Things We Lost In The Fire
by ilene - June 8th, 2010 1:53 pm
Things We Lost In The Fire
Courtesy of Joshua M. Brown, The Reformed Broker
Over the last month, US markets have been burned to a crisp. Blame it on Europe, blame it on a softening of our own recovery data, blame it on the end of earnings season, blame it on the end of quantitative easing, blame it on the Gulf spill, blame it on the engineered cool-off in China.
Is it too soon to eulogize the March 2009 – April 2010 bull market, a 78% performer that even the most bullish never really believed in the entire way up? Depends on which support lines and moving averages you happen to be fixated on at the moment.
But it is certainly not too early to lament the Things We Lost In The Fire - the idiosyncrasies of the Impossible Rally that we may have lost for good. These include:
Apple as the Michael Jordan of the NASDSAQ- Steve Jobs had us from hello, we clamored around the television for each product release and conference, and Mr. Jobs did not disappoint. Nor did Apple stock, which seemed to go up 3 to 5 points a day for what seemed like an endless stretch of time. It was a reminder to stockpickers everywhere that ETFs didn’t control everything- that you could get one right on research. The release of the iPad and the move toward shattering the $300 per share mark epitomized the release of our pent-up optimism and will always be remembered as a special time in market history.
Cree Research, Green Mountain Coffee and Baidu- The hottest of hot…
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DiggAs Apple’s market value explodes, questions abound…..(AAPL)
by ilene - April 25th, 2010 11:06 pm
As Apple’s market value explodes, questions abound…..(AAPL)
Courtesy of The Alpha Ninja
Brett Arrends of the Wall Street Journal has a must-read for anyone owning Apple (APPL) shares, titled "Seven Reasons Apple Shareholders Should Be Cautious." It pretty much implies to anyone invested in the stock market, as Apple is the S&P500′s second biggest weight, behind ExxonMobil.
I won’t list all 7 reasons Brett cites, but among the more important are:
5. The cellular networks. At what point will they stop giving away the store? Right now they’re paying most of the cost of each new iPhone, and under-charging for the data plans too. That’s great for customers and great for Apple, and bad for the networks.
3. The share price. At $260, Apple’s stock price has more than doubled in a year. Amateur investors say, "It’s going up." Present tense. Serious investors say, more accurately: "It has gone up." Past tense. No one knows the future. And the more it rises, the less attractive it gets. It’s now 20 times annual cash flow and 5 and a half times annual sales. At $235 billion, the company is being valued at more thanSony, Research In Motion, Dell, Motorola, Nokia, HTC,SanDisk and Palm … put together. That assumes a lot.
To the first point, I’m not in agreement. AT&T signs people up for a two year contract pulling in $70-120 per MONTH, on a device that sells for $500ish without a contract, and even that is only to protect the Apple "brand." If anything, networks could GIVE the phones away, with economics like that. Ever heard of a car that costs $30,000 to buy, but $$8,000 per month to USE? Neither have I.
The second point is the bigger worry. At what point does the "law of large numbers" intervene, capping Apple’s market value? I simply don’t know. In the meantime, Apple’s market share in both the US and internationally only has to budge a little to have a huge impact for their profits. Critics cite Apple’s higher price points as a reason this can’t happen, but they forget how fast the iPod and iPhone’s went from uber-expensive to generally affordable.
Below is a chart that shocked me as I graphed it. It’s the top ten S&P500 companies by market value,…
A few good shorts
by Chart School - April 22nd, 2010 4:24 pm
Here’s what Allan is shorting.
A few good shorts
*****
YHOO – fresh signal
Allan’s newly launched newsletter, “Trend Following Trading Model,” goes with the trend-following trading system he’s been working on for years. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here. For a more detailed introduction to the Trend Following Trading Model newsletter and trading system, read this introductory article.
p.s. Market Club sent out three videos yesterday on Apple, Oil and Gold.
Summary (but watch the videos):
Apple: "the hottest stock in the world."
Oil: "crude oil has been very choppy."
