In the past, writers who discussed stocks and other financial instruments would disclose any and all of their and their employer's interests in those instruments. That way their readers would know if the writer might stand to gain from their reporting. Today, writers almost never reveal their or their employer's positions when blogging or reporting on stocks. I think this issue needs to be addressed. Here are some examples of why it's so important for a writer to disclose their positions. If I wrote a blog and said "everyone should buy Apple (APPL) stock because I have analyzed x, y and z and it's going to explode!," I would also need to tell people that I owned APPL stock. That way, readers would know that I would stand to gain from any increase in the stock's price as a result of my article. Knowing this might help the reader to make better decisions on what actions they might want to take after reading the article. It's also important for a writer to reveal that they do NOT own a stock that they mention in their writing. For example, if I said "whoa, Alibaba (BABA) is about to tank today" and revealed that I didn't own any shares or interests in that stock, then you would be more likely to consider whether or not I might have written that article to get shares to drop temporarily (as history has shown they would often do) so that I could buy into those shares for a profit of my own. On the other hand, in the above example, if I disclosed that I DO own shares or interests in BABA, it would be less likely that my opinions or reporting would lead to my personal gain. Of course, assuming that the writer is being honest about their positions in all of the above cases. I would recommend that all writers include whether or not they or their employer's hold positions in any of the stocks or funds they mention in their writing. It will give you more credibility and increase your value as a writer and reporter. That is good for you, and it is good for your readers who will trust your reporting more and keep coming back to you for information. What do you think? Let me know in the comments section. … [Read more...]
Why Apple Stock Fell This Morning
Just a brief note on this topic. I just read an article by the "Wall Street Journal" stating that multiple analysts had no idea why Apple (AAPL) stock fell this morning. Well, maybe they don't read the papers. Last night it was widely reported that orders for Google's (GOOGL) Chromebook surpassed those for Apple's iPad in classrooms across the USA. This is a major hit to Apple which could amount to over a hundred million dollars in lost income, in this season alone (estimated). That might be why the stock fell this morning. This decision is also a sign that Google products are replacing Apple and that Apple may not have the forward momentum in computing products that people were hoping for or expecting. The iMac and other computing products have had slow and small increases in market share over the last few years, and investors were likely hoping for a more solid increase in this segment of Apple's business. This signals that that may not be the case. The tides are constantly changing in business, especially in an area with as many competitors as the personal portable tablet market. Other factors, China's economy is in question, a major world market. If they tumble into recession like the US did, it would impact Apple's (and others') sales for a long period of time, decreasing projections significantly. Another article last night suggested (and I agree) that the central bank of China's recent rate-lowering (as well as their reported injection of money into the banking system) point to serious economic instability, or the immediate concern of such, which these actions are meant to delay or prevent from becoming a reality. The Chinese government was reported to estimate their GDP around 7.2-7.5%, but the article stated that these actions would not likely be necessary unless the GDP was closer to 2.2%. These concerns impact Apple's potential sales and income now and into the future. In addition, other factors impact share prices. Apple has risen approximately 20% over the last 5-6 weeks. Why is a pullback surprising at this time, in light of this and other news? Our own (US) economy is due for a change once the Federal Reserve begins to raise interest rates, expected to come early to mid-next year. The entire stock market will be impacted when this occurs, I suspect. Increases of a percent a day, many days of the week, over years, with regular pullbacks, is not a normal market in and of itself. As they say on "Big Brother," "Expect the Unexpected." Or in this case, expect the expected. ---------------------- The writer has no positions in any of the companies mentioned. … [Read more...]
Outlier Analysis 