Parchayi.com – Personal Finance Simplified

I’ve been following all the liveblogs online and have everything investors need to know about the new iPhone.

So far the most significant thing about the iPhone itself that we didn’t know since the  leaked iPhone is that it has a gyroscope. That will make the iPhone the leading development platform for mobile gaming until someone else adds one. The rest of the stuff is nothing as great or as magical as Steve Jobs would like you to believe.

The other  significant thing is the improvement in image quality and the great HD video quality. I’m not sure how the EVO stands up to this but I’m sure the difference will not be significant except maybe in the quality of the video editing tools. Android will probably catch up quickly.

Ome more thing was multitasking. Finally iPhone OS has caught up to everyone else there.

The most significant thing not directly related to the technology is that AT&T will let users upgrade now as long as they are eligible at any point in 2010, that is six months in advance. This should drive sales.

I don’t know if Apple has had bad snafus like the one they had this time where NYT wouldnt load on the iPhone 4. Steve Jobs conveniently blamed it on everyone else using the wifi. But it worked for the 3GS and everyone else, just not the new iPhone. So maybe that things revolutionary antenna is not so revolutionary. It was funny when someone from the audience shouted Verizon when that happened.

It was disappointing to see that video conferencing will be wifi only for a while. Considering how long AT&T took to deliver tethering, I wouldn’t hold my breath for that on 3G anytime soon. EVO, anyone?

In a nutshell – The iPhone 4 has some new features, some of which are part of iPhone OS 4 and sone of which related to the hardware. The software ones will mostly be available as a free upgrade for most older devices. Considering that iPhone revisions happen only once a year, other manufacturers will catach up soon. But so far the iPhone maintains a harware lead.

Some other highlights:

• iPhone OS was renamed to iOS and Steve Jons introduced the new iAd platform and claims that it will take nearly half the mobile ad marketshare for the second half of 2010
• Nearly 1 billion in payments have been made to developers
• Other impressive stats about app downloads etc. we given
• You can play farmville on your iPhone soon. Another nail in Flash’s coffin.
• Netflix is coming to the iPhone.
• Bing search was added to the iPhone.

So far the announcement has been a non-event for the stock which is down about in line with the market. This is what I expect to continue until sales numbers are announced at some point. The early upgrade option will really help numbers in my opinion. The only bad thing here is the end of AT&Ts unlimited plans because this iPhone is finally a serious competitor hardware wise to the other phones out there and will consume more data than ever before. This is the time for unlimited plans and caps much higher than 2GB. AT&T’s network has some suffering ahead.

Final conclusion – this should be a non-event for both stocks until some numbers are announced.

For more comments and discussion visit this post on Seeking Alpha

AT&T has ended unlimited data pricing on all devices including the iPad. The $30 unlimited plan has been replaced by the options of $15 for 200MB or $25 for 2GB. This may be good for AT&T in the short term but this is a long term negative for the consumer as data consumption is only growing as smartphone adoption increases. Also, Verizon is considering similar changes to their data plans. Already on most devices and plans, unlimited really meant 5GB.

Notable exceptions were AT&T’s plan for the iPad and Sprints upcoming 4G plan for the HTC EVO.

What does this really mean? It means that the HTC EVO seems a far superior choice than the new upcoming iPhone because Sprint’s plan is cheaper and unlimited. As it is Sprint’s plans have been better and cheaper than other carriers for a while but anybody who has experience with Sprint customer service a few years ago never wants to go back. After this change they might consider giving Sprint a second chance.

As a side effect (hoping for reduced data usage) of this AT&T expects to  introduce tethering for the iPhone at an extra $20 per month (without adding any more data, What?) to coincide with the launch of the new model. This has been a long time coming with promises of it ‘coming soon’ made three years ago when the original iPhone launched. US is the only country with tethering missing for the iPhone in the world. This should be have been an embarrassment for AT&T who also cannot get the phone to work right in major metros like New York.

Just a few days ago AT&T introduced new smartphone early termination fees. My assumption is that AT&T doesnt want a mass exodus to Verizon when a new iPhone launches on Verizon later this year or next year. But now I realized it also prevents people from defecting to Sprint when they get hit by data overages.

Final conclusion is that this is bad news for the consumer, not so good news for AT&T and Apple (especially in case of the iPad) and impending bad news for Verizon when they introduce tiered pricing themselves. The only winner here is Sprint. Maybe. AT&T claims that the tiers are based on what people actually use but I’m not sure I believe that and going forward as we start watching vidoes etc. on our phones and mobile devices – I’ve been using Youtube often on my phone – things are only going to get worse.

