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

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?)

Click to expand...

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...

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!"

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.

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.

escobar said:

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.

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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.

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....

swissaustrian said:

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

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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

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.

DCFusor said:

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.

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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.

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.

PMBug said:

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.

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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..

DCFusor said:

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..

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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.

Oooops:
http://www.zerohedge.com/news/fat-finger-halts-unhalts-aapl-shares-which-hit-54280

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?).

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

The camera person does favor the elegant 5th order shape of her chest...and she sits right.

We'll call your mom the Contrarian Oracle.

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.

brave move, DCF.
Technically AAPL is in very overbought territory since 2 months now. It's about time for a big correction, maybe even the gap at $450 is gonna be filled:

I didn't short enough to call it brave. After all, this could be like those few little pullbacks on the exponential rise, but it just feels a little different this time.

We have a new product that isn't new, and has the usual glitches Apple has had lately - and the usual denial. But it's nothing new...that's one sign.

And, it appears not to be taking the market by storm so much. Yeah, the usual have to have one crowd all has one - but then, nothing, or so I hear. All my friends that do fondleslabs are getting android and they are tech thought leaders.

We're going to have serious margin compression if this Foxconn stuff actually happens...

But this market up/apple down is the kicker - normally its market down, and apple holding the index up...

Long apple is one crowded trade - and we know how those all end. Only question is, when. When I hear all the irrational babble, it just convinces me more. OK, they say half of all households have apple stuff. When they said that about color TV, the end of the American consumer electronics business was only a year away - it became a non-growth business, just replacement, and we let Japan have it.

When I hear how many billions in China don't yet have an iPhone, I cringe. Those same billions also don't have a toilet, and the infrastructure doesn't exist to support billions more phones and won't for awhile - growth can only be so fast given that, and China, well, might not be growing as fast as before.

Nothing can grow to the sky. It's a matter of time. I might close this short if things go much against it, but I'll double down (repeatedly) if not. I got short right at 600 even. We'll see. I'll ignore the first day of next quarter pop if I must.

AAPL is sure on a tear today! Right now up $19 and over 3% at $618 and some change

HAHAHAHA!

Look at Groupon! GRPN has fallen like a rock! Anyone who bought at the IPO and held is getting their ass handed to them.

...BTW, Reggie Middleton from boombustblog.com is drumming for a while now about coming margin compressions for Apple (with all the cause-effect domino, that would happened to Tech industry stocks, when the single stock that's worth more than half of the countries on that planet, went down...), also he was very critical on Groupon since forever.

Personally, I see it in the mobile space, as a carbon copy of PC market of yesterday - Android is by far most crappy experience of them all (although improving FAST, since taking onboard Mattias Duarte, the mastermind designer behind Palm's webOS, as the head of Android's User Experience, some year and a half ago - and the recent handsets based on Android 4.0 Ice Cream Sandwich, ie HTC series One are nothing to be ashamed for! Beautiful, well rounded experience, fantastic hardware), and they did the same thing as IBM did with their PCs - gave license to anyone asking for it (nearly) free. Thus, more vertically integrated manufacturers (Amiga, Apple, Atari, etc.), just couldn't compete with the massess churning out one PC clone after another.

The situation looks strikingly similiar in the mobile space today. RIM, Palm, are going/went the way of dinosaurs, Apple has it's dear iOS, but shrinking, Android winning big time, WP7 w/ Nokia bordering the "others" category. That is a trend, and it is very difficult to change that momentum, with all the OEMs of this world churning out one flagship Android handset after another. And it is race to the bottom, so margincompression will come to Apple sooner or later.

All my geek pals like Android better. One has to distinguish between the opsys and the total platform, though. Linux (android) is a much better opsys, with built in security and genuine multitasking, unlike Ios. But Apple has the "better" apps and distribution at present. So for the masses who aren't just writing their own apps to actually get something useful done, the Apple gig is better. My coding friends want nothing to do with it, so longer term - looks like Android will win out, despite a considerable effort by Microsoft and Oracle (and Nokia and others) behind the scenes to cripple it via abuse of the legal system - documentation on groklaw.net.

I think Reggie might be right about margin compression going forward, but a ton depends on Apple keeping promises to do a better job with the workers at FoxConn - they very much didn't last time this came up, just shined it on and let the issue drop out of the media.

