Yesterday, we discussed the earnings and "risk aversion" of Goldman Sachs. Today, we move to the tech sector... Specifically, tech darling Apple...
Apple's quarterly earnings more than doubled to $7.31 billion, up from $3.25 billion last year. Revenue jumped 82% to $28.57 billion. And gross margins improved to 41.7% from 39.1% a year ago. Plus, the company booked its strongest iPhone and iPad sales in history. Shares increased more than 3% to $390.
Apple sold 20.3 million iPhones, compared with expectations for 17 million-18 million. (The company added 42 new carriers and 15 new countries during the quarter.) Last year, Apple sold 8.4 million iPhones. And Apple sold 9.25 million iPads, up from 3.3 million a year ago – or "every iPad we could make," according to finance chief Peter Oppenheimer.
The highest growth in sales came from Asia Pacific – the biggest portion being China. Revenues there more than doubled to $6.3 billion. And Chief Operating Officer Tim Cook said revenues from Greater China (including Hong Kong and Taiwan) increased more than six times to around $3.8 billion... "I firmly believe that we are just scratching the surface," Cook said. "There is an incredible opportunity for Apple there."
Following the blowout earnings announcement, the financial talking heads are calling for Apple shares to hit $500 and even higher. Nearly everyone is bullish on the company...
... Except for one highly respected fund manager – the legendary Jim Rogers. The billionaire commodity bull believes Apple is expensive. And he's shorting the technology sector right now.
How do we know? Jim recently sat down for an interview on the S&A Investor Podcast – our weekly Internet radio show hosted by our own Frank Curzio. It's one of the most widely listened-to financial podcasts on iTunes. Frank interviews some of the top analysts, hedge-fund managers, and economists on Wall Street every Wednesday.
This week, Jim explains why he is long the dollar (yes, he's long the dollar) and why he recently added to his gold position despite the record high prices. He calls for the resignation of Fed Chairman Ben Bernanke and Treasury secretary Tim Geithner – and also talks about investing in one of the most unstable countries in the world. Jim's interviews are always entertaining... You certainly don't want to miss this one. You can listen to this interview – for free – by clicking here.
After getting whacked yesterday and sinking even further today, gold bounced back to nearly $1,600 (from an intraday low of $1,582) on no significant news.
The reason seems to be the bullish call from John Taylor, the manager of the world's largest currency hedge fund. Taylor, who oversees $8 billion at FX Concepts, predicted gold would hit $1,900 by October. He also said the Aussie dollar and Canadian "loonie" would rally as the European debt crisis eases.
But Taylor doesn't think the good times will last for gold... He says the metal will retreat to $1,100 as the world slips into yet another recession, which he believes will be worse than 2008 as the U.S. is running out of tools to combat a slowdown. Taylor also reiterated his call for a European slowdown, saying the euro will drop to $1.15 and potentially hit parity with the dollar next year. You can watch the full Bloomberg interview here.
You may recall resource guru Eric Sprott's call that the world is running out of silver. The commodities bull holds 70%-80% of his fund in gold and silver. And he's doing his part every day to fulfill his scarcity prediction.
The Sprott Physical Gold Trust (PHYS), a trust that holds gold bullion, today announced the completion of an offering for 19 million units at $14 per unit – total proceeds of $266 million. That means Sprott is taking another $266 million of gold bullion off the market.
Signs of a top... Another big tech IPO... Shares of real-estate website Zillow started trading today under the ticker "Z." Shares debuted at $20, up from the $12-$16 range planned last week. They immediately tripled to $60 and have since retreated to $35 – a 75% increase from the initial public offering (IPO) price. Memories of 1999 abound...
And here's a bonus "IPO we'd avoid"... Shares of headphone company Skullcandy IPO'd today. The company raised nearly $190 million in the debut. The company priced the offering at $20, above an estimated range of $17-$19 per share. And it increased the size of the offering from 8.5 million to 9.4 million shares.
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New 52-week highs (as of 7/19/11): V.F. Corp (VFC), Coca-Cola (KO), WD-40 (WDFC), CARBO Ceramics (CRR), EV Energy Partners (EVEP).
In today's mailbag, another satisfied customer. We'd love to hear about some of your greatest trades this year. Send feedback to feedback@stansberryresearch.com.
"I first bought Petrohawk at Porter's recommendation. I bought low enough that I never stopped out. I didn't learn about the buyout until I checked my portfolio after market close that day and noticed the share price surge. The next day I sold half of my position for a 92% profit. I'll let the rest ride for a while to see how it does.
"I started out slow following the advice of the Private Wealth Alliance editors. Having lost about 40% of our retirement funds in mutual funds in 2008 I wanted to be careful to make sure I understood what I was doing. I opened a brokerage account and bought my first stock the last day of March 2010, but I didn't actually use the majority of our retirement funds to buy stocks based on your recommendations until the middle of June 2010.
"About the same time I also began following your advice about buying physical gold and silver. So, in just a little over a year, our gains in stocks and precious metals have grown our portfolio beyond what we Iost in 2008. The education, advice, and recommendations all of you provide has made this possible. Please accept my profound thanks." – Paid-up subscriber Ricky Van Massey
Regards,
Sean Goldsmith
Baltimore, Maryland
July 20, 2011
Apple's huge numbers... We sit down with Jim Rogers... The reason behind gold's rally... Sprott buying more gold... Another tech IPO... China warns the U.S. on the debt ceiling...