We’ll diagnose your diseases, or we’ll help you with a cut, scrape or a scratched eyeball.

We’ll give you a recipe for cupcakes, we offer you a group hug and tons of sympathy, if a friend or relative should get ill … God Forbid.

We’ll help you raise your children, as well as your relatives, your neighbors’ children, your dog or your pet python or squirrel.

If you have a problem with your Apple Product, or ANY product for that matter, we’re nearly as good as the Genius Bar.  We’ll give you advice about buying anything from soup to nuts.

We’re better than Google Maps if you need to find yourself.

We’ll help your kids with their homework or how best to study for an exam.

We’ll wish you a Happy Birthday on your Birthday and we’ll even bake you a Birthday Cake.

What I’m trying to say, is we’ll ALWAYS be there for you.

All for one and one for all.

I am about to add a second full-time job to my responsibilities as a general partner of my venture fund. One of the companies in the fund portfolio is showing great promise – I believe that it has an opportunity to go public in 2-3 years if it is run the right way between now and then. So, I will be taking on the role of CFO for that company in hopes of duplicating what I did at Mercury Interactive – build profits, build a strong infrastructure to support growth, and position the company with market and financial analysts to prepare for an offering.

This will leave little or no time to spend here on Sanity, a loss that I will mourn.

If you would like to know a little about the company that I will be joining, you can read about it at www.alter-g.com. 

Who knows – perhaps in a few years you will be following investments in AlterG, and posting about how little I care for stockholders. <grin>

I’ll drop by as time permits, but I will greatly miss the interaction that we have had here on Sanity.  I won’t be around to correspond via PM, but if you need to be in touch, you can get me through the Applelot.org board (which I will leave active as a backup location for you, although I won’t be able to monitor it much).  I do have email through that board at techstock2000@applelot.org.

My best wishes for you all,

TechStock2000

The work of the Applelot community shows that plenty of iPhones have now been manufactured for Apple to have met its self-imposed goal of 10 million iPhones sold in 2008, and the general press is picking up the story.  For example, the following was posted on Wired on October 7, 2008.

Apple May Already Have Sold 10 Million iPhone 3Gs

Apple is selling off because of funds needing access to cash.

However, the markets crashing may not prove to be a good time to invest this time around.  We have a huge variable here not seen in the past: credit contraction.   This is a huge sum of money being taken away from the economy.  The Bond market is extremely huge relative to the stock market.   The problem we have is in the bond market side and there is no way that the stock market or the economy is going to survive a bond market contraction.  The bond market can swallow the entire stock market and still be starved for more.  If you are looking what the bond market is saying, it is predicting a nasty contraction of the economy.

People here are making a huge assumption that the money on the sidelines will somehow be put to work.  Hate to break it to you, but there is no money on the sidelines.  That money is being taken away to deal with the bond market damage.  People want their money back in cash or treasury bills.  There is no interest in putting that money to work in investments.

I’m not saying get out.  I’m simply trying to tell people be very careful.  Looking towards history for help on how to invest is a poor decision when what we are experiencing has not happened since 1929 and the 1930s.  This is no longer 1987…  it is far worse.  2001 is a joke relative to what we are seeing.  There is little leadership because cash is king.  It may not rebound this time around.

This is why I’m preaching for folks to start preparing for the worst, and pray for the best.  I just don’t believe we have the leadership in Washington to handle the problems we are facing.  There are too many crooks who are looking out for their own best interests and don’t give a rats ass about America.  The invisible hand is great when building wealth by investing.  It does not work when individual goals are to destroy capital for profit.  There is no secondary economic benefit from shorts…

Capitulation
Some of you have been praying for capitulation.

Congratulations! Now you have it. I’m out.

Enjoyed the ride, hated the landing. Made some friends here, met some wonderful people. Thank you for enriching my life.

I still think AAPL is a great company, but no company is going to withstand the current turbulence unscathed.

Guys… it’s been fun… I’m taking a break for the next month… Too depressing otherwise…
I’ll leave what options I have left for a hail marry rebound. But, I’m already figured the remaining money is a sunk cost and gone.

Right now, I’m preparing myself and my family for what could be a repeat of the 1930s. The Fed, SEC, have played mathematical experiments with what is the Modern Financial System. The models don’t work and the theory is wrong.

What seems to be happening is similar to forest fire preventions. Since 1987, all the government agencies worked to prevent recessions (all types of forest fires). Well… the dead wood built up and we had some mini fires like LTCM, which were promptly dealt with. Then, there was Bears Stern, again… the Fed came in and tried to kill the fire off. This time, the Lehman fire was started, along with AIG and the Fed decided it could not and would not stop this fire. They are hoping that the fire damage to the forest will be limited, or that the forest will rebuild itself. The real risk is that the fire will engulf the whole forest.

