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#plus 2015 was 8 years ago!! can you believe it? gross!
fayoftheforest · 1 year
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Fay's Fic Rec Friday #2
It was so lovely to see the positive response to last week’s prompt both here and on Twitter! I’ve now created an AO3 Collection where I’ll be bookmarking every fic rec’d by you guys, so that it’ll be super easy for you to filter and peruse it when you’re next looking for something new to read! Anyway, here we are, back for round two B)
This week’s prompt is: Share an ancient and sacred text from the fandom's early era. (AKA, a fave fic published before 2015!)
For me, I’ll nominate Fell In Love With A Dead Boy by Spirograph, from all the way back in Ye Olde 2006. This is a K2 fic told in a series of 20 vignettes, centred around Kenny’s experiences with death and immortality. It's so damn beautiful, you guys T-T I reread it just now and oh my gosh, the ending will never fail to make my heart swell up with joy. It’s gentle and slow paced, and carries that sweet, heady sense of nostalgia that that certain special kind of South Park fic embodies. I'm sure someone recommended this fic to me last summer when I was on a K2 binge, but I cannot for the life of me recall who, and it’s driving me a bit mad. Whoever you are, I am eternally indebted to you <3
Do you have any early-era fics that you believe deserve to be treated like a holy artifact? If so, then please do share them in the reblogs, tags or replies! :)
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[hyper]tension
There are so many things I could be writing about right now. 
I’ve chosen to stick with one of the things I know best for this post.
Did you guess “body image issues and the problem of narrowly defining the concept of health?” 
If so: a cookie for you! 
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A handful of pictures popped up in my Timehop from 12 whole years ago that gave me pause the other day.
Sometimes when I see older pictures of myself I am overwhelmed by how different I look now... in a bad way. I see myself in those pictures as thin and beautiful and I see myself now as a sausage monster stuffed into bike shorts. 
The more I sit with and work on my body image issues, the more I have noticed healthier thinking habits developing. Let me be clear, this has been an incredibly slow process. But seeing those changes is something I am really encouraged by... and it makes the every day body image fight have some measurable value. 
I can say with confidence that, at 200 pounds, my body image is currently the best it has ever been.
That has nothing to do with the specific number on the scale and everything to do with working really hard over a lot of years to understand that neither “beauty” or “health” are inherently defined as “thin.” A fundamental pillar of that understanding is that you cannot separate mental health from the concept of general health. 
Mainstream culture does this. 
Mainstream culture wants you to believe that it’s your weight or your BMI that determines whether or not you are healthy.
That is bullshit. 
Here are the pictures of me from 12 years ago. We were moving my high school boyfriend into his freshman dorm for his first year of college. I don’t think any of the people in these photos will mind me sharing them in the context of this blog post. 
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I am *THIN* in these pictures.
I am 17.
Apart from a very clear warning sign that I was already developing horrible posture, I noticed a couple of things right away about these pictures when I was looking at them the other day.
My shirt is a size small or extra small. 
I am holding my arm across my stomach in the fourth picture because I do not think I am *thin enough* to be wearing that shirt. 
I may have been a thin 17-year-old. But I was not healthy.
I was physically fit.
I played soccer for three out of four seasons of the year.
But I was not healthy.
I know I wasn’t healthy because I was about to embark on my senior year of high school during which I would, at times, only allow myself one and a half meals per day. Sometimes that one meal would be pasta. Other times that one meal would be a bag of dark chocolate peanut M&Ms and a Mountain Dew. Other times it would be a gallon of strawberries. Other times it would be a family pack of Twizzlers.
My body in those pictures might look healthy. 
But appearance is not an appropriate indicator of health. 
The two times in my adult life that I have been the thinnest have also been the times in my life where I have struggled the most with body image and disordered eating. 
After I escaped the abusive relationship of my freshman year of college, I gained around 20 pounds.
The following summer, I exercised for an hour every day and ate only pickles and Greek yogurt (separately, of course, don’t be gross). 
I lost 30 pounds.
That was also not healthy.
Fast forward a handful of years to 2015. 
I start an anti-depressant. 
Over the course of the next two years I gain around 50 pounds.
Today, in the spirit of full disclosure (and because the numbers don’t mean shit), my weight fluctuates between 190 and 200. 
I am obese.
A mathematical algorithm used to determine BMI has labeled me “obese.” 
My clothing sizes vary day to day thanks to IBS-related bloating but I’m somewhere around a 14-16. 
Do you know the cut-off for plus sizes? 
It’s 14. 
So, I am an obese, plus-sized woman.
The numbers aren’t very polite, are they?
Within the last two years I was diagnosed with severe iron-deficiency anemia.
I committed to correcting that with a number of lifestyle changes including taking supplements and adding iron-heavy foods to my diet. I took Vitamin C to boost my absorption. On days I took the supplement I had no coffee, no tea, no dairy, and no acid-reducer meds. In 6 very committed months, I resolved my iron issues, for the most part. We have since learned that the daily stomach medicine I take may be affecting my iron absorption so, although I am no longer taking supplements, I am taking a daily vitamin to help maintain a healthy level of iron. 
That story is about health.
I had a health issue and I developed a strategy to resolve the issue, being sure to consider my mental health as well. 
I have worked really, really hard to consider my HEALTH instead of my WEIGHT.
This obese, plus-sized woman exercises for around an hour every day. She does not drink alcohol or soda. She is aware of what she eats and is careful to eat when she’s hungry and stop when she’s full. 
One of the ways I know my thinking is healthier is that when I look at bathing suits on Target’s website, I have started to consider their plus-sized models “normal.” 
The average size of an American woman based on the most recent data is between sizes 18 and 20. 
I spent over twenty years unable to see an average-sized woman as beautiful.
Even though the clothing industry has labeled me “plus-sized,” if anything, I am “slightly less than average-sized.” 
In this post, I’m sure my thinking seems sort of piece-meal and disconnected.
In my head, thin-ness and health and body image and eating and exercise and cultural interpretations of beauty are all smashed into one big Frankenstein’s creation. 
For a long, long time I did not consider plus-sized or average-sized women to be beautiful solely because they were not thin.
When I was thin (and not healthy), I know that I considered people of that size, the average size, to be unhealthy.
I am at a point in my life where my habits are the healthiest they have been and my mental health regarding my body image is also the healthiest it has been.
And I weigh 200 pounds. 
You cannot look at a person and have any idea how healthy they are. 
You cannot look at a BMI or a number on a scale and judge a person’s health accordingly. 
I have worked with people who are suicidal who are thin and people who are suicidal who are not thin.
Health cannot be separated from mental health.
