Invest in Smartphone Technology!

Smart Phones

The "toggle" button in the top right will help you enlarge this and you should be able to print it. Anyways, the smartphone business in my view has only began to grow and firms who are not only producers but part of the supply chain will propser in great lengths. From my research, smartphones only have about 15% or less of the market currently, which in my view is could double if not triple in 2-3 years. Apple has about 18% or so of the market with just 1 phone, which in my view is incredible. If they actually move to other providers like a Verizon and develop more models with colors or something, the stock could print $300 just due to the fact that the market is so underdeveloped. Same with Research in Motion; however, from my belief their niches are a bit different. I think RIMM will probably hit a lower income consumer and business professional. The growth may not be as robust as Apple but in my view, I think all the companies will run, even Nokia and PALM is getting rave reviews with the Pre. Now, that is just phone providers....let's begin to explore more in detail, let's say components...what is in these type of phones?

Well touch screens is one thing and CY is a huge player there and even the glass screens with Corning (GLW) will benefit...in addition semiconductors will work like SWKS, TQNT, RFMD, QCOM, and the lists go on forever....and bandwidth providers work too, like a CIEN, ADTN, etc...and web analytics firms like GOOG or OPWV....

Anyways, you get my point...this is a massive arena that has UNBELIEVEABLE growth and market share battles will begin soon. The main issue is that this is not a "trade" but rather an "investment" because the smartphone growth will NOT occur in days, weeks, or even months but rather in 12-48 month periods....kind of like the digital music platforms or internet retail, etc.

With that being said, I am will accumulate exposure soon but will ignore flucuations in prices and just hold out for richer returns!

Letter from Doug Kass - Weekend Reading

This man called the bottom (link below) and now read his lead from today to the public...I see the Mr. Kass is also a student of Benjamin Graham, as is RF.
http://www.businessinsider.com/kass-calls-the-bottom-2009-3


Please Mr. Market

By Doug Kass, The Edge

I am still waiting for Mr. Market to deliver my letter.So many days you passed me by See the tears standin' in my eyes You didn't stop to make me feel better By leavin' me a card or a letter Marvelettes, "Please Mr. Postman" To paraphrase Herodotus, "Neither Microsoft (MSFT), nor Amazon (AMZN), nor snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds." The "What, Me Worry?" crowd, who arguably appear unconcerned about the threats to a self-sustaining economic recovery, continue to deliver with an unrelenting confidence. If their ignorance is bliss, I would certainly appreciate a bit more of it! Ahead of the U.S. stock market opening, futures have reversed the late-Thursday afternoon post-Microsoft/Amazon-induced weakness. The cover of this morning's Wall Street Journal speaks volumes: The lead article describes a roaring world bull market in equities (which the bulls describe as forward-looking) and the columns below it contain downbeat content regarding Microsoft's earnings and a worse-than-expected U.K. GDP report (which the bulls describe as backward-looking). No doubt, we saw a bull market in pessimism reach its crescendo into the first week of March 2009, as the big-money investors screamed "get me out!" Today, in late July 2009, the bull market in optimism continues in force but is getting equally stretched as investors yell, "get me in!" Clearly, the bullish talking heads in the media say they are looking over the economic valley as stocks reach their highest close of the year. I, too, am looking over the valley, and I don't like the headwinds I see as the odds favoring a consumer-based double-dip remain high. Color me confused and increasingly impatient as I wait for Mr. Market to deliver my letter -- the sooner, the better.

RF SEll SPWRA

RF WINS AGAIN!

SOLD ALL AT $31.77 FOR 30% GAINS

RF Trading Portfolios

I am positioning for a 5% correction across all indices, which may or may not happen, just my view that can change at any moment.

RF Portfolio I:

Cash (63%)

Long Exposure (37%)

AMD, EXM, ENTR, SPWRA, GNK, FRO, and PRU.

