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Gundlach Is Not A Fan Of Socialism, Thinks Apple Is "Over-Bought"

Tyler Durden's picture




 

After last week's presentation, DoubleLine's Jeff Gundlach (having rotated his spec play from Long Nattie, Short AAPL - which was a winner - to Long SHCOMP, Short SPX) committed the cardinal sin in a great interview this morning with CNBC's Gary Kaminsky. The apocryphal 'new' bond guru noted that he is against big government, doesn't like risk assets at these levels, believes QE will end in higher rates (adding that he would not be surprised to see 10Y yields 100bps higher by the end of the year), but most abhorrently: "the obsession with Apple is a truly remarkable social phenomenon - the stock is over-believed and over-bought. There is NO exit for the Fed, QE3 will be ineffective, and it is more likely that the Fed buys all the Treasury bonds that exist." Two must-see clips covering why buy-and-hold is completely dead thanks to government intervention to his preference for secured credit funds (where have we heard that before?) to the huge risks in buying financial stocks and the vulnerability of risk-assets - as the world realizes the circular financing reality of Europe.

 

A lot of truthiness in these interviews and for once a CNBC host who is not trying to drag the conversation back to 'yeah, but which stock would you buy...'

Part 1... Treasuries, Volcker, Big Government, and Apple...

 

Part 2... Bonds, QE, and Banks...

 

FYI - AAPL vs Nattie post-recommendation.. has had its big moments...

 

 

 

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Wed, 09/19/2012 - 12:37 | 2811557 Precious
Precious's picture

APPL = ETF = APPL = ETF = APPLE = ETF ~

Up and up, round and round it goes, to infinity.

All a company has to do anymore is get listed in the primary ETFs for the sector.  After that, automatic daily up with the funds.

Wed, 09/19/2012 - 12:38 | 2811572 TruthInSunshine
TruthInSunshine's picture

The Bernank will use all of his resources and tools to prop up Apple. It is 20% of the Naz on a weighted basis. Allowing Apple to fall 15% would be the equivalent of letting 50 Lehman's fail, and we can't tolerate such events in the new, better-er, centrally planned, non-free market & completely pre-ordained economy.

Wed, 09/19/2012 - 12:39 | 2811582 fonzannoon
fonzannoon's picture

It ain't just apple. It's stocks in general. If the Bernak can convince everyone there is no need to own gold because gold can't even keep up with the indexes then he will keep this bubble blowing to infinity.

Wed, 09/19/2012 - 12:51 | 2811628 TruthInSunshine
TruthInSunshine's picture

Lord Krugman has written his latest missive whereby he again endorses the wisdom of reflating the equity bubble, despite his past denials that he ever advocated for Greenspan's inflating the housing bubble in 2002.

That's sooooooooooo Krugman.

 

....printing fiat, inflating bubbles & pretending it's economic growth, for the common good...

Hating on Ben Bernanke, by Paul Krugman, Commentary, NY Times

 

 

"...stocks will rise, increasing wealth, and the dollar will fall, making U.S. exports more competitive"

 

Bubbles, bubbles, that's his thing, K-R-U-G-M-A-N.

 

But hey, it worked in Japan:

http://www.ritholtz.com/blog/wp-content/uploads/2009/06/nikkei-225.png

 

Wed, 09/19/2012 - 13:01 | 2811689 GetZeeGold
GetZeeGold's picture

 

 

An AAPL a day.....keeps the Krugman away.

Wed, 09/19/2012 - 13:35 | 2811836 Nothing To See Here
Nothing To See Here's picture

If the Federal government can force you to buy health insurance for your own good, they surely can force you to buy iPhones for your own good AND that of your country.

Wed, 09/19/2012 - 13:37 | 2811850 Nothing To See Here
Nothing To See Here's picture

Paul Krugman = columns of mass destruction

Wed, 09/19/2012 - 14:23 | 2812092 Manthong
Manthong's picture

 

03:55

“I don’t like to see the markets being so grossly manipulated”

“As my friend Jim Grant says: “We’re living in a hall of mirrors””.

