Sign up  |  Log in

2019 Ideas

scared money don’t make money… what names/sectors/assets are on your watchlist heading into 2019?

get down with OPP

See how TagniFi is helping investment professionals streamline their valuation and analysis process in Excel. Sign up for a free trial today.

I’m starting to look at banks again. OZK is the only one I’m active in (OW - Vol) . They should report earnings in the first half of January 2019.  Mr. Market will be looking for additional signs of credit weakness 

I’d like to see how the esports industry grows. I’m leaning towards Activision (ATVI) because of Blizzard but EA and TTWO aren’t bad either. They’ve taken huge hits recently bringing P/E to 20ish which seems ok. A drop below 15 and it’ll look really good

List of interesting sectors (for other people’s money):

1) Bullish Retail - US consumerism continues to outperform. Holiday sales were the best ever in 2018. Oil prices in tailspin, easy to drive to Target. Despite everything else, count on Americans binge shopping without end. 

2) Bullish Consumer Staples - Boring stocks are under appreciated in this multi year bull market. If anything, they’ll be better than other stocks in volatile conditions.

3) Bearish Tech - Herding millennials kept buying brand name companies they liked. How much premium is priced in? Expect one of FANG cohort to have some big problem, and spread contagion to adjacent names. 

4) Bearish Real Estate - Home prices are out of control! Every quarter, data is looking worse. 

For 2% commission, I’ll happily manage your thematic portfolio. Tanks in advance. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

Agree with Ohai’s view verbatim.

Additionally, I like Basic Materials.  Paper / Pulp / Lumber: IP, WY, MERC.  Chemicals: DWDP, NTR, ETN, SHW, ECO.  Metals/Mining: NUE, TECK, BHP.

Industrials neutral on the sector, but like ERJ, GE, ROP. 

#FreeCVM #FreeTurd #2007-2017

AAPL!

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

Like Pipelines (TRP and ENB), AT&T. Agree with calls on Consumer staples and Materials. Love NTR as well

Yeah, NTR is good, like FMC, CC, HUN too.  Lots of amazing widespread value in the chemicals space, so much to the extent an ETF almost just makes sense.

#FreeCVM #FreeTurd #2007-2017

hpracing007 wrote:

AAPL!

Tim Crook a month ago: “No longer disclosing iPhone sales volumes , not relevant to business.”

Today, also Tim Crook: “Lower iPhone sales volumes driving guidance reduction.”

I’m no Steve Jobs, but this feels like a one or the other thing.

#FreeCVM #FreeTurd #2007-2017

AAPL down 7% after hours today - weak guidance, especially from China. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

People need to get with the program and start looking at that 60% iPhone gross margin while Samsung giving away TV’s and Huwai killing them in EM (they won’t admit it).  

#FreeCVM #FreeTurd #2007-2017

In general, yes, Apple seems to have lost their ability to shock customers with innovative new products. This will erode their margins over time. This time, it seems more related to awful China economic projections.

I think Apple needs to reinvigorate their service products by allowing pron into the Apple Store. Since pron is like 80% of the internet, it stands to reason that Apple Store has 200% to 400% in revenue to gain. When the BangBros app is #1, remember you heard it here first. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

very sad!

it’s just below my orig price target I had in mind back in 2015/2016…. which I don’t update as often as I should. (Revisited a few weeks ago it’s moved up, looks undervalued to me) I dunno, I hate to sell into a falling market but maybe that would be my second mistake, not selling when it crossed it originally… I dunno. Massive cash balance and even if revs are down, it has a captive user base and good margins, services… still generating tons of cash. I’ll have to think about it more. Maybe more downside but if i sell now it feels like 2016(?) again when people were super bearish and it cracked $90.

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

it was 18x at its recent peak. it sells right now for 11.5x. there really is no replacement phone. i have tried them. when your entire family or friends have an iphone. its really retarded to use any other phone. sending pics is very hard! iphones are so good that people keep them and dont resell them. in fact their resale value is ridiculously good. plus the fact that cos like google will pay 9b in 2018 and 12b in 2019 to be the default search engine is something to keep in mind. that is pure margin for them, and google still has a ridiculous amount of margin. with that said i dont really like to use other search engines.

I love my cheese. I got to have my cheddar.

I just loaded a bit more into the ol’ 529 today.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

Nery why you downvote me. Anyway, with AAPL, they cannot grow earnings by selling phones to existing users - not exactly anyway. Tim Cook wants you to buy a new iPhone every 2 years, but most people won’t upgrade that often. He’s also stated that they’ll make more money by increasing phone prices, but how much more than $1000 are they going to be able to charge? 