RF Portfolio II:

Cash (20%)

Short Exposure (38% dollar amount/ 85% "real" short value - leverage applied):
Long TWM, BGZ, SRS, SDS

Long Exposure (42%)
BAC, EXM, F, FTK, HIMX, KEY, RIMM, UNG, UYG JAN 2011 $ 3 CALLS

MSFT and AMZN

WEAK earnings after the bell, should weigh down the Nasdaq tomorrow

RF Position Update: SPWRA

RF wins in SIZEEEEEEEEEEEE

Sunpower beats by $0.10, beats on revs; guides FY09 EPS above consensus, revs above consensus (24.85 +0.82) Reports Q2 (Jun) earnings of $0.24 per share, excluding non-recurring items, $0.10 better than the First Call consensus of $0.14; revenues rose 39.4% year/year to $298 mln vs the $263.3 mln consensus. Co issues upside guidance for FY09, sees EPS of $1.15-1.60 vs. $0.96 consensus; sees FY09 revs of $1.35-1.7 bln vs. $1.32 bln consensus. Co reiterates FY09 capex guidance of $250-300 mln and production guidance of 400 MW."

RF Sells GNK and EXM

Sold 25% more of my EXM at $8.92, 40% gains

Sold 50% of my GNK at $24.25, 25%ish gains

RF Sell SSO Sept $30 Calls

Remember these bad boys with the RF S&P Call? You damn right you do baybee!

Sold all 10 contracts at $1.60 from $.85 purchase, +88% gain!

RF SELL ENTR

sold 50% at $3.02, 31% gain

NTGR - Old RF Fav has accounting issues!

NETGEAR misses by $0.01, beats on revs; guides Q3 revs in-line, announces restatement (16.53 +0.68) Reports Q2 (Jun) loss of $0.02 per share, $0.01 worse than the First Call consensus of ($0.01); revenues fell 29.2% year/year to $144.7 mln vs the $141.8 mln consensus. Co issues in-line guidance for Q3, sees Q3 revs of $150-160 mln vs. $151.89 mln consensus; sees non-GAAP operating margins of 5-7%. Non-GAAP operating margin was 3.7% in the second quarter of 2009, compared to 11.5% in the second quarter of 2008, and 3.7% in the first quarter of 2009. We are also pleased to announce that our current year-to-date operating expense cost reductions is approximately $6.6 million, as compared to our total 2009 operating expense cost reduction target of $10.0 million, which was based on our annualized fourth quarter 2008 run rate." NETGEAR also announced today that the Company will restate its financial statements for the first quarter ended March 29, 2009, due to a misapplication of FASB Interpretation No. 18, Accounting for Income Taxes in Interim Periods. As a result, the Audit Committee of the Board of Directors today has concluded that investors should no longer rely on the Company's previously filed financial statements for the quarter ended March 29, 2009. Consequently, for the quarter ended March 29, 2009, the Company expects net income and earnings per share computed in accordance with GAAP to be negatively impacted by $3.8 million and $0.11 per share, respectively, and non-GAAP net income and earnings per share to decrease by $431,000 and $0.01 per share, respectively. "With inventory at healthy levels and currency exchange rates becoming more favorable, we expect improvement in both gross and operating margin in the third quarter of 2009

TQNT

My favorite semiconductor crushed earnings:

TQNT TriQuint Semi beats by $0.05, beats on revs; guides Q3 revs above consensus (6.54 +0.38) Reports Q2 (Jun) earnings of $0.08 per share, excluding non-recurring items, $0.05 better than the First Call consensus of $0.03; revenues rose 33.2% year/year and 42% sequentially to $169.1 mln vs the $146.0 mln consensus. Co issues upside guidance for Q3, sees EPS of $0.08-0.10, excluding non-recurring items, vs. $0.08 consensus; sees Q3 revs of $170-180 mln vs. $159.3 mln consensus

Position Update: AMD

Terrible quarter and the conf. call was worse. I will hold this one hold but have thin patience. Long-term they should do good with the PC market rebounding; however, the company's management is borderline sucky as best.

RF Position Update: F

If you got in with me on the secondary at $4.90ish, you racked up a sweet 40% as the stock is ripping in pre-market at $7.

Ford just posted a $2.8 billon quarterly profit via debt reduction!

RF wins again!

