Since84
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To infinity and beyond!
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Post by Since84 on Jan 7, 2016 3:24:17 GMT -8
Good morning everyone. Buckle up. RED, RED everywhere, led by China. Chinese market shut down again due to circuit breaker at -7%. Global markets are following... AAPL is RED in premarket, trading at 98.00 -2.70 (-2.68%) at this early hour. For context, the DOW is down 2.30% and the is S&P down 2.38%. Could we please repeat Monday and close up for the day? In the news: CNBC has Technical analysts sound the alarm on Apple shares. Not much else. Take a deep breath. Have a great day. In the long run we will make money. P.S. That stink bid at $93 looks good...
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Since84
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To infinity and beyond!
Posts: 3,933
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Post by Since84 on Jan 7, 2016 3:35:41 GMT -8
Max Pain continues to slip. For the week we are now at $105. For the 15th (Triple Witching + Leaps) it is still at $110.
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Post by audiosculpture12 on Jan 7, 2016 3:45:41 GMT -8
I've been holding for a few years straight now...and this is the first time i've been actually nervous. Radio silence from Apple ('cepting the usual app store release) is a good sign (i hope), that i'm clinging to for optimism...
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Post by macwire on Jan 7, 2016 3:48:14 GMT -8
The indexes are starting to probe that oct low SPX...with so much trapped overhead supply from huge gaps downs, it will be hard to get the bull ball rolling so to speak back to ATH...path of least resistance is down and worse case scenario is we have weeks or months of downside momentum.
Please be safe and trade your plan. Identify your out point if you get in...do that because you wont be able to manage your emotions once you are in the trade.
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Post by tuffett on Jan 7, 2016 3:54:26 GMT -8
I generally subscribe to the theory that where there is smoke, there's fire. I'm really starting to worry that FQ2 guidance and results will be weak. I would never believe a single supply chain data point but several that point to the same thing? Then also the other stuff like Foxconn staff getting vacations when they are normally working like crazy, suppliers forecasting zero growth, etc.
I think the USD may really be hurting Apple. Yes the iPhone is somewhat of a luxury device and customers are less price sensitive but when the price has gone up 40% in your currency (CAD for example) I'm sure a lot of people would second guess automatically buying another iPhone. Combine this with an unstable economy and job losses practically everywhere but the US and I think there could be an impact here that may be starting to reveal itself.
Even if the above is true I feel the stock is dramatically undervalued. It would explain the drop though and be a remarkable parallel to 2012. Remember that the reasons for that correction were not entirely unfounded.
I'm holding but I won't be surprised to see weak guidance at the conference call and a subsequent drop. FQ1 will be fine but might not matter, as we so often see.
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Post by chasmac on Jan 7, 2016 3:58:38 GMT -8
The indexes are starting to probe that oct low SPX...with so much trapped overhead supply from huge gaps downs, it will be hard to get the bull ball rolling so to speak back to ATH...path of least resistance is down and worse case scenario is we have weeks or months of downside momentum. Please be safe and trade your plan. Identify your out point if you get in...do that because you wont be able to manage your emotions once you are in the trade. Does crying count as "managing"? Going to be at a P/E of 10 before we know it. In the old days at the CME we would have runners ask the big brokers filling lots of paper where the support was. It'd be interesting to know what kind of orders are sitting at 92. Never thought we'd be here pre earnings.
