The Stock Market and Investing

gagrice

Further, Plans often are cheaper today than 15 years ago.

They are way cheaper. A buddy of mine in the early 1990s carried a bag phone everywhere he went. His bill averaged $800 a month. It was for his business so a write-off. Very few had cell service back then.

The difference is people with very limited incomes are getting sucked into those smartphone plans that cannot afford to put food on the table. What happens when Congress gets their head out of their butts and makes radical cuts in all the giveaway programs? What percentage of the 47% that have a smartphone, spending $100 per month for that service, will be able to make the payment?

The End of Smartphone Contracts

NEW YORK (TheStreet) -- Let's say you could buy a stock today for anywhere from $200 to $450, and that I could promise you with 100% certainty it would be worth $1,080 two years from now. Would you buy it?

Of course you would! The implied rate of return on a $200 to $450 investment turning into $1,080 over two years is a no-brainer, if you are capable of doing basic math.

Still, many U.S. consumers, who apparently don't know basic math, do exactly the opposite: They sign up to pay an extra $1,080 over two years in order to get a check worth anywhere from $200 to $450 today.

Normally, we call this a paycheck scam. Perhaps loan sharking. Nobody would even lease a car on these terms.

So what am I talking about here?

I'm talking about the way the vast majority of U.S. consumers buy their smartphones, including well over 90% of iPhone buyers. The rates are probably similar for Android, Microsoft (MSFT) and BlackBerry consumers.

http://www.thestreet.com/story/11706240/1/the-end-of-smartphone-contracts.html

imidazol97

>The End of Smartphone Contracts

StraightTalk, Walmart with ATT, lets you buy an Apple iPhone in the store and have a $45 month unlimited talk and text. There may be a data limit or may not be, I'm not clear from deciphering the X-generation talk on howardsforum.com about cell phones. StraightTalk is actually Tracfone/Net10.
straighttalk.com

Or buy Net10's offer of android or iphones on their site net10.com. They offer several lesser androids but it's now difficult to find the page. Go to current customer, then pick phones from the menu. http://www.net10.com/store_manager.jsp?task=buyphone
From the face page, Net10 sells iphones and high android phones, sometimes through an "independent" store.
Net10 also allows you to bring you unlocked iphone and android with a buy a sim setup. I haven't tried that, but it's a lot cheaper at $45/mo than the alternative. Bring a capable T-Mobile phone, you can have 4G service on Net10.

No contract phones have changed. And that was what made me think Apple was losing more business than we thought. They are offering iPhones through the Straighttalk and Net10 plans. It makes it look like they are worried about Android penetration.

Or is Apple just getting extra value out of their phones already in place, much as a car company sells to rental and fleets to make some extra profit per vehicle although not the usual amount.

gagrice

It is really bad. AT&T wants $299 on an iPhone5 at signing. That means they are financing the remaining $350 over 2 years. They are charging you $45 per month to finance that iPhone. If you are a lousy VISA credit risk you are probably paying 20% interest. If you put it on VISA and paid it with equal payments over 24 months it would be $17.81 per month. So AT&T is charging the equivalent of 145% interest on money they borrow from Bernanke for a fraction of a percent. Where are the people that are protecting the consumers?

imidazol97

Looking on Walmart's site, they have the iPhone5 listed. 16 GB $649. IIRC, either the Net10 iphone or the StraightTalk iphone could be paid on a Walmart card at $25 per month. NO INTEREST. Not all stores have the display. Two of the stores in our nearby area had them when I was doing a shopathon to see what phones they carried in the store. My son's Android phone touchscreen quit on his trip to DC during spring break.

They also have iPhone 4 and 4S.

Does this help Apple, or hurt Apple. I think it helps.

ljflx

If you are a lousy VISA credit risk you are probably paying 20% interest.

If you are a lousy credit risk you shouldn't be buying the iPhone and you deserve to get a 20% interest charge. It means you don't know how to manage your money and the result is you are too big of a risk

houdini1

Then again, if your credit is lousy enough, you get a free phone and free service, courtesy of the tax payers and borrowed money from China.

gagrice

Which is worse 20% to Visa or 150% to AT&T or Verizon. Smartphone contracts are the ripoff of the decade.

fintail

I haven't had a landline since 2001. Mobile phone can do it all and more. No bubble there - if anything, smartphones are just hitting market saturation.

