Apple -9.83% after market hours

464.25

-49.76 (-9.68%)

Real-time:   9:59AM EST, Thursday 24 Jan

 
Some of the titles
Apple Inc. (AAPL): First To The Tech Grave-Yard?
Could This Be the Demise of Apple Inc. (AAPL)'s Earnings?
Apple's iPhone disappointment fans doubt on growth
Apple Sales Gain Slowest Since ’09 as Competition Climbs

I should have sold the shares today Wednesday, as I already have a profit (yes I know I use too many times the word 'should').

I should have made the following analysis:
1. Good results, shares go up on Thursday, so what
2. Bad results, the shares go down
So in order to minimize the risk, selling would have been the best option, but my buy and hold 'strategy' does not let me do it even if I read somewhere that only billionaires like Warren Buffet and Bill Gates can afford nowadays to be long-term investors.

***
Just came back from the dentist. It takes so much time to properly clean your teeth: brush properly, floss, use a Sulca brush.

I was thinking Apple should make a product iMouth. It would be like a mouth guard with small electric rotating brushes that go between teeth and along the gum line, in short proper teeth cleaning, and you could watch TV at the same time.
It might be expensive, let's say $1,000 but wouldn't you pay this amount so that you saw your dentist only for the annual check-up? Yes, I thought so.
***


Here it is how Wall Street is reacting. I like especially this "Given the decline in the share price, we are lowering our 12-month price target to $888.00 from $1,111.0." How did they come up with these very nice looking numbers? 1,111 not 1,039 or 1,183 for example or why not 939 or 856 instead of 888. Did they really make any calculations?
 


BARCLAYS:

Capitulation Process Seems Well Underway: "It seems the reaction to this EPS report is universally negative – especially since AAPL gave subdued guidance and changed the way it does it (they really mean it). We believe a capitulation process is underway – and while painful – it is healthy since the loftiest expectations should be reined in quite a bit. This spring, Apple should be readying a bevy of new products and services – and when the builds for these products become known – shares may act a lot better. We have seen sentiment turn quickly before with other leaders like Facebook (in 2012) and Google (in 2011). While this recent sell-off and Apple’s execution of late has tested our patience, we will evaluate Apple from here based on whether these products and services create the kind of excitement we are used to. Maintain OW rating."

CLSA:

Two key (interrelated) questions related to Apple are 1) whether the company has lost its competitive edge and 2) what the right margin profile is longer term. We believe Apple maintains its premium brand image (e.g. iPhone ASP) but needs to adapt to marketplace demands and abandon misperceptions about “one-handed ease of use” (yes many like it, but many don’t) by broadening its iPhone lineup – the same way it abandoned its 7” tablet stance and delivered a best-in-class product. We believe margins with multiple phone form factors and a lower-end offering for emerging markets could be structurally lower, but this is very much discounted in the share price as discussed below. We lower F13/F14 EPS from $48.95/58.38 to $44.79/51.71 reflecting lower iPhone share, mini cannibalization, and lower gross margin. We cut our price target from $680 to $575 reflecting lower estimates and risk associated with its product transition. BUY maintained.

CREDIT SUISSE:

Three steps to a recovery: none coming imminently, patience required. First, a new product cycle (we expect a high-end iPhone refresh and lower end iPhone later in 2013). Second, increased carrier expansion: while this is clearly happening slower than we thought, we still believe it's likely over 12 months. Third, increased cash distribution: Apple ended the quarter with $137bn of net cash some ~30% of market cap and 31% onshore so the capacity to distribute exits. While all these catalysts are plausible, none are imminent in our view, meaning patience is required.

PIPER JAFFRAY:

We are buyers of AAPL on the pull back following the company's December quarter earnings report based on our belief that Street numbers will be adequately reset and investors will return to the stock once the potential of new products comes into focus over the next 3-6 months. While we are adjusting our price target to $767, we remain optimistic about shares of AAPL.

