With earnings season set to begin and with the S&P merrily cutting estimates for Q3 earnings as they have been doing going into every quarterly earnings season for over a year now the rumor mill on
Consider the following headlines if you will:
"IC suppliers concerned about new iPhone orders"
"iPhone 6s supply chain makers bracing for strong sales in 4Q15, say sources"
The first headline was from this morning and the second was from two days ago. I am well aware that technology moves fast but this is beyond pathetic and so obviously biased.
Take a look at a snippet from the first headline: "Overall shipments of the iPhone 6s series are expected to reach 75-80 million units in third-quartet (r) 2015, but the estimated volume for fourth-quarter 2015 has been reduced to 65-70 million, the sources cited the IC supplier as saying."
Here's a snippet from the second headline: "Buoyed by strong sales of the iPhone 6s and iPhone 6s Plus, total shipments of iPhone devices are expected to hit a record of 75-80 million units in the fourth quarter of 2015, higher than the 74.5 million units shipped a year, the sources estimated."
In less that two days, December quarter expected shipments go from 75-80 million down to 65-70 million as per these "sources". Talk about manic-depressive, huh?
The headlines are from DigiTimes.com which at one time was an excellent source for unbiased information. However, the last few years, many fellow hedge fund buddies have told me that they think the site is far from unbiased and I am putting it kindly.
The positive headline (second) drew scant notice but the negative headline is drawing a lot of attention this morning and already shares of Apple are lower by $1.85 per share in pre-market trading.
In the current "throw the baby out with the bath water" environment the slightest negative means time to head for the hills and that is exactly when one should be buying. The false rumors and negative chatter are on pretty much every prominent company but the easiest to knock over is Apple.
Apple will more than likely continue to be at the mercy of negative rumors and false innuendo as it always is given the fact that they have chosen to isolate themselves in a Tower of Silence, so to speak. Steve Jobs was able to carry off that lone-wolf image brilliantly due to his charisma and force of personality however asking (Tiny) Tim Cook to do the same is actually laughable. So, until earnings for calendar Q3 (Apple FQ4) are out, investors are at the mercy of these rumors and negative chatter.
Having said that, the risk-reward is moving increasingly towards the long side albeit with market-related risk as an overhang. Not completely in favor of a long only trade but getting there as the negative chatter goes full bore.
(please note I am long apple shares, long and short apple options)