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Post by chasmac on Jan 7, 2016 4:08:08 GMT -8
I generally subscribe to the theory that where there is smoke, there's fire. I'm really starting to worry that FQ2 guidance and results will be weak. I would never believe a single supply chain data point but several that point to the same thing? Then also the other stuff like Foxconn staff getting vacations when they are normally working like crazy, suppliers forecasting zero growth, etc. I think the USD may really be hurting Apple. Yes the iPhone is somewhat of a luxury device and customers are less price sensitive but when the price has gone up 40% in your currency (CAD for example) I'm sure a lot of people would second guess automatically buying another iPhone. Combine this with an unstable economy and job losses practically everywhere but the US and I think there could be an impact here that may be starting to reveal itself. Even if the above is true I feel the stock is dramatically undervalued. It would explain the drop though and be a remarkable parallel to 2012. Remember that the reasons for that correction were not entirely unfounded. I'm holding but I won't be surprised to see weak guidance at the conference call and a subsequent drop. FQ1 will be fine but might not matter, as we so often see. And you know we're going to get the inevitable "sales growth in China is declining!!!" (Even though it's at 80% vs 110% which still represents gigantic sales). They'll still be raking in loads of cash. Regardless of lower prices for buybacks, this still has to hurt employee morale.
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Post by tuffett on Jan 7, 2016 5:01:29 GMT -8
Yep, and investor morale too. Like I said before there is absolutely zero incentive to hold this stock for the long term. Just sell high and wait for the inevitable 20-30-40% drop. Clockwork.
Pounding the table about how fundamentally strong the company is just elevates my stress levels. In the end it doesn't matter. The market does not care. It's all about momentum and immediate sentiment.
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Since84
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Post by Since84 on Jan 7, 2016 5:05:08 GMT -8
Per Bloomberg TV, UBS lowered 2016 iPhone sales estimates... is now projecting a decrease in iPhone sales in 2016 vs. 2015...
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Post by macwire on Jan 7, 2016 5:06:45 GMT -8
Yep, and investor morale too. Like I said before there is absolutely zero incentive to hold this stock for the long term. Just sell high and wait for the inevitable 20-30-40% drop. Clockwork. Pounding the table about how fundamentally strong the company is just elevates my stress levels. In the end it doesn't matter. The market does not care. It's all about momentum and immediate sentiment. its actually all about supply and demand. in this case, to boil it down most simply, more sellers then buyers. its just that simple. fundamentals, all that stuff paint a larger picture that matters but in the medium term, people are bailing. all the banging the table about fundamentals (all things i agree with) are a case of confirmation bias imo...
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Post by tuffett on Jan 7, 2016 5:25:35 GMT -8
Agreed. It has done me more harm than good.
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Since84
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To infinity and beyond!
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Post by Since84 on Jan 7, 2016 6:22:30 GMT -8
Certainly the price at any given time is a function of supply and demand. The question is how efficient is the market?
Fundamentals are even more important during broad market declines. Those issues with a lot of wind in their sails, pumping shares prices up to nose bleed levels are more risk of falling farther and faster than those with good fundamentals. If you had to $100,000 right now, would you put it in Amazon or Apple? (Obviously, real world choices are not a dichotomy)
The real issue is what are good Fundamentals? Much of Apple's agita relates to prospective fundamentals. The narrative in the marketplace has been that Apple is a one product company. The perennial concern is whether next quarter can possibly top the same quarter last year for this one product. All other products are dismissed as irrelevant despite the fact if they were housed in any other company they would be a dominate factor in that company's results.
To be successful as investors, we must challenge the truisms of the marketplace -- including those of Apple.
Regardless of the markets valuation of Apple today, Apple remains a money machine. Far more so than many others whom the market values much more. I remain in Apple because, longer term, I expect Apple to outperform most others and, indeed, I do not expect investments many those others to pay off. I honestly cannot conceive of a scenario where an investment in Amazon makes sense at >1,000 PE. Could it pay off? I guess. But it is far more likely to come crashing down.
Can Apple change? Of course. We must remain vigilant and continuously question our precepts.
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Post by ericinaustin on Jan 7, 2016 6:32:05 GMT -8
Yep, and investor morale too. Like I said before there is absolutely zero incentive to hold this stock for the long term. Just sell high and wait for the inevitable 20-30-40% drop. Clockwork. Well hell why didn't I think of that. Sounds so simple...... NOT. The only way to make money in this stock or the market is to buy strong companies when they are cheap. That fits AAPL perfectly right now. Look under the couch cushions for any spare change. I suspect this will be another of those historic fire sales that you rarely get.