NOMURA:

The weak Q2 dynamics seem to support our view that Apple is moving into an ex-growth phase in which unit growth is likely to come increasingly at the expense of gross margin declines. The net effect is limited earnings growth, EPS that likely tops-out at $50, which is likely to attract a multiple little better than comparable ex-growth peers such as Microsoft and Cisco. An 8x ex-cash multiple on our EPS forecast of $50 plus $89 in excess cash drives our fair value of $490.

CITI:

We stand by our recent downgrade and continue to rate the shares Neutral. On lower estimates, our price target falls to $500 from $575.

DEUTSCHE BANK:

AAPL reported revs of $54.5B and EPS of $13.81 which beat EPS expectations (vs. Street at $54.5B/$13.33; DB at $53.4B/$12.55). Upside was led by iPhone (48M vs. DB at 45M) and iPad (22.9M vs. DB at 22.0M) which offset light Mac results (4.1M vs. DB at 5.4M). Despite the EPS beat, AAPL revised its guidance format and the combination of margin pressure and decelerating iPhone growth implicit in guidance raises growth concerns. We reset estimates and cut our price target to $575. Trading at $460 in the aftermarket (~7x PE ex cash) we view AAPL as undervalued; maintain Buy. 

GOLDMAN:

A tough setback, but the story is not broken

Apple reported 1QFY2013 revenues of $54.51 billion, above our estimate of $53.56 billion and just below consensus of $54.73 billion. EPS of $13.81 was above our estimate of $12.58 and consensus of $13.44. Gross margins of 38.6% and operating margins of 31.6% were above our forecast of 37.0% and 29.4%. iPhone, iPad, and Mac units all fell slightly short of our expectations, although more resilient margins led to the slight EPS beat. Apple’s guidance was essentially what we expected from the typically conservative management team. The problem, and the key disappointment in the call, was that management made it pretty clear that it was moving towards providing more realistic guidance. In this case, the guidance was a definitive disappointment.

JP MORGAN:

Apples and Oranges: Fundamentals and Investor Expectations Continue to Diverge

We reiterate our Overweight rating and Dec-13 price target of $725 on Apple. We are surprised by the sharp correction in shares of Apple in last night’s after-hours trading. At one point, the stock declined 10%, as the company tried to explain its new guidance approach. Without splitting hairs too much, we think the new guidance commentary is not much of a change and could restore beat-and-raise potential to the model.

JEFFREYS:

Downgrade to Hold: Demand Slowdown and Margin Pressure

We are downgrading Apple from Buy to Hold due to: 1) slowdown in iPhone sales is real and material; 2) we believe margins are likely to continue to fall; 3) new guidance methodology implies less potential upside to the model. We cut our estimates and PT from $800 to $500.

MIZUHO SECURITIES:

Moving into the Value Territory? F1Q13 Results

While we expect growth investors to continue losing interest in the story as earnings growth is unlikely to materialize this year, the stock offers plenty of reasons for value investors to step in at these levels. We reiterate our Buy rating while lowering our PT to $575 from $600.

MORGAN STANLEY:

Reiterate OW. The medium-term risk-reward is attractive with our Base case EPS now close to the Bear case and positive catalysts in F2H13. But near-term catalysts are limited as Apple faces tougher comps in C1Q13; as a result, Apple is being removed from the Best Ideas list.

SOCGEN:

After disappointing quarter, new products are needed to drive future growth

The results for Apple’s two key products suggest that iPhones and iPads are now growing broadly in line with the overall market for smartphones and tablets, i.e., much slower than growth rates seen in the last few years. Additionally, the margins have shrunk considerably, with the overall gross margin down by more than 600bp YoY. With slower growth and greater competition, a rapid recovery looks unlikely to us, at least based on the current product line-up. We have therefore cut back dramatically on growth rates for the iPhone, with revised growth of 12% for FY13 (previously 20%). We have also taken down our assumed margins, looking for a 45% margin on iPhones (over 50% previously) and 30% on iPads (35% previously). The net impact of these changes is to cut our EPS forecasts by over 25% for FY13 and FY14.

TOPEKA:

Given the decline in the share price, we are lowering our 12-month price target to $888.00 from $1,111.00 for Buy-rated Apple, which is based on over 13x (S&P 500 multiple) our interest expense/income adjusted CY14 pro forma EPS estimate plus net cash per share of $144.75. This equates to a straight P/E of just over 15x our CY13 EPS estimate, and is well below the mid-20x's multiple of 2006-2010. 