Gold: "this market is setting itself up for a large move to the upside." But not tomorrow.
Apple Praise Borders On Hyperbole
by ilene - April 21st, 2010 3:13 pm
Time to invest in, say, Orange. – Ilene
Apple Praise Borders On Hyperbole
Courtesy of Joshua M Brown, The Reformed Broker
Every single living, breathing analyst on Wall Street (and some that are deceased) has come out with a bull call on Apple ($AAPL) this morning on the heels of the company’s blockbuster first quarter earnings announcement. In over a decade trading this market, I have never seen anything like this analyst lovefest.
Never.
Don’t believe me? How ’bout this?
Clyde Montevirgen, Standard & Poor’s: Buy rating; new target $295, up from $270.
Samuel Wilson, JMP Securities: Market Outperform rating; target to $290, from $260.
Peter Misek, Canaccord Adams: Buy rating; target to $325, from $300.
Robert Cihra, Caris & Co.: Buy rating; target to $310, from $300.
Tavis McCourt, Morgan Keegan: Outperform rating; target now $325.
Keith Bachman, BMO Capital: Outperform rating, target now $290, up from $265.
Doug Reid, Thomas Weisel Partners: Overweight rating; target to $320, from $300.
Andy Hargreaves, Pacific Crest: Outperform; target to $330, from $300.
Jeffrey Fidicaro, Susquehanna: Positive rating; target to $300, from $275.
Shaw Wu, Kaufman Bros.: Buy rating; target to $315, from $305.
Scott Craig, Bank of America/Merrill Lynch: Repeats Buy rating; target to $300 from $260.
Mike Abramsky, RBC Capital: Outperform rating; target to $350, from $275.
Gene Munster, Piper Jaffray: Overweight rating; target to $323, from $299.
Toni Sacconaghi, Bernstein Research: Overweight rating; target to $300, from $275.
Yair Reiner, Oppenheimer: Outperform rating; target to $320, from $285.
Mark Moskowitz, J.P. Morgan: Overweight rating; target to $316m, from $305.
Richard Gardner, Citigroup: Buy rating; target to $320, from $300.
Phil Cusick, Macquarie: Outperform rating; target to $325, from $250.
Bill Shope: Credit Suisse: Outperform rating; target to $315, from $300.
Ben Reitzes, Barclays Capital: Overweight rating; target to $315, from $300.
Katy Huberty, Morgan Stanley: Overweight rating; target to $275, from $250.
Chris Whitmore, Deutsche Bank: Buy rating; target to $350 from $325.
Told ya.
DO APPLE’S EARNINGS EVEN MATTER?
by ilene - April 20th, 2010 2:30 pm
DO APPLE’S EARNINGS EVEN MATTER?
Courtesy of The Pragmatic Capitalist
I always marvel at the quarterly earnings at Apple Corporation. Not necessarily because of the impressive fundamentals, but because of the game being played. Corporate earnings are a game. The best managements know how the game works and they play the analysts for fools by consistently managing expectations. No one does this better than Apple. Every quarter they beat and every quarter they sandbag earnings. Like clockwork, the analysts peg their estimates near Apple’s “projections”. And Apple blows them out of the water. This quarter should be no different.
Today, I was particularly intrigued to see CNN’s list of quarterly estimates. They are broken down by analyst, but also show a few “unaffiliated” estimates. What’s interesting to note here is how much higher the “unaffiliated” estimates are. The average “unaffiliated” estimate calls for revenues of $12.6B while the consensus analyst estimate is for just $12.15B – a full $450MM difference. The average “unaffiliated” EPS estimate is for $2.75 while the consensus Wall Street estimate is for $2.48 – a full $0.27 difference. We’re not talking about a small difference here. This is night and day. It makes me wonder just how these two parties could both be considered reasonable sources, yet so far apart in terms of their estimates?
