Talking stocks, trading, and investing in general

CYstyle · Jul 6, 2012

GreenFrog said:
My hypothesis and action plan:
- Tomorrow, the gubment will release positive jobs numbers, indirectly boosting Apple's recent run-up a little more
- Sell all my Apple shares before EOD tomorrow and take profitz
- Expect Apple shares to pull-back a little before earnings release
- Expect Apple shares to fall dramatically after earnings release
- Buy after tumble, and hold until end of the year

thoughts on GOOG?

Dbear · Jul 6, 2012

I think AAPL will continue to climb up until earnings, beat the estimates (as usual) but then drop immediately afterwards, as people take profits.

Then we'll see it slowly rise again as it approaches the fall when people get themselves into a frenzy over 3 possible new products announced before year end -- (a) iPhone 5 w/ a 3.96inch screen (b) iPad nano with a 7 inch screen and (c) aTV or iTV upgrade of some sort.

I don't think AAPL will drop back down to the 400s or low 500s soon. They seem to be laying even more foundation for controlling their whole supply chain in both hardware and software. Hardware as in building more manufacturing plants in china to pump out whatever they want in a short amount of time. For example, the whole 7 inch iPad rumor. If Google can make their tablet in 4 months, AAPL can do that in the same amount of time or shorter. While Microsoft announces a tablet and shows everyone, but then we have no idea when it will be released or pricing. Just seems really slow and clunky for MS.

As for software, they are continuing to take really useful 3rd party applications and then integrating it into their own iOS with their own product. Eliminating google maps was pretty shocking because it's such a useful product, but it's really smart if their own map app is just as good or better.

Not only are they controlling more and more of their own supply chain, they are constantly attacking other companies with use of their patents. The whole Galaxy Nexus ban just seems crazy. Like, they actually were successful in halting the sale of another Company's flagship product? It doesn't seem like they are playing fair.

Just some food for thought...

brokencycle · Jul 6, 2012

I am looking for a bit of advice.

I am looking to invest about $2600/yr into my Roth IRA (I am already currently doing $2600). My current funds are going into a precious metal & minerals fund.

The two questions I have are:

1. The metal fund is down quite a bit since I purchased it, but it has been rebounding as of late. Should I cut my losses and sell it? Should I just stop investing in it? Or should I keep going because it is down over the last year, and it will continue to rebound? I think it will do well considering all the Euro issues, etc, but other opinions greatly welcomed.

2. I am looking to use the rest of it to do either an ETF or a index fund. Are there ones you recommend? I was figuring I'd go with something like Vanguard due to the low expense ratios, and if they're all holding basically the same thing, it seems minimizing the fund's expenses are most important. I do a lot of other business with USAA, anyone have experience with any of their funds such as their S&P index fund?

Thanks for the help.

Background:

I'm 25, and I have a 401k through my employer that is matched $1:$1 for the first 4% which I take. That money is put into a target retirement age account. Although, I'm considering switching it because it hasn't done great.

GreenFrog · Jul 6, 2012

CYstyle said:
thoughts on GOOG?

Don't follow GOOG at all, sorry.

Anyway, just sold all my AAPL shares @ $607.

Still debating on what to do with ARR.. it keeps climbing everyday.

GreenFrog · Jul 6, 2012

Dbear said:
I think AAPL will continue to climb up until earnings, beat the estimates (as usual) but then drop immediately afterwards, as people take profits.

Then we'll see it slowly rise again as it approaches the fall when people get themselves into a frenzy over 3 possible new products announced before year end -- (a) iPhone 5 w/ a 3.96inch screen (b) iPad nano with a 7 inch screen and (c) aTV or iTV upgrade of some sort.

I don't think AAPL will drop back down to the 400s or low 500s soon. They seem to be laying even more foundation for controlling their whole supply chain in both hardware and software. Hardware as in building more manufacturing plants in china to pump out whatever they want in a short amount of time. For example, the whole 7 inch iPad rumor. If Google can make their tablet in 4 months, AAPL can do that in the same amount of time or shorter. While Microsoft announces a tablet and shows everyone, but then we have no idea when it will be released or pricing. Just seems really slow and clunky for MS.

As for software, they are continuing to take really useful 3rd party applications and then integrating it into their own iOS with their own product. Eliminating google maps was pretty shocking because it's such a useful product, but it's really smart if their own map app is just as good or better.

Not only are they controlling more and more of their own supply chain, they are constantly attacking other companies with use of their patents. The whole Galaxy Nexus ban just seems crazy. Like, they actually were successful in halting the sale of another Company's flagship product? It doesn't seem like they are playing fair.

Just some food for thought...

I think the opposite. I think we're going to start to see AAPL decline a bit after the recent run-up. The only way AAPL will go up after earnings is if it releases another SMASH record, like last quarter. I don't think this will happen, as Apple never got a chance to sell iPad 3s in China due to the Proview lawsuit, and the fact that iPhone sales in America have been declining as of late. I don't think they'll do poorly.. they'll probably have decent earnings, but Wall St. will react negatively to them.

I exited AAPL as mentioned already above and I think I'm going to stay away from picking it up again until after earnings.

Dbear · Jul 6, 2012

at least we both think it'll drop after earnings

RedLeg · Jul 6, 2012

GreenFrog said:
Don't follow GOOG at all, sorry.
Anyway, just sold all my AAPL shares @ $607.
Still debating on what to do with ARR.. it keeps climbing everyday.

I've never gotten into REITs, but as long as their cash flows are healthy why not keep riding it? Also, how leveraged is ARR and how are they financed? The main two worries I would have about your position would be a dividend cut or any whisper about rising interest rates, which would send a shock wave through the repo markets.

