Theme: Short AAPL

Wrote this on 10/20, same points apply, will update it soon (to include grmn, rimm, palm, vz, etc) :


Short AAPL


AT&T's earnings this morning point to a dominance of the iPhone that
is both amazing and possibly priced in. Apple seems to be firing on
all cylinders, computers, ipods, phones, media, margins. Not a cheap
stock, in p/e/g, p/b, p/c, so possibly priced in.

The only competitor that has a comparably loyal following and
amazingly well designed products is Google. At some point, Android
will be a winner, even if by a little and that will crush Apple's
valuation metrics for that business and put a chink in otherwise
spotless armor.


Interestingly, Apple provides both quinessential examples of either
outcome: the iPhone may be the 'iPod' of the cell phone market and
dominate market share in a very competitive world with many argueably
better mousetraps.

Or Android will be like the iMac, a superior product with tiny market
share but that still makes a dent in the leader's dominance.



Flys In the Ointment:

Leaders tend to stay leaders for a long time. Network effects may
have taken enough hold to perpetuate.
Their mac acceptance may continue to go through the roof.
Earnings growth and stability may demand a growing premium in a world
increasingly barren of both.


Technicals:

Stock is still on a tear, making new highs. Extended, though not safe
to short yet simply because of action. Idealy the market would turn
lower, Apple would break it's 10ma, but by then alot of money has been
made.
Can short a little here, wait for confirmation or market crack.
Basically a high beta play on the SPX.