Can you be too thin? Absolutely. Your body needs a certain amount of fat and muscle to function properly. Can you be too big? Absolutely. Risks for all kinds of delightfully chronic and fatal conditions increase with weight gain.
Can you be big and be healthy? Yes. 
I know because I am those things.
If you exercise, if you are aware of what you eat and are careful to not over-eat, if you get the vitamins you need, if you prioritize balancing mental health and physical health, if you get enough sleep, “healthy” is within reach for everyone. 
If I ever write a book, it will be about balancing mental health and physical health. Because for basically my entire adult life, I’ve focused on one or the other and that does not work. I promise that if I do write a book, it’ll be better organized than this zig-zaggy blog post.
We have to push back against the cultural tendency to keep mental health separate from our definitions of general health. 
We have to push back against the cultural tendency to define health by how a person looks.
You are not “healthy” if you are not physically healthy.
But you are also not “healthy” if you are not mentally healthy.
And sometimes, especially if you have a tendency toward body dysmorphia or disordered eating, the healthiest option is not to focus on weight loss or buy into a fad diet plan. 
I am not trying to lose weight.
I am trying to be healthy.
And, you could argue, I’m not trying to lose weight BECAUSE I am trying to be healthy.
Trying to lose weight feeds mental illness for me. And that is not healthy.
This blog post is brought to you by a lot of years of working really hard to understand myself. My specific approach to managing my health may not work for you, but I challenge anyone reading this to take a moment and think about whether or not you are giving balanced consideration to physical and mental health. Because, even if our specific situations are different, balancing mental and physical health is the only path to being healthy. For me, for you, for everyone.
This blog post is also brought to you by a new health hurdle that has been laid in my lap over the past few weeks.
I have high blood pressure.
Chronic hypertension runs in my family, so I have a predisposition for high blood pressure. I have not been aware of having it at all in the past but thanks to my mom’s new blood pressure machine, I am aware of it now. 
Learning that I have high blood pressure instigated a bit of a breakdown. 
For a lot of the reasons I have already mentioned.
I’m working really hard to be healthy by balancing my mental and physical health. So why, if both those things are headed in the right direction, does my body not seem to agree?
Well, genetics will do that.
In the name of health, I scheduled an appointment with my doctor. We talked about the typical “lifestyle changes” that would be recommended for someone my age with high blood pressure.
I am already doing all of them. 
There are things I cannot control, however, that are affecting my mental health right now. I am carrying a lot of stress about the upcoming election. I am carrying a lot of stress about Black people being disproportionately arrested, charged, jailed, and killed by police as part of a system of oppression that I would very much like to have a part in dismantling. I am carrying a lot of stress about the pandemic that has killed 170,000 Americans. I have spent 7-8 years learning how to manage my stress. Those tools were not intended to work in situations like this.
So, my doctor and I made a plan to monitor my blood pressure, to try do more meditation and progressive relaxation, to eliminate processed snacks from my everyday diet (on occasion is still allowed), and to start doing some basic weight exercises with my cardio. 
Blood pressure is a really good example of why a healthy approach requires balancing mental and physical health. 
I’ve checked the physical health boxes for blood pressure management. 
And things beyond my control are preventing me from checking the mental health boxes for blood pressure management.
And also, genetics.
With the help of my doctor, I’ve developed a plan that considers both my physical and mental health and only time will tell if that has an impact on my blood pressure. For what it’s worth, my doctor is optimistic. Part of the reason my doctor is optimistic is because I am healthy.
To clarify, being healthy does not mean that my IBS has gone away, it just means I am treating my IBS with diet and medicine. 
Being healthy does not mean my anxiety has gone away, it just means I am in control of my anxiety.
I would not be healthy if I was unable to manage my IBS. 
But I would also not be healthy if I was unable to manage my anxiety. 
I would not be healthy if I had not figured out the value of balancing physical and mental health. 
Just like I found a way to overcome my iron-deficiency anemia, I will find a way to overcome my high blood pressure. It may require new medication and lifestyle changes, but by giving adequate consideration to both my physical and mental health, I have no doubt that I will eventually find a healthy solution to push myself over this hurdle as well.
Gonna wrap this up with a poor quality mirror-selfie I took this morning when I tried on a new bathing suit. This is a (headless) picture of a 200-pound, obese, plus-sized, healthy person.
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junker-town · 5 years
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Has Cam Newton played his last game for the Panthers?
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Photo by Jacob Kupferman/Getty Images
Newton went on injured reserve and has no guaranteed money remaining on his contract.
Cam Newton won’t be returning to the Panthers’ lineup anytime soon. Carolina put its starting quarterback on injured reserve in advance of a Week 10 showdown with the Packers, ending his 2019 regular season after only two games due to a foot injury.
That decision puts a middling franchise at a crossroad. Newton, the 2015 NFL MVP, has only one year and no guaranteed money remaining on his contract. His replacement, former undrafted free agent Kyle Allen, is 5-1 as a starter in his stead. Moving on from Newton via trade would likely bring some draft assets back in return while saving the team more than $19 million in salary cap space in 2020.
A Newton trade or release seemed unheard of four years ago when the dual-threat passer rallied his team to a 15-1 regular season record and the NFC championship. His Panthers have stagnated since then; he’s an even 23-23 as a starter in the three-plus years since.
In that span, they’ve missed the postseason twice and gotten a new owner who may be looking to make a splash. David Tepper bought the franchise from a scandal-embroiled Jerry Richardson after a wildly successful finance career based predicated on bold moves. He could make another such deal by swapping out his starting QB and head coach Ron Rivera this offseason.
So what are the odds Carolina moves on from its all-time passing leader?
Christian D’Andrea: 20 percent
There’s some logic to moving on from a former MVP who is only 30 years old. Newton’s breakthrough 2015 looks more like an oasis in a desert of mediocrity the further it gets in the rear view mirror. In the 3.5 years since, he’s completed less than 60 percent of his passes, thrown 44 interceptions in 46 starts, and averaged only 6.9 yards per attempt. Of the 42 quarterbacks who’ve thrown at least 500 passes in that span, Newton’s 82.6 passer rating ranks 33rd — just beneath Joe Flacco and Josh McCown but just ahead of Ryan Fitzpatrick and Blake Bortles.
Still, Newton’s top gear puts him on a completely different plane than those guys. While it may be panning for fool’s gold to hope he’ll ever be the same player he was — especially as nagging injuries have conspired to sap a little bit more of his strength every year — he still brings plenty to the table.
Newton’s 2020 cap number is a relatively affordable $21.1 million. Combine that with the paltry six-figure/low seven-figure number Allen will receive as an exclusive rights restricted free agent, and you’ve got a QB rotation that would likely cost the Panthers less than the Jaguars will pay Nick Foles next fall.