I don’t know if the current valuation makes AAPL cheap - maybe it does, even though guidance can always change dramatically like it did yesterday. What people do know is that Tim Cook’s plan is BS, and the market is calling him out on that. The fact is that smart phone sales are showing signs of peaking, and Apple’s old growth plan is invalid in today’s more competitive and commoditized market.

After Jobs went away, Apple became a company of milkers, not leaders. Tim Cook is a brilliant operations specialist, but not an artist or social leader like Steve. His job has been to take Apple’s existing business and tap all the money they can from captive users. He has succeeded in that, but that only goes so far. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

I’m long SUNE, Kodak, and 3D printing stocks.

hp, as someone who bought AAPL in the $90s during the last selloff and as someone who is not at all interested in the stock in the $140s, i’m here to tell you AAPL’s competitive advantage is much different now than it was in 2015/2016.

the two things that kept AAPL users trapped in the AAPL ecosystem in 2015/2016 were FaceTime and iTunes.

now that Google Duo can be used on all devices and it is comparable if not better than FaceTime, it is likely to become the go-to video calling app. FaceTime reminds me of BBM that is doomed to fail because it was only functional on BlackBerries. when FaceTime is made available to all devices, Duo will be preinstalled on 85% of the world’s phones and manually installed by much of the iPhone user base.

now that everyone uses Netflix for video (and more will use streaming apps for video when AT&T and Disney launch their services this year) and the hipper of the lot uses some form a streaming service for music (Spotify, Pandora, etc), the value of one’s iTunes library is miniscule.

i see no reason for anyone to stick with iPhone and know several people who have switched from iPhone to Pixel in the past year. primary reason - FaceTime no longer necessary and they all have Spotify.

Also, iMessage is redundant with ********, which is also something used by 80%+ of the world essentially.

Anyway, this is also besides the point, which is that Apple earnings cannot grow even with user retention, if those users do not upgrade their phones at some relatively high frequency. Phones are getting better and remain usable for more years. This increases the replacement interval and decreases sales of new phones. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

haha it wasnt me. i just downvoted you even further to -3! anyways i agree they very likely cant charge higher prices. hence why they stopped reporting certain metrics like unit sales. but it is also foolish to think that they cant make more money in other services with higher margins. lol apple made money  on hardware. hardware is typically just the tip

I love my cheese. I got to have my cheddar.

when i see people with other phones. i immediately think poor. they’ll always say, I DIDNT GET THE PIC. PLZ send through whatever messaging tool non compatible people have. that inconvenience alone should convince other to switch back. my phone just reached 2 yrs old and its just not enough storage i literally had to subscribe to icloud storage cuz of too many vids, pics, and apps.

coincidentally. 2 years ago i bought a samsung edge cuz i live life on the edge. before a week was even up. i returned it cuz i just could not deal with the major differences. apple imo has a brand now. and there is no replacement for being a baller..

also i have whats app. but the only time i ever used it was when i went on a date with sum russian figure sk8r from canada that was only here cuz sum dude at manhattan beach flew her there to stay in his condo. lol what a cuck.

I love my cheese. I got to have my cheddar.

iphone killer

"You want a quote? Haven’t I written enough already???"

RIP

MLA, I was thinking about that today… about how itunes has been replaced and more. Personally, I’m not getting anything but an iphone but I could see some people getting a cheap phone, downloading the apps and calling it a day. Worrying stuff.

The thing that worries me the most about this stock in the short/mid-term is if they spend a ton of a cash on a stupid acquisition (haven’t seen anyone mention that today).

I can’t get over how good the valuation looks, the company generates so much cash but that could change. To get it back to where it was from this point, they need to launch something meaningful, which I don’t have any insight into.

Stocks gone down like 40% from it’s peak… if you exclude the cash, the enterprise value went down a good amount more than that. I’m using pricing as another way to look at this, not as my main source of value but I don’t think there was THAT much growth built into the stock like the other tech co’s, so the price decline seems excessive. People i think really fear that they’re turn into Nokia and Motorola back in the day but I think unless something comes out that is such a huge step up that Apple can’t copy it or compete somehow, that risk is overblown. The Apple universe still exist. People buying apple watches and airpods in 2018 aren’t going away anytime soon, hopefully.

If I wasn’t already in it, since 2015/2016, I’d buy at these levels.

