What a controversy!
By now, we've all seen the "Bengate" video of the iPhone 6+ being bent by hand but now it turns out that the video that's gone viral may have been FAKED!!! This is a video that knocked 5% off AAPL's stock price this week, costing its investors $30Bn in lost market value – so not a harmless hoax.
As a disclaimer, it's important to note that, in our first Webcast of the year, we picked AAPL as our top trade idea and again, on TV on March 6th, I was almost embarrassed to say AAPL was once again our trade of the year for BNN (it was last year's trade too). AAPL is up 33% since than and our initial trade idea is up over 300% (we used options for leverage) but we still have bullish AAPL trades in our Member Portfolios – so we do like the company and have some bias…
That being said, we don't know the bias of "Unbox Therapy" and we don't KNOW that it's a hoax but it's starting to seem like one as AAPL has already put out a rare public statement rebuffing the claim, stating that only 9 customers to date have complained of bent phones (out of 20M sold) and now Consumer Reports has done a test confirming that, indeed, you can't bend an iPhone 6 Plus with your bare hands.
Speaking of hands, there are some inconsistencies in the Unbox video that are very disturbing. First of all, look at the hands in the image above and then look at the guy narrating the video – people are saying those are not the same hands. That may or may not be the case but it is certainly the case that there's a huge discrepancy in the video itself:
As you can see, the phone he is bending "live" at 1:38 in the video says it's Tuesday, 23rd at 2:26 but then, 40 seconds later, the "same" phone says it's 1:58. This is not an editing discrepancy since he had an UNBENT phone just seconds before 2:26 that he "bent" on camera (or someone's hands did!). This is quite the scandal!
While this is all kind of funny to the casual observer there are, in fact, BILLIONS of dollars on the line and look how easy it is to short AAPL stock at $103 on the 23rd, have 9 people report a bent phone in the first few days of release (that would go without notice) and then release a video showing a phone bending and making a fast 5% as the stock dropped over $5. In fact, with options, the October $95 puts shot up from $1 to $3.50 – a 250% gain based on the release of one questionable video.
Who besides market manipulators would stand to benefit from this sort of thing? How about Samsung, HTC, Nokia… Corporate espionage is a very real thing and anything that causes people to buy a million less iPhones over even a made-up controversy means a million more sales for their competitors. In fact, this wasn't the first attempt to create a "Bendgate" scandal – the same thing was said about the iPhone 5 when it first came out – but that video never gained any traction. This time they got it right!
Most of those videos did come out of China, where many rival phones, and the iPhones are manufactured. Those videos were ignored and, as you can see from the Consumer Reports test, as well as the actual two-year use of 100M iPhone 5s – that was complete and obvious BS. The difference with the current Bendgate videos is the "trustability" of the Canadian blogger and the timing – so soon after the release that people have no other experience with this model to compare it to.
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At Philstockworld, we teach our Members to find the TRUTH in investments, not to simply react to the latest rumors. We took advantage of this little dip in AAPL to take a few more long positions but we'll be happy to see others panic out and create better entry opportunities down the road. As I reminded our Members, the same thing happened in 2011, when Cramer and his goon squad at TheStreet and many other media sources acted like the death of Steve Jobs would be the death of AAPL.
I told our Members to BUYBUYBUY – that was over 100% ago.
Demographics – The West’s age distribution is too lopsided to support entitlements
http://www.maxkeiser.com/2014/09/video-demographics-the-wests-age-distribution-is-too-lopsided-to-support-entitlements/
Mathematics 101: The Money Printing Machine And CAPE
http://www.valuewalk.com/2014/09/money-printing-fed/?_escaped_fragment_?Zm8b
There goes the neighborhoods: 6 billionaires who ruined their surrounding environs
http://www.salon.com/2014/09/28/there_goes_the_neighborhoods_6_billionaires_who_ruined_their_surrounding_environs_partner/
Old Energy Is Doing Everything It Can To Hold Back The Rise Of Solar
http://www.businessinsider.com/r-taxes-fees-the-worldwide-battle-between-utilities-and-solar–2014-9
The Misunderstood Global Financial Crisis. “It’s the Energy Stupid”
http://www.globalresearch.ca/the-misunderstood-global-financial-crisis-its-the-energy-stupid/5404783
It’s Time For Microsoft To Kill Any Global Ambitions For Windows Phone
http://www.forbes.com/sites/ewanspence/2014/09/23/microsoft-should-kill-windows-phone/
How Can Competent Traders Become Great Traders?
http://traderfeed.blogspot.com/2014/09/how-can-competent-traders-become-great.html
The Greatest Books of All Time, As Voted by 125 Famous Authors
http://www.brainpickings.org/2012/01/30/writers-top-ten-favorite-books/
How to judge a ’bot; why it’s covered
http://www.economist.com/blogs/babbage/2014/09/robot-jurisprudence
From Bloomberg, Sep 28, 2014, 5:01:35 PM
Hong Kong investors prepared for a
stock-market retreat and made arrangements to work outside the
financial district amid the biggest police crackdown on
protesters since the city returned to Chinese rule.
To read the entire article, go to http://bloom.bg/1qK2AUw
Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8
From Bloomberg, Sep 28, 2014, 12:41:30 PM
The Federal Reserve mustn’t “fall
behind the curve” as it weighs when to start raising interest
rates, Dallas Fed President Richard Fisher said, citing
strengthening U.S. growth and building wage-price pressures.