That’s a fair price to keep a reliable QB tandem in town, and few teams understand the value of a useable backup more than the Panthers right now. If Newton doesn’t work out, he can leave in free agency the following year without Carolina owing him anything. If he does — and the team still believes in Allen as its future — the club could still move him before the trade deadline to a needy team with postseason aspirations and a shaky passing offense.
There isn’t much incentive to release Newton. Trading him while his value may never have been lower isn’t likely to bring the kind of return for which the Panthers would hope. If some team — i.e. the Bears — bowls Carolina over with an offer, Newton could be gone. Otherwise there’s little risk involved with keeping Newton around and seeing what he can do after a full year of rehab.
James Dator: 45 percent
Never, ever underestimate the possibility of the Panthers doing something monumentally stupid — and make no mistake, moving on from Newton would be colossally idiotic. Newton is the first and only true, franchise quarterback the team has ever had, and it took them almost 20 years to draft him.
That said, there are salary cap and coaching issues at play too. Should the Panthers decide to part ways with Rivera (and general manager Marty Hurney by extension) after the season, then there is a plausible scenario where a new leadership team wants “their guy” to be the quarterback moving forward. Newton will eat up a sizable chunk of the team’s cap space next season, and it might seem prudent on paper to free up that money and get some draft picks in exchange.
Should this happen then the Panthers deserve the next decade of mediocrity. The team’s defense and Christian McCaffrey are good enough that they won’t see a top-five pick anytime soon, so they’ll limp along to a series of 6-10 and 7-9 seasons with Kyle Allen or whomever at the helm until someone finally gets fed up and lets the team tank.
On a personal level, moving on from Newton is just gross. The front office retained their jobs on his back for the last 8 years, floundering to give their franchise QB decent receivers or an offensive line of note. He still went on to take them to a Super Bowl and become the best passer in team history despite every card in the beck being stacked against him. Newton never threw the organization under the bus, even when they deserved it. Turnabout is fair play and they deserve to stick with him now.
But football is a cruel, harsh business sometimes run by total idiots who can’t see the forest for the trees — so a scenario absolutely exists where he’s gone by the draft. If Newton is traded to another team they deserve to kick the crap out of Carolina every year until Newton eventually retires.
What does this mean for the Panthers going forward?
D’Andrea: Two questions for you, James.
What do you think Tepper’s presence means to the franchise and how much he’s ready to take the wheel after leaving things relatively stable in his first year as owner?
What you think the Panthers would do with the extra cash/assets the team would glean from moving on from Newton?
Dator: Tepper was resolutely behind Newton when he took over as owner, largely taking the approach that he would support whatever his football staff believed was the right. It’s still early to put a pin on what Tepper really believes in as owner, however. This is still the honeymoon phase, and there’s no doubt he’s monitoring how fans are reacting to Newton being hurt.
In terms of what the team would do with potential assets — that really depends on who the GM is. There’s a scenario where I can envision them finally building from the inside out and shoring up their offensive line before trying to find a quarterback, but fans are also growing weary of mediocrity. If the Panthers decide to part ways with Newton they better have an answer, and fast.
Remember when the Chargers let Drew Brees go to New Orleans? That didn’t sting very much because Philip Rivers is excellent. If that same scenario plays out and the Panthers don’t have a Rivers-like QB to insert then there are no depths of how upset fans will be. The big problem: The team is winning right now.
Some questions for you, since you don’t have a vested interest as a fan.
Is there a scenario you see where the Panthers can compete in the next five years without Newton?
Looking ahead to the draft: Is there any way the Panthers could conceivably find another franchise QB quickly?
D’Andrea: I think the Panthers could be a couple of impact defensive players away from being able to succeed with a caretaker QB. Hell, they’re 5-3 right now with Allen playing roughly as well as late-stage Andy Dalton. McCaffrey’s cheat code abilities out of the backfield should boost any quarterback, and adding another few difference makers to the core of Luke Kuechly, Brian Burns, Donte Jackson, Kawann Short, and a potentially re-signed Mario Addison could mire opponents long enough for an average QB to squeak out a series of wins. The last two guys on that list are starting to get old, though — so Carolina would have to make that move soon.
Finding another franchise quarterback, especially without a top-10 pick, will be tough but not impossible. In recent years we’ve seen players like Lamar Jackson, Dak Prescott, Teddy Bridgewater, Jacoby Brissett, Derek Carr, Jimmy Garoppolo, Russell Wilson, and Nick Foles fall to the back end of the first round or deeper. The Panthers could also take a chance on a rehabilitation project on the free agent market like Jameis Winston or Marcus Mariota, if they want to swing hard in 2020. Neither path is ideal. I like the draft idea far more than trying to break a middling QB’s bad habits, especially when you consider the contract costs involved, but Carolina has options.
The Panthers have gone 5-1 without Newton in the lineup in 2019 and have jumped into the thick of the NFC playoff race behind Allen, stout defense, and McCaffrey’s MVP-like performance. However, Carolina is only 1-2 against teams with winning records this season and still has plenty of work to do before putting a capital “C” on their contender status.
Rivera’s team could wind up stuck in the league’s middle class as 2019 winds to a close; not good enough for the postseason but not ready to rebuild either. That’ll push some serious questions about this team’s future to the forefront of its offseason planning. All things considered, it makes sense for Newton to play out his contract in Charlotte — but asking the Panthers to make the logical choice isn’t always a safe bet.
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rulystuff · 5 years
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https://servicemeltdown.com/is-the-united-states-at-end-of-empire/
New Post has been published on https://servicemeltdown.com/is-the-united-states-at-end-of-empire/
IS THE UNITED STATES AT END OF EMPIRE?
America’s economic primacy is pretty much behind us. And, I don’t believe there is any chance of reversing a trend that began thirty plus years ago. The best-case scenario for the nation is to arrest the rate of economic decline – never mind social and cultural decline, which are probably lodged in irreversible decay.  As Robert Kaplan says in his book, The Revenge of Geography, we might prolong our position of strength by preparing the world for our own obsolescence and thus ensuring a graceful exit.  But even this outcome will require the strength of will that has yet to be demonstrated by leaders in business, education, and government.
Economic primacy might be measured along many fronts – income per capita, rate of growth, productivity, foreign exchange reserves, among others – but if one looks at Gross Domestic Product (GDP), perhaps the coarsest measure of a nation’s economic well-being, then the United States has lost its economic primacy to China.
