Doug Kass fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- How Apple remains a large short position for Kass.
- How the market is still resistant.
Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.
While the company's current quarter will be fine -- aided by Samsung's problems and channel fill -- I don't believe the company will get away with bad execution, aggressive accounting, the absence of innovation and treating customers not so well, especially in the face of competitive products that are superior (Google Pixel Phone, Microsoft Surface Studio, etc.).
Besides my negative secular investment thesis recently spelled out here, there some additional issues:
- The phones have all sorts of problems with Intel modems (probably was a bad decision to go with Intel).
- Battery problems in 6s models.
- "Touch disease" and Apple actually charging $150 to fix this problem. Surprisingly, Apple is blaming its customers for their own design flaws.
- Dropping warranty accruals in the face of all of this.
I further added to my short exposure today in a quiet, pre-Thanksgiving trading session.
And now it's time to run down "The Good, the Bad and the Ugly" ...
- The market remains resistant (Rs over Ss and Ns).
- Brokerages, banks and insurance companies continue their league-leading strength.
- The Russell 2000 Index is up for the 15th consecutive day.
- Retail extends yesterday's strength. Nordstrom (JWN) , Macy's (M) , Best Buy (BBY) , Target (TGT) , Walmart (WMT) , Foot Locker (FL) and JCPenney (JCP) are strong. First day down for Amazon (AMZN) .
- Agricultural commodities are lackluster, but soybeans are up another up $0.05 today, up substantially for three days in a row.
- Speculative biotech (Sage (SAGE) , FibroGen (FGEN) , Acadia Pharmaceuticals (ACAD) and Aerie Pharmaceuticals (AERI) ) stronger after recent weakness.
- Ag equipment up big time after the Deere (DE) beat.
- Bond prices were much lower early in the day, with yields up by nearly 10 basis points. But fixed income has rallied back (reducing the drop by half on the day).
- Valeant Pharmaceuticals (VRX) , more weakness.
- Large pharma lower, led by Eli Lilly (LLY) .
- Old tech lags, with International Business Machines (IBM) , Intel (INTC) , Cisco Systems (CSCO) and Microsoft (MSFT) all lower.
- Media roughed up a bit (CBS (CBS) and Comcast (CMCSA) ).
- Gold down another $23 to $1,188 (SPDR Gold Trust ETF (GLD) down $2.25).
- Urban Outfitters (URBN) down $5.