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Post by phoebear611 on Jan 7, 2016 6:44:45 GMT -8
China just suspended circuit breakers - this may be positive for our market given that it allows natural price discovery in China. So we shall see. This could be a V-shaped market...just watching for now.
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Post by mrentropy on Jan 7, 2016 7:11:32 GMT -8
Certainly the price at any given time is a function of supply and demand. The question is how efficient is the market? Fundamentals are even more important during broad market declines. Those issues with a lot of wind in their sails, pumping shares prices up to nose bleed levels are more risk of falling farther and faster than those with good fundamentals. If you had to $100,000 right now, would you put it in Amazon or Apple? (Obviously, real world choices are not a dichotomy) The real issue is what are good Fundamentals? Much of Apple's agita relates to prospective fundamentals. The narrative in the marketplace has been that Apple is a one product company. The perennial concern is whether next quarter can possibly top the same quarter last year for this one product. All other products are dismissed as irrelevant despite the fact if they were housed in any other company they would be a dominate factor in that company's results. To be successful as investors, we must challenge the truisms of the marketplace -- including those of Apple. Regardless of the markets valuation of Apple today, Apple remains a money machine. Far more so than many others whom the market values much more. I remain in Apple because, longer term, I expect Apple to outperform most others and, indeed, I do not expect investments many those others to pay off. I honestly cannot conceive of a scenario where an investment in Amazon makes sense at >1,000 PE. Could it pay off? I guess. But it is far more likely to come crashing down. Can Apple change? Of course. We must remain vigilant and continuously question our precepts. Honestly if I was putting new money to work, Amazon, no question. It would have been the right answer at any point during the last 20 years. Fundamentals don't matter, Amazon is just valued more and probably will continue to be. For me, the question is whether it is worth it to take the tax hit and sell to move existing money from AAPL.
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Post by tuffett on Jan 7, 2016 7:13:52 GMT -8
Certainly the price at any given time is a function of supply and demand. The question is how efficient is the market? Fundamentals are even more important during broad market declines. Those issues with a lot of wind in their sails, pumping shares prices up to nose bleed levels are more risk of falling farther and faster than those with good fundamentals. If you had to $100,000 right now, would you put it in Amazon or Apple? (Obviously, real world choices are not a dichotomy) The real issue is what are good Fundamentals? Much of Apple's agita relates to prospective fundamentals. The narrative in the marketplace has been that Apple is a one product company. The perennial concern is whether next quarter can possibly top the same quarter last year for this one product. All other products are dismissed as irrelevant despite the fact if they were housed in any other company they would be a dominate factor in that company's results. To be successful as investors, we must challenge the truisms of the marketplace -- including those of Apple. Regardless of the markets valuation of Apple today, Apple remains a money machine. Far more so than many others whom the market values much more. I remain in Apple because, longer term, I expect Apple to outperform most others and, indeed, I do not expect investments many those others to pay off. I honestly cannot conceive of a scenario where an investment in Amazon makes sense at >1,000 PE. Could it pay off? I guess. But it is far more likely to come crashing down. Can Apple change? Of course. We must remain vigilant and continuously question our precepts. What you say makes perfect sense but it's not grounded in reality. Or the alternative is that the market perceives AMZN to be more fundamentally strong than AAPL. There is no evidence that AAPL does better in broad market declines. AMZN has been a more stable stock, has outperformed AAPL and has had fewer large corrections. This are the unfortunate facts. I'm still very long AAPL. I don't know the mechanics of going private, but I hope the BOD is taking a good hard look at it right now. Use the cash and the balance sheet for something - even just a threat that they are looking into options will spook the bears.
