My latest focused portfolio of only ten stocks is doing awesome in just these last three days. I love it so far... and I have really pumped some $$ into a few of the stocks, and they've been paying back big.... SO FAR.
But, I can't help but notice one big loser... IBM. :surprise:
Sprint is currently rated #1 in the all important customer service/satisfaction category. For many years they had terrible customer service but they have really turned that around in the last few years.
Ron LeMay, a past president and COO of Sprint (1990's) and I were friends in college. He got into hot water over some sort of tax shelter that his accountant got him involved in. Nothing criminal but he did have to resign.
MAKO is my home run company for May. I bought it on May 5th at around $24. It closed today at $34.66, up around 45% since May 5th. I am not sure what is going on there but I am glad I am along for the ride.
Not quite as good but I bought Nielsen (NLSN) at $25 on its IPO and it's now at $31. I see it getting to $35 this year and I'll probably sell between $33 and $35. The IPO strike price was a lot lower than $25 but I d'ont know anyone that got it at the strike price. I had a bunch of bids in between the strike price and $25 and only the $25 bid closed.
Sprint is currently rated #1 in the all important customer service/satisfaction category.
That's very good for investors to realize.
Ron LeMay, a past president and COO of Sprint (1990's) and I were friends in college. He got into hot water over some sort of tax shelter that his accountant got him involved in. Nothing criminal but he did have to resign.
Last I heard he had started a company reclaiming old cell phones and cell phone batteries or something like that...but I have lost touch with him the last few years. I am sure he landed on his feet though. Very, very, sharp guy.
It looks like Gold is golden. It is up about $16 today. I think silver is up over 3 bucks this week. The declining dollar is the only answer I can see.
Just hanging around Tony... busy with stuff... like baseball. My son has just one more game to win to clinch the season championship next Saturday!... so there'll be lots of practices before that big game.... then it's on to the All-Star team after that... it never ends.
Actually hanging around for the Memorial Day weekend... but the tourists are already here packing the beaches and adding to the traffic.
Market seems to be holding its own... barely... with slight downturn, but I have done OK this week. I continue to buy AAPL on the dips and I have a whole lot of it. I sure hope something good happens soon with that stock. Sprint has actually been the real winner for me lately... hope it continues.
And let's remember this Memorial Day weekend to be gratefull to all those men and women (some practically boys and girls) in all the branches of our United States Armed Services that have sacrificed so much for the rest of us... so we can continue to be free to enjoy this wonderful and blessed country...
...even though it's been tragically abused by many politicians, partially sold to the highest bidder, overrun by non-citizens, cheated by corporate scoundrels, and manipulated by the likes of George Soros.
And let's remember this Memorial Day weekend to be gratefull to all those men and women (some practically boys and girls) in all the branches of our United States Armed Services that have sacrificed so much for the rest of us... so we can continue to be free to enjoy this wonderful and blessed country..
I thank the Lord daily for our fighting men and women. They have a miserable job in some of the places they are stuck. Worst part is they are not appreciated enough, here or in many places they have given all to bring justice and peace. I hope everyone spends a few moments of silence thinking about those that gave all for US this weekend.
TM...I've waited for a good come-back and now I have it mixed with a little investment lesson that confirms what Len has been teaching us regarding valuations. IBM will not grow as fast as Apple but it is a great INVESTMENT stock. MSFT, on the other hand, is even more frustrating to it's shareholders than aapl from a future growth standpoint.
At the end of the day, IBM is a solid stock for the foreseeable future, afaic.
A parade of analysts and investors chide Microsoft for its abysmal shareholder returns over the past decade. In reality, Microsoft the company has done terrific. How many large companies grew earnings at 10% annually during one the worst economic decades on record? (11, if you're wondering). Nearly all of the misery Microsoft investors experienced over the past 10 years can be explained by starting valuation. Shares traded at 60 times earnings at the start of the last decade. Shareholders' fate was already sealed at that point. There was no realistic outcome that could have left them with anything other than tears today
Well therein lies the amazement I have that the market woould take Amazon from 72X to 98X for a company growing at a significantly lower rate than Apple today or Microsoft in its day. If we really believe in market manipulation than the outcome of this will be a slow devaluation of multiple for many years and someday someone rewrites this Microsoft story. Re Microsoft it begets the question do you ask Balmer to step down because of lousy management (which this story negates) or because of a lousy stock price?
You don't have to look far to see why investors punish a company for hoarding so much cash. Take Microsoft's recent $8.5 billion purchase of Skype, a deal done at a valuation universally panned as outrageous, irrational, and a sign of desperation. Deals like this combined with Microsoft's enormous and ever-growing pile of cash give investors an excuse to discount both the current cash hoard and future earnings.
I'm beginning to think this is part of Apple's problem. What will they do with all that cash. It'll grow to $100bln by late next year if they d'ont do something. But investors can only discount it so much. Discount it too much and you give management a shot at a buyout of a significant portion or a full takeover. Still Apple explains nothing about its cash hoard and that has to have people wondering. It has me wondering that's for sure. Also if you put to great a discount factor onto Job's health than you really take the company too low in valuation.
If you are into buying Apple products this is one of the best places. I've bought other things from them, such as Blu-ray players, and they are very good with electronics overall. Often they discount the just ending Apple products by a significant amount. Right now they are doing 10% off on any purchases over $350 but I'd think the IPAD 2 is excluded though I didn't check. They are taking off $300 on the highest end IMAC's, less on others.
Everything... including the alignment of the planets... points to a VERY good day for the stock market today. Futures are way up and historically, the day after Memorial Day has been a good day for stocks, the majority of the time. We should follow suit.
Even that "Greecey" mess appears headed towards a solution... another plus.
Continuing from an historical perspective, the market has been trickier a few days later in the week of Memorial Day. But... we are in uncharted waters, IMO... however, the same greed, and bubble-making mentality is as firmly entrenched as ever.
Mark your calendars. iCloud and iOS 5, as well as OS X Lion will be the focus.
Lookie here!... we are going to be all about SOFTWARE! Well, at least until that next hardware surprise is revealed. And, the MacBook Air will get a nice performance boost this summer.
On the iMac do you know if you can hook up an existing windows based PC to it and use it as a monitor for anyone that doesn't want to learn the Apple technology differences (hint - my wife)?
