{"id":31351,"date":"2015-07-10T09:21:34","date_gmt":"2015-07-10T13:21:34","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=31351"},"modified":"2015-07-10T09:21:34","modified_gmt":"2015-07-10T13:21:34","slug":"sentiment-changes-with-apple-i-am-probably-wrong","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=31351","title":{"rendered":"Sentiment changes with Apple. I am probably wrong."},"content":{"rendered":"

What did I write a couple of days ago?<\/p>\n

Fasten your seat belt; Don your hard hat, it\u2019s going to be bumpy.<\/p>\n

Just how bumpy? Look at this chart showing the last two days. Talk about bumpy<\/p>\n

\"lasttwodays\"<\/a><\/p>\n

I dumped most of my Apple yesterday. <\/strong>Apple is a sentiment stock. Sentiment was moving against it. I had felt the change when it was $128\/$127. But hung onto it because I loved the company. Dumb. Dumb. Dumb. Every time I hold because I love, I lose. <\/span><\/span><\/p>\n

When it’s a sentiment (also called momentum) stock and sentiment is turning against it, follow your gut. Get the heck out.\u00a0<\/span> <\/span><\/p>\n

The Apple Watch was bombing. My friends were mildly curious as to why I wore the thing. But they weren’t persuaded by my love to plonk down $400 and buy one. That was very different to the iPhone 6 and 6 plus. They saw its benefits and wanted one.<\/p>\n

The computer trade press was always a big Apple Watch booster and is still, sort of. For example, One reporter took off his Apple Watch for a week and reported his life without it:<\/p>\n

This is what my week without the Apple Watch taught me. Of course I can get by without it, but given the number of conveniences I’ve been able to quantify in the flow of my daily life, I can no longer imagine life without it.<\/p>\n

For the story, click here.<\/strong><\/a><\/p>\n

But much of the computer press seems to be falling out of love with the Apple Watch. TechCrunch promised a full two-month review. When you got to the site you got a short video of the reporter chucking the watch into his desk drawer. No words. No comment. Just video discarding the watch.<\/p>\n

\"techcrunchreview\"<\/a><\/p>\n

Apple’s fall attracted attention on CNBC. Their reasons for the decline:<\/p>\n

\"WhatsUPwithApple\"<\/a><\/p>\n

Last night BloombergBusiness did a long piece:<\/p>\n

Apple Stock at Brink of Correction After Consecutive 2% Declines”<\/strong><\/p>\n

Apple Inc. fell for a fifth day, posting its first consecutive 2 percent declines since 2013 and pushing shares to the brink of a 10 percent correction. The slide comes amid a rout in China\u2019s market that is occurring two weeks before the company reports earnings.<\/p>\n

The iPhone maker\u2019s stock decreased 2 percent to $120.07, bringing its five-day loss to 5.2 percent — a drop that wiped out $38 billion of market value. Since reaching its all-time high of $133 on Feb. 23, the stock is down 9.7 percent, leaving it about 40 cents away from a correction.<\/p>\n

Losses in Chinese equities, where almost $4 trillion has been erased<\/a> in a monthlong deluge, may leave consumers with less money to buy gadgets. The Cupertino, California-based company releases third-quarter results on July 21, its first report to include sales of the Apple Watch.<\/p>\n

China\u2019s rout \u201cand reaction from policymakers could create a bigger problem for the economy, causing consumers to retrench, which would impact Apple\u2019s sales,\u201d said Walter Todd, who oversees $1 billion as a chief investment officer for Greenwood Capital. \u201cIt\u2019s a risk that\u2019s certainly starting to be reflected in the company\u2019s shares.\u201d<\/p>\n

Josh Rosenstock, a spokesman for Apple, declined to comment.<\/p>\n

Analysts predict Apple earned $1.79 a share in the three months ended June 30, compared with $1.28 a year earlier, according to data compiled by Bloomberg. The company has beaten estimates every quarter since 2012.<\/p>\n

Deutsche Bank analysts, who rate the stock a hold, said in a July 5 note that sales of the Apple Watch are a \u201cwildcard\u201d in the third quarter, and that the firm had trimmed longer-term estimates for the device. In the quarter, the company probably sold 3.9 million watches, they said.<\/p>\n

Apple\u2019s stock slide has both coincided with and contributed to a period of turbulence in U.S. shares. The Standard & Poor\u2019s 500 Index lost 1.7 percent Wednesday, its fourth-biggest decrease of the year, and gave up four-fifths of a rally Thursday after rising 1.4 percent in the first half hour of trading.<\/p>\n

Apple got 17.4 percent of its revenue from China in its last full-year reporting period. That was the 16th-highest portion among S&P 500 that break out revenue for the region, Bloomberg data show. China sales were up from 15.8 percent the prior year and 11.7 percent in 2011.<\/p>\n

