What is going to happen?

[Joy Pathak]

Hey guys I thought I would make a thread where we can discuss what will happen to certain equities or whatever as we go further. Ex: BP oil spill. What kind of opportunities will this create for shorting BP, etc.

I hope this lasts... Maybe we can make it sticky if this is successful. There are many industry folks on this forum. Maybe some might be impressed by some pointers that people on the forum give here and contact you?

What do you guys think will happen with Jobs gone to $AAPL? Massive short tomorrow?

 

[MSFHQ]

Long BP. They will reinstate their dividend. The legal claims will be less than expected. Oil is still a vital resource.

Long Apple. If something happens to Jobs, wait a day or two and buy on the bottom. Iphone, Ipad, Itunes, are all gateway drugs. Apple has had a 5% market share for personal computers forever. Everyone is now using and getting accustomed to having a Mac device. Corporate environments are starting to use Iphones also. All signs point to increasing market share.

Long Best Buy. They compete with Amazon. BBY has a great online site, the have a dominant retail presence. Amazon beats them on price with the no sales tax crap. Look for states to close that revenue loop hole quick, fast and in a hurry. The stock panic sold and is starting to rebound.

 

[Joy Pathak]

Long BP. They will reinstate their dividend. The legal claims will be less than expected. Oil is still a vital resource.

Long Apple. If something happens to Jobs, wait a day or two and buy on the bottom. Iphone, Ipad, Itunes, are all gateway drugs. Apple has had a 5% market share for personal computers forever. Everyone is now using and getting accustomed to having a Mac device. Corporate environments are starting to use Iphones also. All signs point to increasing market share.

Long Best Buy. They compete with Amazon. BBY has a great online site, the have a dominant retail presence. Amazon beats them on price with the no sales tax crap. Look for states to close that revenue loop hole quick, fast and in a hurry. The stock panic sold and is starting to rebound.

I agree on the long BP and long AAPL. AAPL to be bought on any dips.

 

[AlexandreH]

I have Apple Options (calls for April and July )and hope the earnings numbers are good enough to make up for Jobs leaving...

 

[DominiConnor]

Jobs has been ill before, indeed this may be the same thing moving to a new stage, so to some extent it is priced in.

To me the question boils down to momentum, both real and perceived.

Apple enjoys good margins on products that are either of lower specification than competing brands, or very slightly ahead, relying heavily on branding and cosmetic design.
Also, it's equipment is made by outfits like Foxconn who are eager to make stuff for other people.

So if it dials back even slightly on the new product pipeline, it is screwed big time.

Apple has a really very small % of the corporate market, and when you take out media industries it's hard even to even measure it. That matters because corporates tend to stick with the same vendor for longer than a retail customer, and of course they buy a lot of kit.
Again, that means that losing Jobs is worse for Apple than losing Michael Dell would be for Dell, and losing top management at Microsoft would probably be good for them.

It has a serious pile of cash. With Jobs gone, investors may come to feel that the big growth days are gone (easy to do when a firm is #2 in the world) and demand that it gets used, either by dividend or acquisition.

Jobs, to his credit doesn't do much in the way of acquisitions, but an Apple board without him might well decide to justify their existence and stock options by buying something. ARM maybe which might not be a bad idea, but there are many ideas much more risky (electric cars), and history shows that cash piles tend to be squandered. A merger of Sony and Apple has often been floated.

I perceive that Apple has benefited from the recession. Many firms that might have competed with them more aggressively have decided to "wait and see", Jobs took a gamble and won, but now Apple is a leader, its also a target.

HP has the technical resources to turn out stuff that makes the iPad look like an overpriced, fat calculator. It doesn't because it's led by people whose interests consist solely of screwing their secretaries, golf and accountancy. No manager at HP has a clue, but... they might get one.
No sign of that yet, their pads are astonishingly bad, so bad that one journalist friend of mine reports that when they showed it to a room of hacks, laughter broke out.

Dell turns out mediocre pads that actually manage to be poorer value than Apple, that requires talent. Again they may wise up.

