Category Archives: 72 Hour Call

The time to short Apple, as in $AAPL, is nigh

11/29/2012 Portland, Oregon – Pop in your mints…

Here at The Mint, we don’t generally comment on individual stocks.  In general, we see equity prices as subject to monetary policy whims and HFT (High Frequency Trading) bots.  As such, it is rare that the perceived fundamentals of a stock match its bid in the markets at any given time, no matter how perfect the market’s knowledge may be.

Add to this the fact the Corporations are, at their base, socialist enterprises, and you too, fellow taxpayer, will begin to see equities in a whole new light.

That said, sometimes things come to us so clearly and are of such significance that we can ignore the fact that we are talking about an equity and simply study the phenomenon which it represents.  In the case of Apple, the brainchild of Steve Jobs that has given the world the IIe, the Macintosh, and the Ipod-phone-pad craze, among other things, the phenomenon we are witnessing demands a response.

In summary, we believe that about the time that Santa Claus makes his annual jaunt around the world, dropping Apples I-whatevers in the stockings of children, both young and old, of well heeled parents all over the world, it will be time for wise investors to short Apple, big time.

Why such a bold call?  Other than a hunch, confirmed by a recent analysis we were fortunate to read, we will attempt to articulate our reasoning for this prediction as follows:

1.  Reliance on patents as a business plan is equivalent to capitulation in the technological sector.  A short time ago, we wrote briefly regarding the lawsuits which Apple has launched against Samsung and others who have dared to “imitate” its mobile technology:

Apple’s use of Patent Law indicative of an inferior product offering

Relying on litigation either for revenues or to protect revenue streams is a losing strategy.  It not only hurts your competitors, but the public in general.  Since innovation got Apple to where it was, why not continue?  It shouldn’t be difficult with the largest cash hoard in corporate history at their disposal.

We once “got in” on an IPO for a company called “Caldera Systems,” and hung on for dear life, waiting for them to profit from the rising tide of Linux Operating Systems.  We then watched helplessly as their strategy degenerated from trying to profit from open source software to changing their name via an acquisition to SCO Group and initiating a lawsuit against IBM which boiled down to a few lines of code that SCO claimed was theirs.

As far as a business strategy, pursuing Intellectual Property claims is last ditch effort to save face.

2.  Steve Jobs is gone.  Mr. Jobs was a rare creative genius as well as the gravitational center of Apple.  Without him, Apple was bound to turn into the technological equivalent of the break up of the Roman Empire, or any Empire for that matter, with brutal wars for territory and resources, no matter how abundant they may be, which will eventually leave the Empire a shadow of its former self.

3.  Fund Manager window dressing.  Apple stock has minted a 44% return year to date at the time of this writing.  It has also become a big part of the Nasdaq and S&P 500.  As a consequence, many institutional investors have large direct or indirect stakes in Apple which has a juicy return that is begging to be booked before year end.  Sell.

4.  The moronic Fiscal Cliff.  This is crushing business confidence and by extension, the US Consumer.  The combination of the unprecedented uncertainty surrounding legislation with wide ranging economic consequences, such as Obamacare and the Dodd-Frank act, coupled with the debt ceiling, spending sequester, and sun setting tax provisions has utterly paralyzed American businesses as some 1,000 in Washington bicker over numbers they do not understand.  Washington will get a deal done and it will be bad for all involved.  Unless the payroll tax holiday gets extended, the US consumer is toast.

This is why we think Apple is ripe for the picking.  However, we learned long ago to ignore our gut feeling until it is confirmed.
Enter Chris Vermeulen.  In a recent post over at the Market Oracle, Mr. Vermeulen defines the terms for the upcoming demise of Apple’s stock price in terms of the psychology of market swings.  For specifics on the phenomenon at hand and a possible short signal (which, as near as we can tell, will be when $AAPL touches $640 in late December), we refer you to his insightful article:

Apple, How Market Booms Turn to Busts, Trading from New Paradigm to Despair

In our humble assessment, which should be taken with the same grain of salt which all free advice must be taken, we believe that Mr. Vermeulen has put into numbers and graphs what we have felt, generally, ever since we purchased our first Android:  Apple’s days as king of the mobile computing realm are numbered.  People will not pay for things that they can have for free, and, as the commercials from Designer Imposters long ago reminded us.

