In Case The Mainstream Media Didn't Get The Memo, I Crush The Apple Reality Distortion Field On CNBC

Reggie Middleton's picture


Yesterday I appeared on CNBC Street Signs, and dropped the truth about America's favorite over hyped company. Check it out...

One viewpoint that is prevalent is the ideology that Apple's problems are temporary and can be fixed with a smattering of pixie dust and fairy farts within the crumbling Apple RDF (reality distortion field). The pundit in the segment above stated that their are no signs of margin compression in the iPhone franchise because ASPs are level. Wait a minute dude! ASPs may be level but costs are increasing. Steady sales plus increasing costs mean lower margins right? I called this last year on TV. Reference...


The short call - October 2012, the month of Apple's all-time high and my call to subscribers to short the stock:  Deconstructing The Most Accurate Apple Analysis Ever Made - Share Price, Market Share, Strategy and All

This crux of that article was to debunk the widely assumed notion that I was bearish on Apple's share price for 2 years. The reality of the matter was that the paid research and opinion clearly supported much of Apple's share price until right about the last earnings report and release of the iPhone 5, until I notably went bearish and Apple promptly lost 35%, or about 4 Dells with a LinkedIn thrown in to boot...

apple stock and front month options apple stock and front month optionsapple stock and front month options

Notice how this chart shows subscription research would have provided ample profits LONG and short, with the long presumed to be unleverred as a straight stock purchase. This is to put to bed any naysayers. Now, as to whether my many proclamations over the last two years regarding Apple were able to hold water, we let the facts speak on the reasoning behind the call and the accuracy of my call in the deterioration of Apple's margins, market share and status.

Now, if you recall, there were many sell side analysts calling for Apple to break $1,000 per share just a few months ago. On Friday, 25 January 2013 I penned "What Sell Side Wall Street Doesn't Understand About Apple - It's Not The Leader Of The Post PC World!!!", and is excerpted as follows:

I was going to name this piece "Why Sell Side Wall Street and the Mainstream Media Can't Touch Me", but I decided to go the humble route :-) Do you guys remember those highly paid Wall Street analysts and popular MSM guys who had $1,000+ price targets on Apple just a few months ago? Let's reminisce, shall we...

Let's contrast this to what I have espoused over a similar time frame...
    1.  - This pretty much says it all, right Mr. Munster of Piper Jaffrey??? Yeah, I called you out on this one! Here is an excerpt for good measure, but before you read it remember that Apple's thrashing at the exchange has forced it to renounce its earnigns manipulating ways - just as I anticipated!!!

Well, let's see what's in today's news... Oh yeah!!! Apple cuts MacBook Pro Retina and Air prices, boosts specs 

Apple has slashed the price of its MacBook Pro with Retina display notebooks, throwing in some updated specifications along the way.

Hey, wait a minute! Didn't I say that in the CNBC segment yesterday, and all through last year? Subscribers can access my full Apple report and valuation here Apple 4Q2012 update professional & institutional and Apple 4Q2012 update - retail). Those of you who don't subscribe can review the dated, redacted version below...

Apple -Competition and Cost Structure - unlocked Page 01 Apple -Competition and Cost Structure - unlocked Page 01Apple -Competition and Cost Structure - unlocked Page 02 Apple -Competition and Cost Structure - unlocked Page 02Apple -Competition and Cost Structure - unlocked Page 03 copyApple -Competition and Cost Structure - unlocked Page 03 copyApple -Competition and Cost Structure - unlocked Page 04 copyApple -Competition and Cost Structure - unlocked Page 04 copyApple -Competition and Cost Structure - unlocked Page 05Apple -Competition and Cost Structure - unlocked Page 05Apple -Competition and Cost Structure - unlocked Page 07 copyApple -Competition and Cost Structure - unlocked Page 07 copyApple -Competition and Cost Structure - unlocked Page 08 copyApple -Competition and Cost Structure - unlocked Page 08 copyApple -Competition and Cost Structure - unlocked Page 09 copyApple -Competition and Cost Structure - unlocked Page 09 copyApple -Competition and Cost Structure - unlocked Page 10 copyApple -Competition and Cost Structure - unlocked Page 10 copyApple -Competition and Cost Structure - unlocked Page 11Apple -Competition and Cost Structure - unlocked Page 11
If after reading the articles and viewing the videos above and you believe that I'm the best thing since Wall Street brokerages were private partnerships that couldn't squander other peoples capital at insanely levered levels while misleading muppets with inanely bullshit analysis and sales pitches to 89% losses on their recommendations (reference Multiple Muppet Mashing Leaves Groupon Shareholders Holding The Bag After 89% Off IPO Coupon) just to get paid multi-million dollar bonuses instead of jail time, then feel free to subscribe here.

