- why the recent rally may cool;
- a stealth Apple-derivative play; and
- why Apple is a stock to own, not to trade.
Watch the Patterns Posted at 3:50 p.m. EDT on Friday, Sept. 14 I cannot, for the life of me, figure out how much of this rally is short-covering. Today I am watching the apparel companies, and I am thinking it's short-covering aplenty. Deckers ( DECK), which has been languishing seemingly forever after a bunch of misses, has now stabilized and is gapping up nothing, a sign that this perennial short may be worrying the bears. > > Bull or Bear? Vote in Our Poll PVH ( PVH), Ralph Lauren ( RL) and V.F. Corp. ( VFC), three names that have been in the cross-hairs of shorts because of their European exposure, now seem to be in orbit now. That feels like beleaguered shorts who have just thrown in the towel. The same goes for Fossil ( FOSL), which is going crazy to the upside. Even Coach ( COH), which "blew" it, has a feel of "time to cover." Only Nike ( NKE), which has everybody freaked out, has been able to buck the bullish trend. Or how about the Zynga ( ZNGA)/ Groupon ( GRPN) world? The law of small numbers precludes Zynga and Groupon from being home runs. It is time to cover. Plus, the whole group is getting a boost from Facebook's ( FB) bounce, which now comes under the category of something real and something animal-spirited. There had been a sense that the high-growth restaurant names peaked post- Chipotle ( CMG), but the other day a boutique research firm said that Panera's ( PNRA) numbers could be stronger than expected. The group sustained a jarring upward move, although today Chipotle's giving up some of the Panera-inspired gain. Watch these patterns -- they are often gains made at the later end of an advance. The powerful rally yesterday on top of day-after-day increases means, to me, that it is time to cool off, because now these gains are the froth that comes from the Johnny-come-latelies and the hedge fund coverers.
A Stealth Apple-Derivative Play Posted at 7:53 a.m. EDT on Thursday, Sept. 13 Everybody loves playing the derivatives for the new Apple ( AAPL - Get Report) iPhone, and my take is that you are too late for almost all of them, as they have roared into the launch. That's the case except for one. It's a stealth play called Millennial Media ( MM), a nifty little company that just came public, and I spoke to CEO Paul Palmieri on "Mad Money" Wednesday night. Millennial helps advertisers reach people through mobile devices on the Web. We hear a lot about the monetization difficulties on mobile compared with, say, the desktop. However, I am beginning to think it is more of an opportunity -- just an opportunity that's been blown by many companies so far, including Facebook ( FB), because they didn't see it coming. Millennial sure did. It deals only in mobile. It's up against Google ( GOOG), which is the biggest player, and Apple, which also has an advertising-service business -- except this is one of those rare situations in which a company you may not have heard of, Millennial, is actually beating Apple. The major reason for this is that Apple's ad system, unlike that of Millennial, does not support the Droid -- and the Droid is the biggest smartphone product there is. Meanwhile, Millennial supports everyone's system -- and the bigger, better and higher resolution a smartphone is, the more money it will get for ads. So it is a pretty terrific derivative play. Why is mobile not problematic for Millennial? The new cell phones enable advertisers to communicate through video, and mobile video is one of the most successful forms of advertising there is. Advertisers are paying more money for mobile video than they are for desktop banners, and the adoption is just occurring. I believe that, with the trends going as they are, it will be difficult for Millennial to stay independent. It's a wonder that, at $1 billion in market capitalization and 75% revenue growth, this company hasn't been picked off already -- especially considering how so many others are struggling with mobile monetization.
Just Bite Into Apple Already Posted at 3:24 p.m. EDT on Wednesday, Sept. 12 Oh, for heaven's sake, stop trading Apple ( AAPL - Get Report) and start owning Apple. People are trading the stock as if it were a movie and sending it up and down based on the latest review. Look, I get the importance of the iPhone to Apple: It accounts for 70% of the company's earnings. I understand that some people are always going to be disappointed that it doesn't have this feature or that gizmo. But the important thing is that so many people have hung back and waited for this new iteration as a way to take advantage of the new rollout of 4G that it might just sell well anyway. And given that Sprint ( S) is ready to go to war with Verizon ( VZ) and AT&T ( T) to give it to you, the subsidies will be heavy and the demand excellent.