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3 O'Clock High: Hiding vs. Running


"I see retail warnings ahead... and trouble for Britney and Kevin!"


I was hanging out with the extended in-law family, watching Texas beat Ohio State and minding my own business, when I saw the ad for the new i-Pod nanos. My reactions, in order, were:

1. "Must... have... nano....", followed shortly by
2. "Holy cow that 'no new highs for Apple (AAPL) call was horrible."

These reactions are worth sharing, given my personal backstory:

  • I generally don't "do" TV ads. Had I the cash flow which comes from 50,000,000 fans (who couldn't be wrong, I would note) I'd be shooting TVs faster than Elvis himself, such is my impatience with commercials.

  • I called the i-Pod product line "Pet rocks for the new millenium" on national television. Since that was only basic cable television, I then clarified the point by opining (in a non-advising but hope-you-took-the-other side way) that Apple couldn't possibly keep the momentum fires burning.

  • To deepen the backstory further, I don't much care for the i-Pod I have. I find the operating system baffling in the sense that I can't find the music I want or effectively create playlists. It's a personal thing at this point, as I also once bought my wife a colorful i-Mac under the impression that it would be "easier than Windows!":
    a) No, it is not easier than Windows
    b) No computer that has to be restarted with an unbent paper-clip on a regular basis can rightfully claim to occupy the "user friendly" space.

  • And I once lost money in an Apple put position. Of course I took it personally.

From a stock perspective, the nano is a knife in the side to the shorts. It has nothing to do with fundamentals. Apple could lose money on every nano sold and the Street would applaud. For Apple, it's about buzz. The stock can't support itself unless Apple can keep coming out with must-have products. How about an Apple iGas,for example?

The nano could be horrible but the television spot I saw could be enough, by itself, to kill the Apple shorts. I still find the company insufferable and I don't much care for my existing i-Pod. I need a better i-Pod, not a smaller one. Still, while the nano fit none of my needs, I want(ed) one anyway... immediately, the way I want my fifth cocktail on a Northwest Airlines (NWAC) flight.

I don't think traders are "hiding" in Apple. I think they are running towards it, and Google (GOOG), and any other stock with cool products, growing revenues and a historic commitment to shareholder-friendly estimate beating. (Even if Google did screw up their last call, the company is rolling).

The set-up for both stocks to rip higher into the quarter end on Friday is "perfect." Back in the 90's, when traders weren't so concerned about "appearances," these things would both be rocking on a day like today and likely for the rest of the week. If I still employed a trading Goose, and he were talking to me (through, say, a Ouji board after the regrettable windscreen/ ejection incident) he'd be calling for the shot.

"They can't mess you up, Mav" Goose would say in his best fighter-pilot drawl. "Those stocks don't care 'bout Katrina and never met Rita. All they got is a rocket on their back and products almost designed to make day traders soil themselves getting long stock behind us.... Shoooooooot!"

I no longer have such a person working for me. Likely as a result, I don't have a position in Google or Apple. Still, I'd wager a metaphorical cup o' joe that both stocks close the week above the current prints ($314 and $54 for GOOG and AAPL, respectively as I type). Not advice, just crazy coffee wagering.

Wlad the Impaler!

Congrats to Euro-Minyan (Spiritual membership), Wladimir Klitscho for his 12-round unanimous decision over Samuel Peter last Saturday.

"Stick that in your soda and swish it around in your mouth, Noseless Pete! Who's going to end up w/ broken thumbs this year? 'Not Macke' that's who!"... ummm... is something I might have been able to say, were I located in Nevada, New Jersey or Antigua.

"First prize is an Eldorado. Second prize is a good set of steak knives. Third prize is You're Fired"

By my quick count, Walgreen's (WAG) miss today brings us to 7 of our 43 Retail Round-Up companies that have warned prior to the official release of September sales (due a week from Thursday).

Remember, the over/under is 10, and more will be coming between now and then. I've got Collins and the elf-folk* at Minyanville HQ working night and day to get our revamped Round-Up ready for October 6th.

I would be "disappointed" if they miss the deadline.

*Editor's note: Any similarities between MVHQ employees and actual "elf-folk" is purely coincidental. Minyanville makes no claims that any of its employees are officially "elf-folk" nor does the company accept responsibility for any "elfish" behavior that may or may not occur as a result of the hypopthetical comparison.

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No positions in stocks mentioned.

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