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Barbaric relic's picture

Don't understand posters belittling Reggie -- he and his team do their homework and so what if he comes off a bit arrogant and self-promotional -- he has a right to.  He has that quality I love about Americans -- he believes in himself and isn't afraid to put himself out there. 

boeing747's picture

Next apple will release iDrone controlled by iPhone6 thru bluetooth5.

Umh's picture

I can call'm if time is not a factor. Everyone with an IQ above an apple's should have known AAPL was way over valued. The tricky part is when does the house of cards fall down. If you want to play it safe you never but a ticker with a P/E of infinity. Those of us that take some chances may fuck around in stocks like AAPL, but we KNOW that sooner or later it rots.

ebworthen's picture

Those poor Apple faithful.

Steve Jobs is gone, which means the soul of Apple is as well.

Margin compression, competition, and the Copernicus of Cupertino has crossed the river Styx.

dreadnaught's picture

Not to mention that APPLE is bringing it's manufacturing back to the USA-built a mega-million$ plant in Virginia (?) nothing the Windows/Android/Kindle/Samsung/BB etc. can boast of-they are still made by that "suicide company" FOXCONN lol-and please dont whine and bitch that its "only assembly" (not true) stop whining about Apple and GROW A PAIR, men- it is a great start...Microsaur will continue to push for china made products, vaccines, population control and a one world government (via Billy boy and his foundation) -Wikipedia Foxconn; I see the Windows Fanbois refuse to admit that the world is round-to them the world is still flat.

billsykes's picture

Good for Reggie. MF'er needs to make a living. big deal. I think the real "war" will come with full on ID verification of every internet user both with google and DRM enabled browsers.

Google is leading this both with google+ and with that headset that will track and record everyone everywhere. You at the doctors office, go there too many times (elective or not) and the google glasses wearer tracks it send the info to your health care provider, and your employer.  Reggie can you come into my office? I hear you are going to the doctors a lot recently, is there anything the corporation should know about? OK, but just in case, we are going to take you off the Pearson account, till you "recuperate".  But my benefits will be.... not covered because I am part time. My penis reduction surgery is just routine.

Thanks google glasses for tracking everything I do- I don't even have to wear them. And thank you passport for bio metrically encoding my face.

alien-IQ's picture

Another Reggie Middleton infomercial brought to you by ZH and Reggie Middleton. Written by Reggie Middleton. Edited by Reggie Middleton. Researched by Reggie Middleton. Approved by Reggie Middleton. Congratulated by Reggie Middleton. Given a thumbs up by Reggie Middleton. If you want to know more about Reggie Middleton, just subscribe to Reggie Middleton and make all checks payable to Reggie Middleton. On behalf of Reggie Middleton, Reggie Middleton thanks you for loving Reggie Middleton. Sincerely, Reggie Middleton.

sessinpo's picture

Another sub par IQ poster that acknowledges that he is watching a commercial, then goes on to bitch about it.

WaEver's picture

Apple..... Sounds like that object that fell on newton s head! How can one make a living writing writing on that topic

SillySalesmanQuestion's picture

Reggie, can you ship a couple of helicopter loads of pixie dust and fairy farts to Ben Bernanke ...? He really could use some help.

