Got a major sell signal for AAPL today ... from my mom

swissaustrian

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I've been talking to my mom on the phone today. She is 69 years old and never ever touched a computer in her life. She even got problems with a simple cell (not: smart) phone.
So the conversation goes on for a while and I'm telling her that I'm having a hard time finding good (non-mining) stocks to put some of her retirement money in and then she says:
"You know what, why don't you buy me some Apple stocks? I've talked to one of my best friends (another lady about her age) and we both think it's a great company. They're all over the news, they have to be great."

As a contrarian, I instantly took this as a major sell signal for APPL. My mom has NEVER traded stocks and has never dealt with any AAPL product and any computer or smart phone for that matter.

Remember the famous rule from 1929:
When even shoeshine boys are giving you stock tips, it’s time to sell (Joseph P. Kennedy?)
http://www.barrypopik.com/index.php...iving_you_stock_tips_its_time_to_sell_joseph/

Don't get me wrong:
I don't want to say my mom should be compared to a shoeshine boy, but as far as stocks and technology are concerned her knowledge is at the level of such a person.

------------------

Getting a little more serious:
Recently, there have been reports about questionable accounting methods used by AAPL to inflate earnings by accounting for sales of products which aren't actually sold.
Additionally, the company is considering to use it's huge pile of cash to broaden their product portfolio which usually ends in a desaster.
EVERYONE is on one side of the trade. Literally all big fundmanagers own APPL. The trade is totally overcrowded.
APPL faces problems with their manufacturing slaves in China.

etc. there are a lot of reasons to be cautious.

iAm considering to buy some puts...
 
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DoChenRollingBearing

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I missed out on the huge runs of APPL and GOOG. I too would be very cautious with these.

Jim Cramer sez: "If a company has accounting irregularities, GET OUT!"
 

escobar

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Yeah I hear you. I feel kinda bad because my dad was telling me we should buy some many years ago and I was like its a consumer tech company so much competition etc. Guess they beat the odds. Yeah who knows how long it can go on for.

The only stock I ever pounded the table on shorting was Edison Schools when I was working for the beasts in NY. It was the craziest thing I ever saw they tried to be a for profit high school provider that was funded by the govt. Every contract they signed cashflow got more negative but they would show this hockey stock projections way in the future. Ended up getting delisted and was a zero.

I just never liked even looking at a short if it was hugely cashflow positive and zero debt. But who knows maybe in a yr samsung comes out w an iphone or ipad killer. who knows. someone will eventually just like msft got stopped by apple. guess just a matter of time.
 

ancona

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The market is way too "toppy" right now to do anything but sell and get in to cash or PM's for a while. We are on the brink of something quite dark, and I do not mean night time. With incredibly low volumes and drifting markets, it will only take a very small geopolitical or monetary dislocation to send this fucker in to a fatal tailspin.

I am no magician, I do not have second sight and I am not omniscient, but I can sense something very bad in the air. I feel it when I go to the LCS to bullshit or pick up a hundred more worth of junk. I feel it in the grocery mart while waiting in line to pay. I feel it while waiting in line at the bank. People are nervous, sometimes without even knowing why. It is very unnerving in many ways, but for me at least, very real.

It is my completely uneducated opinion that we will test the 2008 -09 lows in the markets and may even see the DOW break below them. It's a fucked up wait and see thing, but for myself, I am out of the game for now and sitting in only extremely fungible investments or physical and some fiat. The Brotherhood of Darkness isn't getting one more cent from me unless they are using a roof mounted .50 and squad of heavily armed ground pounders with the latest and greatest weaponry. Even then, there will be a fight.
 

swissaustrian

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Yeah I hear you. I feel kinda bad because my dad was telling me we should buy some many years ago and I was like its a consumer tech company so much competition etc. Guess they beat the odds. Yeah who knows how long it can go on for.

The only stock I ever pounded the table on shorting was Edison Schools when I was working for the beasts in NY. It was the craziest thing I ever saw they tried to be a for profit high school provider that was funded by the govt. Every contract they signed cashflow got more negative but they would show this hockey stock projections way in the future. Ended up getting delisted and was a zero.