 “You really don’t know what investors think because the price discovery is being destroyed by government intervention"

“I don’t like what the Fed is doing”

Well, that just about says it all.

Wed, 09/19/2012 - 14:26 | 2812116 Nothing To See Here
Nothing To See Here's picture

Those are the best segments. But what makes it more interesting is the reaction from the CNBC talking head...

Gundlach : "I don't like to see the markets being so grossly manipulated by the government"

Talking head : "Duly noted. So, what do you propose the government do to fix this?"

Gundlach : "Didnt you ear what I said?"

Talking head : "Well yes of course. Now to my more important question, how can the government intervene to save the markets and the economy?"

Wed, 09/19/2012 - 14:52 | 2812263 Chump
Chump's picture

Did that exchange really happen?  Can't watch the vids ATM, so did that really happen?  If that really happened I need to call my doctor immediately to increase my valium dosage, so please respond forthwith.

Wed, 09/19/2012 - 15:23 | 2812421 Nothing To See Here
Nothing To See Here's picture

Calm down buddy. Did not happen exactly like that. Just gives an idea of the mood...

Wed, 09/19/2012 - 15:37 | 2812502 Chump
Chump's picture

Oh I'm calm/venting.

Wed, 09/19/2012 - 13:48 | 2811892 Debtonation
Debtonation's picture

Maybe we'll export all our food, since that's one of the most valuable things the US produces.  We could export so much we won't have anything to eat, but who cares, we'll all be rich!

Wed, 09/19/2012 - 12:40 | 2811589 redpill
redpill's picture

AAPL is like a bright shiny yellow piece of corn in a steaming pile of shit.  No one knows how it made it through the digestive process and it makes you want to vomit looking at it, but somehow it's still there.

Wed, 09/19/2012 - 12:59 | 2811681 Fredo Corleone
Fredo Corleone's picture

Indeed, the hourly rate earned by those in the employ of Apple's PRC manufacturing facilities is likely equivalent ( in dollar terms ) to the price of a can of Niblets.

Wed, 09/19/2012 - 13:25 | 2811765 redpill
redpill's picture

Which is why Apple has gone out of their way to cut down on the suicides; funeral expenses are out of control!  Much cheaper to just continue paying them pittance to make electronic goodies that somehow they've managed to convince legions of trendy metrosexuals that they absolutely must purchase, using their TBTF bank credit card no less, so they can sit at Starbucks and tweet to their platonic girlfriend about how horrendous the beading was on that one dress on Project Runway.

 

Wed, 09/19/2012 - 12:42 | 2811595 ChubbNut
ChubbNut's picture

Dude....just listen to yourself...

Wed, 09/19/2012 - 13:03 | 2811701 resurger
resurger's picture

TIS: AAPL will end up on the Fed's balancesheet 100%

Wed, 09/19/2012 - 13:14 | 2811752 TruthInSunshine
TruthInSunshine's picture

Not 100%, but your point remains--

 

Israel [Central Bank] to begin buying shares of AAPL
Wed, 09/19/2012 - 13:09 | 2811733 whatsinaname
whatsinaname's picture

So if (as I believe) the BOJ has been doing the equivalent of QE for 15-20 years then is the BOJ almost the owner of the entire Japanese bond market ? Anybody know if this is true ?

Wed, 09/19/2012 - 18:15 | 2813109 Doublescythe
Doublescythe's picture

If you are short or underinvested $AAPL, there is one simple word for you - STUPID.

This company nets $1B in free cash flow almost EVERY day.

Short at your own peril.

Wed, 09/19/2012 - 12:38 | 2811574 fonzannoon
fonzannoon's picture

I liked how he said the fed has no exit strategy. They will end up owning 100% of treasury bonds. His recommendation based on that was obviously gol......cambells soup?

Wed, 09/19/2012 - 12:42 | 2811592 Precious
Precious's picture

The Fed will own 100% of nothing.

Wed, 09/19/2012 - 12:53 | 2811651 ParkAveFlasher
ParkAveFlasher's picture

The Fed will own the taxes that anchor the bonds, the means of tax collection, and a billion dum dums to secure said taxes.

