iCONOMICS: Six Key Takeaways From the Era of Apple
by ilene - February 16th, 2011 11:09 pm
Courtesy of Joshua M Brown, The Reformed Broker
iConomics is a word I’ve created to capture the state of doing business in a world that Apple ($AAPL) owns and the rest of us just live in.
Regular readers know that I am a fairly astute observer of market trends and themes. While lots of ink has been spilled about Apple’s ascendancy, no one has really yet formulated a good list of takeaways from it all. Below are what I view to be the key lessons for companies in the Era of Apple…
1. Don’t just invent the product, invent the market:
Nobody knew they needed an in-home Keurig machine to make cup after cup of coffee until Green Mountain Coffee ($GMCR) convinced them that they did. In much the same way, Microsoft had tried and failed repeatedly to kickstart a market for tablet computers over the last decade. Each failure was blamed on there being no market for the devices. Funny, Apple’s iPad came into the world with a similar lack of a market for tablets – so it had to invent one.
2. Pick needy partners:
Jamie Dimon awoke to his destiny in early 2008 as one of the few remaining pillars of strength in the financial world. While all the other bank CEOs were running around trying to do deals with each other, Dimon’s JPMorgan ($JPM) was busy partering with the government. He and his resources were needed so badly that he was handed Bear Stearns almost for free – a price he voluntarily raised it on his own because it was such an embarrassingly good deal. As the government got even more needy, it handed its new partner Washington Mutual while simultaneously eating all the bad debt – too good to be true. In much the same way, Apple launched its iPhone with the neediest of partners – the combining Cingular/AT&T ($T) colossus that, above all, needed a hit phone to overcome their patchwork coverage network. Apple was handed a monumental opportunity to have its untested hardware pushed to millions of new customers.
3. Consumer tastes are overrated:
Steve Jobs isn’t one of those guys who test-markets stuff to death. Rather than try to innovate by committee, he relies on his own taste and the prowess of his designers and engineers. And it works. He is delivering functionality like music-playing, web-accessing…
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ARe You ReaDY To ReMeMBeR…Today for the Rest of Your Life?
by ilene - November 16th, 2010 1:39 pm
ARe You ReaDY To ReMeMBeR…Today for the Rest of Your Life?
Courtesy of William Banzai7, Zero Hedge
Apple is apparently ready to make another big announcement today. This will supposedly be yet another day that we will never forget.
This got me thinking about how many days there have been in my life so far that I will really never forget.
I vaguely remember being born. Lots of bright lights. I remember getting my first bicycle. I can remember a particular summer vacation day in New Hampshire when I was about 5 years old. I remember exactly where I was when JFK was assassinated. I don’t remember the Martin Luther King or Bobby Kennedy assassinations very well. I remember seeing Jimi Hendrix live in NYC. I remember some other important days like my high school and college graduations, the days my kids were born, the day I was married…and divorced. I remember 9/11 very well, I remember the day AIG claimed they had absolutely no exposure to subprime risk and I remember the September day Lehman tanked. I remember the day Paulsen and Bernanke said we were all doomed and I remember the day Obama was elected…
What could Apple possibly be planning that we will never forget?
Can it be this?
or this?
How about this…
or maybe even this…
or this…
All of the above would probably excite me more than an Beatles/Apple music deal with iTunes or an announcement concerning live streaming iTunes. But I am not quite sure I would remember any of it for the rest of my life.
Here, however, is an event I am pretty sure I would remember at least until the next AAPL quarterly announcement…
AAPL Fight Club 2010
I remember the last time I heard this type of extraordinary claim coming from a Silicon Valley darling…
But I can’t remember what it was that they announced.
AAPL…10:00 AM EST today…
"The easiest way to attract a crowd is to let it be known that at a given time and a given place someone is going to attempt something that in the event of failure will mean sudden death."--Harry Houdini
UPDATE
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Bullish….Bearish… or Neither
by ilene - September 24th, 2010 1:29 pm
Chris, on being neitherish, i.e., how he views the markets. – Ilene
Bullish….Bearish… or Neither
Courtesy of Chris Kimble
Am I Bullish, Bearish or Neither?
Choice “C”…Niether!
I am of the opinion, being Bullish or Bearish are emotional states of mind. They are NOT STRATEGIES. I believe that we should invest in each asset on its own individual merits/patterns, not based upon some global macro prediction.
Did I suggest to buy the 500 index (see post) and become “BULLISH” on 8/29 because the economy was fine? NO! Bought the 500 Index due to these conditions…Bottom of channel support and a falling wedge and by the way, the fewest investors bullish since the March 2009 low. NOTHING MORE!