China’s GDP on a purchasing power parity (PPP) basis is superior to that of the United States. The PPP approach levels the GDP calculation to each country’s relative price of goods. So, if a television set costs $500 in the United States while the same television costs $250 in China then, theoretically at least, we’re undercounting China’s GDP by $250. Using the PPP rationale, China’s GDP was approximately $23 trillion in 2017 compared to that of the United States which came in at $19 trillion.
Some politicians, economists, lobbyists, and others, like to use a different measure of GDP to suit their own purposes. The nominal GDP, which looks at the total of goods and services produced at current exchange rates yields a substantially different calculation. The nominal GDP of the United States in 2017 came in at $19 trillion. By comparison, China’s nominal GDP came in at $12 trillion. If we only look at nominal GDP, it is clear we are being lulled into a false sense of economic security.
Diplomatically, China might also have an edge on the United States. In the 1980’s, the then leader of the People’s Republic of China, Deng Xiaoping, enunciated his famous maxim of tao guang yang hui. Interpreted variously, the maxim is meant as a foreign policy directive that regardless how muscular the nation might become economically, geopolitically, and militarily it is always best to keep a “low profile diplomatically.” No more beguiling example of Deng Xiaoping’s maxim is in evidence than in China’s Belt and Road Initiative. Simply put, China plans to build one “road” from China to Europe and thus control all manner of transcontinental commerce. Already, China controls or has a presence in ports that handle about two-thirds of the world’s container traffic. In Greece, the port of Piraeus is mostly in the hands of the Chinese which makes Greece a strategic entry point for China into the heart of Europe.
IF WE’RE NOT MAKING STUFF WHAT ARE WE TO DO?
Let’s face it, manufacturing was lost to our shores for all intents and purposes many years ago. There are now roughly 12 million workers in the United States engaged in manufacturing down from approximately 18 million in the 1980’s – President Trump, to his credit, is determined to revitalize manufacturing, steel, and coal but despite gains in these areas total employment numbers will continue to slip on a trend line basis.  China, by comparison, has approximately 80 million manufacturing workers. Further, in 2015, China displaced the United States as the top manufacturing nation in the world with a total value-added manufacturing output of $3 trillion compared to $2.2 trillion for the United States.
Services is the new game in town accounting for roughly 80% of our nation’s GDP. And, as a nation, we better excel in that new cycle reality. But from the way we treat our veterans, clients, patients, students, donors, and citizens – customers, all, to my way of thinking – you would think that we are flush with options on which to fall back. We are not. The United States does run an annual balance of payments surplus in services of about $250 billion – compared to a goods deficit of approximately $800 billion – but don’t let that fool you. In the all-important Computer and Business Services category, as we noted in an earlier essay, imports are within earshot of total exports. Moreover, unless we accelerate the rate of growth of exports – the rate of growth is about even for both imports and exports – we might soon be facing a deficit in this sector of the economy so crucial for the good health of the nation in the twenty-first century.
In the Introduction, we referenced the Accenture survey of 2007 which showed that 41% of respondents described service quality as fair, poor, or terrible. Perform any human endeavor at that level of proficiency and you are an abject failure. In the services sector, however, that is par for the course. In the Far East, cultural determinants do not confuse service with servitude. As a rule, suppliers will go the extra mile to please a consumer. In the West, and particularly in the United States, the most that a service worker can muster when asked to perform a personalized service is to utter something like, “no problem.” That kind of indifferent attitude is ingrained and certain to keep our level of service quality from clambering out of the aforementioned levels of mediocrity. In the meantime, off-shore locations feast on our indifference to service and do whatever it takes to secure and maintain a customer relationship.
The oft-cited explanation for the comparative advantage of off-shore locations, namely, their low cost, is a facile response to a more complicated dynamic. It is true that off-shore locations enjoy all-in cost advantages vis-a-vis the United States. It is also true, that President Trump has worked hard to enhance our competitiveness on the world stage by reducing the oppressive web of regulation; reducing our world-leading corporate tax rates; negotiating better trade deals; offering a tax holiday for repatriated corporate profits, among other initiatives. But my experience is that, particularly in technical disciplines, services delivered by off-shore locations are superior to ours. The President’s apprenticeship initiative, if it were aggressively expanded to include science, technology, engineering, and mathematics (STEM) occupations, might make us more competitive in this area. In the rarefied world of supercomputers so critical to pushing the frontiers of science and technology, for example, the United States is out-produced by China on the order of two-to-one. So, until and unless we grow a much larger crop of more competent technical workers we will continue to be outperformed by nations more determined, better educated, more dedicated, and hungrier than we are.
THE NATION FACES SOME VERY STIFF HEADWINDS
The United States economy has structural defects which will not go away simply by holding rallies and mouthing rhetorical flourishes in the halls of Congress. Decline might be inexorable but we should not stand by as mere spectators. The will and purpose to restore our economic vitality must be marshaled by every American. It must begin, first and foremost, by demanding of our leaders, our institutions, and ourselves to be unafraid to serve. It is the remotest possibility that we can salvage the service economy and consequently our nation unless our standard of performance is nothing less than service excellence in everything we do.
We don’t have a lot going for ourselves. Labor productivity growth is stalled at near zero levels; the rate of household savings is paltry; regulation and taxation still suffocates businesses and individuals despite President Trump’s initiatives; unemployment – not the nominal rate but the U6 rate which measures the unemployed, those that are not looking for work, and those who have had to settle for part-time work –  is mired at levels of near 8% (during the Obama years the U6 rate never got below 9.2%); the national debt is in the stratosphere; entitlement spending well exceeds 50% of our budget dollars and is likely to increase with both a growing number of baby boomers reaching retirement and the population’s longer life expectancy; and fraud and corruption run rampant among other serious afflictions. Perhaps the most troubling portent for the nation’s future is its inability to clamber out of a deep and black hole in education. Among the 35 industrialized nations which comprise the Organization of Economic Cooperation and Development (OECD), for example, the United States ranks 31st in mathematics and roughly in the middle on science. Clearly, all of the monetary and fiscal policies in the world will hardly fix this crippling deficiency.
Prior to Mr. Trump’s coming to office, the federal government was hell-bent on redistributing wealth rather than getting out of the way so that risk capitalists could create wealth. We’ll just have to see if the President’s reforms bring back a full-throated free market approach to the nation’s issues. Meanwhile, in the corporate world, business leaders are fixated on how quarterly earnings affect their pay packages, and when push comes to shove, cutting corners and worse. It is rare to see business leaders get compensated for delivering excellence in service to those from whom they benefit the most: the customer. But don’t expect any changes in this area until there is an all-out shareholder revolt that devolves power back to the rightful owners of these firms.
As I argued in a previous essay, The United Kingdom Is Resurgent, the former world economic power, lost its supremacy because it failed to adapt to the winds of change which buffeted its shores long after the economy reached its apex in the early twentieth century.
