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  • Apple: Desperately Seeking Capitulation (Part 2) [View article]
    George,
    Thanks for another excellent article. I was thinking of your last article this week and wondered how I might find out your current thinking - and here you are.
    I agree with your conclusion based on the lack of volume, the next support level not being until $350-$360, and that it won't happen until after the next earnings report and analysts start to seriously drop their targets wholesale.

    UNLESS, Apple increases the dividend this quarter - I'm not holding my breath.
    Apr 22 12:40 AM | Likes Like |Link to Comment
  • Apple: Desperately Seeking Capitulation (Part 2) [View article]
    George,
    Thanks for another excellent article. Your last article came to mind this last week and here you are answering my unasked question. Was this week capitulation or not. I agree, it was not. I think the lack of volume is the key. That, and 1) the next technical support level is not until $350-$360, and 2) price targets need to start really coming down. Then we'll see the end. None of that will happen until after April 23's earnings report.
    Apr 22 12:33 AM | Likes Like |Link to Comment
  • Another day, another low-cost iPhone (AAPL +1.3%) report. RBC's Amit Daryanani says his checks indicate a cheaper iPhone with a plastic case and a 4" non-retina display is on the way. He thinks it will arrive in the June/July timeframe, sell for less than $400, and (after modeling various scenarios in a spreadsheet) add $22B in sales and $5 in EPS to Apple's 2014 results. For those keeping score, RBC, Jefferies, KGI Securities, Sterne Agee, and Goldman have all predicted a cheaper iPhone will arrive, but the details they provide vary plenty. [View news story]
    One way or another the Apple story is not over. There are hundreds of rumors about all things Apple but the bottom line is the price. Has it bottomed or not.
    I find it significant that today is the exact 6 month anniversary of the Friday, 9/21/12 peak. 26 weeks ago today it hit it's all-time high, then topped out on 12/3, 1/2/13, 3/19/13 (3/21/13 also touching it)- all of which formed a perfect long-term trend line. Broken for the first time in 6 months today - to the day.
    Also, if it closes at or above 460 it will have closed above the 50 day SMA for the first time since October 4.
    BUT, who knows.
    Mar 22 12:40 PM | 3 Likes Like |Link to Comment
  • Apple: Developing A Reasonable Expectation [View article]
    I just went back and reviewed the Bill Miller comments from last week on CNBC. He gives no timeline but clearly, after talking directly with Apple, believes sooner rather than later. As my son likes to say in understatement about something that excites him, "That would be nice."
    Mar 20 01:07 PM | Likes Like |Link to Comment
  • Apple: Developing A Reasonable Expectation [View article]
    Thanks, Bill, once again.
    I believe a dividend increase is superior to a buy back as it is sustainable and on-going. And it brings in an entirely new class of investor. Those that don't sell at the slightest drop in growth.
    If the dividend increase is in the 50% range and the yield settles out at 3.00% that means a value of $530 (right where you are at.) However, if an additional $10B of buyback occurs right now, on top of what has already been announced, it's an un-leveraged, one time boost of maybe $10 (calculated by using the current PE versus the EPS gain that would result).
    Also, I consider all this talk about a dividend increase pre-mature. This is a very deliberate company. Other than the March 19, 2012 announcement that the dividend was being brought back, all announcements have come at the earnings report. The next report on April 23 will only be the fourth dividend. I believe it will be the July 23+/- report at which an increase, if any, will be announced.
    I'd like to know if you disagree and think it would be sooner - though I would be utterly amazed if no increase was made.
    Mar 20 12:30 PM | Likes Like |Link to Comment
  • Apple: Do You Hear The Crickets? [View article]
    The question of whether or not management has a duty to "speak-out" is fodder for a very very long conversation. One aspect of which would certainly be any moral or ethical obligation to lead and motivate the "team." (A nod to sports fan Maurer there.) You can decide who that team is but I believe it includes the employees, customers AND the investors. In most businesses this would be relatively straightforward and mundane. In the world of culture changing technology, it is an obligation that Mr. Cook, whether or not he wants it, has.

    I do not know the name of the head of IBM, GOOG, SAMSUNG, or any number of other great companies in a variety of industries. But we all know Tim Cook - he's the guy who has to fill Steve Jobs shoes. And we know others such as Meg Whitman, Jeff Bezos, Warren Buffett, etc. but they are the exceptions from the rule. So there is a face to Apple. And Tim Cook is that face.