Did I harvest the S&P 500 position and become “BEARISH” yesterday (see post) , after an 8% gain in three weeks, because something is bad about the economy? NO! Harvested due to Fibonacci resistance at the top of a trading range. NOTHING MORE!
Did I buy Silver a month ago (see post) because something is wrong with the dollar or that inflation is going to go wild or….NOPE! I bought Silver on an upside breakout from a favorable pattern, an ascending triangle . NOTHING MORE!
Why own Emerging Markets or Brazil right now? Falling channel breakouts! (See Post) NOTHING MORE!
Why own High Yield mutual funds? A breakout of a flag pattern and above moving averages (see post) . NOTHING MORE!
Why BUY HOME BUILDERS XHB (see post) when so many people are BEARISH on this industry? Because of rising channel support plus a sizeable falling wedge after a 30% decline. NOTHING MORE! (Current gain of over 12%!)
Will we buy the 500 index and other global markets (see post) on an upside break of these long-term falling channels? YES!!!
My goal is to try to provide solutions, that will help investors “inflate portfolios, regardless of market direction by way of the Power of the Pattern!” I will leave the Bullish or Bearish elements of this business to people much smarter than myself.
Chris
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Billionaire Ken Fisher Explains His Biases
by ilene - August 21st, 2010 5:06 pm
Billionaire Ken Fisher Explains His Biases
Courtesy of Mish
Ken Fisher says high levels of pessimism are a reason to buy stocks. Please consider Kenneth Fisher Recommends Stocks as Pessimism Surges.
Rising levels of investor pessimism are a reason to buy equities now, billionaire Kenneth Fisher said today.
“I’m never going to be bearish when people are pessimistic,” Fisher, who oversees $35 billion from Woodside, California, said in an interview on “Bloomberg Surveillance” with Tom Keene. “My bias when pessimism is high is to own equities.”
Explaining Ken Fisher’s Bias
Ken Fisher’s bias is to own stocks come hell or high water. Fisher’s recommendations have as much to do with optimism or pessimism as the planet Pluto does with an octopus.
Fisher makes money being perpetually bullish on equities. It certainly helps that Fisher peddles advice that people and pension funds want to hear.
It is amazing how much money one can make mismanaging money in conjunction with a remarkably successful advertising program.
Addendum
Flashback February 26, 2007
Housing Boom!
For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007′s housing disaster turns out to be. Well, there won’t be any housing disaster. We won’t have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.
The consensus forecast is for single-digit S&P 500 earnings growth tied to a slowing economy. Disbelieve it. Experts’ forecasts have been too low for four years and will be now. First, the accelerating economy will deliver earnings that exceed expectations.
This is a time to own stocks. Here are some companies that will participate in the prosperous economy of 2007:
Home builder Pulte Homes – PHM
Toll Brothers – TOL
Beazer Homes – BZH
Absurdities
Look – Anyone can be wrong, but quite frankly that is absurdly wrong.
Pulte Homes was $34 then. It is $8 now.
Toll Brothers was $34 then. It is $16 now.
Beazer Homes was $44 then. It is $3.75 now.
Someone let me know if he ever issued a sell signal on those.
Regardless, Ken Fisher is consistently bullish. In fact he HAS to be bullish because you cannot manage $35 billion without being bullish. Ken Fisher’s advice is designed to do one thing – make money for Ken Fisher.
Photo from Psychology Today.
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DARK HORSE HEDGE UPDATE
by ilene - July 23rd, 2010 3:38 am
DARK HORSE HEDGE UPDATE
By Scott at Sabrient and Ilene of PSW
You can run, you can run, tell my friend-boy, Willie Brown.
You can run, tell my friend-boy, Willie Brown.
Lord, that I’m standin’ at the crossroad, babe,
I believe I’m sinking down.- Crossroads, Robert Johnson
Heading into Friday July 23, 2010 the market is again at a technical crossroad with the SPX closing Thursday at 1093.7, above the 50-day Moving Average of 1085.5. The MACD 12-26-9 remains close but still under the (zero) signal line at -1.13, with the RSI 14-day at 45.26. There is lateral resistance at the 1096 level from the close last Thursday showing how the market has traveled a long way the past week to get nowhere.
Amazon.com Inc. (AMZN) fell short of analysts’ forecasts after Thursday’s close and was down 14% in after-hours trading, suggesting that the market may follow the pattern it has been in most of the summer.