It is also provocative to think that there might be a “natural” life cycle to nations as there is to human beings that is irreversible. Regardless of one’s view in embracing one or another theory that might explain the demise of nations, there is no reason to remain indolent in resisting such decline even if there is only the remotest possibility of such an outcome. Keep in mind that the demise of Rome was hardly cataclysmic but the result of a long succession of imprudent decisions made by the Empire’s leaders.
CAN THE UNITED STATES GUARANTEE THE PEACE?
If the nation has ceded its economic primacy, its military primacy is being severely tested. United States’ land-based forces are heavily committed to counterinsurgency operations to fend off non-state actors while conventional warfare strategic planning appears to be dead. In Europe, a likely conventional hotspot, NATO and U.S. forces are outgunned and outmanned by a factor of at least ten to one by Russian forces.
Our ocean defenses are in no better shape. The nation’s principal bulwark protecting our shores is in steep decline. The United States Navy is but a ghost of its former self. The nation now has fewer vessels than it had before World War I. Most notably, our aircraft carrier fleet which must number sixteen in order to patrol three separate ocean theaters now numbers ten or barely enough to protect two theaters. In the Mediterranean, the U.S. Sixth Fleet is a non-entity the result of which is to have created a vacuum that is now filled by the Russians, Syrians, and Iranians. In the South China Sea, where American Navy vessels seem unable to sail without colliding into tankers and containerships, the United States is being challenged by a territorially aggressive and technologically advanced Chinese Navy. Already, an armada of sophisticated dredging vessels is reclaiming land from the sea for the sole purpose of building military airfields and naval port facilities.
Former U.S. Undersecretary of the Navy, Seth Cropsey, in his chilling and sobering account, Mayday the Decline of American Naval Supremacy, reminds us that China was the naval hegemon in the fifteenth century. Under the leadership of Admiral Sheng He, Chinese sailors coursed the oceans from their territorial waters to the Strait of Hormuz. Chinese vessels of the time were of a length and tonnage that were not to be seen in the West until centuries later. China’s naval supremacy only came to an end when civil servants forced severe budget cutbacks on the kingdom. Does our own budget sequestration of 2013, with its mandate to, in effect, disarm the military, ring a bell? The results of each nation’s budget missteps are eerily similar. China, for its part, will probably not repeat its mistake.
In all likelihood, it will take the United States a generation, assuming proper funding and political will, to restore the U.S. Navy so that we can confidently state that the nation can project power and protect seaborne commerce beyond the horizon.
Just as troubling as the rickety state of the nation’s military naval forces is the state of the United States Merchant Marine. The Merchant Marine fleet hauls cargo during peacetime and is attached to the Defense Department during wartime to transport troops and supplies into war zones. The United States should hope it does not get into a major conflagration oceans away as it has experienced a dramatic attrition in its Merchant Marine fleet and manpower inventory. In 1960, the United States had nearly 3,000 vessels in the Merchant Marine fleet. Today, the nation has fewer than 175 vessels or less than one-half of 1% of the total vessel count worldwide. Worse, United States-flagged vessels carry a mere pittance of the total volume of goods and materials that transit through the nation’s ports. The consequence of what is obviously a weak flank in the nation’s defense posture is that in the event of a major outbreak of hostilities the United States would be reliant on foreign-flagged vessels to carry troops, armaments, and supplies with all of the attendant security risks.
In sum, if as the great military historian B.H. Liddell Hart suggests, a nation’s Grand Strategy is a composite of its political, military, economic and diplomatic tools in its “arsenal” which can be brought to bear to advance a state’s national interest then the United States appears to be convulsing in its gradual decay.
0 notes
smartwebhostingblog · 6 years
Text
Apple Silly Season Is Upon Us
New Post has been published on https://rwamztech.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
Apple Silly Season Is Upon Us
New Post has been published on https://rwamztech.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
lazilysillyprince · 6 years
Text
Apple Silly Season Is Upon Us
New Post has been published on https://rwamztech.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
hostingnewsfeed · 6 years
Text
Apple Silly Season Is Upon Us
New Post has been published on https://rwamztech.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
weekendwarriorblog · 6 years
Text
WHAT TO WATCH THIS WEEKEND December 21, 2018  - Mary Poppins Returns, Aquaman, Bumblebee, Second Act, Welcome to Marwen
This was going to be my last column for the year, but there’s just too much to write about, so I’m going to split it up and publish another, hopefully shorter, column next Monday. This is the last weekend before Christmas, and while there are a ton of big movies released – as well as a couple lower-key ones – most of these movies will just be doing a very small part of their overall business in the generally slower weekend before they explode next week with everyone off from school and most off from work all week.
MARY POPPINS RETURNS (Disney)
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Opening on Wednesday is Walt Disney Pictures’ last prospective blockbuster of the year as well as a sequel to one of the company’s most iconic films over its entire history, 1964’s Mary Poppins, which was nominated for 13 Oscars, winning five. Mary Poppins Returns might also be Disney’s first big play for a Best Picture nomination since The Helpin 2011, which actually was a DreamWorks movie. Then again, Disney already seemingly has its stokes in the Oscar fire this year with Marvel’s Black Panther, so this family musical in the Walt Disney tradition might be suitable back-up.
It’s the latest movie directed by Rob Marshall, who helped Disney’s Miramax division win Best Picture with his theatrical directorial debut Chicago, then delivered a musical holiday hit for Disney four years ago with Into the Woods, which grossed $128 million from a Christmas Day release. Chicago grossed $170 million after its own Christmas Day platform release in 2002, and that got Marshall the gig directing 2011’s Pirates of the Caribbean: On Stranger Tides, which grossed $241 million in North America but did even better with $800 million overseas.
Marshall reunites with a couple of his Into the Woods stars, most notably Emily Blunt, who is so perfect to step into the very big shoes of the original Mary Poppins, Julie Andrews.  Blunt is already having quite a spectacular year after starring in hubby John Krasinski’s The Quiet Place, which grossed $188 million domestically, making it Blunt’s highest-grossing movie to date. A few years ago, Blunt starred in the movie based on the bestselling book The Girl on the Train, which also did decently with $75 million, and that was mostly based on her name (and the book, of course.)  That should be enough to help place Blunt even closer to the A-list and playing Mary Poppins is likely to solidify that role. Who knows? It might even get her that Oscar nomination that has been so elusive despite having six Golden Globe nominations.
