The First Trillion Dollars is Always the Hardest

In its first 10 years, the iPhone will have sold at least 1.2 billion units, making it the most successful product of all time. The iPhone also enabled the iOS empire which includes the iPod touch, the iPad, the Apple Watch and Apple TV whose combined total unit sales will reach 1.75 billion units over 10 years. This total is likely to top 2 billion units by the end of 2018.

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The revenues from iOS product sales will reach $980 billion by middle of this year. In addition to hardware Apple also books iOS services revenues (including content) which have totaled more than $100 billion to date.

This means that iOS will have generated over $1 trillion in revenues for Apple sometime this year.

→ Asymco

Warren Buffett: Oracle or Orang-utan?

Buffett has taken the criticism from these fellow giants of finance in his stride, responding with trademark wit and humour. He even compared himself to an orang-utan flipping coins. Joking aside, this is a testable hypothesis: Is Buffett’s performance better than chance? To test it, we will stand on the shoulders of another giant: Jacob Bernoulli.

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Again it is a very small number, but we can use our formula to calculate its value:

The expected value is much smaller than 1, so we can conclude that Buffett is a better investor than the luckiest orang-utan. If stock returns really do follow a random process – as Eugene Fama asserted – then Warren Buffett is more than just lucky. Compared with his competitors in the S&P 500, he’s brilliant.

→ StatsLife

Black Monday, Kinda

Monday, August 24th brought you one of the weirdest trading day ever seen in the past several years.  

So to sum up what happened today, here are a few charts, courtesy of Bloomberg, ZeroHedge and NANEX — time of the events may vary :

  • It all started sometimes in China, when it’s business as usual these days :

 

  • S&P Futures followed, kissing the dirt :

 

  • Which then started a major liquidity squeeze on the US market, as seen on the following charts by NANEX :

 

  • Causing buy-sell orders to never quiet match — courtesy of ZeroHedge :

 

  • Shortly after the opening bell, something like this on the Dow Jones : 

 

  • And an impressive rise on the VIX :

 

  • In the meantime, major (mini) crashes : 

 

  • To prevent further deterioration, just press the “HALT” button across major indices, including 3 consecutive press on the NASDAQ and 1’200 times during that day :

  

  • Then the master of markets, Tim Cook, dropped an email to Jim Cramer stating the following :

I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.

  • Which caused this :

 

  • Then, all of a sudden, while unrelated from the previous event — well, who knows : 

IMG_3010

  • Oups…

 

  • …While European markets will stay stucked for a little longer :

 
There’s more to it for sure, but here are some events, mostly correlated, to show the newcomer what’s up for today on the trading side. 

Finally here’s a fun tweet from Josh  Brown :

@ReformedBroker: Look, it doesn’t matter what you bought or what you sold. The important thing is that you panicked.

Who Solved the Capitalist’s Dilemma ?

In particular, they observe that capital is allocated toward the type of innovations which increase efficiency or performance and not toward those which create markets (and hence long term growth and jobs.) This itself is caused by a prioritization and rewarding of performance ratios rather than cash flows and that itself is due to a perversion of the purpose of the firm.

→ Asymco

If a Bubble Bursts in Palo Alto, Does It Make a Sound?

The truth is that most Americans have little interaction with the big-money, small-jobs technology boom, so they might be sheltered from the worst of the technology bust, at least as it looks today, if not years from now. But that might be cold comfort: It is a sad state of affairs if one of the most vibrant, explosive and creative parts of the economy — and one of the few that is minting millionaires — seems more like a walled garden than a public park.

→ The New York Times

The Secret Science of Stock Symbols

We separated stocks with pronounceable ticker symbols from those with unpronounceable symbols. Across both markets, stocks with pronounceable symbols enjoyed a bigger post-I.P.O. boost than their unpronounceable counterparts. The effect was strongest during the first few days of trading; over time, it weakened, but never quite vanished.

→ The New Yorker