The Best of Kass
Among his posts this past week, Kass explained why he remains bearish on American Express, outlined the challenges that Apple faces and discussed the current struggle between inert fiscal policy and expansive monetary policy.
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Bearish on AmEx
Originally published on Friday, Oct. 12 at 3:20 p.m. EDT.
American Express (AXP) has traded (relative to other financials) as if the company will report a reasonably large miss in third quarter 2012.
I continue to expect the company to disappoint, as European billings weigh down top and bottom line.
At the time of publication, Kass was short AXP .
More Fast Times at 'Fast Money' High
Originally published on Tuesday, Oct. 9 at 1:21 p.m. EDT.
Brad Hamilton (Judge Reinhold) : Why don't you get a job, Spicoli?
Jeff Spicoli (Sean Penn) : What for?
Brad Hamilton : You need money.
Jeff Spicoli : All I need are some tasty waves, a cool buzz, and I'm fine.
-- Fast Times at Ridgemont High
Here is what I discussed on CNBC's "Fast Money Halftime Report" a few minutes ago.
I was asked by Judge what's up with Apple (AAPL) .
I explained that the stock had market issues, technical issues and company-specific issues.
Market Issues : Just when everyone got comfortable that the disconnect between weakening fundamentals and improving stock prices would continue -- in part based on the silly notion that the performance chase would buoy stocks and in part based on the blind belief that the global monetary easing put would trump the challenge to earnings -- investors became concerned as stock prices began to decline. Last week, despite the market's rally, breadth was poor and volume virtually nonexistent, except when provided by high-frequency traders who filled the volume gap a bit with their own financial weapons of mass destruction (those damn algorithms!).
Technical Issues : When Apple's shares sat at $700 a few weeks ago, up by nearly 70% for the year and vulnerable to profit-taking, it became an institutional source of funds.
Company-Specific Issues : In broad terms, innovation has a history of impacting every tech market. Ultimately, it results in product homogeneity and in the fullness of time degradation of profitability. Meanwhile, concerns have cropped up specifically at Apple. Its first-mover advantage seems to have narrowed or is in jeopardy, owing to supply chain issues and product quality issues. (Remember these factors become ever more problematic as the size of the company rises so dramatically.)