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Post by sponge on Jan 7, 2016 7:46:55 GMT -8
Never expected to be rooting for a close above 100. Clearly at this point we are the markets ATM. When panicked they simply take out cash by selling aapl. And we have a run on the Apple Bank that started in March of last year and simply took off.
The good news is that RSI has only hit this low 3 other times in 5 years. It is safe to say we are at the bottom.
Another way to look at this compared to 2013 is that expectations have gotten so low, that earnings reaction should be positive. Last time we dropped 11% after January earnings when Apple supposedly missed revenue by 500 million.
I thought for sure 102 would be the low three days ago. I guess I was off by 5 points.
Let's get back on the train and get moving towards 105 and 110 and if we are lucky 115 by earnings.
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Post by tuffett on Jan 7, 2016 8:15:19 GMT -8
$115 by earnings is a pipe dream. We'd be lucky to be in the triple digits.
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Post by mrentropy on Jan 7, 2016 8:15:40 GMT -8
Never expected to be rooting for a close above 100. Clearly at this point we are the markets ATM. When panicked they simply take out cash by selling aapl. And we have a run on the Apple Bank that started in March of last year and simply took off. The good news is that RSI has only hit this low 3 other times in 5 years. It is safe to say we are at the bottom. Another way to look at this compared to 2013 is that expectations have gotten so low, that earnings reaction should be positive. Last time we dropped 11% after January earnings when Apple supposedly missed revenue by 500 million. I thought for sure 102 would be the low three days ago. I guess I was off by 5 points. Let's get back on the train and get moving towards 105 and 110 and if we are lucky 115 by earnings. No, it's not safe to say it's the bottom. It's never safe to say that. You might say it is probable we bounce here, but that is about the only thing you can say. Please don't make theses prognostications with some air of certainty, someone who doesn't know better might believe you.
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mark
fire starter
Posts: 1,552
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Post by mark on Jan 7, 2016 8:27:38 GMT -8
I generally subscribe to the theory that where there is smoke, there's fire. I'm really starting to worry that FQ2 guidance and results will be weak. I would never believe a single supply chain data point but several that point to the same thing? Then also the other stuff like Foxconn staff getting vacations when they are normally working like crazy, suppliers forecasting zero growth, etc. I wonder if perhaps Apple decided that a single contract manufacturer is too "dangerous" and are working to diversify their business among more than one of them? Of course we haven't heard any rumors about a new contract manufacturer producing iPhones yet. As far as trades go, I sold some more Jan '18 puts today. I figure as follows - if someone puts the shares to me at a net price of 82-83, I'll take it. Heck, even at the current dividend rate, and it will probably rise in 2016 and 2017, that's already a 2.5% yield at that price. And if nobody puts those shares to me, well, I get to keep the premium, that's good too.
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Post by hydrarx on Jan 7, 2016 8:33:18 GMT -8
If we close under 100, that would be a bad sign. Next support is around 94. If we get back above 105, then we could hit 115 by earnings as that is the next big resistance price point.
A lot will come down to what the numbers and guidance are. If the supply cut rumors were true, we're f*cked.
If the rumors were BS and we have great earnings, hopefully the market will get some sense slapped into it.
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Post by phoebear611 on Jan 7, 2016 8:35:03 GMT -8
Folks - I can appreciate if the market is up and we are flat to down we can complain but in all seriousness this is a MUCH broader market issue and the truth is that unless you have something terrific to say like NFLX said yesterday afternoon - we are going to be down. If everything should turn and we just meander THEN you can gripe. Actually - who am I to say when you can gripe - do as you please
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Post by macwire on Jan 7, 2016 8:42:21 GMT -8
Apple will never go private. It simply can't. The capital required would be monstrous and the financing of that alone...it would take multiple banks. It's a non starter and would never happen.
As for efficient markets - I used to care about that. The market is the market. Nothing is perfectly efficient otherwise this game would be easy. E. Z.
Market participants are humans ultimately. Humans are imperfect irrational and emotional.
