The law of Gravity works either in Stocks or Politics

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Jun 18 2008
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Guess the law has been proven right again – whatever goes up must comes down and vice versa. This does not applies only to stock investing or option trading but also to other fields such as politics and lifes. You experience ups and downs throughout the journey of your life and so the end of the political game could be on the horizon for Malaysia Prime Minister. SAPP (Sabah Progressive Party), one of the component parties in the once mighty BN (National Front) has finally announced that it has lost confidence in Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Short of quitting the front, it was perhaps the best way to get the party kicked out instead of pulling out and risk being labeled a traitor. With only two Members of Parliaments and four state representatives, SAPP started the ball-rolling and could lead the way to form bigger independent group(s) with the option of joining the opposition Pakatan Rakyat (People’s Alliance). Anwar could be telling the truth after all (about forming the next new government) but it could also due to an article that exposed the hidden RM3 billion (in RM500 and RM1,000 notes) which were smuggled out of the country more than 10 years ago by none other than former Finance Minister Daim Zainuddin. But would the motion be allowed in the Parliament in the first place?

Newton Law on AAPL and BNAnyway, it was fun to see how the local stock market took the beating today. And talk about Isaac Newton’s law of gravity it appeared Apple Inc. (Nasdaq: AAPL, stock) has reverse the selling pressure due to rumors on Steve Jobs’ health. Morgan Stanley raised its price target on Apple Inc. shares to $210 from $185, saying it expects the company’s iPhone unit sales to double in 2009 at the new $199 price point. Morgan Stanley further said it expects 27 million iPhones to be sold in calendar year 2009 with average revenue of $550 per unit.

Regardless of criticisms that the lower prices of new 3G iPhone would slash Apple’s own profits, Steve cleverly took the game to another level – volume game. People were grumbling that “owning” the $199 to $299 iPhone was actually more expensive because of the new two-year contract required from AT&T but it’s not yet clear if the same rule will applies in other countries. I asked Maxis the other day if they support or have any schedules to support iPhone to which the answer for both questions was “No”. Of course come this July, the cheaper iPhone will be available in 70 countries excluding Malaysia. You can crack it to work with current local GSM network but I wouldn’t want to take the risk as I’m sure I wouldn’t be able to sleep if my iPhone decides to malfunction.

With $199 to $299 Steve Jobs had literally declared war with competitors in a big wave. While Apple grabbed handset share from rivals Research In Motion Limited (Nasdaq: RIMM, stock), AT&T Inc. (NYSE: T, stock) is giving its competitor such as Verizon Wireless and Sprint Nextel a run for their money. Already there’re speculations that other carriers might lower service costs by as much as 40% in the second half of the year – hoping to retain customers from industry’s onslaught as well as the escalating cost of gas. Stock-wise, it would be interesting to see if AAPL could breach the $184 again after the recent panic sell-off.

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