Steve Jobs steps down, Buffet backs Bank of America, DJI exhibiting ridiculous volatility. Should be a fun day for traders.
Apple: they’re like Americans…Job-less
Ok, Steve Jobs is a great CEO, but the 2nd largest corporation in the world is not going to collapse from losing Jobs. Ok, let’s say they will collapse from no Jobs, since he is god. Considering the iPad was in development in 2007, Apple still has a solid lineup for strong revenue the next few years down the road. Some rather irrational selling coming from Apple fanboys/fangirls just because “OMG! It’s Steve Job’s company! I’m going to buy some stocks!” Maybe Apple won’t be “amazing” anymore, but that doesn’t justify irrational selling. Being the big fundamentals fan that I am, I would say Apple is still good to go (for now) despite losing Jobs.
Besides, I’m sure Steve Jobs can’t feel good leaving his company if he knew Tim Cook would crash the boat into an iceberg. Worst comes worst, let’s assume Steve Jobs was responsible for the iPhone and iPad completely. That means Apple won’t be developing new product lines after Jobs leaves. That still leaves Cook with the profitable iPhone and iPad lines, which comprise of 47% and 21% respectively. Ok. You’d literally have to fly to South Korea and Taiwan, announce to the world that your products suck and Samsung and HTC make the best phones/tablet PCs in the world to screw this one up (on the short term at least). Throw in the developing market penetration in developing nations, and Apple seems set even if their entire executive board leaves (ok, I’m exaggerating a bit, but you get my point).
Slower growth on the long term? Maybe
Tim Cook fucking shit up because he’s “not Jobs”? Nah
Buffet: Doing it like J.P. Morgan
Tigers are beautiful animals: they intimidate their prey with their shout, they hook onto their prey with their claws, and kill their prey with their teeth. Bernanke is like a tiger without claws and teeth: he can still intimidate with his roar, but he has no tools left to really do some serious damage. His money-printing-claws are weaker because of a S&P downgrade, and his interest-rate-decreasing-teeth are nothing but gums (how do you get lower than 0?). And besides, Bernanke’s shout is not as intimidating anymore. QE3 rumors just aren’t enough to prop the market up.
Thank god the private rich man comes mend what government institutions can’t do. Buffet’s roar sends the failing BofA up to a high of 8.8 from the previous close of 6.99. Then, it’s about to sink it’s claws deep into BofA with it’s $5 billion dollars in cash. Finally (I hope), with it’s large stake and Buffet-power, it’s going to pressure BofA into making serious changes to prevent it’s collapse. Sort of starting to look like J.P. Morgan gathering bankers into his private mansion, and solving problems with his own money, no? Apart from the potential gains from this investment, I think Buffet also saw the disaster that will arise if BofA falls (Lehman 2.0?). Great save, Buffet. My hat comes off to you. Web gem on Bloomberg?
Young Bankers: PE is better
Recently, I read a Bloomberg article:
Makes me sad that people aren’t enjoying the current scenario. It’s the most exciting time to be working in finance. More on this in my next post.