iPad 2 News

If I do any more post about the iPad I'm going to have to rename the blog iPadanomics. But here's one more with links to relevant iPad 2 news.

- Forbes says 70% of iPad 2 buyers are new to the iPad
- How much does an iPad 2 costs to make? Depends on who you are asking, but the profit margins are pretty huge based on these estimates.
- Here's a movie created entirely on the iPhone 4 and edited on an ipad 2
- This guy paid $900 to be first in line to buy the new iPad
- This analyst says Apple sold 500,000 iPads this weekend
- Barely 20 years after the fall of communism, Russians are capitalizing on iPad 2 arbitrage

Here are a few ways to capitalize on Apple over the next few months:

1. Buy vertical call spreads. The Jan 12 345/355 call spread is currently going for around $500, and will return $500 if Apple is above $355 in January 2012.

2. Sell Apple cash secured puts. The Jan 12 $255 put is selling for $10.50. If apple is below $255 in January, you will have to buy 100 shares of apple for a net cost of $244.5. The $300 put is selling for $21.15. If Apple is over $300 in January, you keep the full $2,115 or have to own Apple for a net cost of $278ish. Seems like a good bet to me.

3. Sell covered calls on stock. Buy 100 shares of Apple and sell a Jan 12 $400 call for $24. You immediately lower your basis to around $327 and can still participate in any upward movement in the stock up until $400. Total return if Apple is above $400 in January is $7,300 per covered call or around 21%.

Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.

iPad 2 First Impressions

I've had my iPad 2 since Friday and i've had a chance to play with it. Here are some first impressions:

-It's unbelievably smooth and fast.
-The new gyroscope is pretty cool. When playing Jenga, you spin around to go around the tower of blocks.
-The cameras are pretty awful, but work fine for what they are intended to do.
-Watching Netflix and Xfinity on it is awesome. Netflix needs to beef up their streaming library though.
-There are reports that there are light leakage issues around the edges and corners. I notice it a little in mine, but it's not terrible. I might try exchanging it for a new one, but I haven't lost any sleep over it.
-The lack of Adobe Flash doesn't bother me one bit. I have not run into any problems surfing the internet, plus there are apps that convert flash to HTML5 that can be downloaded in the App Store.

All in all, I think buying the iPad 2 was a great decision. I love it. It's simple to use but is extremely useful in so many little ways. I think it's going to be a huge windfall for Apple. I just went with the wifi only 16gb version because I don't need to use it for holding tons of music and videos. I primarily use it for apps, streaming music from my itunes or pandora, watching movies on Netflix, and playing games. Words with friends is my favorite. If you wanna play, hit me up. Username is Flenjamin.

Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.

First post from iPad 2

I picked up the iPad 2 from best buy today. I hedged my purchase with some apple Jan 12 vertical call spreads. This thing is sweet. Everyone should get one!

Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.

Target (TGT)

I actually bought this one in the Benjanomics virtual portfolio last week, but didn't get around to writing about it until now. Luckily, Target has held steady and the trade can still be had for a good price.

I have previously written about two other retail stocks, Kohls and Wal Mart. While I am hesitant to own so much retail in one portfolio, I am comfortable owning these and think that they offer good value to any investor's portfolio.

I personally shop at Target quite often. Being in Atlanta, you are either ITP (inside 285) or OTP (outside 285). Since I am ITP and their are more Targets ITP, I go to Target more often. Also, I think the stores are laid out better and aren't as overwhelming as Wal-Mart. And recently, for the first time in four years, Target actually has lower prices than Wal-Mart. Another thing working in Targets favor is that it will be selling the gadget of the year, the iPad 2! Target currently sells at a PE of 12.91 and has a forward PE of 10.99. So here is the buy-write:

Buy 100 TGT at $51.64:                (5,164)
Sell 1 Jan 12 52.5 Call @4.00:          400
Sell 1 Jan 12 52.5 Put @5.50:           550
------------------------------------------------------------
Total outlay:                                  (4,214)

Total Return: $1,096 on a stock that need to rise by .36 over the next 9 months.

Break Even: $47ish

And to all the people that say "but gas prices are rising and they are going to kill retail!" I say ride the Marta bus.

Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.

Is China rethinking their one-child policy?

Chinese authorities apparently have been reading Benjanomics and are thinking of taking my advice about their one-child policy. They are thinking of lifting it . Imagine what happens to AAPL when all those Chinese people start using iPhones and Ford when they are all driving Ford's to shuttle their 2 child families to and fro. Also, imagine what happens to DBA and other agriculture etfs when there are a billion more Chinese demanding food.

Maybe it's time to learn mandarin? Nee-how!

I can have a brother now!

Interesting Links

- Our computer overlords are making once high-paying law jobs obsolete

- Based on reselling of the original iPad, it looks like the iPad 2 will be a big seller

- 25 best financial blogs of 2011. Benjanomics was 26

- Ford is at a critical level

- Who will be the 21st century Hunt Brothers?