The Best of Kass
Among his posts this past week, Kass shares some negative Apple (AAPL) headlines, talks about the earnings cliff and explains why the short Treasury ETF looks interesting.
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It's the Earnings Cliff
Originally published on Friday, Dec. 14 at 8:58 a.m. EST.
- No rush to buy now .
What is not overblown is the earnings cliff.
And the action of Apple's (AAPL) shares over the last 2-1/2 months is symptomatic of my 2013 fear that consensus top down ($107) and bottom up ($113) profits for the S&P next year are simply pie in the sky.
A sub-$100 2013 S&P forecast is where I live.
And 14x seems a reasonable valuation under the umbrella cyclical and secular challenges.
It is hard to see, with profits and margins near cyclical peaks, valuations expand in a subpar-profit backdrop.
This is true even if a half-assed fiscal cliff compromise is reached in the next week.
There is no rush to go out and buy at this point.
Friday's Apple Negative Headlines
Originally published on Friday, Dec. 14 at 11:34 a.m. EST.
- What's doing the rounds.
- Several more negative sell-side calls on weak supply chain checks (Apple, Jabil (JBL) , etc). See comments from DB Asia/Japan.
Hon-Hai -5% (Largan limit down & LPL hit Thursday) on AAPL iPhone 5 demand concerns. Several more articles out overnight about NAND/DRAM pricing continuing to rip higher. Apple's Decision To Make The New iMacs Super Thin Was A Mistake.
The Short Treasury ETF Gets Interesting
Originally published on Thursday, Dec. 13 at 12:50 p.m. EST.
- The TBT has fallen to a level that should be near support.
The ProShares UltraShort 20 Year-Plus Treasury ETF (TBT) has fallen by nearly $1 a share from the morning's highs.
I expect that important technical level -- 1.67% yield on the 10-year U.S. note -- should provide support.
I would be a buyer of the TBT between $61.50 and $61.75.
Position: Long TBT common and calls
Chasing the Dragon
Originally published on Monday, Dec. 10 at 10:20 a.m. EST.
- The economic data out of China has clearly improved.
It seems as if it was only a few weeks ago that there was rising confidence in a Chinese hard landing.
Continued worries about the legitimacy of the economic data from that region, weakening PMIs and poor prospects for the country's export markets contributed to a technical breakdown in the iShares:FTSE China 25 (FXI) , which many thought was a continuation of the deep bear market of 2010-12.