Anyone feeling SDS?

Taking ZNGA and CELG with me over the weekend. CELG may stop me out, but I don't think so. If it does I'll post later.

AAPL of course ****ing pops. Monday you want to see it follow through or at the least hold the majority of today's gains.

Lol especially after the post in the TA thread. Remember you don't have anything to prove.

probably won't until the general public realizes our fiat currency.

Sold 60 March 31 puts at 4.22 avg. Big return for my option plays as I bought this under 2. Immediately shorted fb 20% @ 26.70 avg.

Nice Myrna!

You know I been bearish on this stock since right before earnings. Buying more puts on every rally. Match up fb stock against the major indices for the past 2 months and look how it is lagging. I think my next earnings play will be ges. Look at that chart. They probably will have to guide lower as well. I am already short the stock.

If ANF can close at the low of the day today, it will have a nice evening star reversal. It already had a bearish pattern, but this latest retracement back to the uptrendline was dangerously close to breaking resistance.

I plan to short on any more up moves. They presented at a show the other day. This Co is even more overvalued than guess. A big portion of their growth was the Hong Kong/ Chinese market. It was insanely popular at one time. It has really died out the past 3 months. I expect them to report lower numbers than expected and hopefully warn before that.

Added Apple long (was stopped out of my short at 437 earlier this week), and SPXU long.

Gogogo Apple.

Ive really like all of Savant's posts and by no means am i discounting any of his rational. I appreciate him sharing.

I am curious though if anyone has an explanation as to why Apple moved today especially against the market. Did anyone see it coming?

Seems outlier-ish to me.

TBH, I rarely try to find explanations for moves other than there were people buying the stock, I try to focus on what the move means for the chart and if there's a trade coming up, and leave the explaining to Bob Pisani on CNBC (who once had to dig so deep that he used a seeking alpha article to explain a move somewhere, lol). Apple was also THE outlier since its march down from 700, while the S&P went from 1360 to 1560, so I'm not terribly concerned about it continuing to be one.

Nevermind, apparently it was in reaction to Samsung's new phone which didnt impress.

The market is anything but rational.

I think there is a lot of manipulation with AAPL. A company that has 140 billion cash - adding 40~ billion more per end of year - has great potential for growth - has no debt - and makes a great product - when it's stock price falls 40% I just think it's someone manipulating the market.

That being said - I think it will eventually rebound and I expect to have a good ride. I still wish I listened and sold it when it was up to $480 and than re bought when Savant did. But that being said i'm not too unhappy with my trade.

I mean what a bizarre world it is when a company like APPL drops that much when it has a very profitable two years and has a hoard of cash, and a big market share. In the fact of the market in a pretty epic bullish run.

Then its stock jumps on a day when it's closest competitor in the phone market makes a big announcement that actually meets expectations.......but APPL stock goes up, because it didn't blow minds.

That there pretty much says it all.

I know, I know APPL stock was inflated to begin with, but my point is, the rational of the buyers in the market is so laughable. The mob mentality is amusing.

I bought it at $458 and $430, and people were calling me a fish, maybe I still am, but either way it's all pretty laughable. If I'm a fish, it's only because the market is driven by fish! LOL.

You guys just aren't thinking rationally about this.

The fact is that Apple has a single product that justifies a valuation above $250 billion - the iPhone. Ask yourself:

- How much profit does the iPhone bring in each year?
- What was the average lifespan of every mobile phone hardware or OS leader?
- Why has Android gone from nowhere in 2010 to 70% of smartphone sales market share in three years (vs Apple's 20%)?
- What would happen to Apple's profit margins if telcos stopped giving it massive preferential subsidies, which they will want to do as viable, consumer desired alternatives (Android, Windows Phone, Blackberry) become good enough to push the iPhone aside?
- What will happen over the next 2-3 years as Windows 8 & 9 achieves penetration to hundreds of millions of desktops (this is guaranteed), and the Windows/Windows Phone store starts to rival iOS from that penetration? If you have Windows 8 at home and a bunch of apps, you'll want them on your phone/tablet too given the tight integration. What will happen when Windows 8/9 gets penetration in business and they roll out Windows Phones instead of iPhones due to the back end integration?

