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Apple Inc. Message Board

  • jimturner54321 jimturner54321 Mar 28, 2013 10:53 AM Flag

    CAUTION BEARS

    I would advise bears to practice caution here for two reasons:

    If Apple's cost of sales and R&D spend follow the historical pattern, shorts could be crushed between falling input costs and a surge in sales due to new product releases.
    With Greenlight's recent challenge still fresh in investors' minds, Tim Cook has every incentive to get the stock up in the near term and virtually unlimited funds to conduct a shock and awe buyback campaign. The high probability outcome in such an event is that Tim Cook can stay long AAPL longer than short sellers can stay solvent.

    Whether or not such a buyback is the according-to-Hoyle "right" thing to do is almost irrelevant: Tim Cook is holding that ace, and he can play it if he wants to.

    This alters the risk-reward profile for the short thesis substantially. It's like taunting a man with a nuclear weapon and an itchy trigger finger: You stand to lose big even if you're right.

    Be careful out there.

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