I think T-Mobile is moving to including some no-contract plans (well, you have a contract of sorts if you make installment payments on a provided device). Might impact the industry, but the company has inconsistent coverage outside of metro areas.

ljflx

Boy - I'm glad I'm not as paranoid as you guys. These things are set-up to benefit the economy and are overly protective for too long because it takes time to work. That's when people start to take advantage. The bankers stayed very rigid for a long time so Bernanke kept the rates very low. Now they are getting very loose (in some cases too lose) again and the money is flowing. That's the only reason why the economy is picking up and even with that it's a very slow job growth market because of productivity and technology gains. The easing of bank restrictions is a much larger help to small business. When it was tight only large business could effectively borrow. Small businesses froze becuse they didn't want to pay 10-15% hedge fund rates. You had to have multi-year contracts and a real safe business model for banks to even look at you. So now that the money is flowing again you have paranoid people thinking its loophioles. The facts of life are that big business and greedy business people will always make things work for them as long as they have the power to. If you can get past that and really play in the market of growing a business then you'll realize that many small businesses can also take advantage of the rates and the banks lowering the entrance fee. That is good for jobs and their business. It trickles to the consumer in low mortgage and equity line rates. Those have been available for a whle now but consumers have failed to take advantage of them.

Where I think the problems are is in the super trades on Wall street and the fact that I know you have hedge fund collusion, tie-ins to the media to get press out (could be bad, could be good - it all depends on how they want to trade in this blog era) and super computers giving the big buyers a decided advantage and making the market un-equal.

ljflx

If you can't afford a smartphone - why buy one? It's not a matter of which rate is worse. It's why are you even buying if things are that bad. I didn't look to buy or lease a Lexus or Mercedes when I couldn't afford one. Before I could I took Acura and before that Chrysler. I upgraded to real lux cars when I could easily afford the lux brands. Likewise I moved up in housing when I could afford to do so. If you are irresponsible financially than you are going to get penalized. Fact of life.

gagrice

If you are irresponsible financially than you are going to get penalized. Fact of life.

And you should be. However our current government feels they should protect everyone from every eventuality. Which includes buying Smartphones for those on welfare, with our tax dollars. That to me is stealing from the tax payer and giving to the upper and lower classes.

Welfare recipients are now getting upgrades to smartphones (Assurance Phones) at taxpayer expense – That large Federal tax on your cell phone bill (which keeps increasing) is now being used to give free cell phones and free cell phone service to people on welfare. Apparently smartphones, along with internet access are considered a basic civil right under the Obama administration.

http://www.assurancewireless.com/Public/Welcome.aspx

imidazol97

>buying Smartphones for those on welfare, with our tax dollars.

Originally meant to be lifeline for a home landline phone for the poor, infirm, elderly, this has been perverted into an income redistribution program. The Arkansas congressman has a bill in to revert it to the original intent. Lotsa luck with that in DC. He says some addresses have several "Free" phones--the number 10 sticks in my mind. I know in Ohio the reports showed several phones for same people. No interest in fraud control from government. Surprise?

The same giveaway has been operating in the mortgage program. Tax money flying. A neighbor works a part-time job. His new wife employed said to skip a payment on what was originally his home. Then the government helped the bank write down the mortgage by $5000 because he was in danger of getting behind on payments. The push to help homeowners with mortgages under water by forgiving part of what they owe is another giveaway problem from government.

Hey, will they make my Medicare payment for me for the year? I don't like having to pay for things.

Hey, I need a new car. Subsidize my purchase.

I still see these government attitudes leading to the same place we were for the general population out in the hinterlands.

imidazol97

>smartphones are just hitting market saturation.

Saturation worldwide or in US?