Wed, 09/19/2012 - 19:50 | 2813360 Law97
Law97's picture

100% of treasury bonds will eventually amount to 100% of nothing.

Wed, 09/19/2012 - 12:56 | 2811667 Dr. Engali
Dr. Engali's picture

I have shelves and shelves of Cambells soup in my basement....does that count?

Wed, 09/19/2012 - 13:55 | 2811932 silverserfer
silverserfer's picture

that expired in 2006?

Wed, 09/19/2012 - 12:38 | 2811575 Cognitive Dissonance
Cognitive Dissonance's picture

Just remember.............over-bought can most certainly become even more over-bought long before it becomes over-sold.

Wed, 09/19/2012 - 13:02 | 2811695 Dr. Engali
Dr. Engali's picture

I agree with you there. The problam with Apple is they generate a ton of cash and they don't have a huge multiple. Having said that if they don't do something beyond adding an extra row of icons soon that cash generation advantadge might could slip through their fingers.

Wed, 09/19/2012 - 13:55 | 2811933 gmrpeabody
gmrpeabody's picture

The halls of ZH are littered with the bodies of those who were absolutely SURE the crash was here and now.

Wed, 09/19/2012 - 14:26 | 2812114 Manthong
Manthong's picture

 “become even more over-bought”

You mean “ become more over-boughter”.?

Wed, 09/19/2012 - 22:54 | 2813753 butchee
butchee's picture

I think you mean even more-er overboughter-est

Wed, 09/19/2012 - 15:34 | 2812486 Hedgetard55
Hedgetard55's picture

Priced in gold it HAS CRASHED. Priced in nominal (meaningless) dollars, it is flat since 1999.

Wed, 09/19/2012 - 14:57 | 2812300 Nobody For President
Nobody For President's picture

Exactly Dr. E.  Apple right now reminds me of Microsoft in the 80's - riding higher than hell with unstopable products and marketing. 

But the iPhone 5 is just a follow-on product - maybe a very good one very well marketed, but what is coming down the pike in Apple that is the next iPod, iPad, iPhone iWhatever that once again creates and then owns an entire new market segment?

But they can coast a long, long way on the current momentum - I would not short that beast just yet.

Wed, 09/19/2012 - 12:41 | 2811583 slaughterer
slaughterer's picture

At the rate the FED is currently monetizing, Wall Street can afford to push AAPL up $3/day if it wants.   True, AAPL is an "obsession", but I would not contemplate a short AAPL except on some QQQ rebalancing news (could come soon), poor iPhone5 initial sales (also could come), or a dud product release (cough, mini iPad, cough).  

Wed, 09/19/2012 - 13:07 | 2811723 fuu
fuu's picture

http://venturebeat.com/2012/09/15/hardware-is-dead/

"If this were a movie, the lights would have dimmed and all the activity in the room frozen. 300 renminbi is US $ 45. And that was the initial offer price given to a bewildered foreigner in China, no haggling. I felt a literal shock.

I bought the device and did some more research. This was a 7-inch tablet, Wi-Fi only with all the attributes of a good tablet. Capacitive touchscreen. Snappy processor. Front facing camera. 4GB of internal memory and an expandable memory slot.

I later found out that these devices are now all over the supply chain in Shenzhen. At volume, say 20,000 units, you can get them for $35 apiece. My device ran full Android 4.0 Ice Cream Sandwich and had access to the full Google API, including Gmail, Maps, YouTube and Google Play (not quite sure how that works either)."

Wed, 09/19/2012 - 14:36 | 2812152 Manthong
Manthong's picture

wow

“Who made it?.” My stock answer is “Who cares?”

Wed, 09/19/2012 - 15:57 | 2812605 fuu
fuu's picture

Yep.

Wed, 09/19/2012 - 12:40 | 2811587 ceedub
ceedub's picture

BIG GOVERNMENT IS BIG CORPORATIONS

50% MORE HANDOUTS ARE GIVEN TO CORPORATIONS THAN PEOPLE

Wed, 09/19/2012 - 12:43 | 2811601 ChubbNut
ChubbNut's picture

Cool....thanks for your worthless comment.

