Good Morning, lets get started

Posted on December 2, 2005 , filed under Stocks | Print This Post

This morning we opened slightly lower. I expect to see the market reverse and close up today. AAPL, Apple Computer Inc. just touched above $72. On September 23rd, 2005, when AAPL was trading at $53, I predicted that AAPL would reach $70 by the end of the year. I predicted that all time high for AAPL would be $80. I am considering shorting shares of the company if the stock reaches high $70’s-low$80’s by the end of the year. Purchasers of APPL are betting on the company’s non stop growth. I believe sales of the Nano and new video enabled iPod’s will be strong this holiday, but unsustainable in the long run. Any consumer electronics device goes through rapidly changing trends and diminishing margins. I see that manufacturers are releasing solid state and disk based mp3 players with lower prices and betting on volume sales. The iPod is equally a fashionable and functional device. When the Nano and video enabled iPod drop out of being seen as a fashionable device, APPL will likely have to drop prices in order to maintain sales levels. Investors clearly have forgotten than AAPL was trading at mid $9’s just two years ago in December of 2003. In the history of consumer electronics devices no one device category or company has been able to consistently retain margins and sales levels. Historically look at what happened to powerhouse companies like AIWA and SONY during the portable cassette and CD player days. Sony even failed to capitalize on the Walkman brand name for digital audio players. Consumer electronics change at a heartbreaking pace and Investors would do well to monitor sales trends and emerging technology. The share price of APPL could also change at a similar heartbreaking pace. I wrote an article on September 27th, 2005, covering many of my long term predictions for AAPL.

CAL, Continental Airlines Inc., AMR, AMR Corporation, LUV, Southwest Airlines Co. and JBLU, JetBlue Airways Corporation are all part of my watchlist for Airlines. Airlines have risen aggressively over the lower cost of oil. Depending how I see oil moving, I may short shares of the airlines on my watchlist.

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