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7 reasons why Apple’s stock could be the short of a lifetime

Friday, March 30, 2012 · 2:01 pm · 27 Comments

“I have a confession to make. I believe Apple stock (AAPL) is going to be world’s first trillion-dollar company yet I want to short the snot out of it,” Keith Fitz-Gerald writes for Money Morning.

“I’m not alone in my thinking,” Fitz-Gerald writes. “Uber investor Doug Kass, general partner of Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP, tweeted recently that he had covered ‘half his short’ on Apple following the announcement of their dividend and buyback plan.”

Fitz-Gerald writes, “Given that the stock had run up to nearly $608 a share before the announcement, presumably Kass had banked some gains, too.”

Full article with Fitz-Gerald’s “7 Reasons to Short Apple Stock” here.

[Thanks to MacDailyNews Reader "Dave B." for the heads up.]

Categories: News

Tags: aapl, Apple Inc., Doug Kass, finance, short-selling, shorting

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Comment Feed

27 Comments

Sam

Friday, March 30, 2012 - 2:11 pm · Reply

Eventually one of these guys will be right. The question is when?
Anyone who would ...

Friday, March 30, 2012 - 2:26 pm · Reply

… “short” a stock, especially one they believe will be a winner, is a gambler rather than an investor. While this may very well be fine, for them, taking their financial advice is like going to the track and taking the advice of some down-and-outer who has “an in”. Or “a plan”.
- just read the article ...
  
  Friday, March 30, 2012 - 2:46 pm · Reply
  
  … and my opinion has not changed.
  1) Apple “has single-handedly repeated the bubble curve of the Nasdaq run up” … except that Apple has P/E and Cash support the Nasdaq missed.
  2) “Apple is a “fad” or a “hit” company, meaning that its price seems to correlate to new product launches rather than the sustainable development of key product lines.” Let’s see … MacBook, iMac, iPod … all decade+ long “fads”. The iPhone may be a “fad”, if you consider all other “smart phones” to be “fads”.
  3) “When great leaders are gone, their legacies can struggle” … yeah, OK. This is a worry.
  4) Apple’s short … what’s he saying here?
  5) “The analyst community is almost completely positive”. Can’t argue his point, here. The analyst are usually right by accident. Unless they have something up their sleeves.
  6) “Apple’s profit margins are unbelievably high at a time when the rest of the economy lurches along”, and I agree that can be hard to sustain. Good thing Apple is banking so much of it.
  7) “Apple’s fundamentals may soften” … DUH! They WILL soften. As Sam said: “The question is when?”.
iPhoneIsWorseThanHitler

Friday, March 30, 2012 - 2:32 pm · Reply

Sure, his reasons are fairly logical and applicable to almost any stock that has had a run like Apple’s. However, when he starts writing this:

‘If the economy worsens just how many people are going to buy “gee-whiz” technology beyond the hard core Apple-heads?’

That is some real jackassery. I don’t know what “gee-whiz” technology he refers to, but he should know that both the iPhone and iPad have been successes. The iPhone and iPad start at $0 (on contract) and $499 respectively. How bad would the economy have to get?

Put another way, what will cost conscious non-Apple-heads choose? A PC, be it Mac or PC, or some tablet?

Right now there is no tablet market. It’s an iPad market. Maybe Windows 8 will be successful or maybe even something else. But that remains to be seen.

Disclosure: iPhoneIsWorseThanHitler is long Apple (AAPL).
- shinolashow
  
  Friday, March 30, 2012 - 2:48 pm · Reply
  
  It’s already been established apple does fine with sales in a major economic downturn. Just look at their growth 2008-09.
  
  The real head scratcher here is that this idiot can’t analyze a stock based on recent information at all and mud thane the memory of a fruit fly.
  - John
    
    Friday, March 30, 2012 - 4:19 pm · Reply
    
    +1
peter g

Friday, March 30, 2012 - 3:16 pm · Reply

some of these analysts must have dementia for trying things like this

1 + 1 = 2 but everyone says this so lets say it equals 3 and runs with it
- Jings
  
  Saturday, March 31, 2012 - 4:30 pm · Reply
  
  That’s just silly. Everyone knows that 1 1=3 only for extremely large values of 1.
Kloombine

Friday, March 30, 2012 - 3:27 pm · Reply

it’s scary that people like Doug Kass can write blogs and then have associations with funds dealing (in this case shorting) the stock. I know they put ‘disclosures’ on their blogs but people like Kass are often quoted wihtout the ‘disclosure’ info clearly given by sites like CNBC etc as ‘expert analyst’. Kass keeps whacking apple hoping that it will fall so it’s short will work and people quote him as if he has no bias.
HTML5 Gordon

Friday, March 30, 2012 - 3:29 pm · Reply

I wish him luck covering his position should he be stupid enough to short AAPL. Sure, he could make some money on intraday dips, but that would be the definition of gambling with a stock like this.
- Stephen
  
  Saturday, March 31, 2012 - 10:03 am · Reply
  
  Not every short position involves selling the equity. When I determine the time is right, I’ll be purchasing PUT LEAPS on AAPL. A great risk-reward ratio as far as I’m concerned. Should make as much or more on the way down as I made (long position closed) on the way up.
Ubermac

Friday, March 30, 2012 - 3:32 pm · Reply

The iPhone is a fad….