Continuing from an historical perspective, the market has been trickier a few days later in the week of Memorial Day. But... we are in uncharted waters, IMO... however, the same greed, and bubble-making mentality is as firmly entrenched as ever.
I've got to think that there are bubbles in certain stocks and a lot of commodities thank to QE2. There remains a valley in real-estate though because all the easing in the world c'ant help that sector without jobs and the speculation of that industry to buy multiple houses and sell for a profit is in suspended animation until the economy heats up much more. So far despite commodity bubbles inflation has been tamed and over time the strengthening of the dollar amid the easing of QE2 wll let the air out of those bubbles. Hopefully it's a managable release and not one that dominoes to investments all across the planet.
On the iMac do you know if you can hook up an existing windows based PC to it and use it as a monitor for anyone that doesn't want to learn the Apple technology differences (hint - my wife)?
Two things on that.
What's the type of connection currently being used on the existing PC (from the back of the main CPU case to the monitor?)
Remember, the iMAc can run as a PC, and use Windows Operating System Software, such as XP, and also run Windows-compatible application software, and even store all of the PC files. Essentially it can run as a PC and a MAC all on the same machine.
Hello everybody! Well, everything comes to an end sooner or later. As co-owner, I have been forecasting the weather in my Company for about 38 years now. Back around Christmas time, while visiting my daughter and her family I made the decision that I would retire on May 31. It got to the point that I was totally burnt out. It got so bad that I did not even want to look at a weather map for the past couple years. Once I made my decision, there was no turning back. I am 100% certain that I made the right decision. The only problem that remains is that my business partner and I have not yet reached a settlement. Hopefully, there will be a resolution in the near future.
People have been asking me if I would get bored. My answer is NO WAY! I have plenty to keep me busy. Besides, I can sit around the house for several days and not get bored as long as I have Directv and can watch MLB, the NFL, etc. I plan to take lots of trips to visit my kids (in Seattle and now Akron, OH). My wife wants to keep working for several more years and that certainly helps with health insurance and some income.
I have not posted much at all lately with so much on my mind, but I loved the market action today. Jobs delivering the keynote speech next week was the excuse for AAPL finally soaring today. Let's hope this is the start of a humongous rally that we have all been waiting for many months now.
Yes... Apple was awesome today. I sold every single share towards the end of the session. I couldn't resist taking all those profits. After such a big gain, I am hoping the stock will experience a dip this week, and during that dip (if it happens) I will buy a TON of it ALL OVER AGAIN. Without that dip, I won't feel as confident that the stock has balanced itself out.
People have been asking me if I would get bored. My answer is NO WAY!
You will enjoy it greatly. I have no regrets pulling the plug. I did 46 years and enjoyed most of it until the very end. That was time to quit. I am sure you will stay busy and have a good time doing it. Congratulations. :shades:
If you lose the love of your work and it becomes a real ordeal than it's time to get out. So great move on your part. Whatever deal you cut with your partner try to hang onto something (equity or shadow equity) should he sell out at a high price to someone strategic within a certain time frame
All my best..
Tag - re Apple iMac - I have a DVI connection to my monitor on an HP ssystem. Do you know when Apple's new op system comes out?
First of all, thank you to everyone for your good wishes on my retirement.
TM, I was THIS close to pulling the trigger and selling all my AAPL this morning near the highs. Unfortunately, I got busy with other things and I did nothing. This now looks like it will be a real correction. It got very ugly today.
You are right. I'll have to see how it opens tomorrow and act accordingly. It's a bit sad, however, that I could have gotten out this morning above $351.
You are absolutely correct Len. I lost my passion for my job at least 2 years ago. I will be as happy as a lark when all this is finalized. I hope a live a long life to enjoy it.
Charlie... Before you consider selling your Apple shares, let me remind you of some things.
Please don't forget about June 6th.
and... if for some reason June 6th isn't enough to impress, it won't be long before the world is in awe of Apple yet again.. They have a big surprise in the wings, hopefully before the end of this year.
And... the iPad 3 will be even more amazing than the two prior generations. Even though the parts supply chain has been challenged, there is still a good chance we might see the iPad 3 this fall.
And just think about this... Apple has been doing experiments with a MacBook Air driven with an A5 processor... in other words, testing the idea of turning the MacBook Air into a hybrid tablet with a keyboard. What d'ya'know. Apparently, it performed better than they expected, but not nearly as robust as the alternative Intel low-voltage mobile processors currently running in the MacBook Air, and those more-powerful versions slated to be included in a VERY short time from now.
It might not be long before you would want your Apple shares back if you sell them. In fact, I might even buy shares yet again as soon as tomorrow, depending upon what happens.
Of course, the next generation iPhone will be even more impressive and I can just about guarantee that it will be THINNER than ever. The question still remains as to whether we will see the actual next gen iPhone this fall, or instead a transitional upgrade to the existing model.
Also, I really hope we see a smaller iPad... like a little brother to the regular iPad... somewhere around the 7" size will be perfect. And, to go a step further, I hope we see a new form factor that is more like an oversized iPhone.
I expect that the iPod Nano will get some serious feature upgrades... perhaps a curved glass front, making it easier to wear on the wrist, and perhaps even have some phone or video-chat capabilities (The ultimate Dick Tracy device?).
There will DEFINITELY have to be a big improvement in the book media sales and rentals. Apple needs to get rid of iBook in its current format and instead incorporate a book download service directly through iTunes. iTunes is their single best hope for dominating media delivery (sales and rentals) of all kinds. Apple needs to go full steam ahead with this immediately... and they probably will at some point soon.
The single biggest risk to the share price is Steve's health. When Steve is very ill, near death, or departed, the stock will get hammered, and every day we are getting closer and closer to that scenario. It worries me more than any other factor with regards to Apple stock. As I have always argued, I believe the stock WILL rebound after that, because Steve isn't the only genius at Apple, but do we want to be in the stock when it happens?
The question remains how to handle and prepare for that sad day. I prefer to be out of the stock before that happens, and then wait and buy a TON of it right after the stock is overly-hammered.
In the meantime, we are dealing with a ticking-timebomb-stock that otherwise has so many great reasons to soar to the moon. Tricky indeed, because there is sooo much upside potential ahead, yet the ever-looming threat of the departure of Steve.
