Trading for a Living - the journey to self discovery

Quote from cloudy:

Well Jobs has been very much behind Apple's success. Despite their products are still closed-systems. Their success is nothing short of remarkable.
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1987 Mac SE was my first computer; even then...it was easier to use than any windows PC but still pricey and outside of graphics and spreadsheet...it wasn't easy to find titles. It never really took off as AAPL, the company never really had it together with a whole lot of drama in the boardroom. I think it was a struggle btw Sculley? and Jobs that led Jobs to found NeXt. Ironically, AAPL brought him back when they bought out NeXt (after Sculley was forced out with his own debacle)...

Jobs is a control freak because I think he learned the bitter lesson of what it was like being "forced" out of his own company he help create. He probably figured out that "if its got to be...then, its got to be up to me!". In the companies I provide consulting services for, this attitude is rare as it is akin to a "go big or go home" bet. Jobs figured out how to have the same mentality except to apply it to a select market...one product/market at a time and create an ecosystem around it...nothing short of brilliant.

While I think Jobs definitely deserves the bulk of the credit to AAPL's trajectory...the roadmap has been drafted up and the key is in the execution and their ability to keep the great people in the company. As it was then...AAPL users have been "cult" like...I see no difference now...

I find the stock compelling at this junction and will be adding at every pullback opportunity. I doubt we will see the extreme pullback we saw in 2009.

AAPL closed at $320.26 on Friday. Down 14% from its all time high.
 
Quote from Th3UglyTruth:


I find the stock compelling at this junction and will be adding at every pullback opportunity. I doubt we will see the extreme pullback we saw in 2009.

AAPL closed at $320.26 on Friday. Down 14% from its all time high.
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Byte me :D
 

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For AG
- was looking at the price relative to the 30min 20MVA
- given that it had a good run the day before (10%); I didn't think another 10% was possible on the 2nd succeeding day.
- was difficult to pull the trigger to exit as half the brain was telling me to let it ride...logic prevailed with my self imposed rules


For TZOO
- hit the upper channel drawn on the 17th


Both weren't uptrending stocks. Pure luck or rules made the difference?
 

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Quote from Th3UglyTruth:

1987 Mac SE was my first computer; even then...it was easier to use than any windows PC but still pricey and outside of graphics and spreadsheet...it wasn't easy to find titles.
AAPL closed at $320.26 on Friday. Down 14% from its all time high.
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AAPL closed at $326.35 for the week of June 24th.
- Greek financial problem is all the rage right now with DOW at 11,934
- Steve is still looking pretty sick at the WWDC conference
http://events.apple.com.edgesuite.net/11piubpwiqubf06/event/

Has some time with the new toys and I must say...these things sure ain't like my Mac SE or my first iPod! One beef I have is the lack of flash support. Maybe it is age related...I still have to get used to the touch keyboards (as my son would say...nothing wrong with it dad...you just have fat fingers!). Aside from the two things mentioned above; I am totally blown away by the technology. Who needs a clunky laptop these days?

Having the iPad2 has allowed me to understand the AAPL ecosystem better. I used to have a perception that it was an annoyance created by a control freak. Having multiple PC's both at home and at the office...it sure was frustrating transferring or emailing work documents or having different files stored in different location/PCs...

iOS5 and the iCloud seem to change all that. With itunes being the hub; AAPL truly isn't the hardware/software company I used to know. Given that they are bidding for Nortel's wireless patents also makes you wonder what the picture is! Guess it is fair to say...wireless will be a big part of their future! LOL

And the updates to iOS5 apparently is free....I don't remember MSFT giving away freebies!

Registering with iTunes hit a chord with me when it asked for my credit card info (I know...I'm a newbie with the new AAPL!). With iPhone and iPad both linked to iTunes and linked to my card...what is preventing from my iPhone in becoming a credit card? or AAPL having a finance arm making money on interest and on merchant sales as well?

My journey of discovery continues....

The thought is to load up my retirement portfolio only with one stock...

Initiated first position at $320 even though we bought it lower the day after our post. Who knows where the bottom is...$279 is the next pivot point.
 

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Here is the other side of the coin...on why the low valuations may linger....