Market

I am out to play golf now but as for market, I will remain net short. I believe we will revisit 925 or 900 on S&P, so I am positioning for it. As for stocks, I will hold out AMD and may buy boatloads more, just to cost avg out quickly and call it quits. In truth, the company is absolute dog s*it...the loss is terrible; however, I am betting semis will do some serious "work" in the latter part of the year, with channel inventory restocking and the chance that AAPL will replace Nvida chips with AMD chips. As for the conf call, the word miserable is a understatement. As for portfolio, I deployed about 50% of my cash yesterday, so have 20% cash, 40% short, 40% long; however, with the leverage implied in the ultrashort etfs, my short expsoure is close to 80%. We will see if my market thesis comes true....until then, go to your local best buy and buy some AMD to get this crap company out of the gutter.

AAPL

The conf call was unreal....this company is operating on all cylinders, unlike the doosch bags at AMD.

"We are currently unable to make enough iphones to keep up with the demand"

"We are gaining share in the iphone - business segment for corporate professionals"

This stock can print $300 if they get a Verizon channel going

RF Buy AMD

Bought 1,000 more at $3.50 in AH....terrible earnings but will hold for a conference call notion....

I am up huge, so my risk apetitite is high! Only other PC play than Intel....beat on Revs

RF Buy AMD

bought 2,000 into the bell at $4.07

Market

I believe a 4% correction in the s@p is next to imminent. On the other hand, I would not be surprised to see a 100 on the spy. The momentum traders are playing not but I chase value and belive there is little. I am preparing for a drop but may be way off, so be careful, its a contrainan view.

I might add to AMD here but will wait closer to 4 PM

RF Buy

SRS 10% of portfolio

RF Buys

BGZ - 10% of portfolio at $31.59

TWM - 10% of portfolio at $39.85

RF Buy SDS

Bought 10% of my portfolio in ultrashort S&P at $51.52 - - approaching more NET-NET while the market will do what the market will do..net long still tho.

RF Sell

Sold 25% of my GNK at $24.60, 27% gain

RF Sells

Sold 15% of my EXM at $9.36, 40% gain
Sold 50% of my PRU at $40.30, at 19% gain

Smartphones & 4G Technology

25% of my portfolio will be put into this arena, probably over the next few months. The growth in this area has not even stratched the surface, in my view. Most likely, I will buy 5 names, each will represent 5% of my portfolio. I have been discussing this for a while but I believe these names could run like tech did in 1998. The mobile internet arena has Annual Growth Rates of 100%+ and revenues of these baby revenues are only like $100-300m and can grow 50% YoY in my opinion. If I don't buy 5 names I might buy 3 names: 10%, 10%, 5%. Below is a watchlist of some of the players:

VRGY , CAVM, OVTI, COMS, JNPR, ARUN, SMSI, BRCD, RAX, BGC, CTV, SDXC, EQIX, XXIA, CSCO, NVDA, SNDK, CRNT, PRKR, S, NTCT, CLWR, NETL, CELL, SMSC, NVEC, SVR, ALVR, MOT, NOK, STM, QCOM, TXN, MRVL, ARMH, AKAM, LLNW, ANAD, TQNT, MVIS, BRCM, ATHR, TSYS, LVLT, ERIC, ALU, SWKS, RFMD, SYNA, TKLC, PALM, RIMM, AAPL, CY, ATML, STAR, CIEN, ADTN

Update

If you are still in HGSI, congrats!

As for the market, it remains strong and it's too early to tell if the market is losing breath. With Apple earnings tomorrow (I believe, don't have calendar infront of me), I would feel more comfortable in cash that short. As for my holdings, I am up good for the day, with strong rips in EXM and RIMM. I am loaded to the neck with EXM, and haven't sold 1 share. If you are in for the "trade" I couldn't blame you for taking the 30% week gain but I believe the fundamentals are strong in the drybulk area, so I will hold shippers for years to come. Of course as I sell my GLW, it's looking like it will breakout but then again, no surprise there. On the long side, I might add some FRO here or some more life insurers, but they have had a huge run. I am long PRU in good size and will add LNC and WILL hold into earnings. I did extensive analysis on sector and believe due to the strength in the credit markets during first two qtrs, the book values of these firms (as well as many others) will benefit due to their leveraged exposure in corporates and preferreds. LNC should print $20 in time..

RF's Favorite Shorts

ISRG and ESS

S&P Target

Goldman raised the S&P Target to 2009 year end of 1,060 from 940.

My view: Late to the party Goldman, RF is standing by the April prediction of 1050+