I read that to indicate that iPhones from AAPL have reached market saturation. Growth will be minor unless they can take from the Android phones. Their only hope in US is to come out with a supposed new version of iPhone to get owners to buy newer and to increase their global market.

gagrice

I wish I could be as optimistic about our economy as some folks here. Granted I am in what has to be a somewhat depressed area. At least 3 pts above the so called national average unemployment numbers. Empty storefronts from the coast 35 miles inland. When you get 3000 applicants for minimum wage jobs, you are not in a good economy. Take a quick look at the $1 million plus homes in foreclosure or pre foreclosure. So it is not just the poor getting hit.

http://www.zillow.com/homes/make_me_move/house_type/1000000-_price/539-3599_mp/d- ays_sort/33.133814,-116.983452,32.685909,-117.474403_rect/10_zm/

anthonyp

Those are a couple of good posts.....Particularly your thoughts on the hedge funds, and the use of super computer all tied into the news media....

I have a friend who drives a taxi, and in talking with him, the Medicaid patients get compensated to get to the Dr---by having the gas money or taxi fare....I could well understand that, but thought it surprising as the gov. is usually so stingy...All in all the government is just a big spending machine, so the money we pay in tax , gets recycled ....in many ways...Some I agree with some not....

I think the zero interest rate is hurtful, but I understand the strategy....I just don`t know enough whether I wish it to stop or not Tony

fintail

Relative to the value of the dollar, a smartphone today costs no more than a dumb phone did 10 years ago. Reminds me of someone stuck in 1910 whining that the Joads had a car in 1935...

fintail

Not paranoid, just a little jaded and cynical about what is in effect a rigged game. Of course, we all know corporations and financiers control policy (not vice versa), so it is to be expected.

I don't know if I want an economy so dependent on housing. The FIRE industries had their time in the spotlight, and it wasn't sustainable. They need to be castigated and punished, not allowed influence again. I don't know if I see businesses benefiting so much from the low rates as much as those who cash in via property development, sales, insurance, and financing.

I don't know if legitimate productivity is behind the lack of job gains either, rather fear - so many workers are now taking on the same workload that 2 might have done a decade ago, in fear of losing the job if they don't. I think it's time for the "job creators" to put up or shut up about the trickle down nonsense they've lobbied for over the past few decades.

As you mention, the untouchable (hoping for a crash and doing what they can to create it) hedge fund cabal and mass volume traders are making out - but at what expense to the citizenry as a whole? I also believe there is a component out there, bitter about the past couple elections, who hope and pray for an economic setback too, just out of spite.

fintail

In the US - in the rest of the developed world, they are actually even more common. There are still people converting over today, but the growth rates have to be smaller. Then it becomes what you describe - sales via updates.

houdini1

Charlie, I am pulling hard for the cyclones !! The game is just about to start. Notre Dame could not cope with all those 3 pointers and I hope the same thing happens to Ohio State. Good Luck.

cyclone4

Thanks Houdini! I have been preoccupied with the Tourney. I need to catch up on the discussions here later. I sure hope Babb is not seriously hurt. If so, ISU is screwed. He is our best defender and a great outside shooter as well.

imidazol97

>same thing happens to Ohio State.
Go Buckeyes.

houdini1

That was a fantastic game. Congrats on a great win. That kid just nailed it at the buzzer !! Both teams were great and it is unbelievable how many close games that Iowa State has lost this year.

cyclone4

That "loss" was a very bad low blow for me. I had to compose myself for a few hours before posting here. It is incredible how many times that has happened this year to the Cyclones in the last few seconds. The call against Clyburn with 45 seconds left was hideous and basically cost ISU the game. First of all, he was fouled by Thomas prior to making any contact with Craft. Secondly, Craft was not totally set and should have been a block. Thirdly, Craft's right heel was above that line inside and thus it cannot be a charge. The foot does not need to be touching the line the rule states. ISU would have been up by 3 and likely 4 with a free throw had the officials not totally blown that call. I wish there was a replay rule when it comes to that line inside.

I knew we would lose and could hardly bear to watch when we did not secure that rebound with the score tied and 30 seconds left. That's just the way it has gone in these situations for the Cyclones this year. Btw, it is also questionable if it should have been OSU's ball with 30 seconds left. Thomas may have hit Ejim's hand or the ball as the ball caromed out of bounds.

cdnpinhead

. . .this has been perverted into an income redistribution program.

