Apple Gives Back Almost 5% Since The Big iPhone 7 Event

Even Apple management will admit or at least they should, that the iPhone 7 failed to wow like the other phones have in the past. Tim Cook may crow that "this is the best iPhone we have ever made" but reality is that the new bells and whistles included in the iPhone 7 mainly failed to impress the sell-side and most investors as well. Apple shares are down almost 5% since the "big" event although our misguided Federal Reserve also more than likely played a large part in the declines on Friday.

The newest iPhone is slimmer, sleeker, comes with more color options, has more memory (at a cost of course) and is now wireless as far as headset technology is concerned.. There has been a lot of negative noise about the jackless iPhone 7 and iPhone 7 plus but I will go with Phil Schiller, senior V.P. at Apple, who said that wireless is the future and the iPhone 7 is the first step towards that future.

Another big change Apple has initiated is the decision to not release numbers for the first 24 hours orders and the first weekend sales data which also might have caused hot money to bail on the stock. I am somewhat mixed on that decision by Apple management. While on one hand, it does make sense that the metric is no longer as useful as in the past, given the magnitude of the launch in 30 countries right off the bat and another 30 countries a week later. In the past, at launch, only a handful of countries would be included on opening weekend and it would be a month or more before the iPhones would be available in as many as 60 countries.

Despite the hue and cry about not releasing numbers, Apple has already said that they would be sold out almost right from the get go and if one were to visit various country sites of Apple, one would quickly see that the time between ordering and expected delivery date is lengthening pretty rapidly.

I have been negative on Apple shares for more than a year but since the last earnings report have turned more positive. I continue to be totally underwhelmed by Tim Cook as the CEO and his performance last week did nothing to change my mind. Having said that, I think that the sellside, after having been burnt all of last year, has now turned negative enough on the stock to make it a contra buy somewhere in here (around $103 per share give or take a few points).

Of course, the Federal Reserve has just begun yet again on their path of madness (raising rates) and that is an entirely different ball game altogether. They seem to have not learnt the lessons from the last raise back in December and the aftermath that followed in January and February.

As Albert Einstein said: "Doing the same thing over and over again and expecting different results is a sign of insanity."

The world will soon find out how insane our Federal Reserve really is.

(I remain long aapl, long and short options of varying strikes)