Read more: http://www.businessinsider.com/what-analysts-are-saying-about-apple-today-2013-1#ixzz2IuAAZ900

Poker and Investing

It is not a long story, but an un-interesting one so I will not say how I got to think of poker and investing. The idea is that I had 2 colleagues that were good at poker and good investors as well. They still have their day jobs and even if they don’t laugh all the way to the bank they at least smile while I cry.

And I am not good at poker, they cleaned me out when I was playing with them.

So is there any connection between investing and poker? Apparently there is.
When typing ‘poker and investin’ Google suggests: ‘poker and investing’ - 6,090,000 results and ‘poker and investing go hand-in-hand’ - 19,700,000 results, wow!

 

Warren Buffett: “If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”

From the article Inside Warren Buffett's Private Poker Game

Not shy about his bridge skills, Buffett is very self-effacing about his poker prowess. “You will find me about five minutes after the tournament starts on the sidelines–knocked out as usual in the first round,” he e-mailed me before the tournament. He later explained the difference between the two card games this way: “I just don’t care about poker as much.” Temperamentally this makes sense. Buffett’s favored holding period for his positions is “forever”; poker demands immediate exploiting or discarding. Traders make great poker players; investors, less so.

Also an article from Business Insider The 13 Poker Concepts That Every Investor Needs To Know

Yes, I know 13 seems a good number, not 7 or 10 or 15 or even 20 (overused these numbers) but 13 :).

Tom Demark: Apple's Stock Has Bottomed And Should Rally 22% From Here

DeMark told CNBC that his firm turned bearish on Apple right at the top, and the price action in the stock since then is more or less what they would have expected:

On September 21, we turned bearish on Apple, and it was above $700...we made a prediction that the stock would go down to $494 – $494.97, to be precise. We've held to that forecast all the way down, despite those intermittent rallies.
From Business Insider

Actually it was me who made the stock decline, read here how I single handedly stopped Apple.

I don't see Apple performing to well in the future unless they come with a iPhone bigger than they have now, similar to Huawei's 6.1" wow, I would buy now.

This is the future, a smartphone and a tablet in one, a phablet as they call it.  
I want a PHLABET.

True North Apartment REIT, something is rotten here

I am an investor in TN.UN as I like to invest in REIT Apartments and there are not too many of them.

Jan. 7 news
True North Apartment Real Estate Investment Trust ("True North," or the "REIT") (TSX VENTURE:TN.UN) announced today that it has agreed to acquire (the "Acquisition") a portfolio of 17 properties (the "Acquisition Properties") and the installment note for an aggregate purchase price of $152.8 million. The Acquisition Properties are currently owned and operated by D.D. Acquisitions Partnership (the "Vendor"), an entity controlled by Daniel Drimmer, a trustee and significant unitholder of the REIT.

How come? The company I am an investor of buys something from another investor of the company.

WHY?

Something is fishy here.

No wonder that the stock lost at the end of Jan. 8 4.36% at a very high volume

Vol / Avg.

581,046.00/71,728.00

V is from Victory and from Visa

This is the only stock of a big company that I own that has doubled. And I sold one third of the position. I bought Visa (V) at around $75 some 2 years ago and sold it for $150.

Sometime ago I read how British Airways was charging extra for the airfare paid using credit cards.
So I reasoned "If everyone is going to charge extra for using a credit card, people will start avoiding using them and here it goes another investment of mine." (Warren Buffett has American Express, I decided to go Visa).

I was very tempted to sell it but due to my procrastination I didn’t do anything and Visa went up from $75 to $125.

But another recent piece of information made me think again (I think a lot, I do little).

Rogers has applied for a banking licence to become a credit-card issuer. If granted, Rogers could eventually get transaction fees on payments if its own credit-card credentials are stored in a customer’s mobile wallet.
.... 
CIBC will pay Rogers an undisclosed sum to store credit card information for Visa and MasterCard on Rogers phones, which can then be used to make payments in stores by emitting a signal to a special receiver at checkouts. Rogers will charge CIBC for space on its SIM cards, which are the tiny chips inside wireless phones that give them their identity.

