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Apple’s next move in India is Google’s worst nightmare

Jul 17, 2023

Good morning! 👋

Big earnings week ahead—there’s a lot to think about.

But, counter-intuitively, there are only a few things to focus on.

For example, FactSet reports that analysts expect S&P 500 EPS to be -7% this quarter YoY, but individual companies like JPM—which we’ve already seen knock it outta the park—and Apple, which is yet to come, will do considerably better.

Those are the types of names you want to own.

Don’t worry about whether they’re “expensive” or not. That’s a loser’s game and nothing more than unneeded mental gymnastics.

Simply change your tactics as a way of controlling risk before you buy. (Watch)

Here’s my playbook.

Apple in India is Google’s worst nightmare

Morgan Stanley estimates that the Indian market will account for 20% of Apple’s 5-year growth. In the next 10 years, analysts expect a $40 billion boost in revenue. (Read)

Two things strike me.

I think Morgan Stanley’s numbers are too low, and the actual uptake might be double that as Apple’s product lines and newly minted Indian presence blend; and,
This is Google’s worst nightmare.

You know what to do and I’m here if you’d like some help.

Ford’s F-150 price cut isn’t a coincidence

Yahoo! Finance reports that Ford is cutting prices for its F-150 Lightning EV by $10,000. (Read)

This isn’t a coincidence.

Tesla’s Cybertruck has arrived (Read), and Ford is gonna be backpedaling despite putting on a good face about how they make “real trucks,” something I told you about a few weeks back.

The situation reminds me of the lead-up to Apple’s services and the iPhone, specifically.

People forget their history.

When Ford debuted their electric pickup truck, they promised to keep prices for the Pro model under $40K, only to realize that they had bitten off more than they could chew. The result: substantial price hikes (up to $20K more than promised!) that customers were clearly not happy about.

The situation was much the same when Apple debuted the iPhone, at which point then-Microsoft CEO Steve Ballmer made one of the greatest gaffes in history by dismissing it... on camera. (Watch)

Don’t be “a Ballmer!”

Invest because of China, not in China

China’s second-quarter GDP grew by 6.3%, which is neither here nor there. What catches my attention is the unemployment rate for 16- to 24-year-olds, which is now 21.3%... a record high. (Read)

Friendshoring/onshoring/nearshoring—whatever you want to call it—was a hot-button item last April and, as we discussed at the time, a problem that’s now coming home to roost.

Westerners are saying that this is terrible because the thinking is that loads of unemployed young men are very dangerous to ongoing stability and a threat in terms of social unrest. The Beltway crowd wants to believe that it’ll make China weaker and more prone to economic collapse.

There’s another side to the coin, though.

Beijing may be deliberately orchestrating this as a means of launching another “people’s recovery,” at which point those same young men will be harnessed to do something akin to the “Long March” and China’s next leg higher.

It’s a very dangerous situation, and one from which China could emerge dramatically stronger, not weaker as many Westerners think.

Netflix earnings: Don’t waste your time on the sideshow

There’s going to be a lot of focus on Netflix this week, but the real sideshow will be the SAG strike.

The fear is that striking writers and actors will shut down production, weaken ad revenue, and hurt the bottom line.

Hardly.

The much bigger picture is that the US media industry itself is in big, big trouble, just the way the silent-film industry was when “talkies” came on the screen.

Disney’s CEO Bob Iger, for example, said last week that their TV business is doing worse than feared, which is why—gasp—Disney may seek an exit. The expression “canary in a coal mine” comes to mind.

A trade idea... let the media pump NFLX higher, then make lemonade from lemons by shorting NFLX and simultaneously going long DIS.

Might make a nice Pairs Trade.

PLTR: Buy now to get ahead of earnings?

PLTR shares are up 177.02% off 52-week lows and, by all accounts, getting stronger. The company reports early next month, but buying now could be a super-smart move if you want to get ahead of what I think may just be a jaw-dropping earnings call.