Depending on where you bought in, I might set a stop loss at 5% of today's close.

With AAPL, I'm leaning toward selling. I'm hoping for a nice bounce back day Monday for the market. I don't think earnings are going to blow away estimates in usual fashion, so the downside of taking profit now isn't huge. Probably will also take profits on GS and dump HAL at a loss. Nat gas will make a strong comeback, it's just going to take longer than I initially thought.

chogall · Jul 6, 2012

Dbear said:
I think AAPL will continue to climb up until earnings, beat the estimates (as usual) but then drop immediately afterwards, as people take profits.

Then we'll see it slowly rise again as it approaches the fall when people get themselves into a frenzy over 3 possible new products announced before year end -- (a) iPhone 5 w/ a 3.96inch screen (b) iPad nano with a 7 inch screen and (c) aTV or iTV upgrade of some sort.

I don't think AAPL will drop back down to the 400s or low 500s soon. They seem to be laying even more foundation for controlling their whole supply chain in both hardware and software. Hardware as in building more manufacturing plants in china to pump out whatever they want in a short amount of time. For example, the whole 7 inch iPad rumor. If Google can make their tablet in 4 months, AAPL can do that in the same amount of time or shorter. While Microsoft announces a tablet and shows everyone, but then we have no idea when it will be released or pricing. Just seems really slow and clunky for MS.

As for software, they are continuing to take really useful 3rd party applications and then integrating it into their own iOS with their own product. Eliminating google maps was pretty shocking because it's such a useful product, but it's really smart if their own map app is just as good or better.

Not only are they controlling more and more of their own supply chain, they are constantly attacking other companies with use of their patents. The whole Galaxy Nexus ban just seems crazy. Like, they actually were successful in halting the sale of another Company's flagship product? It doesn't seem like they are playing fair.

Just some food for thought...

Last Q, China saved AAPL's earnings. Probably not the case this Q.

Going to low $400s is probably not going to happen unless equity risk premium skyrockets, i.e., lehman like event.

CYstyle said:
thoughts on GOOG?

Half of their revenue comes from Europe. And search ad is still over 95% of their revenue. Do your own math.

chogall · Jul 6, 2012

GreenFrog said:
I think the opposite. I think we're going to start to see AAPL decline a bit after the recent run-up. The only way AAPL will go up after earnings is if it releases another SMASH record, like last quarter. I don't think this will happen, as Apple never got a chance to sell iPad 3s in China due to the Proview lawsuit, and the fact that iPhone sales in America have been declining as of late. I don't think they'll do poorly.. they'll probably have decent earnings, but Wall St. will react negatively to them.
I exited AAPL as mentioned already above and I think I'm going to stay away from picking it up again until after earnings.

Last Q, the expectations were low, and AAPL surprised with a very strong China sales that saves the day.

It will continue to be the hedge fund hotel though. No one gets fired for recommending AAPL as a BUY.

GreenFrog · Jul 7, 2012

RedLeg said:
I've never gotten into REITs, but as long as their cash flows are healthy why not keep riding it? Also, how leveraged is ARR and how are they financed? The main two worries I would have about your position would be a dividend cut or any whisper about rising interest rates, which would send a shock wave through the repo markets.

Depending on where you bought in, I might set a stop loss at 5% of today's close.

With AAPL, I'm leaning toward selling. I'm hoping for a nice bounce back day Monday for the market. I don't think earnings are going to blow away estimates in usual fashion, so the downside of taking profit now isn't huge. Probably will also take profits on GS and dump HAL at a loss. Nat gas will make a strong comeback, it's just going to take longer than I initially thought.

They're leveraged at roughly 7X and they only invest in government-sponsored/backed MBS. They cut their Q1 Dividend from .11 per share to .10 for Q2, and have set it for .10 again for Q3. So even though the recent cut isn't optimal, they're still very stable (I recall reading about other mREITs having cut their dividends lately).

I'm just concerned as to why all mREITS (not just mine) have been going up so much lately, especially with the yield curve not being as steep. If anything, they should be going down.

RedLeg · Jul 7, 2012

Even if the yield curve isn't steep, when financing costs are near zero, they can make a lot of money at 7x leverage.

mREITS are up because of confidence the fed will keep rates low through 2014. Default rates leveling out certainly helps as well.

If you keep an eye on their dividend coverage I think you will be good. I don't think these dividend yields are sustainable, so the well is going to dry up eventually.

SkinnyGoomba · Jul 8, 2012

And when it does the stock prices for those reits are likely to decline substantially. So, not my style of investment but those buying ARR, why would you buy it over something like AGNC which has an eps higher than it's payout, along with a y-o-y increasing stck price and a 14% dividend?

RedLeg · Jul 8, 2012

I was actually looking at AGNC. In their case, the substantial majority of their portfolio consists of fixed rate securities. They also heavily rely on repos for funding.

If interest rates rise they are going to get burned. Also, how much of that stock price is betting on QE 3?

SkinnyGoomba · Jul 8, 2012

I'm just curious why one would chose one over the other. As mentioned it's not an investment that I would consider.

I feel that anything paying 14% comes with some substantial risk in a change of environment, maybe it's an uninformed opinion, but there is no free lunch.

RedLeg · Jul 8, 2012

SkinnyGoomba said:
I'm just curious why one would chose one over the other. As mentioned it's not an investment that I would consider.
I feel that anything paying 14% comes with some substantial risk in a change of environment, maybe it's an uninformed opinion, but there is no free lunch.

Agreed. Yields that high are not sustainable.

I had a thought of going long on AGNC and shorting the US 30 year as an interest rate hedge. Too much risk that something else leads to a dividend cut though.

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