I really believe my readers, especially those long Apple (NASDAQ:AAPL) deserve a mea culpa. I believed, based on the data available at the time (right before earnings), with close to 1/3rd of Apple's Q1 sales base having reported, that iPhone sales were tracking well below Street estimates.
And yet, Apple delivered another incredible blowout. Certainly, helped by a monstrous quarter out of China, where demand for Apple's products, even at pretty high prices, is still enormous. Granted, there is now a vast Chinese middle to upper class that really has the means to buy Apple, but it's still surprising that they all got out running at the drop of a hat.
Again, I missed this call. Badly. But would I do it the same again if presented with the same information? Yes, I'd have to. One has to play the market logically, even if some calls will be wrong some times. For me, I must say, it could have been worse. I was contemplating taking the short trade. I only avoided a loss on the trade because I couldn't locate any OTM puts that were cheap enough to compensate for the risk. This is a lesson, even a trade that seems rather safe needs not only the odds, but also the pricing to match it. I didn't have the pricing though I thought I had the odds. So I didn't take the trade. Of course, in hindsight maybe the odds weren't great either. Maybe I should have known that China's middle/upper class was chomping at the bit to buy every iPhone they could gather (even though they didn't do the same for the iPad).
Finally, Apple was the iPhone before this quarter. That's even truer today, after this earnings report.
And again, yes, I got this one wrong. Mea culpa.
(I am posting this as an Instablog, since I really shouldn't be earning the pageviews on this one. I expect to do better - and mostly will do better - in my calls)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.