Usually, the markets look out about 6 months, so apple should be dropping now. But two things - they didn't keep the promises last time, and this religion about apple - that this time, something can really grow to the sky and all - it's just taking longer than it should. Where have I heard that before?

At any rate, yeah, glad that was a tiny short - I closed at a loss just now. That hitch in the get-along wasn't the end, yet. I still think it's going to be a great trade at some point.

The "religious" factor for Apple seems to have infected it's stock now which should indicate a top as DCF says.
It's also pretty interesting to see that Nokia and HTC are now finally pursuing an aggressive marketing strategy. The smartphone market (which is the most profitable for Apple) could be in a shift away from iPhones. I hope HTC wins the game, because I'm holding a small position in it's stock (very volatile!).

MS essentially bought Nokia and is pretty much doing what it can to push windows for phones through that - and using their patent base to sucker people into signing licenses for Android that supposedly violates some of those patents. They've caused Nokia to stop supporting major pieces of open source software (QT) they used to be the maintainers for. It could turn into MAD for Nokia and MS, we just don't know yet. I hear very little good about windows phones at any rate.

Microsoft is acting very slimy in this and some other cases. When phone makers pay tribute for the supposed violated patents, they do so under a stiff NDA the prevents them from sayin which ones - (so others could just work around them) or how much they are paying. It's known that MS is right now making more money off Android "licenses" than off windows in the mobile space.

But lookee - when someone like B&N stand up to them in court, so they have to reveal their junk - Microsoft loses, and gets their crap patents invalidated. Which is why they're playing their slimeball troll game in secret as much as they can - they may not be able to collect that tax very much longer. People who settled before may back out as well, once it looks safer to do so.

There is a long history of skullduggery on both MS and AAPL's part trying to get rid of the linux opsys/ecosystem with direct suits, and funding others to sue (SCO). Which is funny because in fact, they both steal code from it (and keep it hidden, but it's in there) and learned from it. OSX IS BSD with a candy wrapper. All of MS's TCP/IP stack is stolen...and so on and so forth. If you develop for microsoft and bought the expensive DevStudio package, you can trace into windows itself and see the stolen code - but you can't reveal it legally due to the TOS in the EULA they force on you.

Nice work if you can get it. Failure couldn't happen to a more deserving bunch.

WP7 as a system is quite nice, and especially from the .NET developer point of view - very nicely integrated with loads of Microsoft stuff, not very steep learning curve if you want to get into Mobile. Problem is, it doesn't get any traction with consumers. I wonder how long Microsoft might be actually trying to haul it & loosing shitloads of money in the process. As it stands, thety are getting nowhere with it. However, it might change for better now, when Nokia started selling their WP7 handsets - we will see..

As for what MSFT & AAPL are doing in mobile space - well, it is plainly wrong, with all the patent trolling and bullying. True DCF, I've also read that MSFT is making much more money from "protection" re: patent and alleged patents suits, vs. WP7 itself. What a nonsense...

I (luckily in my opinion) stopped following MS and having to fix their issues right around the advent of .net, which like many things, claimed to solve stuff like DLL hell, without actually doing it - just moved the problem, again.

I liked devstudio 6, mfc etc. They worked, a huge fraction of what we were doing we could statically link (so no DLL's other than the system ones) and by golly, even interpreted perl is faster than .net - forget C++ which runs rings around both. And you used to be able to use devstudio to edit and run the builds for non-intel/non-windows embedded stuff, all in one project with the PC host code, nice, neat, sweet. I think they removed that feature.

We figured at the time, that the introduction of .net was a way to have all we experienced devs forced to run in place while we learned all the new libraries, while MS continued to use their older toolset (and they did!).

(I wrote rather a long and convincing rant about this back in the day in my book Digital Audio Processing, based on the premise that if you're wasting customer cycles, you're stealing from them since their machine, and your software, could do a lot more if you didn't.)