Up 200, down 200, up 200, down 200 - wash out your savings, rinse and repeat! What a total sham of a market we have these days with machines running us up and down on virtually no news at all. Yesterday they would have you believe that Ben Bernanke caused a sell-off. How ridiculous is that? He didn’t say one thing that he didn’t already say in the Fed Minutes that were released on the 14th, which were the notes from the meeting of June 23rd so for analysts to get on TV and say “the markets were concerned by the Chairman’s comments” is beyond stupid – it’s criminal negligence. Phil’s Thrill-Ride Thursday.
[chart from freestockchart.com]
Thursday’s economic releases were less than encouraging with a jump in the number of people seeking unemployment benefits. Sales of previously owned homes fell, but the market shrugged it off as seasonal and rallied on the earnings of Caterpillar Inc., UPS Inc., and others that beat estimates. However, the SPX hasn’t been able to break through resistance at 1096 and essentially has gone nowhere since last Thursday.…
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Gold and Silver Intermediate Targets
by Chart School - May 17th, 2010 7:46 pm
Gold and Silver Intermediate Targets
Courtesy of JESSE’S CAFÉ AMÉRICAIN
Both Gold and Silver bullion have inverse H&S formations ‘working’ on their weekly charts with the breakouts above their current necklines.
As is easily seen on the gold chart below, this bull market move is a series of inverse head and shoulders bottoming formation as the gold bull struggles to rise against determined shorting from the bullion banks. Each formation is more properly called a ‘consolidation formation in an uptrend’ rather than a bottom.
Gold is currently above the neckline which is around $1200. While it remains above this neckline, the target for this leg of the move would be $1350 as a minimum measuring objective.
If the price breaks below 1200 it is no longer an active formation, but it remains potential while the price is above 1044.
Silver is much more volatile than gold, with a significantly higher risk beta. This is important to note if you are using any sort of leverage, including miners that have a heavy exposure to silver.
Silver has a massive inverse H&S bottom, that is ‘working’ while it is above 18.80. The target for this move is around $30 per ounce. But it remains valid and potential while the price of silver is above 16.
If the price of silver falls below 18.80 then the formation is not active.
The relationship between the miners and the bullion is leveraged, with a beta exposure to the SP 500. Further, gold is a more pure currency play than silver, which has a partial correlation to its industrial use.
It should be noted that in our opinion both markets are being subjected to significant manipulation by large short interests, which are particularly concentrated in the case of silver, and especially stubborn and ‘official’ in the case of gold, involving the central banks. This is our judgement based on the circumstantial evidence.
We also suspect that the Fed is buying across the US Treasury curve, but especially at the longer durations, and that the Treasury and Fed are working with one or more groups to support the equity markets primarily through the SP futures.
This adds quite a bit to the picture, although it is difficult to forecast since it is not natural market action and can distort the trends, but only in the short term.
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Roubini: “The US Economy Is Unsustainable”
by Zero Hedge - May 13th, 2010 10:06 am
Roubini: "The US Economy Is Unsustainable"
Courtesy of Tyler Durden
Yesterday Nassim Taleb said that his primary concern about an upcoming "Black Swan" is a failed Treasury Auction. This is precisely what Zero Hedge has been concerned about for the past year, although we feel that this event will likely be at least marginally telegraphed, either in the form of Direct Bidders taking down close to 50% of each auction (with the Primary Dealers monetizing the balance), and an accelerated flattening of the yield curve. Last night, Roubini, who has apparently thrown away the mantle of moderation and is back to his gloomier ways, said that he worries "that with a trillion deficit this year and next year, 2012, and for as far as the eye can see, eventually, not this year, but the next year, the markets are going to wake up and say, this is unsustainable." In other words whether via the Treasury market, or some other way, at some point the balance will shift from one where the market still believes that reserve currency is enough of a backstop to prevent the collapse of the US, to a regime where incremental bailouts will be seen as negative. That moment will be true black swan, and the beginning of the end of the great US experiment.
Back to Roubini, who in his last night’s interview with Fox Business’ Neil Cavuto is about as bearish as we remember him from the doom and gloom days of early 2008.
On Greece being the tip of the iceberg:
“In my view what is happening in Greece is just the tip of an iceberg. With private debt in many parts of the world, we socialize these private losses. Now with large budget deficits in Europe, in Japan, in the United States. The bond market vigilantes have woken up in Greece, in Portugal, in Spain.
At some point they’re going to wake up in the U.K., in Japan, in the United States. We’re running a 3.5 budget deficit. It is obviously over time not sustainable.”
