This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Best of Kass

Stocks in this article: AAPL

NEW YORK ( TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.

Among his posts this past week, Kass examined a divergence in the monthly jobs data, highlighted a key question about Apple's iPhone, and opined about market "certainties."

Please click here for information about subscribing to RealMoney Pro.

> > Bull or Bear? Vote in Our Poll


Data Review
Originally published on Friday, Oct. 5 at 11:01 a.m. EDT.

The divergent message from the private-sector payroll data for September and the household survey of employment is confusing.

Unlike a lot of the pundits, I thought the September payroll report was, as American Idol's Randy Jackson would say, "just a'right."

I am surprised in the strength of equities.

Let me explain why.

The September change in nonfarm payrolls was 114,000 vs. an expectation of 115,000 and 142,000 in August. The positives were 46,000 and 40,000 upward revisions to August and July, respectively, but virtually all of the revisions were in the government sector. (There seems to have been some difficulty in seasonally adjusting hiring of teachers.)

The September private payroll increase was disappointing at 104,000 compared to consensus expectations of 130,000. Meanwhile, August private-sector payrolls were reduced by 6,000.

The large increase in the household survey in September (873,000) was the largest increase in a decade, but here, too, most of the increase was in government jobs. So, the divergent message from the private-sector payroll data for September and the household survey of employment is confusing.

For this reason and others, I have slightly expanded my short book.

At the time of publication, Kass had no positions in stocks mentioned.


Questioning iPhone Upgrade Cycle
Originally published on Friday, Oct. 5 at 11:12 a.m. EDT.

  • The question is how the valuation will react to the shift in mix.
  • Apple's (AAPL) shares continue to underperform.

    As I pointed out earlier this week, I questioned the upgrade cycle for the new iPhone. And Bernstein must be reading my diary as the firm writes:

    Surprisingly our analysis indicates that only about 30% of iPhones sold in fiscal year 2012 will be from customers upgrading from an older iPhone. The remaining 70% will come from new customers, most of whom have never owned a smartphone. Over the last two years, the majority of new iPhone subscribers have come from existing carriers.

    Bernstein's report is a good one, and anyone involved should get a copy. In it, Bernstein addressed one of the major longer-term issues with Apple's stock -- namely, slowing top-line growth. Given iPhone is Apple's most profitable and important product, as the mix of annual sales shifts more from new customer or exiting (or upgrades), annual growth will slow given the upgrade cycle is about two years for current customers.

    1 of 2

    Select the service that is right for you!

    COMPARE ALL SERVICES
    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!
    DOW 17,810.06 +91.06 0.51%
    S&P 500 2,063.50 +10.75 0.52%
    NASDAQ 4,712.97 +11.1030 0.24%

    Brokerage Partners

    Rates from Bankrate.com

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs