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Post by Red Shirted Ensign on Mar 17, 2013 18:58:09 GMT -8
Before folks get too short happy, I suspect many investors will be buying the first meaningful pullback. The rise in SPY has been too sustained and too powerful to be blunted by a single event, unless that event is a black swan. So you have one sentiment in folks taking profits, but another sentiment in folks buying the pullback. So if you do short, don't take a long bathroom break. Stay nimble. Agree. Dips will be bought. Big money will look for opportunities to put cash to work
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Post by lovemyipad on Mar 17, 2013 19:00:03 GMT -8
Before folks get too short happy, I suspect many investors will be buying the first meaningful pullback. The rise in SPY has been too sustained and too powerful to be blunted by a single event, unless that event is a black swan. So you have one sentiment in folks taking profits, but another sentiment in folks buying the pullback. So if you do short, don't take a long bathroom break. Stay nimble. Excellent, EXCELLENT points! Expect some whipsaws, including a failed retest of the highs (or even incremental highs on negative divergence) after buy-the-dippers buy the first dip. Kinda analogous to AAPL at 680.
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Mav
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Post by Mav on Mar 17, 2013 19:03:27 GMT -8
Sure, buy the dip, but can you reverse the dip?
I'd expect the bulls to put up a fight, since the typical uptrend rules are buy dips, assume the established uptrend will remain intact short-term. Euro uncertainty hasn't bothered the market for a while, but when it HAS...well, you all remember. Big Money can make money short too.
It'll be an interesting Monday if futures remain as glum as they currently are.
This feels more like AAPL 705 than AAPL 680, if you ask me. And I assume you're talking the 680 on the way down from 705.
Difference is, AAPL and the markets have pretty much completely disconnected. So rather than predict anything, I'll just do my best to follow the action.
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Post by fas550 on Mar 17, 2013 19:06:03 GMT -8
Before folks get too short happy, I suspect many investors will be buying the first meaningful pullback. The rise in SPY has been too sustained and too powerful to be blunted by a single event, unless that event is a black swan. So you have one sentiment in folks taking profits, but another sentiment in folks buying the pullback. So if you do short, don't take a long bathroom break. Stay nimble. +1. Don't get complacent and greedy.
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Mav
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Post by Mav on Mar 17, 2013 19:07:32 GMT -8
Difficult to get complacent and greedy as a bear, though, when there's been considerably less money to be made in shorting vs. stuff like portfolio approach over the past several months. Except if you're one of those extra-lucky _AAPL_ bears.
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Post by qualitywte on Mar 17, 2013 19:22:02 GMT -8
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Post by Red Shirted Ensign on Mar 17, 2013 20:01:00 GMT -8
Sure, buy the dip, but can you reverse the dip? I'd expect the bulls to put up a fight, since the typical uptrend rules are buy dips, assume the established uptrend will remain intact short-term. Euro uncertainty hasn't bothered the market for a while, but when it HAS...well, you all remember. Big Money can make money short too. It'll be an interesting Monday if futures remain as glum as they currently are. This feels more like AAPL 705 than AAPL 680, if you ask me. And I assume you're talking the 680 on the way down from 705. Difference is, AAPL and the markets have pretty much completely disconnected. So rather than predict anything, I'll just do my best to follow the action. The Cypriots are already trying to figure how to unscramble the egg. Meanwhile the USA is a safer haven than anytime in the past five years. Any dip domestically will draw in foreign capital. American Treasuries could benefit in the short run, and those big caps. If there is a few week settling out period ( unlikely in my book), the American Dollar and quality companies should do fine. If the Cypriot government is going to send a message that screwing the saver is the order of the day, the saver will find ways, eventually, to go elsewhere. Which is why this whole scheme won't work...
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Post by applemuncher on Mar 17, 2013 20:04:54 GMT -8
Sorry for the long post. I wanted to answer a fine post by ammaroo1 regarding Apple’s go-to-market strategy.
1. Six months ago it simply wasn't a proven market like it is today, making it a much riskier proposition.
I disagree. Displays larger than 4” were standard on almost all high-end smartphones six months ago. It was a proven market.
