Jan 25, 2012

Apple! Holy Cow!

January 25, 2012

Every time it seems that the Greek situation seems to be resolved, a new issue pops up and throws the situation back into turmoil. The threat of a default increased once again after finance ministers in the Eurozone rejected a proposal from the private bondholders proposing a 4% coupon. The private holders say this is their last offer.

The World Economic Forum in Davos kicks off this week and the sovereign-debt crisis looms large on the stage. Participants will be looking for a solution to the problem, a “path to resolution”.

Natural gas has plummeted dramatically since fracking production started ramping in 2008 (see chart below) In response to plummeting prices, Chesapeake Energy said it would cut spending and production of the commodity, which helped the price to jump slightly this week.

Apple (AAPL) posted jaw dropping numbers yesterday. iPad sales were over $9 billion in the quarter, just six full quarters after launch. The company said they have sold over 55 million iPads since the initial launch in April 2010. If you think that AAPL is still a computer company, think again as iPhone sales were 53% of revenues, an increase of 133% from the year ago period. Combined sales of iPhones and iPads were 73% of total revenues.

APPL’s stock is up 7% on the open, suggesting the company’s market cap is beyond the point where it can make big moves. Typically I would expect an earnings beat of this magnitude to generate at least a double digit jump in a stock. At $417 billion, the market cap may be too large to allow for increases commensurate with their performance.

I pilfered this from elsewhere. It appears that Goldman Sachs, ticker GS, has applied with the NYSE to change their ticker to “1%!”. No word yet on the response from the NYSE.

APAC markets were up slightly last night, with the Nikkei rising 1.1%, ASX 200 1.1%, Kospi 0.1%, and Sensex up 0.7%. Hong Kong, China and Taiwan are closed for the Lunar New Year as the Year of the Dragon begins.

I know that many of you are expecting my comments on the President's speech last night, but honestly, I didn't watch it. The man makes me nauseous with his divisiveness and lies. I did see some clips this morning that reinforced to me I made the right decision. "No more bailouts"-hasn't he been hat in hand for the past three years trying to get bailouts for banks, autos, unions, states, etc? Also, he made an obviously erroneous statement suggesting that Warren Buffet's secretary pays "higher taxes" than Warren Buffet, when in fact she pays a higher tax rate because the bulk of his earnings are taxed at the more favorable long term capital gains rates. I understand he never mentioned his signature legislation, Healthcare Reform, and avoided the national debt that has soared in his three years in office.

The NY Times ran this graphic on Wednesday regarding Apple’s foray into education.

Have a great day


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