True, it's even easier to lay out a gui and drag drop code into .net, which I feel is a big reason there is so much new but very badly written code out there - you make it so monkeys can do it, you get monkey code. People who don't understand why things lock up if you poll something in a loop type bad code. The security holes required for the gee-whiz features prove MS still doesn't get it in many important ways. Remote code execution? We do that in linux, but we wash our hands after, and by god, don't do stupid stuff like embed move and audio players in word processing documents.
I'm still waiting for that printout of the Matrix, or Beethoven's ninth.

MS has had a lot of nice ideas - linking and embedding are nice to utterly lock in customers who don't want to have to write boilerplate every year, so they want the doc to change when the underlying spreadsheet changes...automatically and wrong, as often as not. MS just doesn't get them right - almost working is good enough for them, and all too many users have let the good enough be the enemy of the really good. And don't get me started on people who "really know" excel calling themselves programmers....get off my lawn!

All that said, here's a public thanks to MS for being so screwed up. My consulting firm reported something around 10 million dollars income for fixing all that for a few customers - but after having been deep inside windows internals (softICE, trace into, and so on) - no way I run that when the answers count or money is at stake, even the rather nice win7 I'm running on a couple virtual instances to run windows only tools for embedded computers (PICs and the like). I still like xp better, as it was easier to get to the insides of as a user to adjust things like networking for my mixed network. But - nothing that needs security or safety gets to see windows around here, I just know too much about what's in there and how it works, and how easy it is to break it.

But watching Groklaw has been mind opening - finding out who is really behind what lawsuit, following the money...and those guys are as dirty as it gets, creating sham companies, even, so that they can sue, but if they lose, the parent walks away free and with no reputation hit.

And even when they lose, they win. MS paid SCO to sue the world. SCO lost and went bankrupt, but then, so did Novell - and guess who now owns all Novell's intellectual property, which was what the suit was all about? A little special consorium of MS and Apple, created so that no one of them would be in an "anticompetitive" status - that is, against each other. Against the rest of the tech biz? Not so much.

I think I need to go hurl. The disease ain't just banksters - it's a general total loss of all morality by almost everybody over a certain size business. And I was working up a good mood just now, oh well.

Meet Ed Zabitsky, the man betting against Apple
http://www.telegraph.co.uk/finance/...d-Zabitsky-the-man-betting-against-Apple.html

Nice piece by ZH on heavy options activity (with a massive call overhang) in AAPL:
http://www.zerohedge.com/news/aapl-calls-lottery-ticket-effect-action

I dont do paper

Apple is being sued for non-competitive behavior by the DOJ.

http://www.theinquirer.net/inquirer/news/2167263/sues-apple-book-publishers-ebook-price-fixing

I was aware of these deals back when they started and was amazed they could force them at all - they are such an 800 lb gorilla they were able to force terms on all content providers that were purely ridiculous if they wanted into the app store.

Here's the gist:
You agree to give apple 30% of the gross. This must result in a sale price that's the lowest anywhere, period, which means you have to charge anyone else at least the price apple is getting retail. This means you either have to take a 30% loss on sales to apple or not get into the ap store at all. A few outfits (FT was one I think) balked and pulled their content from apple and made it viewable in any browser instead.

At the time there was no talk of collusion here - just apple ripping off every content provider. The collusion is new information.

If this goes big, or fast (court is often really slow) it might be the thing that tips apple price over - their model is very dependent on getting the highest margins in the industry for everything they sell. In this case, it's pure rape as they don't even create the content, just get more % profit off it than any publisher ever did (except for huge bestsellers).

Note - other than big popular authors, the normal take for the writer is 8% of the net, vs apple's 30% of the gross. So yes, this was rape.

lol. Apple has cash. Gov needs cash. Gov sues Apple for cash.

So price fixing is 'illegal' and they have been doing it since ~ 2010. That must be some kind of new record for bringing charges against corrupt, manipulative, and fraudulent corporations. Good job, DoJ. Good job. /sarc

Pretty much everything is green today except AAPL. Trading at 621 and some change as I type. (down 5).

Everything is green until the Bernank comes on the media and denies that QE3 will be taking place because the economy is steaming along so well without it. Then, all red, 200 - 300 point loss over a few days, then more whispers of QE3, lather, rinse, repeat.

This is getting so predictable as to be tiring.

I see that ZH noticed AAPL was down too.

http://www.zerohedge.com/news/rare-apple-beta-inversion