BREAKINGVIEWS-History suggests Big Tech discount could linger11:08AM ET on Friday Jun 24, 2011 by Thomson Reuters

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Robert Cyran

NEW YORK, June 24 (Reuters Breakingviews) - Microsoft <MSFT.O>, Apple <AAPL.O> and Google <GOOG.O> -- together worth over $650 billion -- seem to have plenty of growth left in the tank, but it's not evident in their stock valuations. The shares of all three tech giants, after accounting for their cash hoards, trade at a discount to the market. This phenomenon isn't new. Investors shunned the sector for long stretches twice over the last 40 years, worrying that obsolescence might pre-empt expansion.

Intel <INTC.O>, for one, can vouch for the experience. In the mid-1970s, shares of the rapidly growing chipmaker could have been bought for just six times earnings. Few tech investors seized the opportunity, however, because of a recent scarring.

A few years earlier, upstart mainframe companies like Control Data had been all the rage. And IBM <IBM.N> and Xerox <XRX.N> boasted spots in the list of "nifty fifty" large-caps, whose growth was supposed to continue steadily unabated. Those bubbles popped when computer orders slowed and economic hard times hit blue-chips.

By the early 1980s, investors had regained their zeal for growth stocks. Hewlett-Packard <HPQ.N>, with its hot-selling desktops, was bid up to 28 times expected earnings. Intel regained favor, too, and was valued at a heady 60 times. Meanwhile, the S&P 500 index was trading at a mere multiple of 12.

Recession brought a fresh malaise at the end of that decade. Tech valuations on many smaller companies sank below even the cash on their books, according to Fred Hickey's High Tech Strategist newsletter. Significantly, growth companies suffered along with industry gorillas. Compaq, a leader in the sizzling PC market, was expanding its bottom line by more than 60 percent a year but traded at just nine times earnings, or about half the multiple of the broader market. It took another five years for tech stocks to rebound.

So, while Microsoft, Apple and Google look cheap today -- at 7.5, 9.8 and 11.5 times their respective cash-adjusted earnings expectations for 2011, against 13 for the market -- history suggests the discount could linger. A willingness by investors to bid up unprofitable companies like LinkedIn <LNKD.N> and Pandora <P.N> means they're not yet repulsed by the entire sector. As in earlier cycles, big tech stocks may need to wait until that day comes before they meaningfully climb again.

Th3UglyTruth is...no matter how "we" think or believe that certain shares are "cheap"...in the end, it is market psychology that will dictate its momentum. Till then...we play with the cards we are dealt with...
 

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The CONS:
- the "Steve" effect. until there is a resolution to this either ways...there will always be a "discount" overhanging on the stock. From a logical perspective, I must be missing the puzzle on my NFLX and/or AMZN would be valued any higher. I do understand that they may have different lines of businesses...their metrics seems out of whack.
- the law of large numbers. GOOG hasn't seen its highs for the past 3 years! Mind you, we can take comfort in BRK and that is trading at 17x PE!
- competition/game changing technology or obsolesence. Like they disrupted the "walkman" and mp3 market and now the laptop and cell phone markets...there is always the possibility that another company may duplicate what they did...
- macroeconomic events that will cause consumers to curtail spending

The PROS:
- Cheap compared to its historical valuation ratios.
- China. It is my understanding from friends living there that they are excited with the possibility of China Mobile carrying the iPhone!
- Technically oversold: daily and weekly charts
- Well managed; executes pretty darn well considering its size and the scope of their offerings
- The products, while not the cheapest, are simple to use..."it just works!" and aren't eyesores.
- Has managed to transcend generations/sex/income/culture
- laptops will be what mp3's and walkmans were...
- macs and iPads will continue to gain momentum in the workplace...


I could go on and on...bottom line is that it held at $312ish...we will trend sideways probably till we break $356 (up) or we breach the most recent low...we've accumulated and will sell calls as the opportunity presents itself...
 

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There is certainly something to be said about trading higher priced stocks! Took a chunk of capital; went up $9 in a day but in relative terms...still only 1.8%+ :D Oh well...it is better than nothing. Held 2 days.
 

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