Apple Ranked Number Two in BusinessWeek Study

Apple took the number two spot behind Amazon in BusinessWeek's annual InfoTech 100. The study ranks companies according to four criteria: return on equity, shareholder return and revenue growth, and weight-adjusted total revenues. Amazon claimed the top spot for the second year running, with RIM, Nintendo and Western Digital rounding out the top five spots. The study notes the growing absence of American innovators on the list, with US representation dropping from 43 to 33.

I have a little trouble with the inclusion of Amazon in this list. I guess one could argue that they do create gadgets, like the Kindle Wireless Reading Device. But their first business is online retail, not creating technology products. Therefore, in In my humble opinion, Apple tops this list.

The list is weighted entirely upon the aggregate scores of financial performance. It would be interesting to see the relative scoring used to rank the companies. Just how close was the race? And what would the list look like if it included innovative products? Apple would clearly top that list. Apple is number one in my book, but then I might be biased.

Shaw Wu, AmTech's Dr. Jekyll and Mr Hyde

Shaw Wu, an analyst with American Technology Research, has historically been one of the most bullish Apple analysts. That's why everyone was shocked when he had a reversal of character, and cut his rating from Buy to Hold and lowered his price target just before Apple reported their Q2 earnings on April 23rd. And he did this against a rising tide of optimism from other analysts. Now, just six weeks later, he's doing a 180 degree turnaround. He raised Apple stock to a Buy, and set a price target of $210 per share!

In a research note, Wu did his best song and dance to cover his schizophrenic prognostications by saying, [they] "overestimated the potential negative reaction on the quarter," adding that Apple will likely remain "extremely volatile despite being universally loved." Then he tossed some incoherent hypothesis that a "product vacuum" between now, and whenever Apple releases new product, might put a dent in sales.

So, then just to keep readers off balance, Wu reverted back from Mr. Hyde to Dr Jekyl and listed all the wonderful new products we can expect from Apple in the coming months. Like the 3G iPhone, expected to be announced in June, and "a radical redesign of [the] MacBook and MacBook Pro" laptops. He also pointed to the accelerating growth of Apple's PC market share. Then to make sure that his transformation was complete, Wu said he was confident that Apple would reach their 10 million iPhone goal by the end of the year.

We need analysts that analyze objectively, that report on fundamentals and facts, not what they see in a crystal ball. We don't need analysts that let their emotions rule their predictions, especially when they downgrade or upgrade a company. Stock holders must be able to rely on an analyst doing their job with professionalism and objectivity. Makes me wonder if Shaw Wu had one too many lunches with Toni Sacconaghi.

Is Microsoft Yahoo Serious?

Was there ever a time when Microsoft was a cool company? Cool isn't the right word, perhaps necessary or mainstream are better descriptors. Didn't Yahoo used to be cool? It was for a time, when they built their empire making it easy for average people to have their own web presence with a homepage. Yahoo seems to have lost that coolness factor, although they are trying to recapture it, and they don't need Microsoft to do it.

So, does an alliance between Microsoft, a "necessary" company, and Yahoo, a "used-to-be" company, make for a really cool company? Let's face it, Apple is cool incarnate, and Google is cool doing no evil. Certainly can't say that about Microsoft. Would an alliance between Apple and Google be cool? Duh! They're doing it now, and cleaning Microsoft's clock.

So, why did Microsoft walk away from their negotiations with Yahoo? From the reports, it seems Monkey Boy, Steve Balmer, thought the deal was too pricey. What's the price one must pay to obtain coolness? Apparently there's no price that can make this deal cool.

Remember the actor Yahoo Serious? He made a movie that developed a kind of cult following, called "Young Einstein." The movie was a really funny parody of Albert Einstein as a young man. Yahoo Serious knew how to portray Albert Einstein as cool. Now let me ask you, can the video below, in any way, put Microsoft back in the cool light? C'mon, seriously!

Hey Ben, Do the Right Thing

Ben and friends report on Wednesday whether or not they will continue cutting Federal Reserve rates. The buzz is, or at least the hope is, that the cutting will come to a stop. Most expect a 25 basis point cut, and a declaration from Ben that cutting may slow down or come to an end to keep inflation in check. Come on Ben, "Do the Right Thing!"



The thing about the market is, that it's all about meeting expectations. If the market doesn't get what it wants, then it will likely sell off. So, unless there's some grim and dark thing hiding in a dark recess, something only Ben sees, it's time to move from solving liquidity in the money supply and tend to curbing inflation.

Until the Fed reports on Wednesday (2:15 PM EST) expect big money to be taking it easy. This was evident in yesterday's low volume, and I expect that to be the case today as neither side is willing to take a stand. There's no sense in committing one way or the other until the near term becomes more clear. From a trader's perspective, this should be a time to reflect and not get too aggressive.

I observed recently that the big money seemed to be rotating sectors from commodities to financials, and that observation is becoming more clear each day. So gold and agriculture are feeling that shift, and the rising dollar should put pressure on oil to come down as well. If oil and the dollar continue this way, then we'll have a good chance to break through the down trend in a significant way, as I mentioned in a previous post.

What do you think the Fed should do?

Consumers Choosing Big Box Retailers to Curb Spending

A report from Toby Smith's ChangeWave website says that consumer spending on electronics like iPods, cameras, and such, will slow in the next 90 days, 3% less than this past February. Consumers are avoiding the typical places to buy stuff at places like JC Penny and Sears, and flocking instead to big discount stores like Costco and Walmart. Good thing iPods are sold there too!

It's interesting, this trend has been developing over the past year and a half. But Apple seems to be impervious to this as people are still packing their retail stores. And product is flying off the shelves.


I guess after visiting the warehouse dinginess of a Costco, or the "consumer friendliness" of a Walmart, you need a spiritual uplift, so why not go to your friendly neighborhood Apple Store. Don't get me wrong, my wife and I frequent both these establishments, and take advantage of the values they present, but there's truth in the characterizations.

Oh, and bring your tax rebate check.

-zach bass