Wed, 09/19/2012 - 15:13 | 2812379 Chump
Chump's picture

The Dude does not abide your groundless assholeishness.

Wed, 09/19/2012 - 12:41 | 2811590 Duke of Con Dao
Duke of Con Dao's picture

that Romney camp is full of dumb jackasses... his team called the Dream Team by Brooks of the Times back in Jan. 2012

doesn't look so dreamy now... 

the minute I heard Obama's 'You didn't build that' speech I had a mash-up out the door within 24 hours....

YouTube - "Howard Roark, You Didn't Build That!" says President Obama

...

nothing against William Bonzai but this is much harder to do compared to a Photoshop 45 minute whack-up!

Wed, 09/19/2012 - 12:50 | 2811637 Inthemix96
Inthemix96's picture

Duke of con dao,

Sorry mate, the first of these thousand plus videos you posted was mildly chucklable.

Now they havent been funny since.  Fuck off mate, you are doing everyones head in.  And I mean that in a nice way mind, get something better to do.

Wed, 09/19/2012 - 12:43 | 2811604 slaughterer
slaughterer's picture

OT: will Kass and Bidermann still remain short after the S&P 500 crosses 1500 on Friday?  

Wed, 09/19/2012 - 12:48 | 2811629 Deep79
Deep79's picture

why by friday?

 

 

Wed, 09/19/2012 - 12:55 | 2811660 tu-ne-cede-malis
tu-ne-cede-malis's picture

Option expiration perhaps?

Wed, 09/19/2012 - 12:43 | 2811605 RobinHood73
RobinHood73's picture

CNBC HUMPS AAPL Every 30 seconds. Curious who pays for the CNBC advertising shortfall? Of course it is overbought. It is total brainwashing hype. If they sell 200 million iphone its worth like 80 bucks a share in NPV. The shares have added like 130 in 4 weeks.

Incidentally, no one talks about the erosion in gross margins: with costs per phone like 35-40 bucks more , they have to sell like 15% more phones just to break-even on a cashflow basis. And this is before the retail raises and Foxconn issues,etc. They are on a treadmill that eventually blows up 

Wed, 09/19/2012 - 12:56 | 2811669 fonzannoon
fonzannoon's picture

Exactly right Robinhood. Nobody talks about margins at all. I don't see how input costs can not affect margins bigtime going forward. So I guess we just keep watching earnings miss after earnings miss and btfd....retarded.

Who the hell can afford to keep trading up these apple products anyway? Somone on here the other day said Apple could lie their ass off about their sales and no one would call them on it anyway....that's probably right.

Wed, 09/19/2012 - 12:57 | 2811672 fonzannoon
fonzannoon's picture

edit

Wed, 09/19/2012 - 12:46 | 2811619 resurger
resurger's picture

Dont talk to me on shortning before i see S&P 500 @ 1500

Let the bulls take this shit higher

 

Wed, 09/19/2012 - 12:47 | 2811621 lolmao500
lolmao500's picture

Apple Slave Corporation Inc. : fuck em and anyone who buys their products.

In other news :

- IDF launches surprise live-fire drill in Golan Heights

http://www.haaretz.com/news/diplomacy-defense/idf-launches-surprise-live...

- Former Syrian general: Assad planned to transfer chemical weapons to Hezbollah

http://www.haaretz.com/news/middle-east/former-syrian-general-assad-plan...

- India on Wednesday test-fired its nuclear-capable strategic missile Agni-IV with a strike range of about 4000 km from a test range off Odisha coast.

http://www.hindustantimes.com/India-news/Odisha/India-test-fires-long-ra...

- Japan has deployed 50 patrol ships to the area in the East China Sea. (or about 20% of their patrol ships or 10% of total navy)

http://www.arirang.co.kr/News/News_View.asp?nseq=137282&code=Ne2&categor...

- A total of 326 billion euros ($425 billion) was pulled from banks in Spain, Portugal, Ireland and Greece in the 12 months ended July 31, according to data compiled by Bloomberg. The plight of Irish and Greek lenders, which were bleeding cash in 2010, spread to Spain and Portugal last year.

