Wednesday, August 14, 2013

tumblr. fail

ah, i realize tumblr just doesn't do it for me. i'm headed back to twitter.

Friday, May 17, 2013

Temporary move to Tumblr

I'm going to move the blog to temporarily. If forces are strong enough, I will just end up staying there.

Sunday, May 12, 2013

Mid-May Report

Macro-US equities
Major indices are indicating a pause. With members of the FOMC like Hilsenrath and Fisher mentioning the tapering of quantitative easing, there is just an uneasiness in this environment. However, the catalyst of Congress's dysfunction on the debt ceiling is delayed until Labor Day. The mantra of "Sell in May, go away" has transformed into "Buy in May, stay and play." With the DOW breaching 15,000 and the S&P breaking through 1,600, history is in the making. Where do we go from here? Instead of focusing on the macro-trend and bulking up on diversified top caps, it has been more advantageous for a trader to pick individual stocks.

3-month Targets of Individual Stocks
AAPL@$452 has risen back to it's resistance level of $465 just a month and a half ago, over $100 away from my previous target of $350. It's ex-dividend date just passed, and June doesn't seem so far away. CNBC has stopped its relentless bashing. The earnings release must of placated that audience, but there is still a lot of air uncovered. I am reiterating my target of AAPL to $400.

NFLX @$217 has surprised me. It would be useless to use valuation to argue for the demise of this growth stock. I have doubts on their family plan. Their exclusive content may be too risky. However, Netflix has an edge over the competition. Besides Amazon, there are ads that detract the common consumer. I find it hard for Netflix to implode in the next 2 years, but it needs to be more aggressive to compete with cable or someone else will. I am firm on my target of $200 for NFLX.

SNE@$17 was bound to happen. With G7 giving Japan the green light, I find it hard for this company to go down. Sony posted an annual profit for the first time in 5 years. This is just the beginning. My target on SNE is $25.

JNPR - $18 up from $17
AMD - $6
S - $10

Sunday, April 28, 2013

More AAPL analysis (4 reasons to think twice about AAPL's earnings as a trader)

The earning report was announced on Tuesday: EPS was $10.09 vs $10. This was considered a beat on headlines and caused a temporary short squeeze in the aftermarket from $405 to $429. However, something didn't seem right. I sold into the strength at $427, and currently hold a short position at $417. After months of defending this stock, I've decided to take a step back and join the dark side once again.

Wrong timing
I would like to reiterate that May is close. Although people may see AAPL as a safe haven in the past, it has to compete with the opportunity of gold's sell off or seasonal conversion back to cash. The increase of correction imminent announcements continue to ramp up, and timing as an investor is risky in this environment. As for growth traders, there are obviously better options elsewhere. Netflix, Facebook, JCPenny have been gaining massive volume lately. However, the focus is on AAPL.

Sales to Margin ratio decreasing
Revenues rise, but margins decrease. This means they are selling a lot more, but their expenses are more demanding. There is a notable increase to their selling expense and their manufacturing cost. This is a red flag for sure, but not enough to take money off the table. However, can they maintain the sales going forward? I don't think so.

Lack of new products
An official announcement of a new product has not come. Iphone 5s should be announced in mid-June. The tickets for WWDC sold out in 2 minutes. AAPL is making investors too eager. Until then, Samsung will be eating away at consumers's impatience to upgrade their phones to the Samsung Galaxy s4. As for AAPL's new iPhone ad collaboration with AT&T that promotes the camera; look at HTC One to win customers that are looking for a low light camera, better battery, and innovative speakers on their smartphones. An aggregate of Android based phones continue to eat away at AAPL's market share of smart phones and tablets. There a lot of niches that AAPL will chase, and the probability of catching up is dimming day by day.  A stock cannot rely on rumors of new product launches, because it's just fool's gold. Is AAPL really holding out for Haswell chips to decrease margins on their Macbooks? Apple TV? Consumers will not wait. Traders will not wait.

Value stock curse
A value stock is a value stock. Those looking for AAPL to appreciate from growth will be disappointed. AAPL is slowing transforming into a value stock the same way MSFT and CSCO have in the last decade. Sure, there is a "floor," but the floor is arbitrary and nothing more. It can either be at $400 or $200. I agree that it will slow downwards momentum, but a dividend increase and share buy back is bane for traders looking to make a quick buck to the upside. The only compelling case to hold for the upcoming week is to acquire that quarterly dividend, but there are higher yields elsewhere.

$420 is looking to become the new resistance as it was support only a month ago. If I am wrong about my target of $350, then there will be a lot of people that have positions in their 401k's and mutual funds that are tied into Apple's stock. Until then, investors' sentiment towards Tim Cook continues to turn sour.

Thursday, April 25, 2013

May approaches

"Sell in May, go away."

I happened to stumble upon this mantra two years ago. I have been consistently watching Bloomberg and CNBC this past 12 months, and notice an increased use of this quote. It has influenced me to use it as well, but I felt like I was just spewing rhetoric that seems appealing to common investors. I wanted to find something empirical in order to find some truth in this, so I did some digging. It didn't take a lot of time (thanks to the power of the Internet) before I stumbled across this video:

With under 1,000 views, this YouTube presentation holds great technical analysis dating back to 1960's. The video tries to prove the "monday effect," "January effect," "holiday effect," and the "october to march seasonality effect." The last effect is the one in focus since I am discussing this "sell in May" discourse. At 35:40, there is a summarized chart that indicates that the return from April to September are almost flat- averaging to .5%. The other months average to 4.2%. This indicates that it may not be worth investing in equities for the next 5 months.

With the indices at nose bleed levels (subjectively,) a negative catalyst will send equities dropping. Based on the recent events of Cyprus, the Boston marathon bombing, and the fake AP twitter, the vulnerability of the market is apparent.

3 month out sentiments
AAPL @ $350
NFLX @ $200
JNPR @ $17