“You can patent a mix of chemicals, but you can’t patent a smell.”

Two words:  Short Apple

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 29 2012

Copper Price per Lb: $3.52
Oil Price per Barrel:  $86.62
Corn Price per Bushel:  $7.60
10 Yr US Treasury Bond:  1.62%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,719 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  12,985
M1 Monetary Base:  $2,329,700,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,303,600,000,000

Full Disclosure and friendly warning:  We do not own any shares of $AAPL, nor do we plan on shorting them with our own money, as stock market speculation is a great way to lose a ton of dough if one doesn’t know what they are doing!  Furthermore, we are hardly qualified to give specific stock or portfolio advice to persons we do not know or do know but do not have intimate knowledge of their finances and tax situation.  If you choose to do so as a result of reading this article, you do it completely at your own risk or reward.

72 Hour Call for July 5, 2011 (Adieu to the 72 Hour Call for now)

Today’s Call:  NO CALL, taking a break as we revert to the mean. 

Rationale:  The 72 Hour Call is being mothballed for the moment.  It has been a great experiment and has led us to one inescapable conclusion:  There are no sure things in the day to day gyrations of the markets.  One is best off calling long trends and picking logical entry and exit points for trades, adjusting them as the data relevant to the long trends change.  Please continue to watch our Key Indicators at the end of each Mint.  Thank you for following and drop us a note if time permits!

Result of Call for June 29, 2011:  Euro to fall vs US DollarWas $1.4311:1€., Currently $1.45336:1€.  Good Call.

Calls to Date:  Good Calls: 33, Bad Calls: 30, Batting .524

 

Key Indicators for Tuesday, July 5, 2011

Copper Price per Lb: $4.30
Oil Price per Barrel:  $96.83 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.80   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.14% WITH THE FED OUT, THE SKY’S THE LIMIT
FED Target Rate:  0.07%  JAPAN HERE WE COME!

Gold Price Per Ounce:  $1,516 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,570  WINDOW DRESSING FOR 401K PORTFOLIOS
M1 Monetary Base:  $1,954,300,000,000 RED ALERT!!!
M2 Monetary Base:  $9,098,400,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

72 Hour Call for July 1, 2011

Today’s Call: NO CALL, taking a break as we revert to the mean.

Rationale: As you can see, our calls are reverting to the mean.  It has occurred to us that many of our bad calls end up panning out after the 72 hour time period.  We are going to start a new service based on our findings during this experiment which will give position entry and exit recommendations.  Thank you for watching this space and stay tuned!

Result of Call for June 28, 2011: September Wheat to rise.  Was $6.71-6, Currently $6.12-2.  Bad Call.

Calls to Date: Good Calls: 32, Bad Calls: 30, Batting .516

Key Indicators for Friday, July 1, 2011

Copper Price per Lb: $4.29
Oil Price per Barrel:  $96.90 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.40 MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.15% WITH THE FED OUT, THE SKY’S THE LIMIT
FED Target Rate:  0.07% JAPAN HERE WE COME!

Gold Price Per Ounce:  $1,510 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,571
M1 Monetary Base:  $1,954,300,000,000 RED ALERT!!!
M2 Monetary Base:  $9,098,400,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

72 Hour Call for June 30, 2011

Today’s Call:  NO CALL, taking a break as we revert to the mean.

Rationale:  As you can see, our calls are reverting to the mean.  It has occurred to us that many of our bad calls end up panning out after the 72 hour time period.  We are going to start a new service based on our findings during this experiment which will give position entry and exit recommendations.  Thank you for watching this space and stay tuned!

Result of Call for June 27, 2011:  Spain 5yr Credit Default Swap to rise.  Was 315.20, Currently 269.70.  Bad Call.