As for stock, if you can handle the risk buy Sprint. It has been on a roll after recent upgrades but if the first to 4G works out for them, the stock might to well. If you are less risky buy Verizon because over the long term they will get an iPhone. I’m not so sure about AT&T’s prospects if they lose their iPhone exclusivity and they will also be the last to market with 4G. Even the CEO says the people will not switch to other providers because they are locked in and not because AT&T will provide better service.

Disclosure: I own no stock in any wireless company. I do own Apple stock but no Apple products. I am happy with my Windows Mobile HTC Touch Pro which can be tethered and also has wifi hotspot.

If it was known that a relief well was the only solution that is 100% known to work, why was one not started on day 1 of the spill. We are now at Day 43. The work on a relief well has not even started as BP wastes time trying other stuff. If they would have started work on those on day 1 we would be nearing completion by now and if any of the failed attemts had worked, they could have just stopped work on the relief wells.

Is the Obama administration stupid? Is there not even one person on his team who thought of this?  For this one reason alone I would say that the Obama administration handled this disaster worse than Bush handled Katrina.

People are boycotting and buycotting Arizona in the thousands. I hope everybody just boycotts BP. They have a history of problems. Since the Alaska pipeline leak in  2006, America should have been investigating how to end their reliance on BP. At minimum they ahould have been watching BP more closely.

To add insult to injury, BP had another oil leak in its Alaskan pipeline a few days ago. No matter what the financial impact, the only responsible thing the government and everyone else can do is end all ties with BP. That may not be easy because BP is the largest supplier of fuel to the military but it is time to move on from the most reckless, irresponsible and harmful company on the planet to somebody else. Just boycott BP. This is one company that really company needs to die.

Investors, this is not a buy signal. The costs of this disaster are just begining. Two more months of oil leaks. Oil will hit other states. Lawsuits will pile on. BP has hard times ahead.

On Friday rates dropped to 4.5% for FHA loans and 4.625 for Conventional with 0 points from many lenders as long as you had good credit. However working with lenders is painful. I found lenders from interest.com (owned by bankrate) and I started calling the ones with lowest fees. I actually started on Thursday when rates were an 8th of a point higher.

The first lender I called – Atlantic Mortgage and Funding had lender fees of only $195. I always compare everybody to quotes from aimloan.com, who provide their quotes online on one of the best designed websites for home loans. I would have gone with aimloan but their rates for high LTV loans were higher and they only do conventional.

My 4.625% has only a $195 lender fees and AIM’s has a lender fee of $1995.So
I am beating them by $1800. If you would like to try to lock in today please
give me a call and we will start the application process.

Thank you,

Daniel Dunn
President
1-866-443-9777

Come Friday when I actually started to apply, the fees had gone up to $663.

$675 is the listed lender fee. This includes Credit Report, Tax Service, and
Underwriting. They actually total $663.000.

…

Kimberly A. Jones
Toll Free: 866-443-9777

Basically this sounded like a lender taking advantage of the situation and trying to charge more because more people are applying. Anyway I called them to apply anyway because they were the cheapest on interest.com even after the fee hike but as I started applying I got some cock and bull story – “Interest rates are about to change now and we can’t originate any loans for the next 10-15 minutes. Can I call you back after that?” So I say fine and there is no call. When I call back, I get the story that interest rates have gone up 0.75%. Bullshit. Anyway, I check back on interest.com and I see that their fees have gone up to $995. Also on their GFE which they wouldn’t honor within the hour had title costs that totaled $1764, which is ridiculous. Maybe my mentioning that I want to use my own title company caused them to drop me as a customer? Maybe they get kickbacks?

The second lender I called, United Mutual Funding, was much better and more upfront about everything and I applied with them. Their total costs came out to be a little less than  Atlantic and they pulled my credit report and I was all set. Or so I thought. I get an email some time later that they cannot do FHA loans in Virginia, only conventional. Crap. By the time I see that email, it is beyond 4:30 and I really want to get this done on Friday.

I am not going to be able to secure a FHA loan for you, unfortunately. I just learned that our FHA approval does not extend to Virginia properties. We are only able to originate FHA loans in FL. I will have your credit card reimbursed for the cost of the credit report.

I am terribly sorry about this. I can still offer you the conventional loan but I don’t think that is something you wanted. Please let me know.

Regards,

Erica Guthrie
UMFC

So a quick visit to interest.com to find the next lender I can try and I find Everbank. I call them up because their website doesn’t list FHA rates, I ask what they are and it turns out that they are also at 4.5% (after I asked if they can do 4.5 with excellent credit, the original quote was 4.625), which I was able to lock. Also their fees turned out to be the lowest amongst all the above. They provide a rate lock for 30 days but the agent admitted that they cannot close within 30 days due to high volume but the first lock extension is free and they will close with that time.