To read the entire article, go to http://bloom.bg/1u5ceXG
Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8
Shadow- I am sorry if you mistook my comments as critical, but I would never call anyone a liar in a group like this where I like all and want to befriends all the members and have camaraderie, unless I had incontrovertible truth and a darn good reason to start a fight.. If you read that again, What I ask you is how you can be sure unless you try it! You explain that you are sure you could and maybe you can, but it still isn't knowing beyond a doubt by trying. That's all, and it was just an innocent aside. I am on your team and have no reason to call you a liar, so take my word that it was conversation/discussion and we should be able to disagree without anger. I simply disagree with your definition of "sure" as in "I am sure I can bend it with one hand." I am certain that you are sure, but putting yourself in the shoes of someone else, how can they be truly sure with no evidence other than your personal experience with other things.Take care and I wish you a pain free future.
Craig
I guess my loss of religious beliefs has affected my faith in anyone or anything!
Good morning!
Half of Friday's BS gains are fading out in the Futures – down 0.5% so far but the quarter ends tomorrow and I expect every effort will be made to save it until then.
Hang Seng led Asia down almost 2% (450 points) with protests swelling but Shanghai defiantly ignored it and gained half a point, along with the Nikkei (16,310) while India and Singapore were flat.
Europe is also down half a point with Economic Sentiment losing about 1% in September but there's an ECB decision on Thursday and Draghi speaks so hope should spring eternal over there.
Here's a good chart from BAC – Indicates how badly stretched margin debt is while return on that borrowed capital is falling. Any downturn in the market can be sharply exaggerated under these conditions as all those bets tend to unwind quickly:
Also – WOW – talk about going up with narrow participation:
Gold/8800 – Don't forget the Central Banksters hold about 30,000 tons of gold ($72Bn) that is constantly flowing in and out so THEY set the price of gold at whatever they want and low gold prices mean low inflation and stable money to most people so they want to keep that illusion going for as long as possible.
Only 4,000 tonnes a year are added to the supply, so all that BS about demand here or there is nonsense compared to any Central Bank (or ETF, GLD would be #6 with 1,300 tonnes) adding to or subtracting from their supply.
Right now, it suits all of the World's Central Banks to keep their population from hoarding gold so they are making it look unattractive as an investment. Inflation is AN aspect of gold but not THE aspect – gold is a rare metal which is easy to verify so it can't be counterfeited or over-produced. That's not true about money at all. I'm not advocating gold as a short-term bet but, over the next decade or so – I think it's safe to say SOMETHING will happen that will send it back to its highs.
Wolf/StJ – I agree, low inflation is terrible for the economy but it's good for bankers when they lend long-term money out at fixed rates, because they want to get paid back in money that has roughly the same value. Wolf's problem is he works under the illusion that the Fed gives a crap about helping the economy vs. helping its member banks maximize their profits. Same goes for capital requirements, loose requirements mean the banks don't need money and that means they don't have to offer you anything for your savings – these are all the post-Reagan cons we've come to accept that are destroying the Middle Class.
TA/StJ – Thanks for that one, sounds about right to me. I think Malkiel sums it up very nicely, the reason there are not many studies to show what BS TA is is the same reason there aren't a lot of studies showing you that Astrology or Tarot Cards or Palm Reading aren't real – it's so obvious to the people who might do the studies that they don't see the point and, for the unconvinced, it's more like religion and you're not likely to change their opinion with a study, so why bother?
Bendgate/Shadow – I don't know why you don't just make a video, this guys new video got 1.8M hits, probably about $30,000 in ad revenues for bending an iPhone.
See, he did it on the street, so it must be real!
Clearly it's Consumer Reports and AAPL who are lying, right? Unlike Shadow, I don't know for a fact what's true so forgive me for gathering more information on both sides of the issue, folks…
And, by the way, don't you think it's a bit misleading for the Unbox guy to put out a video called "The Bend Uncut" without doing any such thing? There's a controversy questioning the obvious editing flaws (in the very least) of his phone-bending video and all he has to do is ACTUALLY put up the uncut footage but, instead, he titles a video as if he has but then engages in street theater instead.
Piketty/StJ – Good, maybe this time people will actually read it! Good point by DeLong too but, unfortunately, the conclusion the "book-buying upper-middle class" comes to after reading those paragraphs is that they should invest some money with Bain Capital.
Delta/Burr – As a keeper of multiple portfolios, I long ago got into the habit of figuring out my exposure by OBSERVING the change in my total balance (delta) in various market conditions. I saves incredible amounts of time and helps you learn which adjustments work best under what conditions. Look what we did with the STP this week – we hit 60% and I regretted last time we hit 50% that was stayed so bearish as we dropped right back to 30% so this time we took off half the DXDs and, even after Friday's pop, we're still up 59.2% so we know EXACTLY what variable can be changed to immediately turn us more bullish or bearish.
As a rule of thumb, I try to simplify my indicators because, when it all hits the fan (and it often does), who has time to mess around?
Phil,
Thanks for the in depth explanation of gold as an investment/trading vehicle. Parsing gold – or anything – as an investment vs a trade sure does reduce the importance of timing in the decision process..