The single biggest risk to the share price is Steve's health. When Steve is very ill, near death, or departed, the stock will get hammered, and every day we are getting closer and closer to that scenario. It worries me more than any other factor with regards to Apple stock. As I have always argued, I believe the stock WILL rebound after that, because Steve isn't the only genius at Apple, but do we want to be in the stock when it happens?
At the low multiples Apple is trading at I have to believe the market has a substantial part of that priced in. At issue is do you lose the next bright idea if Steve isn't around? How good are the imaginations of the Apple creative people without Steve? Ops is no issue as the guy running the company whenever Steve isn't, is a magiciian at running ops and cost control. The other issue facing the company is as we've stated several times, what do they do with the huge $65bln and raoidly growing cash hoard?
At the low multiples Apple is trading at I have to believe the market has a substantial part of that priced in.
In this case, I wouldn't give a tiny fraction of that much credit to the investors... and then we have to factor in the high percentage of program trading, which now accounts for somewhere between 1/3 and 1/2 of the volume in any given month.
If investors were really that smart, APPL stock would have been trading much higher. Heck, those investors will spook like a suddenly-frightened horse... they will lose their minds temporarily and over-react. This is what they do almost every day in reaction to some worthless piece of news.
I have no doubt they will over-react. The bigger questions are how long the sell-off will last, and how steep will it be? Hours, days, or even weeks? 3%? 5%? 10% ? I suspect it will be a relatively brief selloff, but you will see the share price drop almost instantly... and, as I've always maintained, I firmly believe the stock will ultimately recover.
You referred to the guy running the company when Steve isn't, as "the guy". That is typical. Most people, including large investors, do not know all that much past the face and personality of Steve Jobs. At this point, "that guy" is likely Tim Cook. He's smart, very smart, but he sure doesn't have that spicey personality like Steve. Ultimatley, we really don't know for sure what will happen... unless Steve Jobs does a VERY SMART move, by announcing VERY SOON who will succeed him, and also convey some genuine assurance that the company will continue to be awesome when he relinquishes his position.
That all said... when the day comes, the market WILL over-react.
Regarding their massive treasure of cash... I continue to believe that Apple will do something very awesome and strategically smart with that money (unlike Microsoft's purchase of Skype and their interest in Nokia). In fact, I believe they (Apple) already have a very good idea of what they plan to do. This is a brilliant company... but even with its brilliance, it isn't all that hard to point out some really stupid decisions over the years. There is no owner's manual to running and growing a company like Apple... it's a work in progress, and mistakes will inevitably be made. Fortunately, most decisions have been absolutely brilliant.
As I have done from time to time... I sold every single share of every remaining stock in my portfolio early this morning. I could have waited until later today, but I have once again made the difficult decision that I do not want to participate in the stock market at this point in time.
As you know, I had already sold all my AAPL shares earlier in the week, because the stock had made a major advance in share price.
Moving forward from here, I might purchase a major number of AAPL shares and/or Sprint shares on a significant dip. It will depend upon the overall situation.
Charlie... Before you consider selling your Apple shares, let me remind you of some things.
Please don't forget about June 6th.
and... if for some reason June 6th isn't enough to impress, it won't be long before the world is in awe of Apple yet again.. They have a big surprise in the wings, hopefully before the end of this year.
Thanks TM. It is not AAPL I am worried about but it is the possible collapse of the market in general that worries me. They had this one jerk (John Taylor is his name I think) on CNBC this morning that was practically predicting a "catastrophe". But then I read an article this morning by James Altucher who is predicting the Dow will reach 20,000 in the next 12-18 months. He also talks extremely bullishly about AAPL on the article. I will try to copy and paste it here. It's on the CNBC app on my iPad. Well, in any case, I am still in with all my AAPL, but I placed a stop below the market just in case things decide to collapse.
UPDATE: I got stopped out of all my AAPL in my E-Trade accounts at about $346. Now, I hope it sells off enough by tomorrow so that I can buy the crap out of it prior to Jobs' keynote speech.
Sorry, I could not post this as a link. Here is the article by James Altucher:
NEW YORK (MarketWatch) -- The market fell like a brick on Wednesday. People can't handle any piece of bad news without saying "this is the big one." We have visceral memories of May through July 2010, just a year ago. We have visceral memories of 2008, when it seemed like no end was in sight. Nobody wants to be caught trying to catch that knife with their mouths like in a circus act. You get cut up that way, and the blood isn't pretty.
But it's not going to happen. Even God took one day to rest. The market every now and then needs a day or two to rest. Maybe even more than a day or two. But over the next 12 to 18 months I expect to see Dow 20,000 (INDU ) .
Here are some reasons:
1) QE2 has not started. WHAT? You might say? I thought not only has it started last November, it's about to end? Not true at all. Federal stimulus takes 6 to 18 months before even one dollar hits the U.S. economy in a meaningful way. So expect that $600 billion or more to start hitting toward the end of 2011.
2) Then why is the market going up? One major reason is because we are in the third administration of George W. Bush. The tax cuts got extended. This signaled that Barack Obama was going to pay lip service to his constituents while still keeping an eye on the stock market. The guy wants to get re-elected, after all.
3) Multiplier effect. Once the stimulus hits the economy, it's not just $600 billion. It's probably more like $3 trillion. How come? Because when you buy that coffee with $1 at the local deli, what does that deli guy do with it? He buys a newspaper? And then that guy buys a donut. The multiplier effect is up to 10X. To be honest, I'm more worried about a bubble in 2013 then I am worried about a economic slowdown.
4) Nonfinancial companies are at their highest cash levels ever. Almost $2 trillion dollars. They were hoarding the cash just in case bad times were going to happen again. Guess what? They didn't. But what good is that? Well...
5) They are spending it. Stock buy-backs are at their highest levels in history. Let me tell you the rule of every market on the planet that we learned in Economics 101: Price is ruled by supply and demand. Demand has been down for the past two years. But that's OK, supply is now going to start going down right when demand picks up. $2 trillion is a lot of supply of shares to scoop up.
6) What about unemployment? Well, according to the Bureau of Labor Statistics, temp workers are at levels not seen since before 2009. Companies hire temp workers first before they hire full-time workers. That happens in every recession in history.
7) Corporate profits are at their highest levels ever. Did you know this is the first recession in history where cash levels in corporate America increased quarter-over-quarter every single quarter of the recession? And now profits are at their highest ever. Analysts expect S&P 500 earnings to come in at $95 next year. What if (as usual) they are too conservative and the number comes in at $100. Slap in a 20x multiple (could happen when the stimulus kicks in), and we have an S&P 500 at 2,000 and a Dow probably at 20,000.
