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Jobless Claims; Thoughts on Apple; Dow Jones: Best of Kass

Doug Kass

NEW YORK ( TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.

Among the posts this past week were entries about unemployment claims, Apple's market share and the reconfigured Dow Jones Industrial Average.

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Jobless Claims
Originally published on Thursday, Sept. 12 at 8:54 a.m. EDT.

Initial Jobless Claims totaled 292,000, well below expectations of 330,000 and down from 323,000 last week.

But Dow Jones News Service is reporting that the main reason was "because two states failed to report all of their claims as they transitioned to a new computer system and the applications either weren't received or didn't get processed," according to the Labor Department.

The analyst at the Labor Department also said, "most of the drop was not necessarily indicative of an improving labor market, and that revised estimates in coming weeks would 'reasonably' correct the data."

The Labor Day holiday may also have had an impact.

Therefore, ignore the headline number!

More Deep Thoughts on Apple
Originally published on Wednesday, Sept. 11 at 11:48 a.m. EDT.

I am getting a lot of emails from subscribers as to whether Apple should be purchased into today's schmeissing.

My answer is no.

The stock market is not always right. In the case of Apple, it might even be underreacting!

Today investors are disappointed that the new iPhone is not different, the price point is too high and that the China event was a dud.

The stock market may have not figured out how bad the loss of share is -- the bullish Wall Street analysts are still talking about margins holding up -- and how much of a strategic blunder yesterday's release was.

What is being ignored is that not only are Apple's profit margins substantially above any of its peers but the company's price-to-sales ratio is astronomical relative to its competition and absolutely high (given that it still is a hardware business).

While Apple's competition grows much stronger, the company is getting to the point where the franchise is being jeopardized by slipping so much in market share.

If you think my view is moderately insane, the same thing happened in the personal computer space three decades ago -- the industry went from equal footing to nothing as Microsoft became the standard.

Bottom line: The stock market understands the value of market share.

Why do growth companies such as Amazon , Salesforce.com and numerous others get such high multiples?

Mr. Market wants them to grow and get share as much as possible now, earn the money later.

The value of the share is tremendously important.

If you sell diamonds or have a monopoly, worry about price.

In industries such as Apple's, worry about share.

At the time of original publication, Kass had no positions in the stocks mentioned.

How Now, Dow Jones?
Originally published on Tuesday, Sept. 10 at 9:12 a.m. EDT.

I am a bit perplexed by the changes that have been made in the DJIA this morning.

Since the DJIA is a price-weighted index, Visa becomes the second most important stock and Goldman Sachs the third most important in the index.

That really changes the complexion of the DJIA, skewing it toward the financial sector (which has recently contracted as a percentage of the S&P 500).

The two companies being replaced in the DJIA, Bank of America and Alcoa , only represented about 1% of the index and were essentially irrelevant.

Now Visa and Goldman Sachs become very important.

Why make financials such an integral portion of the DJIA going forward compared to, say, technology or industrials?

At the time of original publication, Kass had no positions in the stocks mentioned.

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