525.

    So my point is that if some of that selling was part of "re-balancing", then they have room to add now that the price has come so far down. Why would they want to add? That's a good question. The only reason a fund would want to add shares at this point is if they thought there was upside. A blowout earnings and good guidance could convince some people that there is indeed upside. A little short covering sparks a rally, and the next thing you know, we have funds piling back into Apple to get in on the action.

    If there was enough capital to drive the market cap up to nearly 700 billion in September, there should certainly be the money to do it now. Especially since the smart money sold near the top!

    I'd be interested in your opinion of my scenario.

    And incidentally I do not think that AAPL will magically re-capture its highs. As much as I would like to see that happen, you can look at any chart and see that even dramatic runs like the one last winter were no faster than 20% in 5 or 6 weeks. This means the low 600's would be a stellar run. It would take some real force to drive AAPL higher any time soon.

    But what about an earnings call with stellar numbers, an increased dividend, and a deal with China Mobile? It's not likely to play out that way, but if it did, I wonder how much it would propel the stock.
    Jan 12 12:15 AM | 2 Likes Like |Link to Comment
  • The Shanghai Evening News, the Chinese paper that yesterday published an interview with Apple (AAPL) marketing chief Phil Schiller, has revised the interview's text to remove remarks about how a cheap iPhone "will never be the future of Apple's products." Now, Schiller is simply quoted as saying Apple will "never blindly pursue market share," and is focused on making "the best products." That leaves some leeway for WSJ/Bloomberg reports about a low-cost iPhone project to pan out. [View news story]
    "Let's see if that $475 level holds on the stock, or this thing will become a death spiral."

    Holds? It hasn't even been tested. Let's not get ahead of ourselves.
    Jan 11 08:53 PM | 5 Likes Like |Link to Comment
  • Global Trends Will Boost Nokia's Margins In 2013 [View article]
    Jessica Alba is a paid endorser of the Lumia. That explains why she was carrying that phone. The message they want to send is that women will choose this phone. But being paid to carry the phone does not prove it is a convenient weight.

    Interestingly, she is also carrying an iPad, which no one paid her to do...
    Jan 11 12:40 PM | Likes Like |Link to Comment
  • Apple Cash And Investments Are Disclosed And Supports The Stock [View article]
    It wouldn't hurt my feelings any if some of the money was in MSFT and INTC. I think these are solid companies that are unlikely to tank. That is exactly where this money should be. Until they build that space station or whatever else it is that they seem to be saving up for.
    Jan 11 02:29 AM | 1 Like Like |Link to Comment
  • Apple (AAPL) has seen some ex-employees take shots at it lately. Former sales exec David Sabotta criticized Tim Cook's people skills, hiring acumen, and passion for technology. Former engineer Dan Crow argued the same top-down business structure that allowed Steve Jobs to build an empire is now a liability, since no one can fill Jobs' shoes. And last month, Steve Wozniak called Apple "arrogant" for refusing to make a larger iPhone. "Not all people want the same thing. A lot of people want the big screens." [View news story]
    "...when it was shut down without any reminder. They have been warning since June or so of last year..."

    So even though they have been warning since last June and you were aware of this issue, you wanted a reminder? Would it have prompted you to take action?

    "If you had a working @mac.com email address as of July 9th, 2008, kept your MobileMe account active, and moved to iCloud before August 1st, 2012, you will be able to use @icloud.com, @me.com, and @mac.com email addresses with your iCloud account."

    http://bit.ly/Xou9Xg

    So your email address would remain usable if you had created an iCloud account. That you chose not to do so is certainly your business. But based on what you have written about Apple over the last several months, it sounds like they had you not so much by a tether but by the thinnest of threads.

    I hope you will continue to comment on how well the Android platform meets your needs. I am curious about what computer platform you will end up using. You had mentioned Windows a while back. It seems a WP8 phone like the Lumia 920 would be perfect for such an arrangement. I'd be curious how well your Android mobile life and your PC life (mac or windows) combine.
    Jan 10 08:09 PM | Likes Like |Link to Comment
  • Global Trends Will Boost Nokia's Margins In 2013 [View article]
    I am long Nokia and their strong Lumia sales did not come as a surprise to me. But it is not yet an iPhone killer. There is not even any proof yet that WP8 has legs. And I think thinner and lighter is generally a good idea for all electronic devices. Sales figures suggest this is true. Given the opportunity, folks will frequently upgrade to thinner and lighter. This actually gives Nokia lots of room to improve the Lumia line as they go.
    Jan 10 07:52 PM | 2 Likes Like |Link to Comment
  • Global Trends Will Boost Nokia's Margins In 2013 [View article]
    Do anecdotes about co-workers count as facts? How about sales figures? The Lumia line has sold fantastically. But they aren't even in the same order of magnitude as iPhone sales, are they? The only real way to measure consumer preference is not a review, nor is it an anecdote. It is described by the sales figures.
    Jan 10 06:30 PM | Likes Like |Link to Comment
  • Apple's Upcoming Earnings Beat [View article]
    CEBarnes, your logic is not quite right. If the measurement is users (accounts) and not iOS devices, then when an existing account holder buys a new device it would not show up under your methodology.