The fact the market behaves this way doesn't surprise me. The inverse is what would surprise me.
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Post by sponge on Jan 7, 2016 8:52:47 GMT -8
If we drop to 72 like the TA indicated, then going private does become more doable.
With $200 billion in cash and growing, a few hedge funds can come up with the $300 billion and team up with Apple and go private.
Never thought Imwiuld say that, but we are valued like a bank instead of a software or hardware company. We are cheaper then ever and if there is a time for that this might be it.
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Post by macwire on Jan 7, 2016 9:03:25 GMT -8
If we drop to 72 like the TA indicated, then going private does become more doable. With $200 billion in cash and growing, a few hedge funds can come up with the $300 billion and team up with Apple and go private. Never thought Imwiuld say that, but we are valued like a bank instead of a software or hardware company. We are cheaper then ever and if there is a time for that this might be it. Lol. No. A few hedge funds? Do you realize the amount of moving parts required? Do you realize the premium Apple would have to pay to undertake it? Then to finance it? It would be a monstrously horrible decision. So it drops to 72. AAPL still would have to offer a big premium to get shareholders to even consider it. It simply won't happen. Why would you want it to happen anyways? Realize that we all love apple products. I've never owned any non Apple PC in my life dating back to 3rd grade. Isn't this board about AAPL investing? I for one would never want to see AAPL go private just so it won't be bothered by WS expectations. That seems silly. What would be better is if AAPL gave a damn about its investors and took a more friendly investor stance IMO. It's either that or go bat silent like AMZN which works for me too. Either way the status quo is horrible where AAPL gets picked apart by news cycle vultures to the detriment of its shareholders. BTW Cargill is the largest privately held company in the US. It's market cap is 60 billion roughly (estimated). AAPL would be 10 times that.
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Post by sponge on Jan 7, 2016 9:06:27 GMT -8
I think if we were to go private you could still own the shares but not trade on the public exchange.
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Post by macwire on Jan 7, 2016 9:22:49 GMT -8
I think if we were to go private you could still own the shares but not trade on the public exchange. huh? are you referring to where privately held companies list and "trade" like sharepost? theres zero liquidity, no market makers...
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Post by tuffett on Jan 7, 2016 9:30:13 GMT -8
I generally subscribe to the theory that where there is smoke, there's fire. I'm really starting to worry that FQ2 guidance and results will be weak. I would never believe a single supply chain data point but several that point to the same thing? Then also the other stuff like Foxconn staff getting vacations when they are normally working like crazy, suppliers forecasting zero growth, etc. I wonder if perhaps Apple decided that a single contract manufacturer is too "dangerous" and are working to diversify their business among more than one of them? Of course we haven't heard any rumors about a new contract manufacturer producing iPhones yet. As far as trades go, I sold some more Jan '18 puts today. I figure as follows - if someone puts the shares to me at a net price of 82-83, I'll take it. Heck, even at the current dividend rate, and it will probably rise in 2016 and 2017, that's already a 2.5% yield at that price. And if nobody puts those shares to me, well, I get to keep the premium, that's good too. Sounds a little far fetched. Often the simplest explanation is the correct one. Does nobody here have any suspicion that FQ2 might be bad and that none of the below is affected by Apple?
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Post by sponge on Jan 7, 2016 9:37:21 GMT -8
I think if we were to go private you could still own the shares but not trade on the public exchange. huh? are you referring to where privately held companies list and "trade" like sharepost? theres zero liquidity, no market makers... Bingo Goodbye day traders and option traders. Steady slow rise and dividends to boot.
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Post by macwire on Jan 7, 2016 9:43:08 GMT -8
huh? are you referring to where privately held companies list and "trade" like sharepost? theres zero liquidity, no market makers... Bingo Goodbye day traders and option traders. Steady slow rise and dividends to boot. I think you don't know what you are talking about. Lol.
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