8) Major stocks are dirt cheap. Apple (AAPL) trades for 12 times forward earnings and has $65 billion in cash and no debt in the bank. Microsoft (MSFT) trades for around 10 times forward earnings. Intel (INTC) trades for around 8 times forward earnings. These are high market-cap companies. By the way, all the major indices are market-cap weighted. So if the big guys go up, the indices go up. All of these big guys can easily double or triple.
9) Innovation. Barely a year ago the iPad came out. Now what's the number of people who have iPads? 20 million?
10 Read 10 Unusual Things I Didn't Know About Steve Jobs.
10) Major demographic changes are occurring that are going to affect stocks for the next 25 years. What are they? Check my article here next week. Or, perhaps more importantly, follow me on twitter where I engage in ongoing discussions on these things.
Follow me!
The fight never stops between the bulls and the bears. Last summer was personally grueling for me. The market was falling on worries of Greece, an economy the size of Rhode Island, and every day it seemed a new blogger was using this as an excuse to write a blog specifically trashing me. It's usually a bad idea to personally attack someone to get your point across. It's never really necessary, and it's lazy and bad writing. And yet, my kids would Google their last name, and there would be post after post insulting me personally for my opinions.
The market is up some 25% since then. My feeling for the next year is similar: BRING IT ON.
The overall trend in the market has been down for quite some time now. That doesn't mean that we can't make money, but it makes it much more difficult.
Apple is a great stock and I liked the gains earlier this week... finally. I have also done very well with Sprint lately, but perhaps Apple just had its run, and now will settle down once again... with June 6th being the possible exception... IF, IF it is enough of a catalyst to move the stock higher than this week's impressive advance.
There are those doom and gloom guys out there. And there are those guys that drink nothing but Kool-Aid. They all believe they are right. In the end, it shows that they are just talking heads, because it's soooooo unlikely that either dramatic extreme will happen.
But, we WILL most often see movement in one direction or another, that's for sure. The stock market is like a guy using a yo-yo, as he walke up (or down) a hill, or mountain. The smaller ups and downs happen, but the general and bigger trend is usually up... and sometimes down.
We are in the fifth week of a declining market. I wanted to get out on April 29th, as I had posted. My former broker screwed everything up for me. But, I have been fighting my way back through this declining market, by day-trading. It has been difficult. But now that I have worked my way back to this point, I am OUT of this market. I have warned all of you for weeks about this market, and I have not changed my mind.
I will say it again... those extremists are wrong. However, we are in the fifth week of a declining market. In addition, there are domestic and international economic issues that only a fool would ignore. This is a bad combination of ingredients, IMO, and only greedy bubble-builders, institutional investors that have no choice, and innocent or ignorant (or long-term "look the other way" victims) individual investors will be left in this market... IMHO.
Sure, there are some legitimate reasons to be in the market, but I think there are many, many more reasons to be OUT at this point in time. If you want a long list... I can easily provide one. Just look at the unemployment data, our unbelieveable housing crisis, our frightening national debt and deficit, China's bubble, Middle East issues, European issues, commodities prices, war on terror, war on drugs, illegal aliens, near-bankrupt cities and states, our crumbling infrastructure, political gridlock, nuclear threat (Iran, Pakistan, N. Korea, terrorists, more), natural disasters, negative consumer sentiment, skyrocketing health-care costs, rapidly aging population (baby-boomers), insane entitlements issues, genuine potential pandemic at this time in history, stock market manipulation, oil and commodities manipulation, inflation, high taxes, corporate burdens, collossal and growing size of our government, and much more... and, of course, George Soros... LOL.
Do NOT misunderstand me, however. I am NOT a doomsdayer kind of guy. And, I am not drinking Kool-Aid either. I have been in the market in huge levels during many or most of the above problems. But, they are problems that DO exist, and they need to be considered. On the other hand, a Dow of 20,000 within a year or so is absurd, IMO. ANyway, as I said, the current trend is down and we are in the fifth week of decline... and that's not hype.
IMO, that guy that wrote that article is an idiot... although he could be smart enough to get some attention for himself by makking such a ridulous prediction. Heck, I'll writer a bunch of nationally recognized articles and predict a Dow of 5,000 in 12 to 18 months and see if it gets a big reaction. The guy is a publicist, and is just jerking his readers around. A real jerk, IMO.
Life is a beautiful blessing. Don't risk the stock market beyond what is realistic, and enjoy your grandchildren during your retirement! You lucky dog.
Thanks TM for being another voice of reason. BTW, in case you did not see my update above, I got stopped out of all my AAPL shares at about $346 for my E-Trade accounts. I'm hoping to buy it back cheaper, but I could also be left in the dust. I have a feeling Jobs is going to make some sort of astounding announcement on Monday.
I can't remember accurately, but don't you have AAPL shares with your broker as well? I am trying to understand what percentage of your total AAPL shares you have actually sold.
If you intend to buy back more AAPL shares at a cheaper price tomorrow, you need to be careful... IIRC, AAPL shares have been manipulated on Fridays.
Regarding Steve's "announcement" on Monday... I think we are talking iCloud, iOS5, OSX Lion, and a significantly upgraded MacBook Air. In addition, there might be discussion about Apple's market share, increasing penetration and percentage of dominance, general retail growth, and positive sales data... all designed to make shareholders feel good. Also, a "teaser" of some sort could be in the works.
The biggest issue for me remains jobs. Everything else is window dressing. Employment resolves a lot of things including real estate as banks can take advantage of their large reserves once employment comes back. I do like the one line in the data Charlie posted in which the Times reporter noted about combining part time and full time jobs. But it isn't worth much if the part time job is dominated by low end labor. This story from todays Times focusses well on jobs and as usual the differences between Dems and Reps as to how to solve it. The problem is the Dems are so lack of trusting to a market and want to simply ensure hiring at any cost so it's the usual spend and worry about paying for it later. But no matter what, you have to get to the Reps way of doing it at some point. As a small business owner I have no doubt at all that incentivizing entrepenurrial behavior in small business is the only way to go to give a long lasting job recovery but this means relying on market forces. Raising tax rates to pay for wreckless spending - as the Dems want to - will ruin any spending policy they put in to lower unemployment. It's almost like putting a fish hook into an ocean with a lot of extra bait on it and at the same time poisoning the fish in the ocean.