While we’re at it I’ll go ahead and throw my own hat in the ring. My estimates are calling for $2.81 EPS on $12.65B in revenues, 7.3MM iPhones, 10.1MM iPods, 2.95MM MACs, 41% GM so I expect Apple to beat handily. But this all raises an interesting question we’ve been discussing of late. It’s clear that these analysts are highly impacted by management’s communications with them (yes, they get phone calls from the companies if their estimates drift too high). But it’s also clear that management is sandbagging them to high heaven. Knowing all of this, we have to ask ourselves – why do investors even pay attention to these analysts? They’re not “analyzing” anything. They’re just copying the right numbers down after management gives them a nudge in the right direction. Nonetheless, Apple’s stock is likely to soar or tank after the earnings are compared to these phony estimates. That’s what is so frightening here. These men and women can add or remove billions in market cap based on this “analysis”.
In sum,…
THE IPAD WILL SAVE PRINT? YEAH RIGHT!
by ilene - April 5th, 2010 2:47 pm
A watched iPot never runeths over.
THE IPAD WILL SAVE PRINT? YEAH RIGHT!
Courtesy of Richard Metzger at Dangerous Minds
With all of the iPad hype going on this week, I was surprised that so few pundits were saying what I felt was glaringly obvious: No way in hell is the iPad going to save the ailing magazine and newspaper industry. Did anyone really believe that for a single second anyway?
Gimme a break! I already get more than enough distractions for free—no, really guys, my infotainment cup has been runneth overing for a very, very long time now—that there is no way, not a chance—none—that I’m going to subscribe to your magazine or newspaper now that a device I never asked for in the first place has been caused to exist by Steve Jobs. I don’t care what your new iThingee is or how great your marketing people are telling me it’s going to be. If you think what you’ve got is so unique and must-read that I should pay for it, I’ve got news for you, it’s not. It’s a very big Internet out there and as long as 99.99999 percent of it is free, your subscription fee is a self-imposed death sentence, and will not even constitute a revenue trickle let alone a stream.
Witness the recent paywall experiment at New York Newsday. It did not go very well. During the first three months of the paywall, exactly 35 people opted to pay for what they had been previously getting for free. Raise your hands, readers in Long Island, NY, how many of you who plan to buy an iPad also have plans to tap the digital ass of New York Newsday for a monthly fee?
About what I thought: None of you.
Every morning I scan dozens of newspapers around the world for my job at the…
The Only iPad “Review” You Need To Read
by ilene - April 4th, 2010 1:40 pm
Courtesy of Tyler Durden
Guest Post from Fake Steve Jobs of The Secret Diary of Steve Jobs
An open letter to the people of the world
Dear human race,
First of all, you’re welcome. In the last few days I’ve been overwhelmed by your letters and calls expressing your gratitude to Apple, and mostly to me personally, for inventing yet another life-changing, mind-altering product. All I can tell you is that with iPad, as with all of our products, all we did was create something that we want to use. We’re just so glad that you want to use it too. It’s humbling, actually. When you devote your entire life to the endless, selfless quest to improve the lives of others; when you live a monk-like existence, and focus all of your power and genius on the singular goal of creating objects that nourish souls and transform people’s lives with magic and wonder; and when people tell you that this is, indeed, what you’ve done — well, it’s gratifying. Namaste, entire population of Spaceship Earth. I honor the place where your desire to consume becomes one with my desire to create.
Some pundits have posed the question: Why do anyone need this thing? Indeed, even those of you are lining up and standing outside stores may be wondering, Why am I doing this? Why am I lining up like a zombie for an expensive piece of consumer electronics, a product for which there is no shortage and which, let’s face it, nobody really needs? Back in the early days of our design process, Jonny Ive came in to see me and we spent a long time trying to decide where on Mazlow’s triangle this product would sit. Because we knew if we couldn’t be way up above the very top of that pyramid, floating above it, totally outside the needs it describes, then this wouldn’t be a product we wanted to make. Some of our early iterations, in fact, had to be tossed out because when we looked at them we realized that parts of them were too, well, necessary. Don’t get me wrong. That’s fine for other companies. It’s just not what we do here at Apple.