2. Even today it is a smaller, though fast growing, segment of the market.
Almost all high-end smartphones, except for the iPhone, have displays larger than 4” today.
3. It is better strategically to be second mover in any growth market.
I honestly don’t get this point. Apple should be leading the smartphone market, like they were from June of 2007 to about a year ago. Apple invented the high end smartphone market. Now it is better to be a second mover? Really?
3b. When taking significant share of a given market, it is best to hit it at the right stage, after it is proven and has become sizable enough to maximize profits.
I believe it is better to lead from the beginning. Once someone purchases a smartphone that is not made by Apple, it will be more difficult to get them to switch and buy an iPhone.
4. Having an additional product line has margin and supply chain implications.
True, but given the millions of iPhones Apple is selling, the incremental revenue generated by giving customers what they want would offset additional manufacturing and supply chain costs. Apple has two lines of iPads. And two lines of notebooks. Both of these product lines are fall smaller than their iPhone line.
5. Apples actual data has proven they have taken the correct approach thus far, and are in the sweet spot.
Apple should have thee lines of iPhones to cover a diverse and dynamic market. The days of one-size-fits-all iPhones should be over. BTW, I know Apple is still selling the iPhone 4 and 4s at a lower price. That’s not the same thing as producing new phones for different markets.
6. Samsung(main competitor) is now approaching a vulnerable position rather than one of strength. (not true if Apple were to act too soon)
I see Samsung as being very strong right now. The S4 intro event was a disaster. But the phone will be a hit.
7. Apple has a product, they are just waiting for the right time.
I am sure Apple has many iPhones with larger formats that could be produced. But ramping production takes months. I believe Apple still thinks that a 4” display is perfect. And Phil’s comments last week make it sound like Apple believes the only reason why Android phones have a larger display is due to larger battery needs.
Ok time compress for a single customer; if a company has the opportunity to sell 2 products to the same customer rather than 1 doesn't it make total sense to do so? But to do that you have to sell it to them one at a time!
This makes perfect sense if the products you are selling are perceived by the market to be substantially better than the competition. That was true from 2007 to 2011. I think it is fair to say that the perception in the market is that Apple is not leading on smartphone technology today.
To put it another way, most of those who wish for a 5" iPhone have bought the 4" iPhone 5 anyway, while some have gone to Samsung. Meanwhile Apple is netting more customers than they have lost as most prefer a smaller form factor iOS etc. The beauty is is that when the iPhone plus or whatever is released the combined set of those three groups of people will be eager to buy the newer product, whereas if it had been released too soon you would have missed out on a whole round two of sales, while having the added cost of another supply and manufacturing chain for another product, squeezing margin. So thus the effect is compounded.
I agree that customers who want an iPhone with a larger than 4” display have either bought an iPhone 5, an Android phone, or nothing at all. Why should Apple give customers a reason to buy an Android phone in the first place?
Consumers are fungible. If you are going to cannibalize your sales you might as well do it after you sold them your first product, then make them buy something else.
Because if customers switch from iPhone to Android, it will be difficult to get them back.
The great thing I love about Apple is that while people are frothing at the mouth waiting for this iPhone plus, is that they will probably release the 5s in the same form, with a few spec upgrades and just ONE killer must have feature, i.e. fingerprint unlock, and they force another round of upgrading all the while stoking the demand for the next round even further.
Most people in the U.S. upgrade their phones every two years when their contracts are up. My contract was up in January and I am still using my iPhone 4. Should I go with an iPhone 5? Maybe I should try the S4 to see what the Dark Side is really like? Apple should have a strategy of gaining as much of the high-end smartphone market as possible instead of milking the installed base. Defections are happening, and I fear the pace will increase.
Ive said before, that so many people are complaining that Apple doesn't make a bigger phone, or this or that feature, is just proof of the intense DEMAND for Apple products rather than a negative. It would be much more a concern if people just didn't care...but they do! Everyone does! It is a reason to be optimistic.