We have a government that is now so huge that it has an appetite that connot be fed. The only thing to do is shrink the size of government, and reduce spending. Of course, tax cuts would be great.
As I've always posted here numerous times from the very beginning... punitive tax policies and placing burdens on businesses and individuals is counter-productive. Rewarding success and growth in businesses is the BEST way to stimulate the economy by creating jobs and ultimately igniting consumer spending.
That sure is a well written and knowledgable statement......It makes me wonder just what fundamental ground rules are left to rely on....like does inflation, deflation or price earnings have any relevance anymore? ...Tony
I can't remember accurately, but don't you have AAPL shares with your broker as well? I am trying to understand what percentage of your total AAPL shares you have actually sold.
Yes, I have shares with both. I sold the ones on E-Trade. This constitutes about 65% of total number of shares. At this very moment, it looks like I did the wrong thing by getting out. Damn!
After hours trading of AAPL was essentially stagnant... the whole volume was only 35,182 shares... and the share price barely moved... up a fractional 0.0428% from the close... which was only up 0.17% for the entire day's trading.
I don't know if it's likely, but I would love to see the stock tank tomorrow, and then I would buy a ton of it, and then I would turn around and sell it right after the next noteable price jump... which could come as early as Monday, unless investors are unimpressed or lethargic.
I did throw some caution to you last night about selling today, but since you did sell, you need to use that cash to your advantage. Be smart! And watch the stock tomorrow when you have a chance... especially towards the end of the trading day, in case those AAPL manipulators are at it again.
In retrospect this economic slowdown was inevitable. Japan, gas prices, and Europe have all been negative factors. But, Japan is about to start recovering, gas prices reached a peak about 2 months ago, but I'm not sure about the European situation. The market will start to anticipate a stronger economy again by fall. It will start to anticipate this by later this month or July at the latest. That's the time to buy stocks again in my opinion. In any case, this will NOT be the end of the world. We are not heading into another recession/depression.
Comments
My latest focused portfolio of only ten stocks is doing awesome in just these last three days. I love it so far... and I have really pumped some $$ into a few of the stocks, and they've been paying back big.... SO FAR.
But, I can't help but notice one big loser... IBM. :surprise:
I hold you responsible, of course. :P
TM
Ron LeMay, a past president and COO of Sprint (1990's) and I were friends in college. He got into hot water over some sort of tax shelter that his accountant got him involved in. Nothing criminal but he did have to resign.
2013 LX 570 2016 LS 460
2013 LX 570 2016 LS 460
That's very good for investors to realize.
Ron LeMay, a past president and COO of Sprint (1990's) and I were friends in college. He got into hot water over some sort of tax shelter that his accountant got him involved in. Nothing criminal but he did have to resign.
What's he up to these days?
TM
2013 LX 570 2016 LS 460
Actually hanging around for the Memorial Day weekend... but the tourists are already here packing the beaches and adding to the traffic.
Market seems to be holding its own... barely... with slight downturn, but I have done OK this week. I continue to buy AAPL on the dips and I have a whole lot of it. I sure hope something good happens soon with that stock. Sprint has actually been the real winner for me lately... hope it continues.
And let's remember this Memorial Day weekend to be gratefull to all those men and women (some practically boys and girls) in all the branches of our United States Armed Services that have sacrificed so much for the rest of us... so we can continue to be free to enjoy this wonderful and blessed country...
...even though it's been tragically abused by many politicians, partially sold to the highest bidder, overrun by non-citizens, cheated by corporate scoundrels, and manipulated by the likes of George Soros.
God Bless us all.
Have a nice weekend Tony.
TM
I thank the Lord daily for our fighting men and women. They have a miserable job in some of the places they are stuck. Worst part is they are not appreciated enough, here or in many places they have given all to bring justice and peace. I hope everyone spends a few moments of silence thinking about those that gave all for US this weekend.
Personally, I ALSO pray for our men and women serving in harm;s way.
I pray that God will make them all fierce, and invisible, to the ones that would do harm to them and US.
I tell my son his deployment has done more for my prayer life than anything else.
We miss him terribly...
At the end of the day, IBM is a solid stock for the foreseeable future, afaic.
2 Huge Lessons From Microsoft and IBM That Every Investor Should Know
Happy Memorial Day to ALL!
Regards,
OW
A parade of analysts and investors chide Microsoft for its abysmal shareholder returns over the past decade. In reality, Microsoft the company has done terrific. How many large companies grew earnings at 10% annually during one the worst economic decades on record? (11, if you're wondering). Nearly all of the misery Microsoft investors experienced over the past 10 years can be explained by starting valuation. Shares traded at 60 times earnings at the start of the last decade. Shareholders' fate was already sealed at that point. There was no realistic outcome that could have left them with anything other than tears today
Well therein lies the amazement I have that the market woould take Amazon from 72X to 98X for a company growing at a significantly lower rate than Apple today or Microsoft in its day. If we really believe in market manipulation than the outcome of this will be a slow devaluation of multiple for many years and someday someone rewrites this Microsoft story. Re Microsoft it begets the question do you ask Balmer to step down because of lousy management (which this story negates) or because of a lousy stock price?
You don't have to look far to see why investors punish a company for hoarding so much cash. Take Microsoft's recent $8.5 billion purchase of Skype, a deal done at a valuation universally panned as outrageous, irrational, and a sign of desperation. Deals like this combined with Microsoft's enormous and ever-growing pile of cash give investors an excuse to discount both the current cash hoard and future earnings.
I'm beginning to think this is part of Apple's problem. What will they do with all that cash. It'll grow to $100bln by late next year if they d'ont do something. But investors can only discount it so much. Discount it too much and you give management a shot at a buyout of a significant portion or a full takeover. Still Apple explains nothing about its cash hoard and that has to have people wondering. It has me wondering that's for sure. Also if you put to great a discount factor onto Job's health than you really take the company too low in valuation.
Fantastic article. Sooooo relevant to our situation.
Y'know, I think I might just sell all my AAPL shares next week.
I have another familiar reason, and will post about it next week.
Anyway, thanks again for that great post.