    He makes it extremely clear that he wants Apple to focus on only one thing, making the best products in the world. And that is awesome, that is why I am certain they will be around for a very long time. But the team needs to know and believe that they are not operating in a vacuum. A short, bullet-point laden earnings call once a quarter is not enough. Weekly talk show appearances would be too much. But once a month giving a glimpse into the future would be nice in lieu of relying on rumors alone.

    Saying you are taking Daniel Einhorn's concerns seriously and working very hard at studying the issue of the cash you acknowledge is more than you need, while having weeks and months go buy without a real response is not right. Announcing with pride that you will be returning $45B over three years of which only $10B is buybacks is insulting to Einhorn and the rest of us. I'm all for paying excellent employees excellently but all such a relatively small buy back does is cover their paychecks with other people's money. It does nothing for shareholders.

    I believe in Mr. Cook's integrity and customer first mentality but it must not result in indifference to employees and those who pay his salary and hundreds of millions in options.

    That said, I have played this both ways: I am short October $550 Puts and put on a short stock position on declines and take it off whenever I can. Don't want to be caught with my pants down (covered by the short stock position) when an announcement of any sort is finally given. I'm 55 and feel like I'll be 70 before that happens.

    Lastly, advertising. It has a major impact on investor and employee psychology as well as on consumers. Apple's advertising genius has been fumbled. Samsung has picked it up and is running for the goal line. Apple, please get people back into your ads!

    Thank you, Mr. Maurer.
    Mar 16 10:24 AM | 1 Like Like |Link to Comment
  • It's Time To Dump Apple And Buy Amazon [View article]
    Richard,
    To be a contrarian is to always be picking tops and bottoms. Your always looking to go the other way. However, your article indicates you are a trend-follower. Your argument is based on virtually price alone. AMZN is above a 6 month MA and AAPL is below. AMZN is showing stronger relative strength. In a book called What Works on Wall Street (a fascinating book now in its fourth edition - I only have the first edition but I believe the conclusions are the same) Price/Sales (low) and Relative Strength (high) were the best predictors of future returns one year out. This is a very in depth long-term study. I highly recommend the book. And you, sir, are right there with it.

    However, you state, "I am not an in depth analyst of either of these 2 companies", nor need you be if you truly are just following the trend, but beware, the fundamentals and price relative to those fundamentals is hugely in Apple's favor. I'd have my stops in place!!
    Mar 15 02:21 PM | 4 Likes Like |Link to Comment
  • Apple: Desperately Seeking Capitulation [View article]
    Part of me wants to agree with you in that I would like to see capitulation as it usually indicates a clear bottom, at least for a few months minimum. HPQ comes to mind here.

    I trade against a 126 day (6 month) simple moving average - I want to be long "above average" stocks and short "below average" stocks. Pretty simple really once I worked out a way to not get whip-sawed too badly. Anyway, HPQ at it's low was 36.56% below it's moving average. AAPL got down to 27.08% below it's MA on the second day after the earnings break in January and hasn't been that low since (relative to the MA.) Perhaps that was it's capitulation?

    Since the second day after the January gap it has been up on each of the highest 4 volume days and drifting downward on lower volume (on average) on down days. The inherent valuation is by virtually anyone's opinion way undervalued. The price of the stock (and it's decline) has kept the weak retail owner out of the stock except in small amounts. And the institutional buyers are transitioning to stronger newer owners (IMHO). So, I don't see capitulation happening. Though it may drift lower ($390-$400) I don't see the sharp break.

    On the other hand, a positive Black Swan event (a White Swan??) could happen at any moment. A positive catalyst could come in many forms that have been explained ad nauseam elsewhere and the resulting rise in price would be more dramatic I think than any drop at this point.

    As to valuation and HPQ, since I offered it as a comparison, it had gotten down to under a 4 PE going forward, but a large part of it's business is in literally a declining industry rather than a mildly slowing industry (smartphones). I think that's another significant difference.
    Mar 7 11:27 AM | Likes Like |Link to Comment
  • The Market Cannot Remain Irrational Forever [View article]
    "Forget about buying low and selling high, in this market you have to buy at bubble valuations and sell at bubble valuations to the second power."

    Love it, George. You made me laugh. That's where I've gotten to anyway. Not much more you can do. Bottom line: the market's always right. And: the market's always above or below true value - which in itself is in the eye of the beholder.

    Short deep ITM Apple Covered Puts and Amazon Covered Calls - will pull the stock off each respectively when they finally reverse their respective positions. All I can do. An outright long Apple/short Amazon would be killer due to the widening spread!