Unfortunately, 2 problems exist. 1) They did nothing to deal with the arsonists out there that want to see the forest burn 2) They did nothing to eliminate the dead wood in a clean and clear fashion. The SEC, with the removal of all of Joe Kennedy’s rules over the past 15 years, essentially started handing out lighters to everyone entering the forest (markets). So, as soon as one tiny fire is dealt with, another starts. The SEC is claiming that trees can recover and grow as fast as a fire can burn in down. That is the only way naked shorting would have no impact to market pricing. But, maybe the guys at the SEC never passed calculus… Anyway, I don’t think the Fed can do anything anymore at this point. The SEC was and may be able to stop this. But, it won’t. Not until after the whole forest burns down. There just is no leadership out there. Seems like Cox is either paid off or was threatened by the hedge funds. Buying puts is the not the same as going short a stock. It kills me when government officials claim that folks can use alternatives to naked shorting. The difference is that options don’t directly impact the underlying assets. They have their own supply demand characteristics.

Anyway guys… I’ve decided that I’ve pulled all the cash out of the accounts that I can. I’ve accepted the fact that it is over. I’m going to focus my energies on my work and my MBA (not that the MBA will be worth much come May when I graduate. But, given that I already payed $80k for the $100k for the program, may as well finish it…).

I do want to thank all of you guys for the amazing level of support you have given me over the years. It truly means the world to me. I will be back every now and then. But, what I am seeing here is that the dominoes have started to fall, and the momentum of this monster fire can no longer be stopped anymore. This week-end was historic in so many ways. The Fed and the banks played chicken and nobody flinched. If and when WaMu is bankrupt, the FDIC will run out of money for insuring deposit accounts. So, in the end, taxpayers are going to have to come in and bail everyone out anyway. But, then, it will not be the Fed’s problem.

Good luck to all of you.

Rich

Long term recommendation:

STRONG BUY below $186
buy from $186 to $213
neutral from $213 to $245
sell above $245

Best wishes to everyone, and stay safe.

3mo ending on Sep-2008:
Apple gd: $7.80b rev, $1.00 eps
Analysts: $8.07b rev, $1.11 eps
My estmt: $8.37b rev, $1.28 eps
2.9m Macs, 7m iPhones, 11m iPods

12mo ending on Sep-2009:
Analysts: $40.38b rev, $6.05 eps
My estmt: $45.48b rev, $7.44 eps

Valuation (25 x fwd eps):
Sep-2008 (fair value): $186, +25% upside (Sep-2009 eps $7.44)
Jun-2009 (1yr target): $245, +64% upside (Jun-2010 eps $9.79)
Analysts mean target : $208, +40% upside

http://stashbox.org/browse.php?q=user%3Adeagol+aapl

FWIW… here it is… at least I spoke up … 

Don’t know what good it will do… and I was just so pissed off, so  not sure if my letter was in its best form…. I ranted wrote it off quickly and sent it… 

I also cc’ed it to an investigative team for a major news organization too… not holding my breath though…

——-
  

To Chairman Cox,

As an individual investor and one very concerned with the economy as well as the concerted efforts to take down weakened financial institutions (due to bad credit handling) by unregulated hedge funds and illegal naked short selling, it is time for the SEC to recognize that regulating the hedge funds and reining in naked short selling as well as reinstating the uptick rule are of utmost urgency.

Why is it acceptable for shares to be “borrowed” without actual acquisition first?  Personally I don’t think its right that my shares can be “borrowed” against my wishes, regardless of rules involving brokerage houses in order to have investment accounts.  It puts my hard earned money and careful investments at risk by those who are greedy and are allowed to break the rules with impunity and apparently with SEC’s blessings.

The reason I say with SEC’s blessings is that ever since the uptick rule was removed, volatility in the markets has increased and companies have been short selled to the point of failure.  In addition, lessons learned from the temporary protection given to financials against short selling did not seem to take hold.  Once the temporary ban on short selling of financials was lifted… we saw concerted efforts at take down again.  Now the short sellers have gone after LEH, Washinton Mutual and others are on their list…. how many more of these corporations have to fail before you and the SEC leadership FINALLY get it?

The SEC’s job is to PROTECT the investors and the economy.  Not illegal or unethical investing practices.  Your job as Chairman is to protect the larger well-being of the United States, it’s economy and the investors… including the smaller investors.  Otherwise you are going to be perceived as being in the pocket or on the side of those engaged in these very destructive and illegal activities.  