So who would need Visa and MasterCard and all the other credit cards as almost everyone has a smartphone?
Time to sell or as usual I won't do anything?

Again I did not do anything and the share closed on Friday Jan 4, 2013 at $156.77.
And another 'hot' story on Sunday January 6, 2013.

Your morning latte may be getting more expensive. No, the coffee shop isn't raising their prices, but they may start charging you an extra fee if you plan on paying with your credit card .
It's just the latest tactic allowed by retailers who don't appreciate $1 purchases paid for with Visa and MasterCard. Back in 2010, Congress gave businesses its blessing to impose $10 minimums for credit card transactions. Now, a class action lawsuit is going a step further and saying merchants can pass along 'swipe fees' to their customers.
Will retailers start charging for the privilege of paying with plastic? 

So I should have sold half of Visa not only one third as per my 'strategy' to sell half of any stock that doubles and do not care what happens with the other half.

The moral of the story:
"It is scary that a stock I had all the logical reasons to sell has doubled in value. This is a game I cannot win and my only hope now is not to lose."

More than 10,800% profit on one of my stocks!

Yes, it is true (according to my account), but unfortunately irrelevant!

Why I bought Starbucks

In 2008, I was so mentally ravaged by my dwindling investments that I failed to notice that, coffee was recession proof (not that I had too much appetite for investing back then). 

Then, in 2011, I decided to invest in a coffee company after I realized that, regardless of economic circumstances, people need to get their caffeine fix on a regular basis. I looked into Tim Hortons and Starbucks. I don’t mean analyzing their numbers as an astute investor would do, I mean I literally walked into some of the stores and looked at the people inside.

And I made the following totally erroneous observations:

Tim Hortons

This is the coffee store of the working class, for the men who work on the oil sands and in the diamond mines, of the frozen North, who build the roads and log the trees.
For these men, Friday night is always pub night. The 'All Inclusive' Mexico package is the ultimate vacation. A burger and fries is the best meal; a 6 pack the best drink. Family nights out are at McDonald's. They drive SUVs because how else could they have the barbeque and the fridge ready for any outdoor adventure.

Starbucks

This is the coffee store of the artistic crowd, those who write letters to the editor deploring the loss of habitat for the barn swallow, and read the labels on the food to avoid the bad fats.

They ask the waiter whether the chicken comes from a farm where they are humanely treated or whether the salmon is wild and the waiter answers that is so wild it took the trawler several weeks to catch a full load and they can pinpoint on Google Maps where the salmon was caught. They are the people who read thick, heavy books, and pay to see exhibitions like 'Shamanism in the Rapa Nui Island' or 'Art of Embroidery in the Xin Dinasty.’

They listen to CBC Radio 2 and the cable companies desperately try to convince them to subscribe again (as they canceled long time ago their TV subscriptions) adding to the list of channels a few ones with the word 'Culture' in the name and promises that the viewers will be able to watch series as Soviet collectivization movies or best of the black and white Albanian movies from the communist regime.

And I chose Starbucks because it seems more glamorous and focused on international expansion.

The upper middle class in China will go to a Starbucks and have their daily coffee as drinking tea like all their generations before is boring and those who did not make it yet will go to a Starbucks and spend half of what they have earned that day on a burnt (so I was told and my impression was the same) coffee dreaming of the day they would come daily to the Starbucks store and that will be a sign they have made it. In China and India Starbucks will be the place to go to and to be seen.

And I have a dream that one billion, no, let’s make it two billion - after all it is my dream and I can dream whatever I want - people will go to a Starbucks at least once a week!

Seattle, the Starbucks store with the second largest traffic in the US (according to a tour guide)

'Not too busy inside for the 2nd largest traffic Starbucks store (no wonder the stock is down)' This is the comment for the photo I took 4 years ago.
While I made this wisecrack joke the stock was $15.56.
On Friday 28 December, the closing price was $52.64. 
The joke is on me.