Sunday, July 20, 2008

Apple's Earnings

Apple Computer reports after the close Monday, and estimates are for 18% growth in earnings to $1.08.

Apple closed Friday, at 165.15, down $6.66 for the day. So you have the numbers of "life" or of the "beast".

We know that yoy Apple will probably have 50% unit growth in Mac's and any slowdown in ipods or iPhones will be attributed to the rollout of Apple's new 3g iPhone which isn't in this quarter. And we know that Apple increased its procurement of notebook-use printed circuit boards (PCB) by 20% on quarter in the third quarter indicating further bullishness.

We have bank lines for IndyMac, and lines for shoppers at Apple but in this market of PE compression, no-one seems to care. But do we really live or die by Apple?

Why sweat it? Apple always seems to give you a chance to get in after the earnings release, and before the conference call. Some hedge fund will try muscling the stock in the thin market to make it appear that the news is bad. Pick off shares from him if you're quick and you're a bull.

And sell the premium on the way out of the money puts, to the bears buying protection before earnings who think the long lines at Apple are for those returning merchandise.

And live for another day.

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