On why there has not been any market discipline:
“The Fed has near zero rates. There is low growth. There is still deflation. So for a number of reasons, interest rates are still low. That is why there is no market discipline. This is unsustainable. There is going to…
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BIDU Weekly
by ilene - April 7th, 2010 12:12 pm
This is perhaps one of the best examples of Allan’s trend trading system. Allan says that BIDU is an excellent trender and his system would have got you in sometime in January, though the last weekly signal was back in 2009. For you bears, his system should catch a trend reversal early. (It’s hard not to look at that chart and anticipate a BID adieU moment, but maybe that’s just me.) Anyway, Allan’s system is easy to trade and you’d only be looking at signals on Monday morning. – Ilene
BIDU Weekly – Update
Courtesy of Allan
I wrote up the Weekly Trade Model of BIDU back in January. It has turned into one of big success stories of the Trend Models:
We knew in January that BIDU trended well and was a good stock to trade in a longer-term model. Although they all don’t trend this well, having one or two that do, make up for any that don’t. Another "Basket" idea in the making?
And the market as a whole?
Says Allan: Back to Trends.
Notwithstanding my personal trend line, the market’s trend has been up since mid February.
The beauty and simplicity of this directional model cannot be overstated. The up-trend continues, as it will until it reverses. Trade accordingly.
Allan just launched a newsletter, “Trend Following Trading Model,” to go with the trading system he’s been working on for years. His trend-following method is chart-based and objective. 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. – Ilene
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MORGAN STANLEY: PREPARE FOR A SELL-OFF
by ilene - March 17th, 2010 5:19 pm
Pragcap looked and looked and looked and found it. One lone bank afloat in bull-land sea sees risk in the market waters. – Ilene
MORGAN STANLEY: PREPARE FOR A SELL-OFF
Courtesy of The Pragmatic Capitalist
It wasn’t easy to find in this sea of bulls, but there is actually a bank out there that is not full-blown bullish following the huge rally of the last month. Morgan
Morgan Stanley says these two risks could overshadow the market in the coming weeks as investors adjust their portfolios to account for the large discrepancy between bulls/bears and risk assets versus lower risk assets. According to Morgan Stanley the put/call ratio represents overly bullish sentiment levels that are historically followed by sell-offs. In addition, the sign of excessive risk can be best seen in the run-up in the small cap vs. large cap ratio. Risk assets, represented by the Russell here, have surged to their highest ratio in terms of large caps in the last 12 months:
Source: Morgan Stanley
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Mad Dash Into the Year End Statement Print
by Zero Hedge - November 9th, 2009 3:00 pm
Mad Dash Into the Year End Statement Print
Courtesy of RobotTrader
Hapless short-sellers howling again over the weekend about "head and shoulders breakdowns", myriad Elliot Wave patterns pointing to a "speed crash", etc. made for some easy meat for the Goldman Prop Desk Traders. The tape was turned and suddenly all the fund managers scrambling to raise cash were suddenly buying anything and everything to make sure they were fully invested in the "right stocks" by year end.
Once again showing how easily the Wildebeest Herd is spooked from running from one direction to another. Amazing how Goldman can use its Air Horn to turn the tape and book another $100 million daily "Layup Trade".
Leaving your typical, blue-blood GS Prop Desk trader laughing at his largest clients once again. Don’t you hate these guys? Same guys in High School who always had an advance copy of the test answers and always aced the exam despite binge drinking Bacardi 151 the night before.
What was running today? The usual suspects. At least until 2:00pm, an uninterrupted meltup in financials and REITs:
And bonds were unfazed by the huge debt offering unleashed by Uncle Sam, as another 300%+ oversubscription assured that low rates would remain forever, and "Animal Spirits" will run wild among the risk trade speculators.
Performance anxiety cannnot be underestimated among the junior fund managers, otherwise classified as "bankers" by the Junior Leaguers, who do not want to tell their fathers that they are dating a "trader" or "gambler".
Now the race is on as to who can beat the S & P, who can beat the 9999 other hedge fund managers, etc. to get that fat year end bonus.
Imagine being a 26-year old fund manager. And your relationship is on the rocks. Primarily because your 24-year old hot girlfriend thinks you have a dead end job with no potential for huge upside. And your hot girlfriend is being regularly propositioned by Iranian plastic surgeons from Beverly Hills, Greek shipping magnates, professional athletes, Formula One race car drivers from Italy, and all the rest.
And she’s "bored" with the relationship. And you know you will never find another chick with a hotter body.
And you have to "make your year" all in one fell swoop during the 4th quarter.
What kind of stocks are you going to buy?
Obviously, there are…
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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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