Now I’m keeping my fingers crossed that our appraisal keeps our LTV below 97.5%. We’ve paid off  11% of our initial mortgage balance in the last 5 years but our county assessment has dropped 26% from it’s peak in 2006.

If you are also considering an FHA loan with high LTV, keep in mind that FHA charges an upfront Mortgage Insurance Premium of 2.25% (which is generally rolled into the loan, so your new balance will be higher than the previous one). Also whether you go FHA or conventional, you will have to pay monthly mortgage insurance. Since FHA charges the upfront MIP, the monthly payments are lower. They total about 0.5% of the original mortgage amount each month. With the conventional, the monthly payment for PMI (Private Mortgage Insurance) is higher, I’d say about 0.75% but there is no upfront fee.

Another thing to keep in mind is that with FHA, the Insurance stays for a minimum of five years. It can be dropped after five years when you reach 78% LTV. With Conventional, PMI can be dropped at any time as long as you reach 80% LTV. You have to get an appraisal and petition the mortgage company. Either way with a high LTV loan it takes a lot more than 5 years to reach that level unless you pay significant amounts of principal.

I’m glad that somebody bought PALM finally! I own no stock in either PALM, Inc. (PALM) or Hewlett Packard Company (HPQ) but I didn’t want to see WebOS die. I don’t own a WebOS phone but it was a strong contender to be my next phone. Of course my hope was that HTC would take the EVO or the Incredible and slap PalmOS on it, but well HP can do something similar.

Dell is entering the Smartphone market, Asus makes the Garmin Phone and Lenovo has a phone in China. It was an obvious next step for HP to have a phone and HP is a Microsoft Windows Phone 7  partner too. But if HP could have its own OS that is at least equal to if not better than everything that is out there along with PALM’s excellent patent portfolio, that is even better than having the Microsoft deal.

Microsoft has been going after Android device makers to license patents and HP can avoid those Microsoft fees if it has PALM. In fact HP can avoid Windows Phone 7 altogether. Personally even though I am very happy with my current Windows Mobile phone and Windows Phone 7 sounds promising, I expect that it will have teething trouble because it is a complete rewrite and not backwards compatible. Also Windows Phone 7 suffers from many shortcomings of the iPhone such as a closed ecosystem for apps, which are not problems with Android or WebOS.

All HP needs to do now is pair some good hardware with WebOS.

Thanks to it’s meteoric rise in the last year, Apple is now Parchayi and my largest single investment. I was considering taking some profits when it crossed $250, which it did today after the monster quarter of nearly doubling earnings to $3.1 billion ($3.33/share) from 1.6 billion ($1.79/share) same Q last year on a 50% increase in revenues to $13.5 billion from $9.1 billion last year.

The iPad did not start selling in the last quarter and is not reflected in the above numbers. Mac shipments rose 33% and iPhone sales were 8.9 million (worldwide), a lot more than expected and even more than the holiday quarter sales of 8.8 million.

Apple doesn’t comment on rumors but it seems like the question to ask about a CDMA iPhone on Verizon is  not if, but when. Also with the next iPhone (iPhone HD?) in the works with a rumored release in summer and iPad there is no telling what earnings will be like next quarter.

Apple says that margins will be lower next quarter thanks to lower margins on the iPad and lower margins on “future product transition”. That can only mean the new iPhone. Margins are generally always lower on newer products until parts become cheaper as volume increases.

I’m now reconsidering holding on until Apple hits $275 to sell about a third of my holdings. The next iPhone seems to be finally catching up with other phones (HD2, Droid, Nexus One, Incredible etc.) in many hardware specifications where it was lacking such as flash for the camera, higher resolution screen and more.

There are things I don’t like about Apples ecosystem such as it’s fight with Adobe, resistance to Flash, arbitrary app store policies etc. but these don’t seem to be putting a dent in the adoption of the iPhone or iPad. Forced use of Macs to develop for the iPhone is another thing I don’t like but as far as Apple goes that is a great way to sell some more Macs.

For the next quarter AAPL’s guidance is $2.28 – $2.39 a share on revenues of $13 billion – $13.4 billion. Apple is known to provide extremely conservative guidance and has beat its guidance for as far as I know at least five years (don’t quote me on that). Analysts were expecting at $2.70/share on about $13 billion. It is quite likely that Apple will handily beat both estimates unless iPhone sales drop significantly on expectations of the launch of the new iPhone.

