Investment Directions

Ugly Market Produces Beautiful ‘Buy Low’ Opportunity

John Tobey — Fri, 18 May 2012 13:22:47 +0000

Nobody said “buy low” would be so difficult. What looks easy and obvious in a book or on a historic stock chart turns out to be challenging and uncertain.

Today’s stock market is a good case example, especially with this week’s daily drops. Is this the beginning of another serious, mid-year decline, or is it the sputtering end to a more typical “adjustment?”

It appears to be the latter, making now look like a good time to act. Here’s why…

This article is posted on SeekingAlpha.com

Apple’s Drop Now Too Large To Ignore

John Tobey — Wed, 16 May 2012 23:26:43 +0000

It looked like Apple (AAPL) might be establishing a foundation at about $560. With the stock declining, this stopping point is important. The steady rise to $644 produced no clear support levels, and the stock needs a foothold to encourage investors and prevent frustrated selling. Then along came today’s breakdown.

What next?…

This article is posted on SeekingAlpha.com

Apple’s iCloud Upgrade: Creative Leadership Or Competitive Response?

John Tobey — Wed, 16 May 2012 17:13:47 +0000

Previously, I listed iCloud as one of Apple’s (AAPL) uncertain growth/profit areas, explaining:

“iCloud – All the heavies are weighing in along with new, smaller firms, competing aggressively on product and pricing. This activity has the earmarks of a service quickly becoming a commodity with low profitability.”

This view is fleshed out in Tuesday’s WSJ article. “People familiar with the matter” foretold what Apple likely would reveal at its June 11 worldwide developer conference. It addresses these questions…

This article is posted on SeekingAlpha.com

Apple: Now A ‘Trading’ Stock

John Tobey — Thu, 10 May 2012 04:25:36 +0000

Apple (AAPL) appears to be changing from a buy-and-hold investment to a speculative trading vehicle. The cause is twofold: Larger fundamental uncertainty and weakened investor psychology.

Here’s the explanation…

This article is posted on SeekingAlpha.com

Ultrabook: Anti-Apple Weapon Powering Up, Creating Uncertainty Plus Opportunity

John Tobey — Tue, 01 May 2012 16:15:17 +0000

Recently, The Wall Street Journal had two important articles: Walter Mossberg’s “Permission to Procrastinate: Wait to Get a New Laptop” and “All Eyes Turn to Windows 8.” Together, they describe the consumer/enterprise computing changes coming that could have a significant impact on the industry and individual companies, including Apple (AAPL).

For Apple the changes will bring competition into two areas simultaneously: laptops and tablets. They are linked by the industry drive to Ultrabooks. Remember the Ultrabook fanfare at the Consumer Electronics Show, where tablets were mostly absent? These modern laptops (Ultrabooks) are where Apple’s competitors are focusing. With MacBook Air as a model, they are integrating the latest technology to create their own powerful, thin, lightweight, flash memory laptops. Moreover, to compete with iPad, they are developing “convertibles”: Ultrabooks that can be transformed into tablets.

All this means change and excitement, as well as uncertainty and opportunity…

This article is posted on SeekingAlpha.com

Apple’s 2-Day Drop And The Lesson To Learn

John Tobey — Tue, 17 Apr 2012 01:00:34 +0000

Accompanying Apple’s (AAPL) decline below $600 are forecasts that the fall is a mini-adjustment, a technical reaction, an indication of fundamental troubles brewing or the inevitable reversal of a stock taken too high. While speculating on the path from here is interesting, the drop offers an important takeaway: A favorite stock’s seeming invulnerability can change overnight, shaking investor confidence.

This article is posted on SeekingAlpha.com

Gold’s Fundamentals Shining Again – Time To Cover Shorts

John Tobey — Sat, 31 Mar 2012 01:00:21 +0000

For the reasons described in “Gold, Silver At A Crossroads” and “Time To Buy Or Sell Gold?” I shorted gold and silver when their prices broke on February 29. I used equal allocations of the “inverse” (short position) ETFs, ProShares UltraShort Gold (GLL) and ProShares UltraShort Silver (ZSL). My expectation was that there would be a short-term test of gold’s and silver’s recent lows. Therefore, with my positions in place, I put in sell limit orders.

However, gold’s fundamentals could now be in rebuilding stage, so…

This article is posted on SeekingAlpha.com

Why It’s Time To Short Apple

John Tobey — Fri, 16 Mar 2012 12:25:15 +0000

Apple (AAPL) did it. It hit $600. Next stop $750, on the way to $1,000 – $1,500.

