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Howdy y’all, and welcome back to the rodeo, where the bulls buck hard and only the best of the best can hold on til the buzzer.
Our second largest position on the short side of my personal ledger and as outlined here in Revolution Investing, Dollar General DG -0.08% , reported another round of dismal earnings and outlook and it’s down to the lowest levels its been since we stepped in with our short. Our third largest short position, Dollar Tree, is down in sympathy. I’m going to cover about a fifth of my DG short to lock in some of these profits.
Apple’s AAPL -0.64% up big, though we’ve seen that before lately, haven’t we? I’m not selling any of my Apple yet, which remains my largest position. As I repeatedly outlined last week, now that the xMas iPad/iPhone selling season is here, we’ll need to see analysts raising their numbers for each into year-end. And today we’re seeing several reports of raised estimates for iPhone 5 sales this quarter (JP Morgan even upped their estimates for iPhone 5 sales this quarter from their prior guess by nearly 15%). More supply of the iPhone is hitting and that’s enabling supply to meet demand and that demand for both the iPhone 5 and the iPad Mini is likely quite a bit stronger than the analysts expected.
On a similar note, please do give me your feedback on the Microsoft’s MSFT +0.09% Windows 8 and whether you’ve tried it and/or whether you’re going to get a new smartphone, tablet or PC and what kind you’ll be getting next. Here’s some great feedback from my column discussing my pessimism about the Windows 8 reception yesterday:
Hello Cody,First off I would like to say thank you for your work. Although I am not a subscriber I constantly read your various posts on Marketwatch and I must say that following your playbook and your simpliest of advice has allowed me to learn the basics of trading much better than any other columns I have read, technical analysis, indexes of financial terms, etc.I have only been investing seriously for about a couple of years, my first being very painful. This yesr however as I have followed your basic strategies I have been able to realize some nice gains, most notably with AAPL, FIO, and T.I have not yet mustered up the nerve to venture into shorting stocks or options trading and that is something I looked forward to doing in the coming year as I grow my portfolio. I also look forward to becoming a subscriber of yours in the near future; as my current portfolio stands I don’t believe I can justify the expense, but I believe I will able to soon.On a second note in response to your post about “Trading Ideas for xMas”, I agree with your sentiment regarding Microsoft and the Windows 8 reception. I am a Design Engineer w/ PNY Tech in NJ and I have been working with the OS since the early fall before it was released (even though i typically design hardware) and I find it painfully obnoxious.It appears to me that Microsoft essentially smashed Windows Phone and Windows 7 together without any particular amount of effort, strategy, or grace. It feels very eerily similar to those terrible “in between” versions of Windows in the past like Vista or 2000. It seems as though Win 8 is a rough beta of Windows 9 much the way I feel Vista was essentially a Win 7 Beta for public use (or torture).I think this will drive people towards apple desktops at least those unlike myself who are unwilling to stick with win 7 until something better or until Microsoft pulls the support plug.Again thank you for your hard work and research and for sharing that with the public. I look forward to reading many more of your posts and subscribing to your site in the very near future.Best Regards,Ty
Is Windows 8 actually helping drive incremental new sales of Macs and/or iPads and/or Androids? Tell me your thoughts in the comments below or email me at [email protected] and I’ll publish a column with analysis from your input.
Speaking of rallies, tech in general is on fire this morning (knock on wood) and I’m also looking to sell about a tenth of my Sandisk SNDK +0.02% call options that I was buying before the break out as outlined in this post:
I’m also buying some Sandisk April calls with $40 or so strike prices. Just a tranche buy while it’s down and per my write up on flash in the smartphone/tablet world.
Sandisk did indeed break out and is up about 10% in a straight line since I wrote this the next day:
Sandisk is looking like it could try to break out next.
Easy does it, following the playbook. Scale into the best revolutionary stocks on weakness and trim on big rallies. At least while we remain in bull market mode.
Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com, which is not affiliated with MarketWatch. At time of publication, Cody was net long Apple, Sandisk, Google and long Microsoft calls and puts and net short Dollar General and Dollar Tree. Follow Cody on Twitter at twitter.com/codywillard.
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