It’s all about building the best products possible, AND exceeding customer expectations. A 4” display is a huge negative for a large percentage of the high-end smartphone market.
Android is a mess. Literally and figuratively. There is no unity anywhere. You have a rift opening up now between Samsung and Google. At one point Google is going to try to unify the user base with the xPhone and Samsung is moving to their own Tizen OS . A house divided will not stand. Where else will those consumers go besides Apple?
Android is a solid platform with some features, functionality, and customization options that Apple does not have. It would be a mistake to write Android off as a mess.
If you are just concerned about AAPL FYQ213, you are doing it wrong.
Being concerned about FYQ213 does not mean I am doing anything wrong.
ammaroo1, I really appreciate this give and take. I think you presented your points very well. We just see things differently. And that is okay.
All the best, AppleMuncher
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Mav
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Post by Mav on Mar 17, 2013 20:21:54 GMT -8
Well, futures are showing unease. I'm only looking to tomorrow, not to some 10% SPX correction in a month.
People get nervous when their bank accounts are threatened. Remember the situation here in the states? I thought I read somewhere that the account levy/IOU switcheroo/whatever is regarded by at least some as "breaking faith" in terms of leaving people's bank accounts out of EU bailouts. It is "just" Cyprus but I'll still keep an eye on potential domino effects.
Quick resolution yields the best chance of this latest Eurozone issue being more of a blip on the radar than something with cascade potential.
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Post by Mav on Mar 17, 2013 20:24:21 GMT -8
Btw, if anyone uses Forexpros/Investing.com as a RT futures data point on iOS but cannot stand the redirects to the mobile site, this link reliably forces iOS to visit the desktop site, so you can at least see the Nas 100 and SPX futures at a glance: www.investing.com/m2w.php
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Post by Deleted on Mar 17, 2013 21:25:16 GMT -8
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Mav
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Post by Mav on Mar 17, 2013 21:31:27 GMT -8
No media alert, so no cash conference...imminent, at least.
If there's nothing by next Monday at the very latest, I'll start to wonder if Apple's reserving the announcement for earnings...
Meanwhile, Cyprus continues to roil futures markets, to an extent I haven't seen all that often lately. Wow.
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Post by icam on Mar 17, 2013 21:33:49 GMT -8
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Post by sponge on Mar 17, 2013 21:54:28 GMT -8
Lets see if WS raises the bar, the stock goes up, and when we only get half the amount we sell off.
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Post by Deleted on Mar 17, 2013 22:39:25 GMT -8
Hello? Testing testing - can anyone read this?
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Post by sponge on Mar 17, 2013 22:51:50 GMT -8
Hello? Testing testing - can anyone read this? Yes Are you lost?
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Post by sponge on Mar 17, 2013 22:58:45 GMT -8
I would support this plan. I hope TC and company is seriously considering this. I know they hired a stock buyback guru from xerox.
Apple should borrow some funds, say $40 or 50 billion, even though it doesn't need them, because today's interest rates* are negative vs. real inflation, just as Google borrowed funds. Then it should use the funds to buy back alot of Apple Shares, same as IBM does with its shares. If Apple can borrow at 2% for 10 year money, then after-tax its real cost of capital is 1.5% per year (given its 26% tax rate) which is about 1/2 or 1/3 the rate of inflation. And since Apple's shares to be bought back are at a 10 PE, it would earn 10% (even if Apple should possibly not grow) or 7X the cost of that borrowed capital. ITS A NO BRAINER FOLKS. IT WILL INCREASE EARNS. PER SHARE. If Apple grows, which I expect it will, every share bought back at 10 PE, could earn 10% + the Growth, or easily 20% for Apple Corp. on 1.5% cost of capital.
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Mav
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Post by Mav on Mar 17, 2013 23:21:24 GMT -8
Apple doesn't really do gimmicky or even gimmicky-sounding, though.
Also, until we see otherwise, Apple will NEVER take on debt.
So...don't count on it, even if might make sense to many. I think it'll issue bonds before it actually borrows money, and I really, really doubt Apple will issue bonds (read: Einhorn-esque).
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