Imagine that. This is how you get elected. . .and re-elected.

From each according to his ability, to each according to his need.

Sadly, nothing in there about people who think working for a living cuts into their day too much.

imidazol97

I've decided the market has some room upward to go through the summer. As for aapl, I am not convinced about their market anymore. I was an Apple fan back in the 80s and 90s. Tired of the game with Apple computers costing more, doing less, not having shareward available like my PCs, not as many Apple programs, AND constantly being upgraded a _little_, not quite to the best available, but a little. That always left another upgrade purchase of another computer after a few months to get a little bit more up-to-date. Sound familiar with pattern now? How many others beyond a few devoted buyers are available?

imidazol97

I've watched through 50 years of stock market as the management pay and top executives' pay went from a multiple of the average workers' pay rate to outrageous multiples, paired with parachutes beyond belief.

Here's what fuels the fire. Watch the video to the end to see what the income of the top 1% (1/2%) is compared to the rest of the urchins working for a living.

Shocking Statistics: America's wealth gap between the RICH & POOR .

http://www.youtube.com/watch?v=BvEIvQoudOY

I would love to see the same display for the wealth held, not just the incomes, for the top 1%.

>nothing in there about people who think working for a living cuts into their day too much.

If one points that out in our economy, one gets smeared by the politics of personal destruction for mentioning the 25-30% of same. The rest of the 47% was people on disability and social security who are retired and do not have other incomes causing them to pay taxes. Since the 47% comment was not actually negative, only in the mind of a campaign ad was it thus, including the 47% was including some folks who likely would vote to continue the status quo not realizing their Medicare was being drastically cut back in pay to providers for services.

gagrice

Tired of the game with Apple computers costing more, doing less, not having shareward available like my PCs,

I am going through that right now with my daughter in law. She is keeping track of expenses on the two houses we bought, that my son is remodeling. She has iWorks on a Mac that does not do that well exporting to the standard in the industry Excel. Very frustrating. Hopefully they will be able to afford a real world computer soon.

robr2

Tell her to go buy Office for Mac Home Edition - it's less than $100. Don't blame the computer - blame the lousy software that came with it for free.

anthonyp

The thing about the top managers of publicly held companies, are that they have had to innovate after the founders have moved on....Nothing is static, therefore it takes some vision to move a company forward, and that person or team is rewarded greatly if they are successful....When they fail they are still rewarded for trying but really not nearly as well..

If it wern`t that way, then the founder of a company would live to see the `failure` of that company after he/she got too old to continue..

The guy who started a company and innovated gets all he /she can, and so do the next people who take over...:) Tony

michaellno

Tell her to go buy Office for Mac Home Edition - it's less than $100.

When my wife got her MacBook Pro over the holidays, she did exactly that. Was much easier to transfer all of her files over from her Windows-based laptop that way.

fintail

Some of those rewards are still too much, IMO. If one looks at historic exec:worker pay ratios, something is really out of balance right now. It's also stronger in the US than in other first world locations, as our socio-economic chasm continues to widen at the behest of said execs. Maybe I am just jaded, as the execs I have worked with are usually there out of tenure more than knowledge or ability.

fintail

Maybe that's a lesson for the defeated - think before uttering weird comments. Seems that not thinking before speaking is a problem for those who have lost the past couple so-called elections. They have nothing to blame but their own mouths.

I'd wager an awful lot the wealth distribution is even more skewed than income.

anthonyp

Well I agree with you, in that there are abuses, but I am talking in a more `general `term......If a person starts a business, and is thoughtful and lucky, dedicated, and is successful doing `their thing`, they make as much money as they can.....When their turn is over, and they are retired, but still on call, the successor builds on the past model----which by the way is outmodes pretty quickly---if that person is also adaptive, and builds successfully , they too try and make as much as they can......

The success of any business is largely related to the team who is part of the structure, and all benefit...

