This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Best of Kass

Stocks in this article: AXP AAPL

Apple used to have market-defining products that were clearly better than its competition. Consumers were willing to pay more for Apple products, but there are numerous signs that the company is starting to protect its franchise as innovation falls and as competitors such as Samsung begin to catch up.

In response to "Chaminade" Joe Terranova, I said the key fundamental issue to watch in the next two quarterly reports is whether the new iPhone 5 entices old users to upgrade -- in other words, does the upgrade cycle lengthen? That would not be the death knell for Apple's shares, but it would put in a big hurt to the long-term investment thesis.

Given how oversold Apple's shares are, however,a rally at any point is now possible. For that reason, I have covered my PowerShares QQQ (QQQ) short.

Let's go to the tape at CNBC

Tug of War
Originally published on Tuesday, Oct. 9 at 9:01 a.m. EDT.

  • We have a struggle between inert fiscal policy and expansive monetary policy.
  • The September small-business confidence index (issued by the National Federation of Independent Businesses) came in at a disappointing 92.8 compared to expectations of about 1 point higher and to 92.9 in August.

    This is the fourth drop in the last five months as respondents cited the uncertainty of government policy and economic growth combined with the costly burden of health care.

    This report highlights that the policies of our leaders in Washington, D.C., are inhibiting employment growth. In turn, the domestic economic recovery is tepid, producing a serious challenge to corporate profit growth in this year's second half.

    Market participants are looking through this lethargy and relying on the global monetary policy put to protect the market's downside.

    This tug of war between borderline irresponsible fiscal inaction and weak fiscal policy and expansive monetary policy defines the current market condition.

    In the last few weeks, this tug of war has resulted in a draw with sideways market action.

    Where does this leave us?

    The upside can come from a combination of a Romney presidential win next month, an acceleration of domestic economic growth and/or progress on the fiscal front in late 2012/early 2013.

    The downside can come from a combination of the assertion of geopolitical risks (in the Middle East), which would elevate oil prices, a worsening domestic economy and/or an inability to address the fiscal cliff.

    Given the current level of stock prices, I am continuing to side to the downside argument.

    I start the day about 25% net short.

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

    Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

    2 of 2

    Select the service that is right for you!

    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 17,804.80 +26.65 0.15%
    S&P 500 2,070.65 +9.42 0.46%
    NASDAQ 4,765.38 +16.9840 0.36%

    Brokerage Partners

    Rates from

    • 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