It’s official, the guy is an iDiot.
enos33

Friday, March 30, 2012 - 3:40 pm · Reply

Read ‘The Quants’ to see how crooked the stock market is.

http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=the+quants+
Laughing_Boy48

Friday, March 30, 2012 - 3:41 pm · Reply

Someone must have shorted the hell out of Apple’s stock for the past couple of days.
- Weekend
  
  Friday, March 30, 2012 - 8:49 pm · Reply
  
  Ouch!
Jersey_Trader

Friday, March 30, 2012 - 4:14 pm · Reply

Not sure what the “7 reasons” are but, clueless idiot comes to mind if he wants to “short the snot out of it”.

• Didn’t Apple set aside about $10 billion to buy back AAPL stock if someone tries to “short the snot out of it” putting it on sale for the day?

• Didn’t Apple just put RIMM out of the personal iPhone killer market?

• Didn’t Apple kill the HP tablet OS and HP decided to let Apple have that market. Apple is taking their PC market also. They don’t have a say in that either.

• Isn’t Apple about to take the educational e-book market with their iBook app on their iOS devices?

• etc.

So, based on what stupidity would you short Apple? I would short RIMM, HP, Dell, … any company that ends up in a market that Apple wants to be in.

It is your money and I love a short squeeze!
MacHeadB

Friday, March 30, 2012 - 4:56 pm · Reply

Doug Kass typical anti-Apple idiot.

If you follow his advice then you would be welcome company at Ballmer’s or Schimdt’s dinner tables.
fscuttle

Friday, March 30, 2012 - 8:04 pm · Reply

7 of the dumbest reasons i’ve ever heard. What goes up must come down? Great technical analysis. Why is it when these guys talk about Apple they never talk about earnings growth? Thats what makes Apple different from every historic bubble stock. And Doug Kass is still living off of calling the market bottom in March of 09. Other than that he has been consistently wrong.
fscuttle

Friday, March 30, 2012 - 8:08 pm · Reply

The days of short sellers driving Apple down 20% are over. Watch how fast Apple has a short covering rally next week.
GM

Friday, March 30, 2012 - 8:39 pm · Reply

Geez! Doug is a trader. He’s not a buy and hold guy with a little savings to invest. C’mon, know what you are talking about. Comprehend what you read. Be aware of your surroundings. And you did note that AAPL was down more than $10 today didn’t you? Second day in a row. Maybe the sky is falling!
- Eldernorm
  
  Saturday, March 31, 2012 - 4:07 pm · Reply
  
  true. There are investors and traders. One is long term and investing in the company. The other is just looking at making a fast buck.
  
  Ps something’s that go up, NEVER come down. Think Pioneer 1 and 2 and Cassini. None are coming back unless by Alien traffic patrol bring back an abandoned space vechicles!! LOL
  Just think of the ticket!!!
silverhawk1

Friday, March 30, 2012 - 10:35 pm · Reply

It’s the end of the quarter, all the funds are taking some profit so they can tell their customers how good of a job they’ve done.
Sing

Saturday, March 31, 2012 - 4:03 am · Reply

Don’t just bs. Go ahead and short. Apple will shortly sell to China Mobile of 600M subscribers who will gobble up more iOS devices than the whole of US.
Michael Lindley

Saturday, March 31, 2012 - 4:16 am · Reply

An article to generate click-revenue like most on the ‘net. Nothing he said made any sense. He cherry picks his reasons for demise while completely forgetting that China will overtake the US as Apple’s biggest market. And with Apple getting 75% of the profit margin share in any and all of their markets this will not change soon. Apple isn’t bought by people who live economically precarious lives. Working, successful people buy and stay with Apple. People who think technology is easy change their brand then regret it. Android sucks because it is an economic model, not a software excellence model. Windows sucks because it’s Windows. RIM thought the cute little keyboard was infallible. Only Apple makes things customers love, no one else.
Captain Obvious

Saturday, March 31, 2012 - 4:52 am · Reply

“Doug Kass covered half his short”

Uh, this means that Kass BOUGHT Apple stock in order to hedge his bets against Apple stock going down… at what was almost certainly a huge loss. If Kass is such a wizard, how is this an indicator that Apple stock is going to tank??
What?

Saturday, March 31, 2012 - 5:44 am · Reply

Doug Kass has been betting against apple for so long there is no way he could come out ahead even if he shorted on a down turn. If I had followed his advice I would have sold all my aapl long ago. If he has been following his own advice he has no long positions in apple and is way behind.
IStepchild

Saturday, March 31, 2012 - 11:27 am · Reply

Thanks a ton for hurting the average loyal investor who doesn’t play
AAPL growth…I’ll be fine longterm, but I hope this guy loses his shirt…misery begs for company and that is exactly why he wrote the article…he is not the idiot…the people who follow him are.