Of course, Blunt is ably helped by popular actor-rapper-songwriter Lin Manuel Miranda, whose Hamilton broke many records for Broadway musical and who is working on adapting his previous musical In the Heights  for the screen. Miranda previously got involved with the Disney brand when he wrote songs and provided his voice for Dwayne Johnson’s Moana a few years back, and no surprise that he’s out there doing the most press and talk shows for Mary Poppins Returns. Then on top of those two stars, Marshall and Blunt also reunite with Into the Wood’s Oscar-nominated scene stealerMeryl Streep, clearly an A-list star who can bring people out to see almost anything she does, although she only appears for one song/musica number in this movie. The cast is rounded out by Ben Whishaw, James Bond’s Q, and Emily Mortimer, another great British actor, plus there are a couple highly-publicized cameos by original Mary Poppins stars that will be a thrill to fans of the original.
The thing is that there’s a whole generation or two that did not grow up watching the original Disney movie, so they won’t have the personal connection to the character/movie as their parents might. Also, one can expect that males of all ages will be more interested in checking out Aquaman  or Bumblebee their opening weekend,
It’s important to remember a couple things – the first one being that the weekend before Christmas can be slower than usual, and the second being that opening on Wednesday means that really diehard fans who can’t wait until the weekend might try to see it before heading out of town for the holidays. On the other hand, some might just wait until the weekend or until Christmas week to see it with their families. Either way, these things will likely keep the movie’s weekend numbers to be too crazy.
Because of that, I can see Mary Poppins Returns  making around $10 million on Wednesday and Thursday, getting a nice bump over the weekend to just over $40 million, but REALLY exploding in the week beginning with Christmas to the point where I can see it hitting $200 million by New Year’s Day, which would be quite amazing for a studio that is having their best year ever.
MY REVIEW OF MARY POPPINS RETURNS
AQUAMAN (Warner Bros.)
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It’s hard to imagine the latest movie from Warner Bros’ DC Universe might be considered counter-programming to a Disney movie, but let’s face it, Warner Bros. has been struggling against the Disney-Marvel Studios titan for a bunch of years now, and they need a way back into fans’ good graces after last year’s Justice League and 2015’s Suicide Squad.
It’s hard to believe that anyone would ever make an Aquaman movie, especially after the famous Entouragegag – not to mention Saturday Night Liveand others making fun of the character. Jason Momoa’s Atlantean warrior from the Justice League movie is indeed getting his own solo movie, directed by James Wan of Furious 7  and three horror franchises: Saw, Insidious and The Conjuring.
Joining Momoa as Mera is Amber Heard, who also had a brief appearance in Justice League, but has mainly been off-the-grid with the long-delayed London Fields and in the tabloids for her issues with her ex Johnny Depp. Heard hasn’t really been in a major release since the Oscar bait The Danish Girl and Magic Mike XXL in 2015.
The cast also includes Oscar winner Nicole Kidman (as Aquaman’s mother), Oscar nominee Willem Dafoe (as Aquaman’s advisor) and Wan regular Patrick Wilson as his brother Orm aka one of the film’s main baddies, Ocean Master. It also stars Yahya Abdul-Mateen II as Aquaman’s other bad guy, Black Manta.
Reviewsfor the movie have generally been mixed but on par with Mary Poppins Returns, maybe a little lower, but much better than Justice Leagueor Suicide Squad. (Thank, God!) Warner Bros. even gave the movie sneak previews this past Saturday for Amazon Prime users, in which it made $2.9 million. That might help get the word out on the movie, but it also might take some money away from the movie’s opening weekend, since many probably went to see it early from positive reviews.
The movie will also have to tackle the most direction competition from Paramount’s Bumblebee (see below) as well as last week’s well-received Spider-Man: Into the Spider-Verse, which is likely to have strong word-of-mouth business from last weekend going by its rare A+ CinemaScore.
Expect Aquaman to do decently over the pre-holiday weekend with $70 to 75 million, because as mentioned before, many people are travelling or doing last-minute shopping over the weekend, but expect it to continue to bring in repeat business over the holidays, so I could see it grossing $250 million or slightly more by the time it leaves theaters.
Also, make sure to check out my interview with director James Wan over at the awesome new VitalThrills.com! Very excited to have a byline on that relatively new site!
MY REVIEW OF AQUAMAN
BUMBLEBEE (Paramount)
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The third big movie of the weekend -- and some will find it crazy that Paramount is releasing it this weekend against the two stronger movies above -- is the latest movie in the Transformers franchise, the prequel telling the story of Autobot Bumblebee.
Directed by Travis Knight, the CEO of Laika Studios and director of the stop-motion animated Kubo and the Two Strings, this is a prequel that shows the origin of the beloved Transformer character as he’s sent to earth during the Fall of Cybertron and ends up befriending a rebellious teenager (played by Hailee Steinfeld) in 1987.
Having a female lead in a Transformers is quite groundbreaking since women were mostly used as eye candy in Michael Bay’s movies, but Hailee Steinfeld has done a good job establishing herself with her debut role in the Coens’ True Grit, for which she received an Oscar nomination. Since then, she’s been in films like Ender’s Game, Begin Again, Pitch Perfect 2 and most recently, voicing the role of Spider-Gwen in Spider-Man: Into the Spider-Verse.
On the plus side, having a female lead might help bring in younger girls that might not normally be interested in Transformers, but it could theoretically turn off the guys who have already been complaining about the female leads in the Star Wars saga. Both franchises are very male-driven, and both of the new movies above will be of equal interest to anyone who might be interested in Bumblebee.
Fortunately, Bumblebee is much better than most people are expecting, and some might be surprised that it currently has better reviews than both Aquaman AND Mary Poppins with 98% Fresh on Rotten Tomatoes, as of this writing.  It does have a ton of competition arriving in theaters, but it’s fairly clear that Paramount and Allspark Films (the film division of Hasbro) are hoping to get some run-off over the holidays from people who have already seen the above two movies, as well as Spider-Man: Into the Spider-Verse. The fact that Paramount gave a well-attended early sneak preview of Bumblebee on Dec 8 gives you some idea how confident they are that the fans will dig so.
Even so, Bumblebee will be lucky to make more than $20 million this weekend, although there might be enough room with most people off work and out of school on Sunday to see more than one movie this weekend. I can see this one making around $25 million over the weekend but it should also be able to exceed $100 million by New Year’s, and its overseas money should help Paramount stay in the Transformers business for some time.
MY REVIEW OF BUMBLEBEE
SECOND ACT (STXfilms)
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And then we get to some big-time counter-programming, and in this case, it might be a movie that might have a hard time finding an audience, especially against Mary Poppins Returns.