According to Tim Cook, its chief executive officer, Apple is planning on China becoming its largest market eventually. New larger-screen iPhones helped sales in China overtake the U.S. for the first time during the first three months of this year.<\/p>\n

The country\u2019s market rout comes as the company is rushing to roughly double the number of stores it has there by the middle of next year.<\/p>\n

\u201cChina is an important market for Apple,\u201d said Jeffrey Fidacaro, an analyst at Monness Crespi Hardt & Co., who has a buy rating on the stock. \u201cGiven the pullback in equities, if that has a ripple effect in consumer spending, you could see the stock react to it as well.\u201d<\/p>\n

In addition to the correction risk, Apple shares are in danger of breaching another chart level that technical analysts monitor, its 200-day moving average. That price is $118.72, a little over 1 percent below its Thursday close.<\/p>\n

Apple has spent 455 days above the 200-day threshold.<\/p>\n

Speculators in Apple options have rushed into near-term bearish bets amid the selloff. The Chicago Board Options Exchange Apple VIX Index, a gauge of demand for options on the iPhone maker\u2019s stock, has jumped 31 percent since Tuesday, its biggest two-day increase since March 2012.<\/p>\n

One-month bearish puts on Apple cost 7.8 points more than similar-maturity bullish calls, the most expensive level in a year for the relationship known as skew, according to data compiled by Bloomberg.<\/p>\n

This is very hard to play. Apple could be a screaming bargain, now or ten points cheaper. We’ll see. I really hate it when sentiment turns.<\/p>\n

The 2015 summer reading list for innovation junkies. <\/strong>From the Washington Post. Click here. <\/span><\/a><\/strong><\/span><\/span><\/span><\/p>\n

More hacking. <\/strong>This time they got 21.5 million of our most prized government employees. This stuff makes my blood boil. This is not rocket science. It’s laziness and dropping the ball, again.
\n<\/span><\/span><\/p>\n

Here’s the story from the New York Times:<\/p>\n

WASHINGTON – The Obama administration on Thursday revealed that 21.5 million people were swept up in a colossal breach of government computer systems that was far more damaging than initially thought, resulting in the theft of a vast trove of personal information, including Social Security numbers and some fingerprints.<\/p>\n

Every person given a government background check for the last 15 years was probably affected, the Office of Personnel Management said in announcing the results of a forensic investigation of the episode, whose existence was known but not its sweeping toll.<\/p>\n

The agency said hackers stole “sensitive information,” including addresses, health and financial history, and other private details, from 19.7 million people who had been subjected to a government background check, as well as 1.8 million others, including their spouses and friends. The theft was separate from, but related to, a breach revealed last month that compromised the personnel data of 4.2 million federal employees, officials said.<\/p>\n

Both attacks are believed to have originated in China, although senior administration officials on Thursday declined to pinpoint a perpetrator, except to say that they had indications that the same actor carried out the two hacks.<\/p>\n

The breaches constitute what is apparently the largest cyberattack into the systems of the United States government, providing a frightening glimpse of the technological vulnerabilities of federal agencies that handle sensitive information. They also seemed certain to intensify debate in Washington over what the government must do to address its substantial weaknesses in cybersecurity, long the subject of dire warnings but seldom acted upon by agencies, Congress or the White House.<\/p>\n

“This incident that we are talking about today is unfortunately not without precedent,” said Michael Daniel, the White House cybersecurity coordinator. “We have to raise our level of cybersecurity in both the private sector and the public sector.”<\/p>\n

In a conference call to detail the grim findings and announce the agency’s response, Katherine Archuleta, the director of the Office of Personnel Management, said that she would not resign despite calls from members of Congress in both parties for her dismissal.<\/p>\n

“I am committed to the work that I am doing at O.P.M.,” she said. “We are working very hard, not only at O.P.M. but across government, to ensure the cybersecurity of all our systems, and I will continue to do so.”<\/p>\n

She announced new security measures that would be installed at the agency as well as free credit and identity theft monitoring for the victims of the breach, although she said there was “no information at this time to suggest any misuse or further dissemination of the information that was stolen from O.P.M.’s system.”<\/p>\n

Even so, national security officials have acknowledged the seriousness of the intrusion. Before the scope was made public on Thursday, James B. Comey, Jr., the director of the F.B.I., called the breach “a very big deal,” noting that the information obtained included people’s addresses; details on their neighbors, friends and relatives; their travel destinations outside the United States; and any foreigners they had come into contact with.<\/p>\n

“There is a treasure trove of information about everybody who has worked for, tried to work for or works for the United States government,” Mr. Comey said during a briefing. “Just imagine you are an intelligence service and you had that data, how it would be useful to you.”<\/p>\n

Administration officials said it was the personnel office’s work to modernize its computer systems that first led it to detect the breach.<\/p>\n