    They added 100 million accounts since June, not iOS devices. That actually looks like very good news.
    Jan 8 11:47 AM | 2 Likes Like |Link to Comment
  • An Apple Repeat Of Last Quarter? [View article]
    oregondean, If you are not already aware of it, you may be interested in checking out the work done by Philip Elmer-Dewit at Apple 2.0. If you google "Apple 2.0 earnings smack down" you will see that he has tracked each quarter before results what a number of pros and bloggers have to say about Apple earnings. Importantly, he then ranks them by how well they have done both in that quarter and in the past year. It's good stuff, and it shows you who to take seriously and who to ignore.
    Jan 7 07:13 PM | 2 Likes Like |Link to Comment
  • Apple's Possible Production Nightmare Scenarios [View article]
    One correction to your correction. The author is correct. Apple's iPod sales by qtr in 2012 were 15.4; 7.6; 6.7; 5.3 (million). Total for the year was 35 million.
    Jan 7 11:09 AM | Likes Like |Link to Comment
  • Apple's Cash Hoard Is An Asset, Not A Liability [View article]
    Tim Cook: I was collecting those gold bars to make something out of them.

    Therapist: But you haven't actually made anything out of them have you? They've just collected into a big pile. Now we're going to go through them one by one and see if there are any gold bars you can part with...
    Jan 6 09:32 PM | 5 Likes Like |Link to Comment
  • Apple (AAPL) has seen some ex-employees take shots at it lately. Former sales exec David Sabotta criticized Tim Cook's people skills, hiring acumen, and passion for technology. Former engineer Dan Crow argued the same top-down business structure that allowed Steve Jobs to build an empire is now a liability, since no one can fill Jobs' shoes. And last month, Steve Wozniak called Apple "arrogant" for refusing to make a larger iPhone. "Not all people want the same thing. A lot of people want the big screens." [View news story]
    "I'm an ex or former-marachino cherry consumer. "

    Cue Typical Seeking Alpha Response:

    You obviously have no idea what you're talking about! Maraschino cherries are the best cherries there are. They are way better than bing cherries. I guess you're probably a grape lover. Well, okay I'll give you the wine thing, but other than that grapes are useless. If you think maraschino cherries are so bad I guess you had better not watch in 2013 when they take off. Maraschino cherries will leave all others in the dust.

    Disclosure: long maraschino, short bing, also olives and grapes.
    Jan 3 08:49 PM | 1 Like Like |Link to Comment
  • Apple: Don't Follow The Herd [View article]
    "I really think the 400's are a thing of the past. "

    That's what I thought about the 500's. Or at least the low 500's. I'd like to believe you are right, but anything is possible.

    Even if AAPL crushes the next earnings report, will it be enough? Or will the new argument be, "Oh, sure, you did great during the holiday quarter, but what now?"
    Jan 3 08:35 PM | Likes Like |Link to Comment
  • Apple: Don't Follow The Herd [View article]
    "Nokia planning aluminum body for thinner, lighter Lumia 920 successor"

    Luke, elsewhere you said (about the iPhone 5) that no one was asking for thinner and lighter. So is this good news from Nokia or a sign that they are out of ideas?

    My take is that it is good news. I think thinner and lighter are always important. If for no other reason, pushing the envelope of how thin and light something can be allows for something of the same thickness and weight to be packed more full of power and gadgetry.

    I would be the last one to argue that a thinner and lighter (and faster) model constitutes the same level of innovation that the original device had, and this would apply to the Lumia as well as the iPhone. But it is still undeniably an important product improvement. Since the Lumia is one of the heaviest phones on the market, it is great news that Nokia is planning on doing something lighter. But can't be pointless on the iPhone and worthwhile on the Lumia, can it?
    Jan 3 08:13 PM | Likes Like |Link to Comment
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