Banco Santander SA (SAN), Spain’s largest bank, lost 6.3 percent of its domestic deposits in July, according to data published by the nation’s banking association.

http://www.bloomberg.com/news/2012-09-18/deposit-flight-from-europe-bank...

- Military report says Turkish jet downed in Syrian missile attack

http://www.todayszaman.com/news-292796-military-report-says-turkish-jet-...

Wed, 09/19/2012 - 13:39 | 2811862 piceridu
piceridu's picture

you forgot...and Oil down 10%...lol

Wed, 09/19/2012 - 13:00 | 2811683 Robot Traders Mom
Robot Traders Mom's picture

Sidebar: Has anyone seen my son trolling around here, lately? I was talking to a couple fellow ZH'ers yesterday and none of us have seen him for awhile... I assume he's over on the CNBC blogs. 

Wed, 09/19/2012 - 13:03 | 2811697 EvlTheCat
EvlTheCat's picture

I was just going to ask you if you had chained him up in the basement and forgot about him.

Wed, 09/19/2012 - 13:07 | 2811708 Tippoo Sultan
Tippoo Sultan's picture

Try Yahoo! Finance. Doubtful if Sonny set up shop on Motley Fool, as it is a pay to post service - and his winning trades have been, well, painfully untimely.

Wed, 09/19/2012 - 13:12 | 2811728 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

Word is he's giving, against his will, I hope,  Jon Corzine, Jamie Dimon, and Bernanke funny massages at their local gay bar.

Wed, 09/19/2012 - 13:14 | 2811753 Robot Traders Mom
Robot Traders Mom's picture

Yeah, that's the rumor at least...I wouldn't doubt it, knowing my son. 

Wed, 09/19/2012 - 13:18 | 2811769 slaughterer
slaughterer's picture

RT is found at Wall Street Bears site regularly under his usual name, and at Yahoo Finance where he uses a different (I assume his real) name: hint, first name is Scott.

Wed, 09/19/2012 - 13:18 | 2811751 fuu
fuu's picture

Try the forums at wallstreetbear.com, he got banned here again, or at least his account is access denied.

Bottom line is we have seen an outright collapse in the "Peak Energy" argument. No wonder the GUMS are spending wildly.
RobotTrader - Wed, Sep 19, 2012 - 12:13 PM (Views: 24)
Wed, 09/19/2012 - 13:18 | 2811771 malikai
malikai's picture

I was worried. I thought I saw him on a carton of milk the other day..

Wed, 09/19/2012 - 13:11 | 2811713 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

Apple brand, of late,  is one of those strange, rare occurrences where a great many people world wide feel the need to have this product. And I may add it is a good product.  The stock price reflects this.  That being said, Apple is for all intent and purposes a luxury brand manufacturer, or a very expensive toy company.  Those who know better know that all good things come to an end.  Steve Jobs' untimely death, competition, or a product pipeline running out of new, or good ideas, will cause problems in the not too distant future and will send this high flying company spiraling back to reality.

I'll bet any one who wants... a nickel that Apple stock price will see $300.00 before $1,000.00, even with the help of that asshole Bernanke.  

Wed, 09/19/2012 - 23:54 | 2813871 Almost Solvent
Almost Solvent's picture

Not taking the bet, but what you speak of is a major crash that I don't see in the next year. At the rate Apple is rising with all those fools sleeping outside the Apple Stores, $1,000 is within sight.

 

The pension & hedge funds stuffed with Apple would implode if it dropped to $300 - remember that it's algorithims trading Apple, not people.

 

This fucker can fly way closer to the sun before its wings melt  . . .

Wed, 09/19/2012 - 13:25 | 2811802 edifice
edifice's picture

Apple has been overbought and in iBubble territory for months. No news there.

Wed, 09/19/2012 - 13:29 | 2811815 i love cholas
i love cholas's picture

In poker theory, advanced players use several levels of thinking ie. what do i have, what does he have, what does he think i have, what does he think that i have that he thinks that i have, etc. Gundlach and other great thinkers are always game theorizing situations, which a lot of investors do not do. They just want CNBC to tell what to buy and what is "hot".  Great video(s)

Wed, 09/19/2012 - 13:32 | 2811826 Go Tribe
Go Tribe's picture

I'm still waiting for the S&P to hit 500 this year, which is what he predicted. Something seriously odd about this guy.

