David Lentz

Apple's Obstacles Prior to WWDC

Nevertheless, some interesting chart-talk. Since the employment numbers came in decidedly on the disappointing side, and with oil storming the barricades and threatening (at least in the mainstream mind) to move on to 150 and beyond (... to infinity and beyond!), one would reasonably expect this coming week to be an excellent time to write some covered AAPL calls, or take profits in positions that have achieved long-term capital gains status (if that makes a difference to your particular situation), or simply get out and await a lower entry point later in the summer (which sure seems like a possibility). I think that buying into AAPL in the wake of WWDC, especially given the climate in the market in general, would be assuming the role of the Greater Fool. But that's just my opinion. Others are cheerfully invited to prove me wrong.

In the interests of full disclosure, I own both AAPL stock and some Jan 2010 call positions, all of which I intent to sit on and ride out any near-term capitulation. I've sold some other AAPL LEAPS positions as they achieved long-term capital gains status earlier this year and am looking for an entry point (maybe around 140?) to open additional long positions in AAPL, probably via 2011 deep-in-the-money LEAPS (a low-cost alternative to owning the stock).

There. That's enough disclosure for anyone.

The Put-to-Call Ratio: A Long-Term View

Pardon my typo -- emotion got the better of me for a moment there.

The Put-to-Call Ratio: A Long-Term View

He's telling you that you should clear out your long positions and go short for the next year or three.

No great revelation here. Housing continues to implode, inflation soaring, a lunatic at the helm, steering the USofA further into treacherous waters ...

What did people expect?

Here's a clue -- if it hurts when you do something, SYOP IT!

But no one ever thinks of removing the imbecile from office, despite the wording on impeachment making it clear that it was primarily intended to get rid of gross incompetents. The Dems find it too convenient to have Dubya destroying the nation to remove him from office, so they're just as culpable as he is.

Ben Bernanke: Talk May Be Cheap, But It's Not Worthless

If there were the possibility of truly radical and serious fiscal reform in These United States -- things like a flat tax starting at a minimum living income, with no deductions or tax preferences, and a serious attempt at a balanced budget amendment, and a re-structuring of Social Security, allowing it to invest in riskier asset classes (broad-based index funds) for that portion of its portfolio that is targeted for use 20+ years out (in order to bring up the returns on the funds) -- then we could withstand the rate adjustments needed to bring inflation under control.

But if we could accomplish those things, then we could also replace the Fed with a computer program, and target a zero inflation rate, instead of the politically-satisfying "mild" inflation that is supposedly the policy.

However, "if" is a fantastically wild term to use in this context.

Talent Management Sector Getting Stronger

It seems to me that these companies are doing little more than re-purposing CRM software and selling it to companies that have weak management and/or weak HRM departments. Well, there are certainly enough of those to constitute a viable market for their products.

But looking at the web sites of the companies under examination, it would seem that they could stand to turn their products on themselves, and identify/motivate those responsible for presenting the companies' faces over the web. Simply put, their corporate web sites suck, and could use a bit of talent applied to them.

I don't think I would be inclined to invest in companies that sell software to better apply/develop the talent within a company if their own presentation is so poor. It all smacks of a serious need for talent management software.

Does Yahoo Have an Apple-ish Turnaround Ahead of It?

Neither Jerry Yang nor Carl Icahn (and certainly not Steve Balmer) is a Steve Jobs. There's not a glimmer of genius in the lot of them. The best that can happen for YHOO stockholders is that Icahn will sell the company to Microsoft, who will run it into the ground and completely destroy what Yang has built -- but the stockholders would profit.

The only chance that Yahoo has for an Apple-ish future is to continue to go it alone and somehow manage to out-google Google. And the odds of that happening are even less than those of Apple managing to pull out of its death spiral when Jobs returned.

Hey -- miracles happen. But all that Carl Icahn is interested in is making a quick buck from selling YHOO to MSFT.

Inflation Contest: Crude 1-Gold 0

A bit more timeliness would be helpful. Oil appears to have hit a (near-term?) peak and is now in retreat, although by how much is unclear, given that our alternatives to consuming oil are fairly restricted at the moment, and China+India will more than make up for any US+Euro conservation.

But gold is also firmly in retreat, as the Fed talks up the dollar and pretty much removes the possibility of further rate cuts. Gold appears to be on its way to 800, at least, before heading for its next milestone, and whether that is higher or lower than 800 is not clear at this point (but I'll bet it tests its recent highs at least once more before resuming a definitive path).