In April, the agency informed the Department of Homeland Security that it had found an intrusion, and the department went to work with the F.B.I. to learn more, said Andy Ozment, a top cybersecurity official at Homeland Security. That inquiry, he said, revealed that the intruder had broken into a network at the Interior Department that held a personnel office database, leading to the theft of records of 4.2 million current and former federal employees. It also found that there had been a computer intrusion at the personnel office itself, leading to the much larger trove of background check records.<\/p>\n

Mr. Ozment said the hacker in both cases gained access to the computer systems “via a compromised credential of a contractor.”<\/p>\n

The debacle has touched off a scramble by federal officials to bolster the security of their networks. Tony Scott, the government’s chief information officer, said every agency was racing to make improvements, including the use of basic tools like two-factor authentication that requires anyone with the password to a system to use a second, one-time password to log in from an unrecognized computer.<\/p>\n

“This is important work across all of the agencies of the federal government to make sure that we greatly enhance the cybersecurity profile of the U.S. government as a whole,” Mr. Scott said.<\/p>\n

But that effort comes after almost two decades of warnings from government auditors and other internal investigations into the vulnerabilities in federal agency networks. “There’s still much that agencies need to do that they are not doing to protect their systems,” said Gregory C. Wilshusen, the director of information security issues at the Government Accountability Office, which has conducted cyber audits for almost two decades.<\/p>\n

Warnings from auditors about serious vulnerabilities are often ignored by agency officials, he added. “That’s been a recurring theme. They believe they’ve taken corrective actions, but when one goes back to check, we find that they haven’t.”<\/p>\n

The revelations quickly prompted calls for the ouster of Ms. Archuleta, whose agency had been warned in a series of reports since 2007 about the many vulnerabilities on its antiquated computer systems.<\/p>\n

Representative Jason Chaffetz, Republican of Utah and the chairman of the House Oversight and Government Reform Committee, said Ms. Archuleta and her top technology official should resign or be removed.<\/p>\n

“Their negligence has now put the personal and sensitive information of 21.5 million Americans into the hands of our adversaries,” Mr. Chaffetz said. “Such incompetence is inexcusable.”<\/p>\n

The criticism was bipartisan. Senator Mark W. Warner, Democrat of Virginia, also called on Ms. Archuleta to step down.<\/p>\n

“The technological and security failures at the Office of Personnel Management predate this director’s term, but Director Archuleta’s slow and uneven response has not inspired confidence that she is the right person to manage OPM through this crisis,” Mr. Warner said in a statement.<\/p>\n

That attackers were able to compromise the agency using a contractor’s credentials is unacceptable, security experts say, given the wide availability of two-factor authentication tools, which have become standard practice, particularly since a cyberattack at Target nearly two years ago, when hackers managed to break into the retailer’s system using the credentials of a heating and cooling contractor.<\/p>\n

“A second offense is more unacceptable than the first,” said Suni Munshani, the chief executive of Protegrity, a data security company. “The O.P.M. and government agencies need to get their act together and better protect the information of their employees and citizens.”<\/p>\n

Oh yes, then there’s Greece.\u00a0 <\/strong><\/span>I asked my learned, accomplished, brilliant ex-investment banker, Dan Good, “if you were Greece’s finance minister what would you do?”<\/p>\n

His response:<\/p>\n

I would leave the EU, issue new currency, reform the pension system, offer incentives to foreigners to invest in industry, take my currency lumps and pray. The banks would reopen, albeit, with devalued assets, depositors would take a 30% hit, a new government would be formed and Greece would again be open for business, namely, tourism this summer. Never let a crisis go to waste.<\/p>\n

Makes perfect sense to me.<\/p>\n

What will they do instead? Work some miserable deal out with the miserable Germans. And our markets will bounce around. And Greece will have yet another crisis in two-to-three years.<\/p>\n

Wimbledon Men’s semifinals this morning.<\/strong> <\/span>Djokovic vs Gasquet (France). Federer vs Murray. In that order. Starts at 8:00 AM on ESPN. Men’s finals on Sunday. Women’s finals on Saturday — Serena vs Muguruza.<\/p>\n

\"HarryNewton\"<\/a>
\nHarry Newton.. I’m still figuring which of the railroads to short. Which one\/ones is\/are most reliant on coal, a dying industry. Anyone know the answer?<\/p>\n

China and European markets are surging. Ours will too. I’m guessing. But look at that chart above. Up and down faster than a whore’s drawers (old Australian expression).<\/p>\n

Go watch tennis. Go play tennis. Is it time to make tasteless Greek jokes? You bet. I’m seriously annoyed at them for not biting the bullet and doing the obvious. (See Dan Good above.) Teastless Greece. Why did the man return to Greece? Answer: He didn’t want to leave his brothers’ behind. I have not enjoyed losing gobs of money this summer. Worse, I have no simple answers. I need a cup of strong coffee. Have a great weekend. Hug the kids and grandkids. I wish I were with mine. But, sadly, they’re a long way away.<\/p>\n