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Dialectical Materialist

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  • 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 | Likes 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 | 1 Like 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 | 2 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 | 16 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
  • Why Apple Still Leads In Mobile Devices Over Microsoft And Google [View article]
    pk, All I missed was adding the sarcasm tag. I was joking.
    Oct 10, 2015. 12:46 PM | Likes Like |Link to Comment
  • Analysts Are Bearish On Apple - Should We Be Bearish Too? [View article]
    stevewojo, Agreed. Or as Buffett said, "Calling a day trader an investor is like calling a one night stand a relationship".
    Oct 9, 2015. 09:20 PM | 4 Likes Like |Link to Comment
  • Why Apple Still Leads In Mobile Devices Over Microsoft And Google [View article]
    Right Pimust. The iPhone shows us that 17% = 92% profit share. Not 100%.
    Oct 9, 2015. 07:37 PM | 4 Likes Like |Link to Comment
  • Apple TV: The Amazon Ban Won't Hurt A Bit [View article]
    pk, I also come up empty, but I do see lots of articles about using Airplay to watch Amazon video on your Apple TV (which you have been able to do for a couple years). I have watched Amazon video on Apple TV using this method (usually as a last resort when the content isn't available or is too expensive elsewhere), but I don't ever remember an app directly on the Apple TV.

    Airplay support for Amazon Video was something that was added by Amazon, btw, not Apple. Not everything that happens to apps is under Apple's control. Features and availability are often the choice of the app maker.
    Oct 7, 2015. 11:15 AM | 1 Like Like |Link to Comment
  • Apple: How About An iPad Upgrade Program? [View article]
    "questionable that they can be sold at profitable prices because Verizon and Sprint will be selling used iPhones in competition with Apple because of their leasing plans."

    Don't you think most of Apple's second hand phones will be headed to markets in other countries, like India? I do.
    Oct 4, 2015. 08:14 PM | 2 Likes Like |Link to Comment
  • Apple: iPhone 6s Orders Are Likely To Be Tracking Below Last Year [View article]
    Gregg, That is indeed impressive. It is one of those ideas that sounds kind of obvious after the fact, like many great ideas do. King-Man+Woman arrives at a place close to Queen. Pretty clever indeed.

    They seem to be using it for language translation, but it sounds to me like it could have exciting possibilities for machine learning as well. With a language space mapped in memory, an AI could hear the words "Queen Elizabeth" and use vector analysis to surmise this is an English name and a word that suggests female ruler.

    Without ever coming across the exact name before, and without doing an encyclopedic style "lookup", it could already "surmise" that this phrase refers to a Ruler in an English speaking country.

    If you hear the name King Jose' you may not have a clue who this refers to, but you would get the general idea this may be a Spanish ruler. You also know that the title "King" is sometimes symbolic, so you may guess that this is a person of some renown or level of accomplishment who is ethnically Hispanic. So starting from zero, with no encyclopedic lookup, you get something from the meaning of the words.

    Giving a computer a similar method for tying concepts together using a vector map seems very interesting. In this sense it would not be used for translating from one language to another but from certain "known" words in a language to other new words or phrases in order to give them context.
    Oct 3, 2015. 08:33 PM | Likes Like |Link to Comment
  • Apple: iPhone 6s Orders Are Likely To Be Tracking Below Last Year [View article]
    I certainly agree the progress is astounding.

    It will be interesting to see how well humans can keep up with the accelerating pace of technology and the social transformations it causes. 100 years ago each generation had time to digest the new paradigms, and even that pace caused "generation gaps". Now we are seeing social structures evolve much more quickly. Today's kids don't understand what it was like not to be globally connected 24/7 through a mobile device, which was the way all previous generations of humanity existed. Yet even they may have trouble keeping up in the world their children will live in. Machines can adapt very rapidly. Humans maybe not so much.

    And I don't mean to ignore the story you linked to. I'll have to check it out when I have time to sit down.
    Oct 3, 2015. 04:15 PM | 1 Like Like |Link to Comment
  • Apple: iPhone 6s Orders Are Likely To Be Tracking Below Last Year [View article]
    Paulo, I agree that a big risk (in my opinion the biggest risk) to iPhone sales is the "good enough" factor. I am old enough to remember the days when you had to upgrade your desktop computer every couple years because if you didn't you were essentially crippled. The new machines were just too much of a leap forward to ignore. But now, sure they're faster, but good enough is good enough, right?

    Except we also need to realize that the same pace of progress that made new desktops a yawner brought us the mobile revolution. We don't need to upgrade our desktops as much because that scene is played out, but ever more powerful chips gave us a new gadget to upgrade -- the smartphone.

    So we need to project out a bit into a world where phones are so sophisticated that upgrading is not so compelling (and even cheap-o phones are comparatively amazing). What does that world look like? Will ever smaller and more powerful chips be used in news ways beyond smartphones? Of course they will. And the obvious next campaign in the silicon revolution is wearable computing.

    So Apple need not persistently make an iPhone that has a compelling upgrade case any more than it needed to do that with the iPod. It needs to simply field a team in the next arena. Right about the time smartphones are so amazing that they are yawn worthy, the new compelling annual upgrades will be in wearable devices. And like personal computers and smartphones before them, they'll go through the life cycle from gee-whiz products, to useful, to essential and finally to mundane.

    It may very well be that only the best of the best smartphones will play well with all the wearables that we will use in the future. If that is the case, then the use case for the latest iPhone is baked in. But if it is not -- if the "good enough" moment arrives. All Apple will need to do is ensure they are making compelling and increasingly enticing wearables.

    Right now, Apple relies on iPhone sales. But that's fine, because consumers clearly find iPhones desirable compared to many less expensive models. But Apple is making the right moves to compete in the next compelling category. Since the invention of the micro-chip there has always been SOMETHING that had a compelling upgrade case.
    Oct 3, 2015. 02:36 AM | 3 Likes Like |Link to Comment
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