    Just keep swimming.
    Mar 5 06:49 PM | 2 Likes Like |Link to Comment
  • The Massive Underperformance Of Apple Vs. Amazon [View article]
    Paulo,
    Utterly amazing. The 5 year and May, 1997 charts, as you point out coming from where each company was at the time, are stunning!

    Thanks,
    Mar 5 05:37 PM | 7 Likes Like |Link to Comment
  • Herbalife: Here's Why You Won't Hear Ackman's Defense This Time [View article]
    Option III: Sell deep in the money Puts with short expirations.
    Mar 1 10:10 AM | Likes Like |Link to Comment
  • Hewlett-Packard Is A Fallen Angel That Can Double In 3-5 Years [View article]
    Tim,
    The fact that you received kudo's from Chuck Carnevale is good enough for me. Will begin following immediately. And oh yeah, I agree, I've been long since Meg Whitman was named. She is a corporate culture changer.
    Liber8
    Feb 22 10:11 AM | 1 Like Like |Link to Comment
  • Apple Doesn't Have A Problem, You Do [View article]
    One of the things I've been fascinated with is the talk of a prior "exponential" rise in the stock price and "clear evidence" of a bubble - as indicated by btbriant: "In the first half of 2012 with Apple's earnings and margins seemingly increasing exponentially the stock price followed suit and Apple entered bubble territory. For any neophytes out there, bubbles pop."

    I've lived through the markets of 1968 to now and I've seen a few bubbles. When the high price is $705.07 and the fiscal earnings ending that same month are $44.15 for a P/E of only 15.97 - that is NOT a bubble. 1996-1999 was a bubble.

    As has been said in various other places; this is a correction based on tax law changes (last year), product role out bringing margins back to where they were prior to the anomaly of the last couple years, and most importantly a change in share ownership from the growth investor crowd to the value crowd. Nothing more. This is not the worst correction Apple has seen in the last 10 years.

    The margin covering sales that has been reported are only relative to last Thursday and Friday.

    Now Netflix is a bubble. Amazon is a bubble. Wondering if btbriant is long either of those?
    Jan 28 12:22 PM | 1 Like Like |Link to Comment
  • Chimera's Mixed Signals: Another Delayed Filing, But Company Maintains Dividend [View article]
    Zvi, thank you once again for your insights. I always look forward to them.
    Mar 2 08:57 AM | Likes Like |Link to Comment
  • Sell Chimera Before The Earnings Announcement Tonight [View article]
    I do not mean to mislead, sorry. I do not believe world-wide economies will improve in the short term. I believe that world-wide economies will begin to significantly improve about 12 months from now (spring of 2013) and be fully in recovery mode by the end of 2013. I base this on three things:
    1) The second major wave of ridiculous adjustable mortgages went from record high volume to virtually nothing in a matter of about 6 months (rather quickly) and the rate resets on these will all occur by the end of 2012. A LOT of these have already been dealt with but for those that have not, it will be the trigger to keep foreclosures high for a time. It takes about 6 months for these foreclosures to work through the system and I expect that to be done, and the housing market world-wide to improve, beginning in spring 2013.
    2) I believe that in America and elsewhere there will be a significant move toward fiscal responsibility once America realizes that the path we're on will bring us to exactly the same result as Greece. And there is no doubt in my mind that Obama-care will be drastically over-hauled regardless of who is elected in November. But I freely admit much of my hopes are pinned on Obama's defeat and the return to sanity where business creates lasting jobs. I mean really, no sane person can consider that 170,000 new White House jobs in three years, all creating and enforcing a constant barrage of new regulations on everything from rubber gaskets to electric cars to video games is the way to create permanent jobs that will GROW the economy. Sooner or later, that will end - hopefully, sooner.
    3) Europe is now in the grips of an identity crisis, not to mention the financial crisis. I firmly believe, on the basis of history and confidence in the human spirit, that though the pain may be intense for a time, solutions will be found and they will be forced to accept that they have to get up in the morning and go out and care for themselves and grow their own personal economy - as soon as this current crisis forces governments to get out of the way. It wouldn't surprise me in the least if Greece became an economic powerhouse 10 years from now. It's happened before.

    Time is on our side. It may get worse, and it will in pockets here and there, but by 2013 the pain will be subsiding, housing will begin to recover, and optimism will return.
    Feb 13 10:45 AM | Likes Like |Link to Comment
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