Now the government sets a different set of rules, which in part is our social network, funded by taxes......The more successful, the higher the tax....It take enormous sums of money to build a meaningful rather modest accumulation of wealth.......Remember all things are relative.....Most of the time a person`s best earning years are built on decades of struggle, and end as quickly at they start.....I don`t begrudge the hugely successful executives---where ever they are---but do not think that some of the tax gimmicks that have been enacted for their benefit are right and do not think those persons are entitled to the `free pass`....Hopefully some of that will be corrected soon, but I sure don`t want to pay even more than I will shortly...:) Tony ps A example of what I remember in the housing era, was a person could average their last three years of income , when they sold a very long term holding a a nice gain..The reason being was it would not repeat itself.....Also a person could roll a property over into a more expensive property and own no taxes...That may have been the starting of the housing bubble that popped a few year ago Memories

imidazol97

> think before uttering weird comments

Weird it's considered a weird comment. But that was played to the Low Information Voter, so I can understand your taking that POV. But the group of those receiving the handouts thanks all the young people who will never be able to pay for them let alone receiving SS & medicare as those paying no taxes know it today. And the debt per person is only going up, up, up. How many $$$ does new baby owe already? But it's cool that the advertisements were able to sway the LIV's.

imidazol97

Things keep changing for the Aapl position. TMobile now is going no contracts. Since this sounds related to its coordination with Net10 and bring-you-own-phone where it's clear if you bring a T-Mobile 4G phone, you will get 4G on Net10, it could increase the Appl sales because of its lower cost to the consumer enabling them to have Android and Apple related products with fast access.

"The company has already provided an update to allow the Galaxy Note 2 to access the LTE network. Starting today, it will sell the LTE-enabled BlackBerry Z10.

"There's also the off-chance that the iPhone 5 will make an appearance."

"The company has already provided an update to allow the Galaxy Note 2 to access the LTE network. Starting today, it will sell the LTE-enabled BlackBerry Z10.

"There's also the off-chance that the iPhone 5 will make an appearance."


T-Mobile is merging with MetroPCS. Is this a real merger? Or a takeover like Chrysler/Mercedes.

cyclone4

I like the fact that you will not need to sign a 2 year contract anymore with T-Mobile.

Here is an article that talks about Apple's acquisition of a company which will greatly improve Apple Maps. Btw, Apple maps has already drastically improved since its launch. This will be another big step up.

http://www.thestreet.com/story/11879972/1/apple-maps-turning-a-corner.html?puc=y- - - - - ahoo&cm_ven=YAHOO

Here is the news hot off the press about the iPhone 5 being available now on T-Mobile. Could this be a game changer for T-Mobile or Apple? Will the other carriers be hurt?

http://www.thestreet.com/story/11880161/1/t-mobile-might-have-just-blown-up-the-- game-of-selling-iphones.html?puc=yahoo&cm_ven=YAHOO

And, here is one more Apple story from this morning:

http://wallstcheatsheet.com/stocks/analyst-were-all-expecting-too-much-from-appl- - - e.html/?ref=YF

robr2

I like the fact that you will not need to sign a 2 year contract anymore with T-Mobile.

There's no contract per se, but you still have to pay for the phone via installments or upfront. If you leave, you still have to pay for the phone.

I believe it's the same way with any carrier if you pay for the phone upfront - no contract required.

imidazol97

>http://www.thestreet.com/story/11880161/1/t-mobile-might-have-just-blown-up-the-- - game-of-selling-iphones.html?puc=yahoo&cm_ven=YAHOO

The Street story asks, "Why didn't somebody think of this sooner? It's one thing to fall for the gimmick of a subsidized iPhone from Apple (AAPL). It's entirely another to be told you not only have no contract, but you do not have to come up with the cash up front to buy the phone."

And someone already did. That was what I posted about a few days ago. I can buy an iphone for $500+/- and use it with Net10 where it operates on T-Mobile's network (forshadowing today's announcement). Also sold in Walmart is the iphone with StraightTalk as the carrier which is actually ATT, if I understood some signs or posts right.

The question is whether this is a last gasp to keep iphone sales up or is it putting iphones out to new users while the Verizon/ATT original stores are going to be getting something more and newer in the iphone and Apple group in the near future--which would explain why they're not complaining, at least not yet.

Hmmmmm.