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

Their gross margin is like 35% or so yet iPhones have a gross margin of about 60% and are about 2/3 of the business.  In other words a lot of their business is running negative gross margin (mostly scaling software, etc).  The shadyness around cutting back product volume disclosures running into this should be a huge red flag to anyone.  This is not a company embracing its destiny.  What I want to see is someone model out what this company’s valuation looks like on a 35% iPhone gross margin if device turnover slows further causing another 15% drop in volumes and then argue the buy case on that.  Because that is really the question that need to be answered.  This company has not been the best at returning cash to shareholders unprompted and I wonder what they will do with that cash as things slow on them.  Also the admission about slowing old models (within a year of this drop) was not coincidental.

I’m not saying its a sell, I’m just saying I’m not convinced its a buy.  It’s also not my sector and my primary phone is a flip phone.

#FreeCVM #FreeTurd #2007-2017

music is not as spectacular as you guys think. consider spotify, which has a 36% market share (and they actually have the non profitable free model), is only worth 18b vs apple’s 725b or rouhgly 2% of the business. In addition, apple music, which is the spotify equivalent and ranked 2nd, has a market sahre of 20%. in terms of premium subscribers, which is the only profitable portion, apple has about 45m vs spotify’s 87m. apple music is also more popular than spotify in north america, which lets be honest is the only profitable segment, the others are ****hole countries where they charge far less. 

i dont undetsand why would you estimate the iphone gross margin at 35% when its been over 60% for a long time and they actually tried to expand it by raising prices. also the fact that volume is dropping is not really surprising when you raise prices. what is concerning is revenue falling yoy for the most important quarter, which it did. but this could just as easily be a sign of the times. recessions are often declared far after a bear market, and though the stock market is not down 20% from its peak yet, im pretty sure it will be soon.

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

i dont undetsand why would you estimate the iphone gross margin at 35% when its been over 60% for a long time and they actually tried to expand it by raising prices. also the fact that volume is dropping is not really surprising when you raise prices. what is concerning is revenue falling yoy for the most important quarter, which it did. but this could just as easily be a sign of the times. recessions are often declared far after a bear market, and though the stock market is not down 20% from its peak yet, im pretty sure it will be soon.

Because as explained above, margins are dying.  They’ve failed to maintain the innovation, hence replacement cycles are lengthening and price competition has opened up.  They are now losing share to Huawei in their core growth market overseas.  What comes next amidst tanking volumes will be margin concessions.  This is a pivot point for iPhone margins.  The margin expansion failed to take and looking backwards to model forwards because its always been is a losers game, especially in tech.  Analysts are being short term that haven’t seen enough of these tech cycles turn are holding margin static and moving volumes.  They’re also the ones puzzling over valuations.  If you want to stress value it looking forward for any long holding period, you take iPhone margins to 35%, if it holds value there you buy, volumes down another 10%.  If you want to fair value it looking forward you take 45% volumes down another 10%.  This isn’t BlackBerry, but it’s not Steve Jobs’ Apple, either.

#FreeCVM #FreeTurd #2007-2017

i guess what im asking is why choose 35%, you can choose 40, 30, 25, 20.  are you using an old benchmark? is this samsung’s gm right now? or is it what happened to blackberry/nokia on their downturn?

also what exactly is happening? is it because they are starting to lower their prices substantially due to peak phone volume and competition? or their cost to produce the product skyrockets due to lower volume and economy of scale issues?

lol everyone should read this oiriginal aapl thread though:

https://www.analystforum.com/forums/investments/91336454

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

i guess what im asking is why choose 35%, you can choose 40, 30, 25, 20.  are you using an old benchmark? is this samsung’s gm right now? or is it what happened to blackberry/nokia on their downturn?

also what exactly is happening? is it because they are starting to lower their prices substantially due to peak phone volume and competition? or their cost to produce the product skyrockets due to lower volume and economy of scale issues?

Ok, my bad.  Also I should not have been testy, it’s just my DNA.  My understanding is gross margins for most of the computer hardware industry is about 35%.  It may wind up 45% long term (to my point above about 35% being bearish), I’m using these numbers as proxies.  I just don’t think the industry leading 60% is defensible once the innovation edge it was built on begins to erode.  I don’t think costs are skyrocketing, I think this is primarily that prices will have to drop or volumes will drop and you will wind up at the same place.  BlackBerry noteably never really surrendered its gross margin, but their volumes dwindled gradually at first and then very quickly to nothing.  Again, I don’t think this is BlackBerry which was a technology competition issue, I think this is more of an industry maturing environment.