Its time to stop out right the naked short selling and to reinstate the uptick rule.  Its that simple.

Question is, Do you have the personal courage and integrity to do the right thing?  

To be honest, I have doubts about this… let alone that this e-mail will get to you personally without someone deleteing it.

Unfortunately I can’t end this note with a respectful salutation… as I don’t see the SEC or you as Chairman having done anything to deserve respect from me or anyone else who has and is rapidly losing trust in the stock and related markets as a whole.  The only good news of this whole mess… is that I am just glad that discussions regarding privatizing Social Security has effectively been killed for a long time to come.

Signed,

A Disgusted Investor
 

I think the analysts missed it again.  The addition of the speakers and microphone to the iPod Touch is going to be huge for Apple.  The iPod Touch could well become the number one hand held gaming device on the market.  Huge money is made by the hand held game makers and now Apple getting some of that money.

One huge advantage the iPod Touch has over the other hand held gaming devices is all the free and low cost games.  As other kids see all the cool games they will want one.  The Touch is really going to become one big money maker.  Not only can people play games on them they get the best music player Apple ever built.  They also get internet with the wi-fi and all the other features of the iPod Touch.

Looking at the markets Apple has gone into since the release of the iPhone and I see Apple spreading out into some large markets.

The cell phone market.
The GPS market.
The hand held computer market.
The hand held game market.
The wireless headset market.

The iPhone sure change things.  I knew a woman last year who had a GPS device for directions, a hand held computer to keep track of events and for the calculater, an iPod for Music and video, a Blackberry cell phone for calls and e-mail, and a hand held gaming device she carried in her purse along with the chargers and back up batteries for all the above devices. 

Today she only needs an iPhone, back up battery and charger and has all that extra space available for other things.    

I do not know why Apple does not do one of those I am a Mac comercials with a woman like that getting a call and pulling all the devices out until she finds her cell phone while the Mac person pulls out the iPhone and just wonders why the other person has all those devices in the first place.

Ah well, I know it really does not matter if Apple is making more and more money from more products sold in more markets as the stock price is now what it was almost a year ago on the when it hit 148.28 on the 24th of September.  Just think in less than two weeks Apple will have shown a 0 dollar gain in an entire year if the price stays the same and if it goes lower that time will come sooner.  Not bad for exceeding Analysts forcasts for earnings for four quarters, coming out with the MacBook Air, expanding the market for the iPhone from a single country to more than 70 countries, opening the Application store, the Movie store, updated models of all of its products, the time machine, opening more Apple stores around the world, adding sales of Apple products to India, becoming the number 1 music retailer, MobileME, becoming the number one seller of computers to schools and more.

I have to say the obvious as it looks to me like the price of the stock is not keeping up with Apples expanded markets and earnings.    

Sorry for the rant as I am just a little frustrated and looking at that $115 stock price of earlier in the year and am wondering if Apples stock price will hit that once again or even drop below it.  I am a little tired of the sell the news with Apple.  Apple releases the MacBook air and down we go, earnings blow away analysts forcasts again and down we go, more countries to sell the iPhone and down we go, Millions of people buying iPhones and down we go, it is getting a little old. 

Sometimes I feel it would be nice to go back to the days before the uptick rule was changed so Apple would actually go up on good news once in a while.

It is funny to watch the pump and dumps with RIMM.  Gee a flip phone up goes the stock.  Gee Microsoft search on the Blackberry up goes RIMM.  Then they will flip it again for the dump to rinse and repeat later.  The same things that would take Apple stock price down brings up RIMMs stock price.

The new stock market.

 
All the intelligent economists seem to be saying the same thing: the American financial community is in really bad shape now and will be this way for some time going forward.

The two former treasury secretaries under Clinton: Summers and Ruben, were on The Charlie Rose Show last night, and they were quite clear in their assessment of the situation: There needs to be a proactive policy put in place… that unfortunately will be politically very unattractive especially during an election year. A new economic policy that raises capital needs to be put in place by Washington to handle the mess and address this for the future. In other words, bite the bullet and raise taxes at some point… after the election.

The stock market is obviously reacting to the economy… so I think Apple will remain in a trading range, and what we are seeing now is an adjustment to a lower trading range. The range was in the mid 170s just a couple of weeks ago. Now it’s in the 150s… today even lower.

Hate to sound pessimistic, but APPL’s stock price has no reason to go up right now. Plenty of reasons to go down more.

Apple’s October earnings report will probably be good which will prop up the price I would think. They are after all making a lot of money and expanding their market share… despite all the gloom and doom in the economy.

Makes me wonder what the stock price would have been if the economy was healthy.