In some of my earlier posts I mulled that this might be a holding position or to reach lower spenders for service with iphones. I was surprised with the Net10/StraightTalk offerings when I started shopping a few months back when my son said in passing that he would like to have an iphone to replace his aging Android phone.

fintail

It's a weird comment when the media can construe it as they wish. These people need to have others review their planned yapping before they yap. It has nothing to do with low information voters, everything to do with poor planning. Don't forget, the voters who voted in 00 and 04 were no more insightful than those who voted in 08 and 12.

The debt goes up up up as we still cling to such broken ideals as the policeman of the world, so-called free markets which aren't free, and trickle down garbage. And we still don't know anything about the miracle economic plan that some thought would save us.

fintail

It's simply ending the subsidy. You don't have to pay for the phone via installments, you can buy it outright, or finance it with what seems to come out to 0% APR (as I don't think there is a discount for full payment). That ideal has been used by some European carriers for a little while, now.

I don't know if it has really been an option with other carriers before.

robr2

I don't know if it has really been an option with other carriers before.

I know that ATT has always had the option of paying MSRP for the phone and going month to month on the contract.

IIRC, the UK carriers were always buy the phone outright and go month to month but it is my understanding that many are now going to subsidize and contract model.

fintail

What if you bring your own phone? T-Mo allows for that, too. That's what a lot of people in Europe do - might be why T-Mo jumped into it, with their German background (who want to get out of it after overpaying back around 01, I think).

It might work for people who don't want a new $500++ phone every 18-24 months.

cyclone4

There's no contract per se, but you still have to pay for the phone via installments or upfront. If you leave, you still have to pay for the phone.

I believe it's the same way with any carrier if you pay for the phone upfront - no contract required.

Very true Rob. But this installment plan is very different than what the major carriers now provide. For some folks, this plan is very appealing. But of course you will have to make up the difference if you sign up with this plan and then decide to leave it after 2 or 3 months.

In any case, this is obviously beneficial for Apple since it can only do one thing...increase iPhone sales. There are likely many thousands of people that want to stay with T-Mobile but had no access to an iPhone until now.

robr2

There are likely many thousands of people that want to stay with T-Mobile but had no access to an iPhone until now.

I guess I never saw the benefit of of anyone staying on T Mobile if they wanted an iPhone. They have a very small network of their own and they have roaming agreements with ATT. I guess I've always considered T Mobile a second tier carrier.

Yes, it will add some sales for Apple.

robr2

What if you bring your own phone?

Sure, you can bring your own device to AT&T. As long as it's unlocked and works on their frequencies...

cyclone4

Perhaps the deal with T-Mobile is not so great after all. Here is Rocco Pendola's math on the installment plan, etc.

http://www.thestreet.com/story/11880416/1/the-math-on-the-t-mobileapple-iphone-5- -monthly-plan.html?puc=yahoo&cm_ven=YAHOO

In any case, Apple will sell more iPhones now. How many more is not clear.

gagrice

I know that ATT has always had the option of paying MSRP for the phone and going month to month on the contract.

Yes you can buy the phone outright from the majors. The month to month is still about $100. Which makes the contract the better deal. Unless you find a reseller like StraightTalk that sells you the service for less per month. I am still trying to sort it all out.

gagrice

Got a tech idea and want to make a fortune before you're out of your teens? Just do it, is the advice of the London schoolboy who's just sold his smartphone news app to Yahoo for a reported $30 million.

He taught himself to code at age 12 after Apple's App Store was launched, creating several apps including Facemood, a service which analyzed sentiment to determine the moods of Facebook users, and music discovery service SongStumblr.

http://www.reuters.com/article/2013/03/26/us-yahoo-summly-daloisio-profile-idUSB- RE92P01C20130326

fintail

Do other carriers offer this? I am not a big fan of ATT, they are kind of the Deathstar :shades:

I only have experience with Tmo and VZW, I am unaware of either letting you in postpaid without a contract no matter if you bring your own device - but few do it that way anyway, as prepaid is usually the better deal for that strategy.

fintail

Fun story, but probably have better odds buying Powerball tickets. The random right idea at the random right time, often with some parental backing to boot.