TM
http://www.macmall.com/home?store=macmall&source=MWB27354
Even that "Greecey" mess appears headed towards a solution... another plus.
Continuing from an historical perspective, the market has been trickier a few days later in the week of Memorial Day. But... we are in uncharted waters, IMO... however, the same greed, and bubble-making mentality is as firmly entrenched as ever.
TM
Lookie here!... we are going to be all about SOFTWARE! Well, at least until that next hardware surprise is revealed. And, the MacBook Air will get a nice performance boost this summer.
Go Apple!
June 6.
TM
On the iMac do you know if you can hook up an existing windows based PC to it and use it as a monitor for anyone that doesn't want to learn the Apple technology differences (hint - my wife)?
I've got to think that there are bubbles in certain stocks and a lot of commodities thank to QE2. There remains a valley in real-estate though because all the easing in the world c'ant help that sector without jobs and the speculation of that industry to buy multiple houses and sell for a profit is in suspended animation until the economy heats up much more. So far despite commodity bubbles inflation has been tamed and over time the strengthening of the dollar amid the easing of QE2 wll let the air out of those bubbles. Hopefully it's a managable release and not one that dominoes to investments all across the planet.
Two things on that.
What's the type of connection currently being used on the existing PC (from the back of the main CPU case to the monitor?)
Remember, the iMAc can run as a PC, and use Windows Operating System Software, such as XP, and also run Windows-compatible application software, and even store all of the PC files. Essentially it can run as a PC and a MAC all on the same machine.
TM
People have been asking me if I would get bored. My answer is NO WAY! I have plenty to keep me busy. Besides, I can sit around the house for several days and not get bored as long as I have Directv and can watch MLB, the NFL, etc. I plan to take lots of trips to visit my kids (in Seattle and now Akron, OH). My wife wants to keep working for several more years and that certainly helps with health insurance and some income.
I have not posted much at all lately with so much on my mind, but I loved the market action today. Jobs delivering the keynote speech next week was the excuse for AAPL finally soaring today. Let's hope this is the start of a humongous rally that we have all been waiting for many months now.
Personally I follow the weather closely, and enjoy being alarmed by what it does or doesn`t do...We need RAIN .. Tony
That's huge!
I wish you all the best.
Yes... Apple was awesome today. I sold every single share towards the end of the session. I couldn't resist taking all those profits. After such a big gain, I am hoping the stock will experience a dip this week, and during that dip (if it happens) I will buy a TON of it ALL OVER AGAIN. Without that dip, I won't feel as confident that the stock has balanced itself out.
TM
You will enjoy it greatly. I have no regrets pulling the plug. I did 46 years and enjoyed most of it until the very end. That was time to quit. I am sure you will stay busy and have a good time doing it. Congratulations. :shades:
If you lose the love of your work and it becomes a real ordeal than it's time to get out. So great move on your part. Whatever deal you cut with your partner try to hang onto something (equity or shadow equity) should he sell out at a high price to someone strategic within a certain time frame
All my best..
Tag - re Apple iMac - I have a DVI connection to my monitor on an HP ssystem. Do you know when Apple's new op system comes out?
TM, I was THIS close to pulling the trigger and selling all my AAPL this morning near the highs. Unfortunately, I got busy with other things and I did nothing. This now looks like it will be a real correction. It got very ugly today.
TM
Please don't forget about June 6th.
and... if for some reason June 6th isn't enough to impress, it won't be long before the world is in awe of Apple yet again.. They have a big surprise in the wings, hopefully before the end of this year.
And... the iPad 3 will be even more amazing than the two prior generations. Even though the parts supply chain has been challenged, there is still a good chance we might see the iPad 3 this fall.
And just think about this... Apple has been doing experiments with a MacBook Air driven with an A5 processor... in other words, testing the idea of turning the MacBook Air into a hybrid tablet with a keyboard. What d'ya'know. Apparently, it performed better than they expected, but not nearly as robust as the alternative Intel low-voltage mobile processors currently running in the MacBook Air, and those more-powerful versions slated to be included in a VERY short time from now.
It might not be long before you would want your Apple shares back if you sell them. In fact, I might even buy shares yet again as soon as tomorrow, depending upon what happens.
Of course, the next generation iPhone will be even more impressive and I can just about guarantee that it will be THINNER than ever. The question still remains as to whether we will see the actual next gen iPhone this fall, or instead a transitional upgrade to the existing model.
Also, I really hope we see a smaller iPad... like a little brother to the regular iPad... somewhere around the 7" size will be perfect. And, to go a step further, I hope we see a new form factor that is more like an oversized iPhone.
I expect that the iPod Nano will get some serious feature upgrades... perhaps a curved glass front, making it easier to wear on the wrist, and perhaps even have some phone or video-chat capabilities (The ultimate Dick Tracy device?).
There will DEFINITELY have to be a big improvement in the book media sales and rentals. Apple needs to get rid of iBook in its current format and instead incorporate a book download service directly through iTunes. iTunes is their single best hope for dominating media delivery (sales and rentals) of all kinds. Apple needs to go full steam ahead with this immediately... and they probably will at some point soon.
The single biggest risk to the share price is Steve's health. When Steve is very ill, near death, or departed, the stock will get hammered, and every day we are getting closer and closer to that scenario. It worries me more than any other factor with regards to Apple stock. As I have always argued, I believe the stock WILL rebound after that, because Steve isn't the only genius at Apple, but do we want to be in the stock when it happens?
The question remains how to handle and prepare for that sad day. I prefer to be out of the stock before that happens, and then wait and buy a TON of it right after the stock is overly-hammered.
In the meantime, we are dealing with a ticking-timebomb-stock that otherwise has so many great reasons to soar to the moon. Tricky indeed, because there is sooo much upside potential ahead, yet the ever-looming threat of the departure of Steve.
What's the answer?
TM
At the low multiples Apple is trading at I have to believe the market has a substantial part of that priced in. At issue is do you lose the next bright idea if Steve isn't around? How good are the imaginations of the Apple creative people without Steve? Ops is no issue as the guy running the company whenever Steve isn't, is a magiciian at running ops and cost control. The other issue facing the company is as we've stated several times, what do they do with the huge $65bln and raoidly growing cash hoard?
In this case, I wouldn't give a tiny fraction of that much credit to the investors... and then we have to factor in the high percentage of program trading, which now accounts for somewhere between 1/3 and 1/2 of the volume in any given month.