Wed, 09/19/2012 - 14:02 | 2811982 rsnoble
rsnoble's picture

Damage control is already on this one sighting Apple to $1650 on the main finance pages.  I mean I guess it's possible in the land of $400 burrito companies and unlimited digital zeros.  I have a sneaking suspicion that global events will derail Apple long before that target, well unless somehow they pass a new law that it's illegal for war to affect stock prices. LMFAO.  Hell, why not?

Wed, 09/19/2012 - 14:10 | 2812028 AndrewJackson
AndrewJackson's picture

This guy is spot on about the FED. They will own all treasury bonds. For the government debt, does it really matter what interest rates are or how much the deficit is when the fed buys everything? This is why the government and mbs bond market has completely lost any relevance to show true supply/demand. Every single bond/stock/fx market and all derivatives related to them are bunk. The only honest markets left on the planet are commodity markets, especially gold. When the collapse happens, the fireworks will play out in au. Keep stacking

Wed, 09/19/2012 - 14:10 | 2812030 AndrewJackson
AndrewJackson's picture

Double post.

Wed, 09/19/2012 - 14:48 | 2812159 WhiteNight123129
WhiteNight123129's picture

Gundlach is the man.

Higher rates in the Treasuries is relief, it will scare the corporations sitting on cash and this cash will enter the circulation in wages. The solution is for the rich and corporations to spend their money, this is the only place which can help the deleveraging. Rich and Corporations should be taxed unless they spend their cash. If they spend no taxes, if they refuse to dishoard their dollars, they get taxed. They have benefited from the leveraging, time to pay back. I am not for confiscation, but we need to inject cash in the economy where it is. It is not coming from the Gov, it is not coming from consumers, it has to come from the Rich and the Corporations. If they take the initiative and do their duty in investing and spending, give them a tax relief. But if they do not spend their income, wack them up.

Higher rates and steeper and the long bond starting to go the opposite direction is success, it means stagflation starting, not crack up boom. Crack up boom is real assets up and wages stagnant, stagflation is real assets up and wages up. Let go and help Gundlach, Gundlach is a patriot, shorting the long bonds is bad for financial assets but good for wages.

The irony is that the only way the Fed can prevent deflation is by buying assets, and that pushes prices of the stuff they buy up, but really, if the Long bond was at 4% and nominal GDP at 4.5% the Fed would love, the corporations would be stuck with capital eating stagflation, capital accumulated in the leverage phase suck out of the circulation would be dishoarded and converted back in the circulation, unemployment goes down, and nominal wages start to go up with commodities instead of not moving.

As soon as Europe prints free and clear, the safe heaven rally into treasuries is gone. The Fed is fighting the European knee jerk flow into USD and long bond all it can. As soon as the printing press starts for good measure in europe, that is it, long bond yields up for good. Deflation killed, welcome stagflation, bye bye crack-up boom threat.

 

 

 

 

Wed, 09/19/2012 - 14:52 | 2812268 Remington IV
Remington IV's picture

Back to the porn tapes , Gundlach

Wed, 09/19/2012 - 14:53 | 2812275 twh99
twh99's picture

Gundlach is an idiot.  He is the one who 3 months ago was shorting AAPL and lost his ass.

Wed, 09/19/2012 - 16:40 | 2812340 walcott
walcott's picture

 

The Innocence of Appl Shareholder video http://www.youtube.com/watch?v=vT8OU5WtfkQ&feature=related

 

Wed, 09/19/2012 - 15:16 | 2812360 WhiteNight123129
WhiteNight123129's picture

5% dividend paying plantation stocks in Malaysia bitches, it does exist! This will beat Campbell soup hand over fist. Tobacco paying nice DVD, and commodities.

Wed, 09/19/2012 - 16:17 | 2812693 stant
stant's picture

white appl cult, dont fear the reaper

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