Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

August 28, 2012 Update  -- When Apple wins, it loses

The results of the litigation between Apple and Samung were announced at the end of last week and Apple appears to have won much of what it was looking for.  But, the battles are not likely over.  Bloomberg had a very nice interview with the foreman (see video) and it might be grounds for appeal as it sounded like the foreman was providing evidence to defend Apple - hmmmm -- not sure whether that crosses the line as that is usually the job of the lawyers. As other jurors start talking about their experience, it might provide more fodder for Samsung.

As noted in our first article this year on April 24th, 2012 (located below), there is a substantial amount of litigation being shown in the configurations for Apple. It's not over yet, not by a long short. While it appears Apple has won, there is likely enough for Samsung to get an appeal and while both are fighting it out in court which can take years, other companies will leapfrog ahead in innovative technology.

It's worthwhile to mention that a particular astrological configuration occurs every 28 to 30 years and Apple is approaching that cycle anew.  Looking back at the 1985 period for Apple, it was a trying period - Steve Jobs had been fired and Apple was moving their products in a direction incompatible with the players in the rest of the market (one player being Microsoft). Apple had the edge back in the early 80s only to lose it and finally regained it earlier in this decade.  One notable difference between the current time and the period back in the 80s is that this time there is a substantial amount of patent litigation which may further impede their forward progress. 

We've revised some algorithms for the graphs and are providing the new versions of both the Apple 2012 Risk/Yield and the APPL 2012 Delta Core/Transient for this article.


Update 7/10/2012 Apple (APPL) - Apple's earnings are due later this month and this could be the reason that the stock price has been making some significant price moves over the last week or so.  Looking at the AAPL Delta Core/Transient 2012 graph posted earlier this year in 4/24/2012, it's evident that the momentum into risk stabilized the middle of May 2012 and as risk factors decreased and yield factors increased, equilibrium (0) was reached near the end of June 2012. 

Moving forward, the graph is depicting a peak in yield occurring in July - could be before or after earnings as the data points are taken twice a month - on the 1st and 15th of a month.  Note, the peak is not a very high peak as it does not reach 400.  There is a 500 point differential between the May low point in risk and the July high point in yield but, this would have required trading when the data factors are in risk.

After the peak which occurs this month, the momentum moves into risk again.  Later this year, core moves back into yield.  The USA economy also picks up later this year (see home page for graph) and that would "lift" this stock as well as all other stocks.   The global graph (see here), also has indications of stabilization and movement into yield in the months ahead and this would also likely pick this stock up.  To recap, the AAPL Delta Core/Transient 2012 graph shows that both the core and transient peak in July and both move into risk by the middle of August.  This could indicate that earnings did not live up to expectations or that the run-up in the stock price prior to the announcement leaves little room for additional significant price increases.    

April 24, 2012  -- Apple Risk/Yield for 2012

Apple's earnings due to be announced tonight should be quite interesting as a number of people appearing on the financial shows are now questioning whether it can live up to the expectations. On the other hand, many analysts still have targets well beyond the current price. 

While the astrological patterns for Apple are still intriguing, there are a notable number of negative configurations that could cause distress for the current earnings period.  So even if Apple beats, maybe the "bloom is off the rose".

The Apple Delta Core/Transient 2012 graph shows that the long term (black) trend is mostly in the "risk" area  (which is below 0) for the year but, does move slightly into "yield" in July of 2012.  While this company has performed well, it's stock price does not seem to reflect the potential (discussed in Apple 2011) of this company even though it has had a tremendous increase in products sold over the past few years.  Last year and maybe back a few more years, most of this concern was likely due to the uncertainty of Steve Jobs's illness and whether he would have the potential to move the company forward. The uncertainty then (and maybe even now) with this company seems to be keeping the stock price depressed in relation to the innovative products that it was and is creating. 

Only recently has this company's stock price started a parabolic movement upwards which coincided with the change in leadership bringing some stability and a "known element".  It's worthwhile to imagine where other company's stock prices might have climbed to had they had this same product line and innovation .... could it be said that Apple is being held to a different standard ? If so, I consider that "risky" for an investment.

Without even looking at astrological patterns, it's easy to see that Apple will be facing more competitors and the current vendors wanting better terms  - all this might bring profits down but, could be counterbalanced to some point by increased sales in other countries notably, China.

There's also the troublesome aspect of all the litigation that this company has found itself in the middle of .....

           Apple (AAPL) Delta Core/Transient 2012 graph

      Apple (AAPL) Risk/Yield 2012 graph

Disclosure as of 4/24/2012 - Apple (AAPL) is not part of our portfolio at this time.