Lenovo has a weak brand image, but a good cost base, so they might come and hit Apple. Nokia and the other phone makers have been backfooted, but Android is pulling past iPhone. We can have an argument about Android vs iPhone, but the vast bulk of phones are bought through phone companies bundled with minutes and data.
Apple gets a good lump of what the Telcos think of as their money, and so will be very keen to push almost anything else.

So, my forecast is a double dip in Apple price.
The obvious one from Jobs, but about 10-14 days later another as equity analysts et al start more thinking about Apple's weaknesses and risks more than it's strengths. Also Apple's share price curve is ripe for profit taking, only those who have to sell with do so in the next couple of days, and will wait until that signal has been lost in the noise.

Disclaimer:
I'm a headhunter who used to be Test Director @ PC Magazine in Europe, if you think my analysis is worth betting real money on then expect real trouble, real soon.

 

[Joy Pathak]

$AAPL is down almost 5% in pre-market.

 

[Scooot]

I like buying apple here more than shorting it.

It does worry me quite a bit that he takes this medical leave right as their largest earnings report comes out and new product announcments are a week or so away.

I'm really not qualified to comment on timing Apples stock so don't put any weight behind this. I think they are a solid company with a ton of room left to grow.

I would LOVE if we had a thread dedicated to tracking a specific equity. AAPL, GOOG, RIMM, NFLX, MSFT would get my vote.

 

[Joy Pathak]

I like buying apple here more than shorting it.

It does worry me quite a bit that he takes this medical leave right as their largest earnings report comes out and new product announcments are a week or so away.

I'm really not qualified to comment on timing Apples stock so don't put any weight behind this. I think they are a solid company with a ton of room left to grow.

I would LOVE if we had a thread dedicated to tracking a specific equity. AAPL, GOOG, RIMM, NFLX, MSFT would get my vote.

I have seen that on few other forums.

AAPL Watch . NFLX Watch. etc. Or Hedge fund performance. Ren Tech Watch

Jobs had to be really sick to leave at such a timing, or maybe he thought that the earnings report will overshadow his leaving.

 

[Andy D.]

I'm currently investing looking at the long-term i.e. 5 - 10 years a head.

My suggestions are:

NOKIA - They took a bit of a drubbing when the iphone and Android came out, however they are investing in other areas of telecoms tech and with Galileo slated for operation sometime post 2013 I think Nokia will be leveraging this.
However what really interests me on the horizon is the Nokia Morph concept. Some of the tech is slated for release in 2015 (maybe later). However I'm willing to take a bet on the patents that Nokia and Cambridge Uni's Nanoscience Centre get out of the R&D - are going to be very profitable in the future, if not game changers.

My other Long is currently Stratasys - I'm predicting that 3D printing technology is going to start to drop in price to the point that desktop models are going to become available. I see this over the next 5 years. There is the potential here for a huge game changing technology to be accessible to the masses.

 

[Andy Nguyen]

Lately, I received a lot of email from people all over the world telling me about some pending transaction that needs my help to settle. We are talking about several millions. In US dollars. My return is quite profitable, I believe.

So with that sure money in mind, I'm now taking a long term view on the market and would like to invest some of my projected money into some of these stocks.

When I started my MFE in 2006, GOOG was around high 300s. Now, it's 600+.

There is no reason to put my $$ into a saving account that is not growing after inflation.

So let's hear what you guys are personally investing.

 

[Joy Pathak]

Lately, I received a lot of email from people all over the world telling me about some pending transaction that needs my help to settle. We are talking about several millions. In US dollars. My return is quite profitable, I believe.

So with that sure money in mind, I'm now taking a long term view on the market and would like to invest some of my projected money into some of these stocks.

When I started my MFE in 2006, GOOG was around high 300s. Now, it's 600+.

There is no reason to put my $$ into a saving account that is not growing after inflation.

So let's hear what you guys are personally investing.

lol

We should have some disclaimers on this thread, or people posting atleast.

 

[darth]

Orange juice looks like a good bet to me... either you will make money or gain good health...win win situation

 

[daleholborow]

Given that this is a quantitative finance forum, I thought I'd pose a question that this thread provokes.