If investors were really that smart, APPL stock would have been trading much higher. Heck, those investors will spook like a suddenly-frightened horse... they will lose their minds temporarily and over-react. This is what they do almost every day in reaction to some worthless piece of news.
I have no doubt they will over-react. The bigger questions are how long the sell-off will last, and how steep will it be? Hours, days, or even weeks? 3%? 5%? 10% ? I suspect it will be a relatively brief selloff, but you will see the share price drop almost instantly... and, as I've always maintained, I firmly believe the stock will ultimately recover.
You referred to the guy running the company when Steve isn't, as "the guy". That is typical. Most people, including large investors, do not know all that much past the face and personality of Steve Jobs. At this point, "that guy" is likely Tim Cook. He's smart, very smart, but he sure doesn't have that spicey personality like Steve. Ultimatley, we really don't know for sure what will happen... unless Steve Jobs does a VERY SMART move, by announcing VERY SOON who will succeed him, and also convey some genuine assurance that the company will continue to be awesome when he relinquishes his position.
That all said... when the day comes, the market WILL over-react.
Regarding their massive treasure of cash... I continue to believe that Apple will do something very awesome and strategically smart with that money (unlike Microsoft's purchase of Skype and their interest in Nokia). In fact, I believe they (Apple) already have a very good idea of what they plan to do. This is a brilliant company... but even with its brilliance, it isn't all that hard to point out some really stupid decisions over the years. There is no owner's manual to running and growing a company like Apple... it's a work in progress, and mistakes will inevitably be made. Fortunately, most decisions have been absolutely brilliant.
TM
As I have done from time to time... I sold every single share of every remaining stock in my portfolio early this morning. I could have waited until later today, but I have once again made the difficult decision that I do not want to participate in the stock market at this point in time.
As you know, I had already sold all my AAPL shares earlier in the week, because the stock had made a major advance in share price.
Moving forward from here, I might purchase a major number of AAPL shares and/or Sprint shares on a significant dip. It will depend upon the overall situation.
TM
Please don't forget about June 6th.
and... if for some reason June 6th isn't enough to impress, it won't be long before the world is in awe of Apple yet again.. They have a big surprise in the wings, hopefully before the end of this year.
Thanks TM. It is not AAPL I am worried about but it is the possible collapse of the market in general that worries me. They had this one jerk (John Taylor is his name I think) on CNBC this morning that was practically predicting a "catastrophe". But then I read an article this morning by James Altucher who is predicting the Dow will reach 20,000 in the next 12-18 months. He also talks extremely bullishly about AAPL on the article. I will try to copy and paste it here. It's on the CNBC app on my iPad. Well, in any case, I am still in with all my AAPL, but I placed a stop below the market just in case things decide to collapse.
UPDATE: I got stopped out of all my AAPL in my E-Trade accounts at about $346. Now, I hope it sells off enough by tomorrow so that I can buy the crap out of it prior to Jobs' keynote speech.
NEW YORK (MarketWatch) -- The market fell like a brick on Wednesday. People can't handle any piece of bad news without saying "this is the big one." We have visceral memories of May through July 2010, just a year ago. We have visceral memories of 2008, when it seemed like no end was in sight. Nobody wants to be caught trying to catch that knife with their mouths like in a circus act. You get cut up that way, and the blood isn't pretty.
But it's not going to happen. Even God took one day to rest. The market every now and then needs a day or two to rest. Maybe even more than a day or two. But over the next 12 to 18 months I expect to see Dow 20,000 (INDU ) .
Here are some reasons:
1) QE2 has not started. WHAT? You might say? I thought not only has it started last November, it's about to end? Not true at all. Federal stimulus takes 6 to 18 months before even one dollar hits the U.S. economy in a meaningful way. So expect that $600 billion or more to start hitting toward the end of 2011.
2) Then why is the market going up? One major reason is because we are in the third administration of George W. Bush. The tax cuts got extended. This signaled that Barack Obama was going to pay lip service to his constituents while still keeping an eye on the stock market. The guy wants to get re-elected, after all.
3) Multiplier effect. Once the stimulus hits the economy, it's not just $600 billion. It's probably more like $3 trillion. How come? Because when you buy that coffee with $1 at the local deli, what does that deli guy do with it? He buys a newspaper? And then that guy buys a donut. The multiplier effect is up to 10X. To be honest, I'm more worried about a bubble in 2013 then I am worried about a economic slowdown.
4) Nonfinancial companies are at their highest cash levels ever. Almost $2 trillion dollars. They were hoarding the cash just in case bad times were going to happen again. Guess what? They didn't. But what good is that? Well...
5) They are spending it. Stock buy-backs are at their highest levels in history. Let me tell you the rule of every market on the planet that we learned in Economics 101: Price is ruled by supply and demand. Demand has been down for the past two years. But that's OK, supply is now going to start going down right when demand picks up. $2 trillion is a lot of supply of shares to scoop up.
6) What about unemployment? Well, according to the Bureau of Labor Statistics, temp workers are at levels not seen since before 2009. Companies hire temp workers first before they hire full-time workers. That happens in every recession in history.
7) Corporate profits are at their highest levels ever. Did you know this is the first recession in history where cash levels in corporate America increased quarter-over-quarter every single quarter of the recession? And now profits are at their highest ever. Analysts expect S&P 500 earnings to come in at $95 next year. What if (as usual) they are too conservative and the number comes in at $100. Slap in a 20x multiple (could happen when the stimulus kicks in), and we have an S&P 500 at 2,000 and a Dow probably at 20,000.
8) Major stocks are dirt cheap. Apple (AAPL) trades for 12 times forward earnings and has $65 billion in cash and no debt in the bank. Microsoft (MSFT) trades for around 10 times forward earnings. Intel (INTC) trades for around 8 times forward earnings. These are high market-cap companies. By the way, all the major indices are market-cap weighted. So if the big guys go up, the indices go up. All of these big guys can easily double or triple.
9) Innovation. Barely a year ago the iPad came out. Now what's the number of people who have iPads? 20 million?
10 Read 10 Unusual Things I Didn't Know About Steve Jobs.
10) Major demographic changes are occurring that are going to affect stocks for the next 25 years. What are they? Check my article here next week. Or, perhaps more importantly, follow me on twitter where I engage in ongoing discussions on these things.
Follow me!