John Law Lives's picture

"Oh, this 35% Apple correction, drop in margins, increase in competition and decrease in competitiveness of products is a temporary thing. Seriously!!! That Reggie guy shouldn't even be allowed on TV..."

How many times are you going to publicly applaud yourself re. this subject?  Is it working?

AnAnonymous's picture

If he does not that promotional job by himself, one can seriously doubt others will do.

LongSoupLine's picture

when 250 fucking hedge funds are piled in a stock like shit in the fucking colon of Marlon Brando, no analysis is fucking required.

Jack Sheet's picture

An intriguing analogy! Having just watched " The Score" again ( Brando' s last appearance) , you could be right.

davidsmith's picture

Yes,but Reggie is still optimistic that Apple can "fight back."  He's also bullish on Google.  That is, assuming the economy doesn't collapse.  But hey, the economy is collapsing.  Just come to the Bay Area.  It hit a wall in March, and is crumbling fast now.  Rest of the world doesn't know.  It does now!!!!!!!!!!!!!!

Umh's picture

Not enough lube in the world.

lasvegaspersona's picture


please use an editor

'their' is not 'there' (nor is it they're) are too smart to look semi-illiterate.

In the case above There is the word you are looking for 

Their is the possessive  it mean 'belongs to them'

English lesson over...

no need to down arrow me ...I know I'm a difficult person already

Umh's picture

The worst thing about it is that slows down people who read at a decent speed.

sessinpo's picture

It's not about being difficult. It's about wasting a post and out time.


As such I will give myself a down arrow for wasting my time explaining it to you.

lasvegaspersona's picture

Reggie wins with that 'data' thing. Analysis is boring but eventually is all that counts.

Freddie's picture

Why do people get down on Reggie?  TV and Hollywood are total shit.  I stopped watching them years ago but at least CNBC let's one decent person on.    Apple is a F Up corrupt company like GE, BAC, C, GS, Buffett, Nike, and the list goes on.  Reggie does his homework while the others just read Apple's PR statements.

CheapBastard's picture

When Barry finally gives out that $3,000 for 'Thingamajigs,' i still won't buy an iAnything.


I hope he doesn't break his promise.

centerline's picture

iPhone5 top was pretty much a slam dunk the moment it was clear that nothing innovative was on the horizon.  Apple now needed to invent anti-gravity or the perpetual motion machine (and in short order) to keep the ball rolling.

To further the point, retail (what little is in the market) was sold on Apple as the next best thing since sliced bread.  Convinced it was a $1200 stock.  lol.  Same as it ever was.

At this point, Apple is scrambling for new technology to get back the "edge" and maintain margins.  I agree with RM that margins are cooked.  The smartphone/touch-screen euphoria is over.  The Apple fad is fading.  Time for the stock to return to Earth like virtually every other tech stock before them.  I can smell the funds burning in the background already.  Ouch.

SmittyinLA's picture

given the latest Windows® iteration Apple can increase its margins, LOTS. 

Microsoft SUCKS, they're huge and they are Apple's feedlot. 

Apple will "drink their milkshake", Windows customers are free roadkill begging to spend 100% more on anything other than a Windows POS 

NotApplicable's picture

Nobody cares about either from a desktop perspective, cuz it's dead. Whoever makes the best browser across all platforms will win the next round. (as opposed to ALL of the shitty browsers on my android tablet, or my iTouch that try and fail to emulate a desktop).

It will be interesting to see how much market penetration the Google spy-books can get as more orgs look at cutting IT overhead.

Then again, advertising is killing the whole medium anyway. ZH is unusable on any mobile device these days. I installed Ad-block on my tablet, but google obviously doesn't like proxy servers stealing control away from its "services."