I'm currently reading a book, which is pretty much regarding fundamental investment, written by an Aussie Buffett enthusiast... where he hammers home the point that if you dont have "an idea" of what a company is worth fundamentally, and independently of stock market price, then buying shares in it is always pure speculation, never investing. And he goes to great length to iterate that value and price are two different things

So. My question to the forum is: Do you consider yourselves to be "investing" when you say you're going long Apple, for example... and if so, I'm interested in commentary on how you're pricing the companies you buy into. Buying the dips, for example, comes across as more hope on a quick rise before subsequent sale, than a belief that the fundamentals will drive serious long term growth.

Alternatively, do you all consider yourself traders, making short term buy/sell combinations, because the BS/Elliot Waves/chicken entrails told you so?

And I think most interestingly of all... who here is using some/any/all of their professional finance study/experience, when making their own private share investments? I'm thinking something more "brownian motion with levy processes", than "hey, the ROE is great, and the manager is a champ".

Just for myself, I should probably say that my past share and fund investments were more speculative than analytically based, something I aim to correct. I've been burned badly, and got real lucky, but there was no particular rhyme or reason at the time (before i got into the idea of quant finance) The folly of youth eh?

 

[daleholborow]

Oh, and to contribute to the specific question... (and to fly in the face of my "you have to have an idea of fundamental price before you can comment"), I'm currently sceptical of the valuation of Google, and laughing my head off at $50B for Facebook and Twitter

So, I guess you could cheekily translate that into "short Google / facebook / twitter", google longer term, facebook and twitter shorter term. Wonder if I'll end up looking foolish....

 

[tobias elbert]

I'm a big fan of Thai stocks. They generally pay very good dividends and have seen nice growth over the past year. SEA in general is quite interesting, as money often appears to flow into those markets midterm when there is more uncertainty in established markets. Based on fundamentals against their Western counterparts, Thai stocks are still undervalued - though historically high.

Despite a bit of political instability, the SET has been going well. In actual fact, was completely unaffected by the civil unrests earlier last year. I think it's partially due to a fairly conservative and stable banking system with the BoT (Bank of Thailand) possessing substantial reserves (if I remember correctly ~3x private and public debt together). They've definitely learned their lesson in '97.

Currently I am out of the market though as I am expecting a bit of a consolidation happening and reconsider entry in late Q1 this year. The AUDTHB is very stable at the moment at good rates so the risk of losses due to currency fluctuations is quite low IMHO. Big chunks of my spare cash go into TH whenever possible.

Some good companies:
- CPF (Food)
- BANPU (Utilities)
- MAKRO (Retail)
- Siam Commercial Bank

Politicians and the BoT ever so often come up with really funny ideas which they announce publicly causing the market to panic and the SET to drop only to reverse them shortly after (a good recent example was a tax levy on repatriated funds and other capital outflow restrictions) offering good opportunities to buy. It makes you question why the came up with it in the first place - evil to him who evil thinks :D.

 

[Scooot]

Oh, and to contribute to the specific question... (and to fly in the face of my "you have to have an idea of fundamental price before you can comment"), I'm currently sceptical of the valuation of Google, and laughing my head off at $50B for Facebook and Twitter

So, I guess you could cheekily translate that into "short Google / facebook / twitter", google longer term, facebook and twitter shorter term. Wonder if I'll end up looking foolish....

Could you expand on why you think Google is overvalued? I'm of the opposite opinion and would like to here the other side to see if I'm missing anything.

Care to play devils advocate?

 

[daleholborow]

I guess most simply and just talking quickly out loud, I'd say because I believe they've been greatly hyped, seem to trade at a very large multiple of their profits, make all their money on a single product but splash a lot of cash around on what a lot of the time seem like wildly disparate ideas, drop massive amounts on products like Youtube before having a concept like a profit model in mind, are hitting a point where their size makes them the target for quirky regulation (privacy issues etc, particularly in Europe), etc etc etc.

Don't get me wrong... I use Google as my sole search engine, and remember the days of searching the web without with a mixture of horror and bemusement, the next phone I buy will almost certainly be linux/android based instead of Apple...

But would I buy shares in it? No.