Second Actcould just as well have been called “Jennifer Lopez Returns,” because it is in fact her first major non-voice role in theaters since 2015’s thriller The Boy Next Door. That movie was a bit of a joke, yet it still opened with nearly $15 million and grossed $35.3 million based on her role. Her previous movie Parker two years earlier didn’t fair particularly well, much of which may be attributed to her not being as much in the public eye in terms of movies anyway.
Directed by Peter Segal (50 First Dates), Second Actis more in vein of Lopez’s 2002 hit Maid in Manhattan, which grossed $94 million over the holidays after a moderate $18.7 million December opening. Lopez went on to have a few other romantic comedy hits after that including Shall We Danceand Monster-in-Law, but others like The Back-Up Plan (2010) and What to Expect When You’re Expecting (2012) barely made it to $40 million domestic.
That brings us to 2018 where Lopez hasn’t really been in a movie in some time but still has quite a few female fans, and maybe some of them might not be so interested in the mostly white Mary Poppins Returns. (Yes, I realize Lin Manuel Miranda is Puerto Rican-American … no need to write that angry letter/tweet!)
The movie offers a great premise which has Lopez making it in big business after a friend makes up a fake Facebook account, and it’s something that helps push the female empowerment conversation from the past few years even further. Earlier this year, STX released Amy Schumer’s I Feel Pretty, which did decently with $16 million opening, grossing nearly $49 million domestically, despite terrible reviews.
The trailers for Second Act have been received similarly well and Lopez has been doing her fair share of the talk show rounds, but otherwise, STX has only opened one movie with more than $20 million, and that was 2016’s Bad Moms, which was an easy sell even for its rushed-out sequel Bad Moms Christmaslast year.
Even though Second Actseems like a strong inspirational story, it also seems like the definition of a holiday movie that’s released in the bad weekend pre-Christmas, in which it probably couldn’t make more than $8 million. If the movie is as good as it looks, I can see women going to see it with female friends over the holidays to make it a sleeper with between $40 and 50 million total.
Mini-Review: I didn’t go into Second Act expecting much, even though Peter Segal did direct one of Adam Sandler’s better films (50 First Dates).  I certainly didn’t expect that I’d relate to Jennifer Lopez’s Maya as much as I did. No, I’m not a Latina woman from Queens who works in a supermarket, but I have been having trouble getting a job since I don’t have a degree despite having 25 years of experience writing for the internet.
But enough about me, let’s get back to Second Act, a movie with such an up-front premise that you will pretty much get exactly what you might expect if you’ve seen the trailer and liked what you saw. Somehow, Maya finds herself as a consultant at a big-name corporation’s make-up department because her friend’s son doctored her resumé and Facebook page.
Lopez is definitely in her element with this sort of premise which falls somewhere between Working Girl and 13 Going on 30, and if you like those inspirational woman-empowerment comedies, then you’ll probably find elements to like about Second Act as well.
Much of that is due to Lopez’s supporting cast, a group of underrated funny women like Leah Remini (as Maya’s best friend) and Charlyne Yi (an office assistant) plus Vanessa Hudgens proving once again that she’s quite good at handling anything that’s thrown her way as Maya’s primary competition at the company. Some of the jokes work better than others, but whenever Remini is on-screen, you can expect to laugh.
Sure, the overall premise is one that’s already a little hard to swallow, but then it goes off the rails with a twist absolutely no one will see coming. And yet, it somehow finds a way to recover nicely and get its audience back.
Regardless, Second Act is a perfectly harmless and safe film that gives you more than a few laughs, might even have you in tears at times, but basically gives you exactly what’s advertised, which is something rather rare these days.
Rating: 7/10
WELCOME TO MARWEN (Universal)
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Lastly, there’s the latest movie from Robert Zemeckis, which ten to fifteen years ago, may have been a huge deal, especially following the huge success he had with Tom Hanks inCast Awayand Forest Gump, both which were Oscar-nominated (and winning) mega-blockbusters.
Zemeckis’ last film, the WWII spy drama Allied, only made $40 million despite starting Brad Pitt and Marion Cotillard, and his real-life story The Walkstarring Joseph Gordon Lewis might as well have been thrown over the side of the World Trade Center, because it tanked so badly. Zemeckis’ last hit was Flight, starring Denzel Washington, which barely grazed $100 million domestic, but also received two Oscar nominations. The three movies before that were performance capture animated movies with had varying degrees of success.
Like Flight and The Walk, Welcome to Marwenis based on a true story, that of artist Mark Hogancamp, who was injured in a brutal attack and finds therapeutic solace in the models and dolls he builds in his backyard. Hogancamp’s story was previously told in Jeff Maimberg’s award-winning doc Marwencol in 2010, although I’m not sure that many people are aware that doc exists.
Like Nicole Kidman above, this is Steve Carell’s third movie of the year, including the Christmas Day opener Vice, and his last drama Beautiful Boy has only grossed $7.5 million… and that was with super-hot Timothée Calamet! Carell’s 2017 releases, Richard Linklater’s Last Flag Flying and Battle of the Sexes haven’t fared much better, and he’s generally done better voicing Gru in Illumination Studios’ Despicable Me and Minions movies. For this one, Carell is co-starring Leslie Mann (reuniting with Carell for the first time since his breakout film The 40 Year Old Virgin), Eisa Gonzalez from Baby Driver, Game of Thrones’ Gwendoline Christie, Diane Kruger and Janelle Monae, a solid female supporting cast, for sure.
There have been many movies like this released right before Christmas in hopes for any sort of business over the holidays. Movies like Jim Carrey’s The Majestic opened with less than $5 million in 2001, and Will Smith’s Collateral Beautyonly did slightly better in 2016 with its $7 million opening. Also, there was the Tom Hanks movie Extremely Loud & Incredibly Close, which only got a platform release over Christmas, which is generally the way to go for movies looking for Oscar nominations.
In some ways, Marwen reminds me of Ben Stiller’s 2013 remake of The Secret Life of Walter Mitty, which opened on Christmas Day (a Wednesday) with $7.8 million and made another $12.7 million on its way to $58 million domestic. I don’t think Marwen could do that well since it’s opening before the Christmas holiday bump, because Universal is only opening Zemeckis’ latest in 1,900 theaters, and the movie has barely been screened for critics or awards groups before this coming week, which tells you that the studio doesn’t see it being an Oscar player.
Frankly, I’d be shocked if Marwen made more than $5 million this weekend, but if it’s any good, it could make upwards of $30 million but not much more. There’s just too much stronger competition in theaters.
Mini-Review: If you haven’t seen Jeffrey Maimberg’s doc – and I haven’t – then you might be even more puzzled by why Robert Zemeckis might want to dramatize the story of artist Mark Hogancamp who was beaten up outside an upstate bar and left in such a bad mental state, he lost all his memories. In order to get through the repercussions of such an assault, he began building a small town called Marwencol in his backyard, populating it with dolls that he would put into various hero scenarios.
