Sadly, Apple this morning has taking a significant hit. And Jeff Macke has a blistering comment for shareholders: ( http://finance.yahoo.com/blogs/breakout/apple-fix-itself-3-steps-122134336.html )
"Until Apple finds the courage to move beyond its legacy the stock is dead money, at best. The stock will bounce and drop and gyrate but long-term investors are better off elsewhere."
Here's a pre-market quote: 461.00 Down 53.01 (10.31%) 8:59AM EST - Nasdaq Real Time Price
Whose medium-to-long run stock prospects feel more certain today, TC or AAPL?
It's an old and somewhat honorable position, albeit a bit antiquated:
It's interesting that TC is now almost $2 above its 52 week low with up to around 25 million shares short. Those unfortunate shorts are off their peak by an unrealized $50 million, so covering the remaining shares will get progressively more expensive. $6/$8/$10 may occur earlier, perhaps: Winter/Spring/Summer. It will be entertaining to watch the dollars move from one perception (shorts) to another (my wallet), a most pleasing transfer from the 1% to the 99%.
Why should the shorts cover their positions now, when they can cover in 2013 at $10 and return their profits to those more deserving?
Corporate management is like insurance. You don't know its value until something goes wrong. This message board has no lack of breathlessly disparaging remarks about TC's management. There is widespread agreement they've made some mistakes. Greater intellects on this message board can debate whether those could have been easily avoided or whether better tactical decisions could have been made.
But the fact remains that TC's management made ballsy, long-run decisions that, to a reasonable person, appear likely to pay off. What fraction of other firms do this? Digging a hole and processing extracted metals into cash is the origin of the term "pay dirt" for good reason. And diversification of TC's metal production into gold and copper is consistent with those who believe these metals will see increasing long-term demand.
Wild predictions about stock prices tend to be mostly short-term news driven. Everyone's entitled to an opinion, but just as we've seen recently with politicians, people ignore facts at their own peril. While TC endured tactical bumps in the road, those have been addressed, while their strategic planning has remained strong and compelling. Fate favors the bold.
Not necessarily. Analysts are rather like psychics. They're a lot better at predicting things after they've occurred.
After the election, the political pressure on the Fed will ease, increasing the chances of additional QE. TC should also then report completion of most of their spending for, and development of, the new mine.
Cramer's SELL signal is a gift to anyone who wants to expand their TC position. What we need now are the typically hysterical, after the fact downgrades from large analyst firms. This will embolden shorts to pile in even further, driving down the short-run price. $2 or less in the next few months and my retirement date can match the end of their first year of gold extraction.
It would appear that today is a mini-short squeeze.
And all it took was a gold surge combined with "not horrible" news from Europe.
What will happen when the company actually announces any good news?
Does it take $8 million to refurbish one's life?
I could probably make do with $5 or $6 million.
Yes, first the stock market has always been more about psychology and emotion than reality. It is the equivalent of a computer program that waits for the next news input and utilizes an emotion-based algorithm to compute price changes. Feedback loops amplify the response so that fear and greed easily create over-reactions. Fallacies, such as appeals to authority are effective at changing the amplitude of the responses. For instance, when Cramer opines favorably about a particular small-cap stock, notice that it often goes up beyond reason for a few days.
There are numerous economic indicators. The one that matters to the market is the one that gets the most press attention. For instance, the last two were the GDP and unemployment numbers. Before that, the Fed beige book report. While these are pieces to the overall picture, they are the be-all-end-all for their news cycle. Lesser-known pundits who go against the grain tend to be marginalized until the general view switches direction.
Remember that people's nerves were shattered in Q4 2008 and again in Q1 2009 when the market had dramatic volatility, ending at a DOW low of around 6500. The general view was negative and it took quick Fed/Treasury action and a steady stream of good micro-news to combat endless worry about the financial system. While the 'good' news today may seem tepid in comparison to a year ago, it now evaluates to 'excellent' compared to Q1.
Finally, whether remedial action taken this year will have future harmful side effects is yet to be seen. Maybe so, maybe not. Perhaps the improvement in economic demand will effectively end the recession. Perhaps another recession will soon follow. Perhaps the consequences will be far less severe than if the remedial action was not taken. Perhaps the Mayans were right about Dec 2012? Whatever the case, many people have a politically-inspired opinion, usually expressed vituperatively and with the utmost certainty, but generally lacking logical validity.
Your best approach for stock picking could be to follow the momentum of the crowd, but cash out before others without being too greedy. Never, ever, be astonished at the market, just wryly amused, and you'll feel a lot better.
See below RE:Mr. Chambers remarks "let down investors".
That doesn't smack of a call for a market rally.
Sadly, their "beat" was with a 46% decline in earnings. Moreover, 12 cents of their 31 cent "beat" was a 1-time gain. Their top line was off 18%.
Not to worry though, because Mr. Chambers is "upbeat".
Now that's news you can invest with. I wonder if he was "upbeat" last year, too.