But let’s get back to you people who are waiting in line. I mean it’s not like you’re in Bolivia and there’s just been an earthquake…
The Big Apple
by ilene - March 31st, 2010 2:42 am
The Big Apple
Courtesy of Joshua M Brown, The Reformed Broker
Apple ($AAPL) now has a market cap of around $215 billion. Incredible, and it couldn’t have happened to a more deserving company – they’ve changed the world.
More astonishing than the number itself is the list of companies whose market caps have been eclipsed by the tech king…
Apple is now bigger than Berkshire Hathaway, General Electric, Proctor & Gamble, Johnson & Johnson, Google and JPMorgan Chase.
The only companies larger right now are Microsoft, ExxonMobil and Wal-Mart.
One other thing to consider – it all started with a device shaped like a deck of cards that was created to compete with the Sony Walkman - The iPod. Think of how many millions of devices sold as a direct consequence of the triumph and mass adoption of iTunes and the iPod. The dollar value created on the back of that product pairing is absolutely mindboggling.
For the details of who stands where by market cap, click the link below.
Source:
The Most Valuable Companies in America (Fortune)
What is Apple up to in China?
by ilene - March 6th, 2010 9:46 am
Ultimi Barbarorum takes a favorable look at Apple’s store openings in China. Read on to learn why. – Ilene
What is Apple up to in China?
Courtesy of Ultimi Barbarorum
Baruch, in this post: A new piece of information, augmented by local insight, that amounts to yet another upside case for Apple. And yes, it involves the iPad.
The new information: This past Thursday, Apple revealed plans to open 25 retail stores in China. Currently, there is one swish Apple Store in an upmarket outdoor Beijing mall, with one more planned in Beijing and two in Shanghai this year. Opening Apple stores in Chinese cities that most foreigners have never heard of (The likes of Shenzhen, Hangzhou, Chongqing, Chengdu, Kunming —there are 25 such cities in China bigger than Chicago) betrays a whole new level of ambition in the Chinese market, beyond just servicing creative elites in their international watering holes.
But what could Apple possibly sell in those stores that the Chinese can afford en masse? Let’s put that question aside for a moment and look at these recent observations:
- My Chinese teacher, upon visiting my apartment, ogles my 17-inch MacBook Pro and 24-inch Apple screen. She goes so far as to run her fingers over the logo. “Made in China!” she beams. There is pride in the fact that Apple devices are made here, even if the IP comes from elsewhere. They are obviously built very well, which is more than you can currently say about Chinese-assembled cars or buildings. Apple computers may well be the most famous high-quality product coming out of China right now, and the
…
Web Video FIVE Years After YouTube…Meh!
by ilene - February 14th, 2010 10:00 pm
Web Video FIVE Years After YouTube…Meh!
Courtesy of Howard Lindzon
The hottest thing in web video in the 5 years since Youtube was launched is a site I am too scared to log into…
I am not sure if that is good or bad.
It seems longer, but YouTube is now 5 years old .
The Russian YOOT who started today’s hottest site – ChatRoulette – is only 17 years of age. Fred has some more stats and links about the kid and his site .
You may have your opinions about web video, but two numbers matter to me…5 (age of YouTube) and 17 (age of chatroulette founder). If you think we are anywhere but inning two, you just can’t handle the truth.
This industry is so young and moving so fast that my own Wallstrip seems like 50 years ago. In fact, our very first show was only 3.5 years ago (makes sense that $AAPL was our first show in a show about stocks and trends):
With an industry this hot and this early, it seems surprising that there have been so few hits and so little on innovation (pre-rolls for christ sakes still).
Ashkan has a great series of posts on who, what, when, where, who and finally why so few are making money in the web video space .
I believe a lot of what Ashkan says is true and I also believe that Google’s $GOOG massive pay up for YouTube just threw off the whole industry.
I also believe enough time has passed that the next stage in web video is upon us. There will be more winners. The iPad won’t hurt things either.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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