The fight never stops between the bulls and the bears. Last summer was personally grueling for me. The market was falling on worries of Greece, an economy the size of Rhode Island, and every day it seemed a new blogger was using this as an excuse to write a blog specifically trashing me. It's usually a bad idea to personally attack someone to get your point across. It's never really necessary, and it's lazy and bad writing. And yet, my kids would Google their last name, and there would be post after post insulting me personally for my opinions.
The market is up some 25% since then. My feeling for the next year is similar: BRING IT ON.
Those talking heads can really make us dizzy.
The overall trend in the market has been down for quite some time now. That doesn't mean that we can't make money, but it makes it much more difficult.
Apple is a great stock and I liked the gains earlier this week... finally. I have also done very well with Sprint lately, but perhaps Apple just had its run, and now will settle down once again... with June 6th being the possible exception... IF, IF it is enough of a catalyst to move the stock higher than this week's impressive advance.
There are those doom and gloom guys out there. And there are those guys that drink nothing but Kool-Aid. They all believe they are right. In the end, it shows that they are just talking heads, because it's soooooo unlikely that either dramatic extreme will happen.
But, we WILL most often see movement in one direction or another, that's for sure. The stock market is like a guy using a yo-yo, as he walke up (or down) a hill, or mountain. The smaller ups and downs happen, but the general and bigger trend is usually up... and sometimes down.
We are in the fifth week of a declining market. I wanted to get out on April 29th, as I had posted. My former broker screwed everything up for me. But, I have been fighting my way back through this declining market, by day-trading. It has been difficult. But now that I have worked my way back to this point, I am OUT of this market. I have warned all of you for weeks about this market, and I have not changed my mind.
I will say it again... those extremists are wrong. However, we are in the fifth week of a declining market. In addition, there are domestic and international economic issues that only a fool would ignore. This is a bad combination of ingredients, IMO, and only greedy bubble-builders, institutional investors that have no choice, and innocent or ignorant (or long-term "look the other way" victims) individual investors will be left in this market... IMHO.
Sure, there are some legitimate reasons to be in the market, but I think there are many, many more reasons to be OUT at this point in time. If you want a long list... I can easily provide one. Just look at the unemployment data, our unbelieveable housing crisis, our frightening national debt and deficit, China's bubble, Middle East issues, European issues, commodities prices, war on terror, war on drugs, illegal aliens, near-bankrupt cities and states, our crumbling infrastructure, political gridlock, nuclear threat (Iran, Pakistan, N. Korea, terrorists, more), natural disasters, negative consumer sentiment, skyrocketing health-care costs, rapidly aging population (baby-boomers), insane entitlements issues, genuine potential pandemic at this time in history, stock market manipulation, oil and commodities manipulation, inflation, high taxes, corporate burdens, collossal and growing size of our government, and much more... and, of course, George Soros... LOL.
Do NOT misunderstand me, however. I am NOT a doomsdayer kind of guy. And, I am not drinking Kool-Aid either. I have been in the market in huge levels during many or most of the above problems. But, they are problems that DO exist, and they need to be considered. On the other hand, a Dow of 20,000 within a year or so is absurd, IMO. ANyway, as I said, the current trend is down and we are in the fifth week of decline... and that's not hype.
IMO, that guy that wrote that article is an idiot... although he could be smart enough to get some attention for himself by makking such a ridulous prediction. Heck, I'll writer a bunch of nationally recognized articles and predict a Dow of 5,000 in 12 to 18 months and see if it gets a big reaction. The guy is a publicist, and is just jerking his readers around. A real jerk, IMO.
Life is a beautiful blessing. Don't risk the stock market beyond what is realistic, and enjoy your grandchildren during your retirement! You lucky dog.
TM
I can't remember accurately, but don't you have AAPL shares with your broker as well? I am trying to understand what percentage of your total AAPL shares you have actually sold.
If you intend to buy back more AAPL shares at a cheaper price tomorrow, you need to be careful... IIRC, AAPL shares have been manipulated on Fridays.
Regarding Steve's "announcement" on Monday... I think we are talking iCloud, iOS5, OSX Lion, and a significantly upgraded MacBook Air. In addition, there might be discussion about Apple's market share, increasing penetration and percentage of dominance, general retail growth, and positive sales data... all designed to make shareholders feel good. Also, a "teaser" of some sort could be in the works.
TM
http://www.nytimes.com/2011/06/02/business/economy/02jobs.html?_r=1&hp
Look at what it's done.
And... look what the money has been wasted on.
We have a government that is now so huge that it has an appetite that connot be fed. The only thing to do is shrink the size of government, and reduce spending. Of course, tax cuts would be great.
As I've always posted here numerous times from the very beginning... punitive tax policies and placing burdens on businesses and individuals is counter-productive. Rewarding success and growth in businesses is the BEST way to stimulate the economy by creating jobs and ultimately igniting consumer spending.
Reward success... do not punish it. Simple.
TM
Yes, I have shares with both. I sold the ones on E-Trade. This constitutes about 65% of total number of shares. At this very moment, it looks like I did the wrong thing by getting out. Damn!
I don't know if it's likely, but I would love to see the stock tank tomorrow, and then I would buy a ton of it, and then I would turn around and sell it right after the next noteable price jump... which could come as early as Monday, unless investors are unimpressed or lethargic.
I did throw some caution to you last night about selling today, but since you did sell, you need to use that cash to your advantage. Be smart! And watch the stock tomorrow when you have a chance... especially towards the end of the trading day, in case those AAPL manipulators are at it again.
TM
Put on your seatbelts... especially those of you that own stocks.
I personally do not own one single share of any stock... I have a feeling I will be glad.
Charlie... I am not sure I will buy any AAPL... unless it tanks.
This is a dangerous market Gentlemen... very dangerous. Be careful.
If you are going to buy stocks, look for bargains & don't pay too much.
TM
http://www.kcci.com/money/28108223/detail.html
In retrospect this economic slowdown was inevitable. Japan, gas prices, and Europe have all been negative factors. But, Japan is about to start recovering, gas prices reached a peak about 2 months ago, but I'm not sure about the European situation. The market will start to anticipate a stronger economy again by fall. It will start to anticipate this by later this month or July at the latest. That's the time to buy stocks again in my opinion. In any case, this will NOT be the end of the world. We are not heading into another recession/depression.