Wednesday, 25 April 2012

Tiny bubbles in the snow ....

I had a friend when I lived in London who used to continually buy puts on the Nikkei. He did it for year after year as the N225 moved ever higher post 2000. He was such a macro guy that he just couldn't believe in an investment case that could justify the valuations of the market. It cost him a lot of money . . . Until that is the bubble burst. I never asked him for a PnL, but I know the world appreciated the bears more in 2008 than 2001 and therefore I'll always remember him as a success in his terms and the market terms.

So what? Well as Mrs IBC will tell you I'm an Apple product fan boy and enough of one to say that I'm secretly stupid paying the extra margin for them over standard consumer electronics. The margins are unbelievable. I Remember a visit to Japan in 2006 to Panasonic. The investor relations guy spent the hour describing their great plan to hit 5% margins by 2008. Imagine that thinking at Apple? No, neither can I. What do we make of the Apple numbers. They're fantastic, but how long can it last? It just defies so many laws that products like these can forever grow market share and margin at the same pace. Apple may come up with a cure for cancer that you can download through iTunes, but the odds against it are slim .... Even with Steve Jobs somewhere out there influencing things. Where are we? I'm getting back to my old Nikkei put buying mate and saying that maybe some puts one a quarter might be appropriate. In the meantime I'm the idiot with the white headphones in typing away on his iPad.

In case anyone out there is wondering .... There is snow in Val D'Isere and it just might be skiable tomorrow.


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