How about some news headlines and analysis to get us on track for the dog days of July.
Check out this chart showing Apple’s downtrend following the stock split – Chart of the Day comes from Micah Lamar showing $AAPL action from pre- and post- stock split. Fascinating picture of a classic “Sell-The-News” trading event.
Why deflation is a blessing – I used to argue a similar point on Kudlow & Company for years and was practically mocked off the set for telling the truth about deflation being a good thing. Except: “What if we did just the opposite: 1) reward creativity and productivity ( = zero or negative income taxes ) 2) punish doing nothing ( = tax on money hoarding ) 3) embrace the deflation that comes with improving technology There would be no jobless and no debt.” Amen. That is all.
China Revolution Investing: Short NQ and buy BIDU – Despite (or because of) all the angry comments and emails this column generated when I wrote it six months ago, the analysis I provided has proven correct. NQ is down more than 50% since then and BIDU has actually gone up over the same time frame. That’s a perfect pair trade. I’d cover the NQ and move on, but would keep the BIDU as a long if you’re already in it.
Those Waiting For Tax Break May Not Get One – You and I, we pay taxes for police, roads, emergency help, judges, etc. I have long railed against the idea of a “Not-For-Profit” being allowed to get all those same services for free, churches included — pay your taxes or don’t use my roads and police force! And these days corporations like AAPL, GE, and banksters like GS get welfare money and subsidies and so I pay for their police, roads, judges, etc too. Flat-tax for all people and corporations or no-taxes for anybody might be a fairer solution.
4 things GoPro needs to do to succeed – A reader last week wrote to me saying that Ambarella AMBA’s chips (which GoPro GPRO cameras use) are more of a commodity than $GPRO’s cameras. That’s all wrong. That’d be like saying that Intel’s INTC chips are more commoditized than DELL computers. Look at the gross margins of each respective company to garner an idea of how commoditized their product is. The more commoditized, the lower the gross margins. Ambarella’s gross margins are steady at nearly 70%, while GoPro’s own gross margins have been falling: 52% in 2011, 43% in 2012, and 37% in 2013.
Barnes & Noble Agrees to Spin Off Nook Unit as Sales Decline – I’m short BKS because their revenue is declining, the company has too many fixed costs, and their Nook platform is already doomed/dead. Spinning off Nook doesn’t change my thesis overall, and indeed it gives us a new catalyst to the downside since there’s now NO growth in the model at all without Nook.
Some Thoughts on Leverage in the Great Gold and Silver Frauds – The path of least resistance for gold is probably higher now. I am glad we’ve used our playbook approach of scaling into more gold when it was crushed. Steady as she goes, planning to hold most of my gold and silver coins and bullion to give to my daughter someday.
