Had an very interesting conversation with an trader/analyst at major brokerage.
This guy used to work for AAPL. He was in the store getting service on a 5300 and debating purchase of a 1400 or 2400.
We kind of decided on the 2400 as he was going carry it around all day (it weighs 4.4 lbs.) Also the "oo-ah" factor for the swoopy little beast was way higher than for the boxy 1400. He figures he can get used to the keyboard -- which really blows chunks when you first try it. (How many Japanese actually touch-type. Domo!)
Anyway, he's been trading options for a house account and has kind of been making a reputation for himself by buying and selling AAPL -- and actually making money! :)
Here's some of his observations from memory.
* Current market sentiment on AAPL is still in the pits. Consensus is still not *if* AAPL will die but *when*.
* He has little regard for most of the AAPL analysts out there -- "bulls" as well as "bears". Two exceptions are Donaldson, Lufkin and Jenrette; and Josephthal Lyons.
* Two large institutional investors got in below 15 and are selling at 20. They have *no* sense of what they bought and are only looking to lock in a profit. Once these guys clear their positions out, there should be no big sellers left.
* Based on upcoming product announcements - new G3s, Rhapsody and NCs - he thinks things will get bullish in a fairly short period
* More than anything else, the idea of the NC as the "next hot thing" will capture Wall Street's imagination and AAPL will have the first/best product out there. Reportedly the product is ready, and they're in the final tweaking stage. Selling focus will be business and higher education.
* Look for a major alliance with ORCL that *should have* been announced last year. ORCL, looking at a pretty dreadful quarter, decided to put it off.
* He confirmed other reports that the Newton will be replaced with a PowerPC unit running "Allegro-CE". Metroworks should provide the means to port current apps over.
* AAPL was *still* the worst run computer company in the business. (Addressing this is likely the focus of their CEO search.)
*AAPL has the absolute *best* technology in the business and that will drive the stock. (Nonetheless, he thinks AAPL is cutting too deeply into R&D. Said MSFT just hired 1/4 of AAPL Advance Technology Group at 4X times their old salary.)
* While everyone knows that AAPL is cash-rich, he said they have even *more* cash stashed away than people even know about. He put the buyout of all the clones at something like $500 million -- and AAPL handled it without blinking.
* He said he currently holds March $20 calls which he purchased at $17+. A stop-loss order is in effect to salvage a 10% profit.
Based on comparable companies, he figures AAPL's fair *current* value at $31. His time frame for non-traders is 18 months.
soup
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