Let me put it this way, with two questions:

- What are the odds of Apple earning their market cap ($420 billion) before they go bust?
- What are the odds of Microsoft earning their market cap ($235 billion) before they go bust?

The answers are <50%, and nearly 100%. This should give you an idea of the relative worth and diversification of each company. Apple has its valuation based solely on explosive continued iPhone growth - which it hasn't innovated in five years - while competitors have taken over the space. It was also growing into an exploding market, which is slowing down over the next couple of years.

I do think they can have a short time spike (think 3-6 months) with a breakout quarter - indirect market share data I've looked at shows massive breakout sales in January/February that could send the market crazy come earnings next month - but after that it's probably downhill unless they come out with something new and amazing. Which is going to be what? Telcos aren't going to subsidize new products. Margins on TVs and watches are going to be far smaller because they won't be heavily subsidized by telcos.

The market's response to Apple has been rational given the information at each point in time.

And here's a picture for you guys to make it clearer:



Despite all their iPad success, Apple suceeds or fails at post $200 billion valuations solely on the iPhone, which is very vulnerable over the next few years. 3/4 of their profit comes from carrier subsidized iPhones, which are nearing high end saturation. At a P/E of 10, you have to believe they'll do at least current sales AND profit for 7 years just to get your money back. And that current 37% margins will be sustained in a highly competitive fast moving business where competitors are finally starting to offer compelling products and ecosystems. Good luck with that. At a P/E of 15 (i.e. at $600), you need 12 years. That was plausible when Apple was innovating and growing and maintaining margins, but around September they came out with nothing at all new in response to competitors and there was evidence of margins starting to squeeze. So a rational sell off began.

Truthsayer, your arguments are illogical and irrational

Plus you have all the dividends you received, plus you still own the stock, which in all likelihood will be worth considerably more than what it is now.

You are making a great case for someone to go long AAPL

Good job having the argument go straight over your head. Do you know what "before they go bust" means? I'm approaching the analysis from another angle to give a different perspective on why this company has tanked. I'm saying that it's quite probable that Apple will never amass $400 billion in the lifespan of their company. When you think about that soberly you'll appreciate why the world's most profitable company has lost 40% of its value over the past six months while growing massively. It's not a stock manipulation conspiracy and it's not a market out freak out to the turn of $300 billion. It's rational.

Apple has a decent chance of being today's RIM or Nokia in five years. Microsoft and Google have zero chance. The market understand this - idiots do not.

Your arguments have gone from being irrational and illogical, to you being simply delusional.

You are in need of some couch time, before the men in the white coats come for you

.

I have never traded or invested aapl nor do I ever have any intentions to do so, but how are these arguments illogical and irrational? The bear case as presented seem pretty spot on to me.

So what's the bull case now?

This is the truth.

lol AAPL is nothing like RIM or Nokia.

They do have product issues, but they are still a company with 0 long term debt and 40b in cash that made 40B last year

You really think there is a decent chance they lose enough money to go bust in 5 years?

The fact is you have no clue how well their next products are going to do. People have buried Apple many times before.

Truthsayer,

Thanks for the post. A lot of what you say makes perfect sense.

But, the innovation in the phone world is going to be a lot more like baby steps from here on out in my opinion. There's not a lot of innovation to be had there. I don't really see Mac users leaving the iphone because it's still a great phone.

Secondly, I don't think there's a "Decent chance" they will be RIM or Nokia. That's just kind of silly.

The bottom line is that Mac products are still more user friendly and asthetic and tend to have lifelong customers. Once you go Mac, you don't go back. I continue to see them moving into other sectors, while keeping their core customer.

I wouldn't be surprised if they finally went with a lower price base to compete in emerging markets either.

Furthermore, the Samsung phone is now in the same place the Iphone is in, where people are underwhelmed by their inflated expectations. Until someone comes up with a teleportation device, theres not much else we need our phones to do, but we'll continue to buy and use them, and here's where the cool factor of the iphone still matters.