So the more timely picture is the question of which will fall faster over the next 2-3 months, oil or gold. Neither situation is one that clamors for increased investment.

2009 is another matter entirely. But we've got to have money left after 2008 to take advantage of whatever happens in 2009.

Inflation: It Could Be Worse - A Lot Worse

The author needs to visit the shadowstats web site [www.shadowstats.com/al...] and see a picture of how it is worse. Specifically, it pegs the current annualized rate of inflation at around 12%, which subjectively seems a lot closer to reality than the sweetened and filtered government numbers.

But even so, looking back at the period prior to the creation of today's Fed and comparing it to the time since, it would appear that the Fed has done some good, as the incidence of bone-crushing periods of deflation has lessened significantly.

Hopefully, once the Administration of Terror has departed the White House, the Fed and Treasury will work together to bring about a stable dollar and reduced inflation. This will take a long time to accomplish, and a fair amount of pain. But the consequences of not doing so are much, much worse.

Gold is Money - And Nothing Else

If gold is a currency, then I should be able to buy groceries with it, or gas up the SUV, without resorting to an exchange from a commodity into a currency to facilitate this. Credit is a currency, cash is a currency. Gold is a commodity, just like oil or corn, but closer to art and collectibles.

That's not to say that one cannot make a pile of money from gold, as the USD declines ad nauseum. But it's not money. Money is a medium of exchange allowing items of value to be exchanged (example: your time at work in exchange for your salary). Gold is an item of value.

Greenspan: Bubbles Are a Necessary Part of Innovation

I, for one, can see the merits of the argument that today's robust internet was spawned from the dot-com bubble investment.

Incidentally, I see the dot-com boom as being primarily driven by corporate Y2K spending, which pulled an enormous amount of orders for new systems forward, it being deemed cheaper in many cases to replace older mainframe systems with newer web-oriented server-based systems. Of course, when Y2K came and went, all that spending ceased, and there was a vacuum in the order space that popped the boom, turning it into the dot-com bust.

But in the ashes of the dot-com collapse, we found ourselves with a lot of shiny new hardware and software oriented toward integrating corporate operations with the web. THAT's what Greenspan is talking about, and that part I'll buy into.

Looking forward, the idiots who object to the coming green revolution should be seeing it as a similar opportunity to replace the old with the new, a veritable investment bonanza, replacing centralized power generation and transmission with a distributed grid of green power. And the nice part is that this boom won't go completely away when the calendar rolls over past a specific date.

The trick with all bubbles, is to recognize what is going on, and let the air out of them from time to time -- something Greenspan never did. That's the job of the Fed, with interest rate hikes triggered in part by indications (e.g., excessive velocity in the flow of funds) that things are becoming overheated.

It is NOT the job of the Fed to prevent bubbles from forming, as they are part of the formative process of change, and without change we would be left behind rather quickly.

But neither should bubbles become so large as to damage the economy as a whole when they pop. Housing is an excellent example of this -- a bit of research on the Fed's part into why housing was growing a bubble would have uncovered the rotten lending practices, and shown a clear path to the corrective actions that were needed. But Greenspan adopted the hear/see/say-no-evil approach, and that bubble eventually exploded with economy-shaking consequences.

Finally - Gold Options

While certainly an interesting development, one should consider the implications of playing this with the PPT on the other side of your trades ... options on GLD would certainly be a valuable tool in their kit.

Conditions Of New Bull Market: 20% Or More Drop

Think DJIA down 25%-30%, and S&P 500 down 40%-50%. The longer it takes to get there, the more time we will spend at those levels (the "U" vs "V" recession).

Not until most investors have given up looking past the abyss and are looking into it will we see a turning point, when all optimism has been washed away.

Amazingly, the prospect of $200/bbl oil, $7/gal gas, soaring food prices has not yet made a significant dent in the level of optimism out there. People are still making plans on what to do when the bear market ends instead of how to put groceries on the table next week.

Perhaps the next quarter's earnings numbers will put a sufficient scare into folks. And if not that one, the quarter after that.

Friday Outlook: Commodities, Emerging Markets

Never apologize for the occasional rant -- especially when they're as insightful as yours are. You are correct though -- it's hard to make money when one's emotions are wrapped around the drive shaft and your head keeps hitting the pavement.

The Economy is Spelled with a W

silly me, I meant to say ...

L
.L
..L

The Economy is Spelled with a W

How about things going to "L" ...

L
L
L

?