I just never liked even looking at a short if it was hugely cashflow positive and zero debt. But who knows maybe in a yr samsung comes out w an iphone or ipad killer. who knows. someone will eventually just like msft got stopped by apple. guess just a matter of time.
I'd bet on HTC in the smartphone market. Their products are way better than iphones. I'm sure they'll manage to overcame the patent battle with Apple which is their biggest obstacle right now.
 

DCFusor

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I'd love to make money shorting AAPL, myself, I'm kind of an anti-fanboi of them, their walled garden, their price fixing, and so on, and now that Jobs is gone, probably not going to up to major new cool things at all. At least Jobs did get the RIAA somewhat into a business model that can work for them better than the lawsuit business.

But! It's kind of like betting on an economic reset - we all know it's going to happen, but look at it just dragging out and dragging out seemingly forever. In the meanwhile, the way to make money is to work the tape up and down, up and down.

I did see some interesting research the other day that might make an apple short not stupid. It pointed out that a couple months after each product release, the stock tended to be down from the release date, usually a good bit. I'll have to check that out myself, though.

The thing is, from where I sit, Apple is for dumb people who need it to just work, and will accept some fairly serious limitations to get that - you can't hardly program the things, you can only go through the app store, and so on. This does seem to be a general trend in the business - used to be you could write your own hardware drivers for windows pretty easily - now it's not only a heck of a lot more difficult, but also very expensive and time wasting since you have to pay MS to accept and then sign them with crypto or they can't be installed at all. You can still do it in Linux, but it's not super easy there either. In fact, programming in general for windows is becoming pretty hard if you want to do anything truly serious and outside the box that .NET gives you - say a good neural net program that needs to be efficient.

And here's the problem - there are plenty of dumb people out there - many who even think that buying overpriced apple bling somehow makes them hip and will get them laid. (no that's not how it works, it's displaying the ability to waste money that gets you laid, it's not apple-specific, and you will get what you deserve with a gold-digger) Didn't someone say you never go broke underestimating intelligence of the general public? Somehow Apple has managed to sell the "think different" meme to herds without them realizing that they are a herd all thinking alike, thereby! Says it all, eh?

Ancona, wanna borrow my .50, just in case? I never shoot it myself anymore.

You know what's funny about those patent battles? I WROTE some of that software - a lot of the baseband stuff is my stuff - codecs, pitch trackers (the ones that don't sound robotic) and signal processing. I sold the stuff outright a long time ago for what I thought was a fair price - no regrets, but it was like half a million or a little more, not the billions they're now suing one another over that and lesser stuff....
 
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bushi

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I'd bet on HTC in the smartphone market. Their products are way better than iphones.
Hi SA

HTC is undoubtedly making best QUALITY hardware phones, with decent UI skin on them to boot, but I am affraid it is not the quality that wins you the masses. If it was, than I agree, they & Motorola shoul've win hands down.

And don't get me started on smartphones industry ;). BTW, if you are interested in quite amazing& powerfull stuff, check out Motorola Atrix with it's "docks" concept - especially, laptop dock/PC dock. Quite cool and productive (unlike most of the mobile space) - I was hoping it would catch big time in the marketplace, alas, ain't happened.

Apple is all the rage, though, despite going to some lenghts to ignore Enterprise, they are even getting in there - the upward pressure from employees (some of them quite high in the pecking order) is so great. I am not an Apple guy myself, to me iPhone from the start was lacking in functionality (overhyped application launcher)

regards
 
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DCFusor

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This is why in general, I don't trade tech. I know *too much*. It's far too easy to fall in love with the best in tech, and assume the stock will follow...but it doesn't work like that most of the time.
 

bushi

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This is why in general, I don't trade tech. I know *too much*. It's far too easy to fall in love with the best in tech, and assume the stock will follow...but it doesn't work like that most of the time.
I hear you, DCF! I am a hopeless tech buyer myself - buying what is top of the crop as a TECHNOLOGY, but unlike the popular understanding goes, it is quite often that INFERIOR tech wins in the marketplace - if it is good enough, cheap enough to make good profits on it, and supported by skilled marketing teams, and big money - than before superior technology can demonstrate it's superiority, it is already dead in the water.