Jack Sheet's picture

What really pisses me off on ZH are the popups on my android phone. They do not respond to the close tab. And windows 8 is a huge piece of dogshit on any device.

tango's picture

I notice no one castigating the tylers for drowning us in ads   My incredible IMAC works just fine with these ads!   LOL   Folks here may hate Apple (because one of the tylers hates Apple - oh well) but I like their products.  They're efficient, easy to use, platform sharing and great looking.  Apple's problem (as Reggies has pointed out numerous times) is the Google jugernaut that appears unstoppable. Their forays into cars, glasses and other non-IT markets is probably only a foretaste.  With their revenues they can undertake r&D on a massive scale, something Apple can''t/won't do.  

silverserfer's picture

Reggie, One day, not today but someday, your insight will will match that of who we regard as the "Oracle of Zerohedge".. Graham Summers.  

Jack Sheet's picture

Graham Summers is a program like tne "train man" in the Matrix part 3.

Careless Whisper's picture

Excellent Apple analysis. 

Any thoughts on BBRY ? They have cash, no debt, and are the preferred choice in Central and South America because the rates are the lowest of any smart phones. Can the banana republics bring Blackberry back from the dead? 

Any opinions?


hannah's picture

sorry but i thought i was watching a black stuttering john.....

jimijon's picture

I called a little retracement to fill the gap... it did. My timing was accurate.

Now on to Reggie and his Apple bashing... so Apple took a big dive after a major bull runup via momentum.

Not hard to predict... but timing is everything and Reggie has been saying it would come for almost three years. Well now Apple is between cycles and yes margins are pushed a bit... but compared to whom? There is still a lot of excitement in the pipeline and iOS keeps moving on and Android is still a big pain in the ass to develop.

How about an expose on Samsun Reggie? What is their next big thing?

boogerbently's picture


The FB of tech hardware.

billsykes's picture

What about if apple used their huge offshore capital to fund R&D, preventing margin depression and getting investors off their backs by using the cash in an offshore R&D department?

SoundMoney45's picture

Reggie, I think the take away from the Apple stock manipulation, is that no company is too big or too high profile to be manipulated for a profit. So long as one is on the inside, it is free money with zero risk.  I pitty the muppets who are now wondering what happened.

NotApplicable's picture

Not to mention their equally clueless fund managers who kept buying this shit.

Funny how Boomer pensions are supported by college kids going into debt to buy iCrap.

Meanwhile, the college town folks live in a fairy tale world.

Umh's picture

The unemployed aren't supporting anybody!

Freddie's picture

+1 million to Not Applicable

college towns and kids going into life time debt slavery for education/iGadgets are being Sanduskied by their parents and the universities.

Boomers, seniors and other evil idiots who voted for Dorner's daddy the Drone killer f***k-ed-ed their lives and the lives of others.

Idiots keep buying Apple or Amazon.  Unreal.

centerline's picture

Well, they certainly can't expect decent paying jobs in order to start families and buy the boomers McMansions so the boomers can go condo in Florida.  Or relieve boomer stock market investments with a "buy and hold" (nearly threw up writting those words) strategy the same as the boomers were sold.

Bagholder nation.  Apparently he who has the biggest bag wins!

Aegelis's picture

Oops, clicked on this thinking it was about produce commodity.  Glad to hear the fruit is safe.

bank guy in Brussels's picture

Oh no ... Reggie on Apple again ...


Cast Iron Skillet's picture

Reggie, I think you did a good job. Thanks for posting here.

derek_vineyard's picture

and i scored 55 in a summer league high school game!   never been so hot...hit everything...didn't pass i was so hot (and no coach there to take me out.....the players self coached so i stayed in entire game.....defense was lax, it was summer league).  in a 2 on 1 i didn't pass for the lay up and took a jumper (which i made).  doesn't it just irritate you when i self promote???

Simit Patel's picture

at first i was annoyed by reggie's arrogant self-promotion on correctly assessing what any remotely competent contrarian could have done without wasting time on all the margin research, but now i find it amusing......any investor who brags so much after making one right call is obviously too inexperienced to know what it's like to be wrong.....ahh, what a joy it is to be young!