Apple is officially in runaway, fad mode. Where it stops, who knows? But there are two strong reasons to believe the run is over. The first is what’s happening below the surface: Weak buying and potential selling (as yet, unleashed). The second is a mind-boggling graph showing that Apple sits atop the same peak as the Nasdaq did on March 15, 2000.

This article is posted on SeekingAlpha.com

Apple’s Shareholders Expect Too Much

John Tobey — Mon, 12 Mar 2012 13:16:59 +0000

Apple’s (AAPL) 2012 rapid price rise has produced the risk of a significant price drop. The problem is that the uptrend is being seen as confirmation of Apple’s superiority, so concern has diminished just when caution is warranted. Instead, there is building confidence that the fast gains will continue. Compounding this up = expectation-of-up attitude are the following erroneous beliefs…

This article is posted on SeekingAlpha.com

Apple’s Clash: Rising Stock Price Vs. Declining Company Superiority

John Tobey — Fri, 09 Mar 2012 12:32:02 +0000

Last October, I reviewed Apple’s (AAPL) situation without Steve Jobs and with a rare, under-expectations earnings report. I likened those negative items to strikes one and two, but leaving Apple in the game.

Strike three? I believe it has occurred, not as a single event, but as a combination of Wednesday’s new iPad announcement and some uncharacteristic, growing concerns about Apple’s ability to continue its high profit margin growth. These items add up to the beginning of a decline in Apple’s superiority.

This article is posted on SeekingAlpha.com

Market Diagnosis: Opportunities Ahead, But Not Yet

John Tobey — Wed, 07 Mar 2012 05:47:19 +0000

After a smooth rise from last year’s lows, stocks stalled out over the past few weeks. Which way would they go? Many pundits predicted higher prices ahead, using the rationale of “still cheap.” However, this is one of those times when valuation measures don’t mean much. Here’s why, how we should view this drop and, most importantly, how to take advantage of it…

This article is posted on SeekingAlpha.com

Time To Buy Or Sell Gold? 3 Historical Views To Help Decide

John Tobey — Mon, 05 Mar 2012 14:11:39 +0000

Today’s bullish/bearish gold sentiments are mismatched. Bulls list gold’s preservation and protection strengths, and bears point to its high price. To improve the debate, we need to get away from current events and examine history.

Here are three periods and methodologies that provide the perspectives needed…

This article is posted on SeekingAlpha.com

Bernanke Ignites Bear Market In Gold And Silver

John Tobey — Thu, 01 Mar 2012 04:49:45 +0000

Bernanke today didn’t match the scary caricature envisioned by gold and silver bulls. Sensible and restrained, he failed to stoke the easy money, worthless dollar, hyperinflation frights that have kept gold and silver buoyed.

What next? Today’s sharp gold and silver price drops could be the start of a serious bear market. With the precious metals’ fundamentals seriously depleted, buying support at previous lower levels could now be absent. Therefore, there is a high probability that last year’s speculative blow-offs will go down as this decade’s highs, similar to gold’s 1980 peak. We could see a repeat of that multi-year decline, with only periodic trading bumps to encourage hangers-on.

This article is posted on SeekingAlpha.com

Gold, Silver At A Crossroads: Opportunity For Gains Or Risk Of Extended Decline?

John Tobey — Mon, 27 Feb 2012 05:45:03 +0000

Gold and silver prices, after peaking in 2011, have sought to reestablish foundation levels. They seem to have succeeded in two ways.

First, both metals once again travel in unison with silver having given up its wanderlust. Since their lengthy uptrends began in late 2006, both have risen about 200%.

Second, they have recently had similarly encouraging price movements, testing downside breakouts, then easily reversing them – typically, a sign of strength. And now both have regained lost ground, rising to key upside barriers.

So, what’s next? While there is the opportunity for further gains, there is also the risk of a significant, extended decline.

This article is posted on SeekingAlpha.com

Shun Google Until Management Is Replaced

John Tobey — Thu, 23 Feb 2012 15:34:13 +0000

For over two years, Google (GOOG) management has been unable to move the company’s stock ahead. Since December 2009, GOOG has had a 0% return, even though the Dow Jones Industrial Average is up 30% and Apple (AAPL) is up 150%. The question is, “Why”? Is it because management has been foundation building for a major move in the future? Or is it because management has done a poor job? It looks to be the latter.

This article is posted on SeekingAlpha.com