Every time Apple sells a phone it competes against two primary competitors.  Existing iPhones (for upgrade demand) and essentially, the field.  Right now, they’re losing on two fronts in two different ways.  On their home market, they’re losing to team Existing iPhones as the marginal tech advantages simply aren’t enough to justify the high prices required to maintain gross margins on new technology given the marginal cost.  The two are out of sync older model iPhones actually carry a higher gross margin when sold today than the new ones.  So they’re caught in a bind in their home market, either 1) continue to try to push out marginal hardware upgrades to cameras at high incremental cost that aren’t able to generate the marginal price to hold margin and let the margin slip 2) keep pushing out the upgrades to cling to industry tech leadership and hold your pricing, losing volumes and hurting the upgrade cycle or 3) stop pushing out new upgrade versions and see both the volumes slip and tech leadership while holding margin.  Tangentially, they already got caught slowing down models in circulation with software patches everyone knew was happening.  The reality is, most computing and storage happens in the cloud / on server side and will increasingly with new 5G so while usage will go up, the need for device side processing isn’t climbing at the same pace, so low hanging fruit is gone.  People are grinding out minimal upgrades mostly boiling down to commoditized offerings like screens, batteries, cameras and emojis. 

In the emerging market, (their growth market) you face a price sensitive consumer and none of the advantages of installed capacity in the US.  For instance, people mentioned difficulty sending images from an iPhone to non-iPhone and integration with other Mac hardware and existing iTunes and cloud.  These are all great if you already have an existing consumer base you’ve saturated to defend your position.  But in emerging markets (iPhone 8% of China market share) they’re competing from scratch against Huewai, LG, Samsung, and those phone companies know the stakes (winning existing market position) and wont’ let the US scenario repeat.  In China, iPhone’s market share grew from 8% in 2017 to a whopping 8% in 2018.  In that same year, handsets by the top four domestic producers rose from 64% to 80% led by Huawei which rose from 19% to 25%.  Similar things are happening across Asia ex-Japan (not growing) and China Inc will not let its domestic champions fail given the stakes if Apple becomes embedded.  They’re competing on price and commoditized hardware and they’re winning bigly and Apple has yet to come out of the closet about it, the same way they were coy about device volumes no longer being indicative literally a quarter before blaming a miss on device volumes and the same way they whitewashed their device slow downs.  The result is this industry is slowing for them on two fronts and they face a choice between margins, volumes and tech leadership in the home market (not their main problem) and a price fight in their growth market (their main problem).

#FreeCVM #FreeTurd #2007-2017

Nerdyblop wrote:

lol everyone should read this oiriginal aapl thread though:

https://www.analystforum.com/forums/investments/91336454

I’m basically restating the same case I made then except now it’s happening.

#FreeCVM #FreeTurd #2007-2017

https://www.wsj.com/articles/apple-loses-ground-to-chinas-homegrown-riva...

While Tim Cook, Apple’s chief executive, blamed China’s economic slowdown for weakening sales that hurt its global revenue in the past quarter, the company’s problems run deeper than that. The Cupertino, Calif., tech giant may have underestimated how competitive domestic smartphone makers have become, analysts say.

Once a top-seller in China, Apple has slipped to the fifth-biggest phone seller in that country, trailing four domestic producers that have all been growing in popularity. Despite developing more features targeted at Chinese consumers, Apple’s market share has stagnated.  Chinese rivals including Huawei Technologies Co. and Oppo and Vivo, which are owned by BBK Electronics Corp., have rolled out popular features such as camera functions designed for users to take better selfies.

Falling Behind

China’s four biggest domestic smartphone makers have been gobbling up market share while Apple’s iPhone has stagnated.  “The others are a little closer to the pulse of what matters to Chinese consumers,” said Mark Natkin, managing director at Marbridge Consulting in Beijing.  Moreover, Apple’s iOS operating system is proving less “sticky” for Chinese consumers than in other markets because smartphone users spend a large chunk of their phone time inside WeChat , a chat, payments and social-media app from Tencent Holdings Ltd.

#FreeCVM #FreeTurd #2007-2017

^ exactly. it is all about ease of communication, which is literally the purpose of a phone. Apple’s closed software system will result in a meaningful user dropoff. while not likely to be a full wipeout like BlackBerry, Apple has two choices - open up its ecosystem to Android which will erode Apple’s key market advantage of ”we have a better communication systema” or don’t open up the ecosystem and watch users gradually leave the ecosystem for a better one that is effectively developed by the masses for the masses and is functional on all devices. android killed blackberry. it should kill apple too, eventually. might take 20 years and may not be a complete killing but blackberry exists as 1/20th of its current self. why can’t apple one day have a valuation of $60 billion. would that be so shocking in 20 years. it shouldn’t be.