Calls to Date:  Good Calls: 32, Bad Calls: 29, Batting .525

Key Indicators for Thursday, June 30, 2011

Copper Price per Lb: $4.26
Oil Price per Barrel:  $94.98 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.29   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.16% WITH THE FED OUT, THE SKY’S THE LIMIT
FED Target Rate:  0.07%  JAPAN HERE WE COME!

Gold Price Per Ounce:  $1,500 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,414  WINDOW DRESSING FOR 401K PORTFOLIOS
M1 Monetary Base:  $1,954,300,000,000 RED ALERT!!!
M2 Monetary Base:  $9,098,400,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

72 Hour Call for June 29, 2011

Today’s Call:  Euro to fall vs US DollarCurrently $1.4311:1€.

Rationale:  With the Greeks passing austerity measures in the face of widespread protests, the Euro got a temporary boost today.  These types of jumps usually pull back in the short term.  The Euro just double peaked on a triple top vs. the USD and is generally in a bear trend which should be reinforced post June 30th.

Result of Call for June 24, 2011:  10 year US Treasury Bond yield to fall (price to rise). Was 2.87%, Currently 3.108%.  Bad Call.

Calls to Date:  Good Calls: 32, Bad Calls: 28, Batting .543

Daily Default:  PMI Group, Inc., third largest guarantor of US Mortgages.

Key Indicators for Wednesday, June 29, 2011

Copper Price per Lb: $4.20
Oil Price per Barrel:  $94.93 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.98   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.11%
FED Target Rate:  0.08%  UH OH!

Gold Price Per Ounce:  $1,511 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,261
M1 Monetary Base:  $1,895,400,000,000 RED ALERT!!!
M2 Monetary Base:  $9,086,900,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

72 Hour Call for June 28, 2011

Today’s Call:  September Wheat to rise.  Currently $6.71-6.

Rationale:  Kansas Wheat was reported as 55% cut today and reports that the harvest is 100 million bushels lower than last year will weigh on prices as word spreads.

Result of Call for June 23, 2011:  Nymex Crude Oil to rise.  Was $91.92, Currently $92.92.  Good Call.

Calls to Date:  Good Calls: 32, Bad Calls: 27, Batting .543

Daily Default:  TerreStar Networks, Nebraska Book

Key Indicators for Tuesday, June 28, 2011

Copper Price per Lb: $4.11
Oil Price per Barrel:  $92.92 A FAILURE TO INFLATE, WILL TREND LOWER

Corn Price per Bushel:  $6.83   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  3.05%
FED Target Rate:  0.08%  UH OH!

Gold Price Per Ounce:  $1,501 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,189
M1 Monetary Base:  $1,895,400,000,000 RED ALERT!!!
M2 Monetary Base:  $9,086,900,000,000 YIKES!!!

*See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.

72 Hour Call for June 27, 2011

Today’s Call:  Spain 5yr Credit Default Swap to rise.  Currently 315.20.

Rationale:  Spain has been out of the news for some time as Greece’s debt problems have taken center stage.  However, the chance of increasing unrest along with the realization that banks will likely have to roll over existing sovereign debt in Europe will likely raise risk premiums on all sovereign debt, with Spanish debt being one of the more vulnerable.

Result of Call for June 22, 2011:  Yield on 10 US Treasury to fall, price to rise.  Was 2.99%, Currently 2.93%.  Bad Call.

Calls to Date:  Good Calls: 31, Bad Calls: 27, Batting .534

Daily Default:  Los Angeles Dodgers

Key Indicators for Monday, June 27, 2011

Copper Price per Lb: $4.07
Oil Price per Barrel:  $91.30 A FAILURE TO INFLATE

Corn Price per Bushel:  $6.60   MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  2.93%
FED Target Rate:  0.08%  UH OH!

Gold Price Per Ounce:  $1,497 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,044
M1 Monetary Base:  $1,895,400,000,000 RED ALERT!!!
M2 Monetary Base:  $9,086,900,000,000 YIKES!!!

 *See the MINT Perceived target Rate Chart.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.