What can you do, sheeple rules.
 

pmbug

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A better mousetrap will lose to better marketing almost every time. I learned that lesson watching the Betamax vs. VHS saga play out back in the day.
 

DSAbug

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A better mousetrap will lose to better marketing almost every time. I learned that lesson watching the Betamax vs. VHS saga play out back in the day.
Sort of like AMD and Intel back in the day.. I remember when people would take "stances" on the futures of those companies back in 1999. People also cared about "browsers" and "search engines". I guess you could still say people care about Google but it's so played out that I have no idea how anyone could get an advantage trading it.

As for apple.. It has to be one of the most crowded spec trade i've seen since the oil trade a few years back. Well.. Other than treasuries..
 

mmerlinn

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I did see some interesting research the other day that might make an apple short not stupid. It pointed out that a couple months after each product release, the stock tended to be down from the release date, usually a good bit. I'll have to check that out myself, though..
If you adhere to the rule "buy rumor and sell fact," you would buy on the rumor of a new Apple product, and sell the day the rumor hits the marketplace. Your "interesting research" backs up that rule.
 

DCFusor

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Still listening to Reggie and he's not got to Apple yet but what I see here is this:

A big second differential.

This shows up better on some charts than others - on some it's hard to see, but the rate of growth of AAPL price has gone past exponential - the rate of increase is increasing, giving the very classic looking blowoff top - concave up - for the last while. I made crap tons of money pre crash playing in and out of POT which was doing that then - and wasn't experienced enough then to realize that this is THE sign of the end more often than not. Only the fact that I was out half the time - buying the dips and selling the rips - kept me from losing my shirt on that one and giving back all my gains.

Apple looks like that now. We have concave-up, then a rounding over. While its true that sometimes that means nothing - or it could just go flat for a long time and "work off" this exponential rise and just go back to a percent/time kind of thing...at least as often, when these blowoffs start rounding - look out below.

I am thus looking very hard at an AAPL short that might be "trade of the year" or even of the decade, for me.

You know what's troubling me about committing to that? It's all entirely rational on my part, for once. All those old saws and platitudes have finally worked into my psyche and I see (I hope) the truth in most of them. And the one that's bugging me now, as I've mentioned probably too many times is:
"The market can stay irrational longer than you can stay solvent."

Thus, a pure rational-driven trade counts in my mind as too risky! Damn can you ever tie yourself up in knots!

My gut is saying, heck, do like you did with pot - buy the dips, short the rips, make money more than you'll lose buying that last dip that's really the precipice of the cliff - that's what trailing stops are for after all. My gut isn't saying, man, this is the deal of the year, go short big-time and right now. It's saying "meh".

After all, with POT...and a few other things I played with showing this pattern, while we all know it can't go on forever super-exponentially - it can indeed go on to AAPL 1k or some of the other somewhat less stupid numbers you hear...people ARE that crazy and if ZH is to be believed, a lot of the big money is "all in" or close -

Oh wait a minute, isn't that bearish when everyone is "all in" and there are therefore no new buyers? But there we go - it's rational. This entire company story isn't all that rational. Things don't match.

I never thought I'd want tranquilizers to just watch something ~ my usually trustworthy gut says "watch, certainly, there's obviously about to be a big show". It's just not telling me anything I can trade on yet.

The first sign might have been today, though. There was a time when the indexes were rising but AAPL was not, for once. If I see a bigger divergence there, I'm going to start scaling in short. After all, it's rational (izing?). ;)
 

escobar

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damn that Lauren is hot, the classy glasses look does it for me every time. ok off topic, jaja.
 

DCFusor

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Just put in a pretty small short (half a normal "unit" for me). Fingers crossed. Market up plus apple down - and they're a huge part of the market - it just could be time. But I kept the size small for now, in case something magic happens over the weekend.
If not, I've got room to 8x this position should I want to scale in further. I'm still not well enough versed in options to try that - they look expensive at ~12 for $10 out of the money for most of a month - to me, but I could just be dumb.

"They" are saying to expect a first day pop on Monday...9 quarters in a row, the average has been 1.3% for SPY - this would be ten.

I'm leaning more short than long in general just now.
 
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