Two stocks to watch today are Google and Intuitive Surgical (other than Goldman Sachs after the fraud accusation).

Intuitive Surgical reported spectacular results today far ahead of analyst expectations with earnings coming in at $2.12 per share compared to the expected $1.69. Intuitive has beaten expectations in 6 out of the last 8 quarters and more than tripled in a year. In spite of that it continues to remain a good investment as it continues to surpass expectations. The stock price was driven up a lot in anticipation of great earnings  over the last couple of days. Suddenly after the report today the stock price has fallen nearly 5%.

Google also dropped over 6% in spite of beating analyst expectations because they plan to spend more aggressively to maintain their search lead. Google has also beaten analyst estimates in the past 7 quarters.

So what makes people drive down the stocks of companies that show repeated excellent performance. Why do investors question decisions form companies that have consistently done things right? The answer is because they can. Well, not really. The answer is that the stock prices are needlessly driven way up before earnings and that leads some investors to sell to take profits as soon as results are announced.

I put both these stocks at a buy and today with the negative tone that the market has taken might be a good time to get into either one.

Disclaimer: I own both stocks.

Yesterday was the second time I got a call from a “US government” department. This time the department had something to do with finance and they actually got my name correct possibly from a directory listing. Last time I got the call – a few days ago at my work number – they didn’t even know who they were calling. Just “Your Name and Number has been picked to get $7000 from the US Government Department of Krauss” (that’s what it sounded like, I made the person repeat the name of the department 3 times but I couldn’t tell what it was).

Who exactly are the people that fall for this crap? I’m sure someone somewhere believes this shit and hands over financial info. After all there are some people who buy V1@grA from email spammers and send money to Nigeria with the hopes of getting more money from a random prince.

The first call it was somebody with an Indian accent. The second one sounded more like an eastern European one. People who fall for this stuff probably deserve it. If you are someone who would fall for this, here is a warning that it is not true. The US government gives people money quite often but they do make you file taxes to get it.

Taxes reminds me, don’t forget to get your $800 by filling out Schedule M.

Update: After some hunting around online, I couldn’t find many instances of people reporting this. Here is one that I found, which is in Oct. 2009. This led to a phone number – 202-684-6582 – and a search for that phone number revealed at least one idiot who fell for the scam.

Every so often we see merger, takeover and failure rumors floating around. Then the CEO of the company says that the rumors are all false. Before the Wachovia collapse that happened on a Sunday, the CEO went on TV on Friday to let investors know that his bank was not in bad shape. Jim Cramer apologized for being duped.

Palm’s CEO also indirectly squashed takeover rumors by saying “We’ve said we have a plan that takes us to profitability.” However takeover rumors continued and finally Bloomberg seems to have confirmed the rumors making Palm’s stock surge.

It is sad to see Palm go and hopefully the new buyer will be someone who will continue WebOS, which is widely regarded to be the best of the smartphone Operating Systems with real multitasking, easy development and great features from ease of use to great looks.

I’m keeping my fingers crossed that it is HTC and they will put WebOS on something like Evo hardware.  My HTC Touch Pro is now aging but I think I can wait a while to see how 4G pans out before upgrading. I was seriously considering a Palm Pre Plus until PALM’s latest earnings report.

A few months back I got a spam call at home asking me if I would like to support clean coal. I just hung up but I really should have asked the person at the other end if she really believed the crap about clean coal. All these clean coal nutcases think that just capturing the output from coal energy plants will make coal greener. They claim that coal is local and cheap and reduces dependency on foreign oil.

As far as the output from coal energy plants goes, that seems to be a major contributor to climate change (euphemism for global warming).  Anyway foreign oil or any oil for that matter is not a major contributor to electricity generation in the US. The top sources are coal, nuclear, natural gas and hydroelectric.  The big foreign source here is Canada for natural gas.

Clean coal supporters fail to mention that coal is cheap because the conditions in mines suck, as proven often by the regular deaths in coal mines in West Virginia including the deaths on Monday at a mine with a history of violations run by a company with a history of violations. They would rather kill miners, cause them cancer and other health problems and destroy the local environment by mining than import some natural gas from Canada or support more really clean energy like nuclear, wind, solar etc.

Also often cited concerns of nuclear plants are radioactive waste. Well, what about the radioactive waste from coal that is more dangerous and pumped directly into the atmosphere as compared to the safely stored and hopefully reusable waste from nuclear.

Make mines safer, force bad mining companies to cease operations while violations are not fixed and coal may no longer be competitive  in any way.