Good morning
The headlines
- Apple’s new iPad mini.
Link: I want not to like it, but…
So Apple had an event yesterday where they announced some new things, almost all of which were just tweaks of old products. And my initial reaction was a lot like this author’s (you should read the article – it was awesome).
As much as I like the iPad mini (photos at the end), I’m also sad because it says something about the direction that Apple is taking – which seems to be more responsive to competition, rather than ahead of it. That said, none of the arrogance has been lost: the price-tag of the new iPad mini is almost double that of the direct competition.
But maybe that’s just some middle-of-the-week pessimism. Which was shared by Apple investors:
At this point, I’d be buying up Apple shares again. I think that people are about to shake themselves off, get their iPhone 5s delivered, and start feeling a bit buoyant about Christmas and the rest.
The pictures:
I think it’s awesome. Because the old iPad’s are fun but awkward for reading. Because the old iPad is heavy and the size of a magazine. And as for the “people work on these and will miss the space” – y’all be lying. People don’t work on iPads – they’re “taking notes” as they surreptitiously close the scrabble app.
And every time I step on a plane – the cabin is filled with people playing on their tablets. Yes – playing.
- Facebook’s quarterly loss.
Link: that’s two for two.
From what I’ve read, there are two schools of commentary at the moment. The gleeful: who are calling the loss a loss. And the investors: who are encouraged by the increase in advertising revenue.
And my favourite line: “Profit excluding certain items also exceeded projections by a penny”. I love it – there’s nothing like blaming the accounting for the loss.
That said, if you read the earnings conference call transcript, and manage to work your way through to the CFO report (here’s the link), the dramatic expenses are being driven by the high amounts of stock compensation being granted to employees. And that’s fair – you’re not always going to be giving employees stock.
But when you exclude it, you’re talking about quarterly earnings of 12 cents per share. On a share price of $19.50.
Here’s the stock price:
And I’m just not sure that the stock price is low enough.
- Hong Kong continues to intervene.
Link: let’s have a look at those reserves.
On Monday, I wrote about the pegged currency regime of the Hong Kong dollar (see here), where I mentioned that there has been some investor talk about Hong Kong allowing its currency to appreciate.
Currently, the Hong Kong Monetary Authority is having to step in to devalue the currency. Last week Friday, there was a $603 million intervention (in USD). Yesterday, there was a $1.25 billion intervention (in USD).
So it could look like things are hotting up. However, the current forex reserves of the Hong Kong Monetary Authority are around $301.2 billion (so about 241 times yesterday’s intervention). But that level of reserves is also 8 times the amount of Hong Kong dollars in circulation.
I may be missing something – but that sounds like the Hong Kong dollar is not about to free float any time soon. And if it did, that would benefit anyone holding Hong Kong dollars.
Maybe this is the answer to the question: “With the dollar, the pound and the euro in crisis, and with the yuan untradeable for foreigners, where do I put my money?”
- China’s manufacturing index.
Link: “a more moderate contraction”
These results both seem boring and repetitive. And suspect, because Chinese data is openly unreliable according to the Chinese themselves (at least, that’s what I heard one Chinese gentleman say in an LSE open lecture on China).
The usual story: the Purchasing Managers’ Index (PMI) is a measure of economic expansion/contraction; with a score about 50 being a sign of expansion, and a score of below 50 being a sign of contraction. China’s score has been cruising below 50 since April.
But if you want to be optimistic, the latest estimate from HSBC puts the index at 49.1, which is a lot closer to 50 than September’s 47.9.
- Goldfields fires 8,500 workers.
Link: Anglo issues a final warning.
The 8,500 illegal strikers from Goldfields ignored yesterday’s deadline to return to work, and have been fired. They have until the end of today to appeal. Anglo has also set a deadline before firing: midday tomorrow.
The levels of violence in South Africa’s labour sector all point toward a mechanisation of the mines. And then where will the strikers be?
That’s all for now.
Have a good day.
