The Chinese eased tax restrictions on stock gains. We see this as desperate move to stave off complete investor/stock market panic as the Shanghai is down 50% over the last several months. Remember, the Chinese government has the right to take protective measures, just like our Federal Reserve, but we feel China's banking problems are much deeper than many know. We reiterate shorting JRJC in to ANY strength ahead of what we feel will be a disastrous quarter and guidance. Thanks for the question, we hope that helped.
We didn't question GAAP accounting. We have a problem with Apple's entrance into the predatory and commoditized business of phones, where their margins will continue to fall with the reality of choice/competition. The main problem with deferred revenue for AAPL will be exposed in their 10Q relating specifically to their iPhone margins. The fact that so many iPhones are being "unlocked" (pirated) can force AAPL to fall in love again with their claim to fame - the iPod. Apple said they will recognize revenues from iPhones over 24 months. That time frame, even though acceptable, means that GAAP accounting is -psychologically - a tail wind. More phones are bought, pirated/unlocked, and therefore AAPL will suffer from low margins.
We don't want to make enemies with our analysis, but we call it the way we see it. As Jim Cramer says, "I'm not in this to make friends, I'm in this to make you money". We see AAPL's entry into the cell phone market as the beginning of end for high margins and explosive stock price. Of course that is only OUR opinion, and that's why we love the free market system; Commandment #8 says there are two sides to the market. AAPL has entered unchartered territory, even by their own admittance. Lastly, we're not excusing Steve Jobs from being absent from class; no apples will raise his marks.
4 comments:
Any idea why JRJC is flying today on high volume? up 14%.. was up 10% on Monday..
The Chinese eased tax restrictions on stock gains. We see this as desperate move to stave off complete investor/stock market panic as the Shanghai is down 50% over the last several months. Remember, the Chinese government has the right to take protective measures, just like our Federal Reserve, but we feel China's banking problems are much deeper than many know. We reiterate shorting JRJC in to ANY strength ahead of what we feel will be a disastrous quarter and guidance.
Thanks for the question, we hope that helped.
Thanks! hmm.. That would explain buying on the Shanghai Exchange. Why should the US follow suit?
We didn't question GAAP accounting. We have a problem with Apple's entrance into the predatory and commoditized business of phones, where their margins will continue to fall with the reality of choice/competition. The main problem with deferred revenue for AAPL will be exposed in their 10Q relating specifically to their iPhone margins. The fact that so many iPhones are being "unlocked" (pirated) can force AAPL to fall in love again with their claim to fame - the iPod. Apple said they will recognize revenues from iPhones over 24 months. That time frame, even though acceptable, means that GAAP accounting is -psychologically - a tail wind. More phones are bought, pirated/unlocked, and therefore AAPL will suffer from low margins.
We don't want to make enemies with our analysis, but we call it the way we see it. As Jim Cramer says, "I'm not in this to make friends, I'm in this to make you money". We see AAPL's entry into the cell phone market as the beginning of end for high margins and explosive stock price. Of course that is only OUR opinion, and that's why we love the free market system; Commandment #8 says there are two sides to the market. AAPL has entered unchartered territory, even by their own admittance. Lastly, we're not excusing Steve Jobs from being absent from class; no apples will raise his marks.
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