Maybe this premise wouldn’t be so weird if the movie doesn’t start off with a WWII action scene involving Carell’s Captain Hogie in doll form taking on Nazis and being saved by a group of women… and the seeming cross between live action and animation just gets weirder and weirder as the movie goes along. There’s also Mark’s proclivity for collecting and wearing women’s high heel shoes, which also plays a pivotal role in the story, as does a “Belgian witch” named Deja (after the John Carter of Mars character), who is voiced by Diane Kruger, who doesn’t have a real-life counterpart like all of Hogie’s other women.
Sometime in the past ten years or more, you may have heard one woman or another complain about the body issues created by Barbie dolls that real girls couldn’t possibly live up to… so take that and then add a poorly-chosen Robert Palmer song, and you can understand why this movie might get many young women bristled.
It’s hard to completely hate a movie that features Leslie Mann in such a key role as Mark’s across-the-street neighbor Nicol, on which he has developed such a huge crush. This 40-Year-Old Virgin offers the movie’s sweetest and most emotional moments but then it’s soon lost in more silliness with dolls or once again showing Mark being beaten up on that fateful night. Janelle Monae and some of the other actors are wasted, barely appearing fully in human form.
The saddest part about this movie is that it’s painfully aware that Zemeckis has completely lost touch with the kind of movies that audiences might want to see, and Welcome to Marwen frequently has you asking, “Who was this movie supposed to be for?” Rating: 5/10
It certainly will be interesting to see how the top 3 movies fare in a busy pre-Christmas weekend, but even moreso to see how they affect the well-received Spider-Man: Into the Spider-Verse and Clint Eastwood’s The Mule, although the former will probably be more affected than the latter. Fox Searchlight will continue to expand The Favourite nationwide, this Friday into 775, as it racks up awards and nominations, although I’m not sure that will be enough to break into the top 10. It probably will end up with around $2 million or so, as will, Focus Features’ Mary Queen of Scots, starring Saoirse Ronan, which will expand into 700 theaters with Ronan doing the talk show rounds this week. It’s a battle of the costume dramas outside the top 10, but expect both of them to find business over the holidays.
This week’s Top 10 should look something like this… (and mind you, these are all for three days, Friday through Sunday)
1. Aquaman  (Warner Bros.)  - $73.6 million N/A 2. Mary Poppins Returns  (Disney) - $41 million N/A ($10 million on Weds/Thursday) 3. Bumblebee  (Paramount) - $25.5 million N/A 4. Spider-Man: Into the Spider-verse  (Sony) - $19.4 million -45% 5.The Mule (Warner Bros.) - $9.1 million -48% 6. Second Act (STXfilms) - $7.5 million N/A 7. The Grinch  (Universal) - $7 million -40% 8. Welcome to Marwen  (Universal) - $5 million N/A 9.Ralph Breaks the Internet  (Disney) – $4.4 million -48% 10. Mortal Engines  (Universal) - $3.4 million -55% -- The Favourite  (Fox Searchlight) - $2.1 million -- Mary Queen of Scots (Focus Features) - $1.8 million
LIMITED RELEASES
Thankfully, things are slowing down as far as limited releases with only a few left this weekend and a couple more next week.
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First up is the new film from Oscar-winning Polish filmmaker Pawel Pawlikowsky (Ida), as COLD WAR  (Amazon Studios), this one a love story between a young singer and older conductor and how that relationship evolves over the course of the years and a number of world events that try to come between them. I wrote about the film briefly when it played the New York Film Festival earlier this year and hope to rewatch it over the holidays, because it’s quite amazing. A wonderful story told in a tight 90 minutes, all in black and white with fantastic cinematography by Lukasz Zal, who received an Oscar nomination for his camerawork and lighting on Ida. It opens in select cities on Friday.
Opening in L.A. for a one-week Oscar consideration run is Kenneth Branagh’s ALL IS TRUE  (Sony Pictures Classics), which I haven’t had a chance to seen myself, but it takes place during the final years of William Shakespeare in 1613 with Branagh playing the playwright, Judi Dench playing his wife Anne and Ian McKellen as the Earl of Southampton, who according to Roland Emmerich’s Anonymous, may have authored Shakespeare’s works. It follows the burning down of Shakespeare’s Globe Theater which sends him back to his family in Stratford. No word on when it will get a normal theatrical release, but from what I heard, it doesn’t have much of a chance for Oscars either.
Written by Luc Besson and Richard Wenk  (The Equalizer) and directed by Steven Quale  (Final Destination 5), American Renegades  (Europacorp) follows a group of Navy SEALS who have hidden a vast treasure underwater in a lake in Sorbia. It stars Sullivan Stapleton (300: Rise of an Empire), JK Simmons, Sylvia Hoeks (Blade Runner 2049) and others, and I’m not 100% convinced it’s going to be in many theaters this Friday, but it will be on VOD and digital download on Christmas Day.
Maria Pulero’s psychological thriller Between Worlds  (Saban Films), playing in New York (Cinema Village) and L.A. (Arena Cinelounge) following its VOD release earlier in the week, stars Nicholas Cage as truck driver Joe, who has an encounter with a fellow trucker Julie (Franka Potente, The Bourne Identity) who is able to travel through the astral plane to communicate with the dead. When her daughter Billie (Penelope Mitchell from Hemlock Grove) ends up in a motorcycle accident, Julie uses her power to try to bring her back but instead brings back Joe’s ex-wife and puts her spirit in Billie’s body. Sexual hijinks ensue.
This holiday’s special Bollywood film is Aanand Rai’s Zero (Yash Raj Films USA Inc.), starring Shah Rukh Khan as a young man from a wealthy affluent family who meets two women (Katrina Kaif, Anushka Sharma) who take him on a journey to broaden his horizons. It should be in a couple hundred theaters on Friday.
Also on Wednesday night is a special screening of Christina Kallas’ ensemble drama The Rainbow Experiment (Gravitas), which was the opening night film of this past year’s 13thAnnual Harlem International Film Festival and is currently on VOD. It will screen at the Xavier High School where it was filmed Weds. at 6pm, and you can find out more information and get tickets on the Facebook page.
STREAMING
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Streaming on Netflix Friday is the post-apocalyptic thriller BIRD BOX, directed by Danish filmmaker Susanne Bier (In a Better World) and adapted from Josh Malerman’s novel with Eric Heisserer (Arrival). It stars Sandra Bullock as a woman travelling with two small children down a river, all three blindfolded to prevent them from being affected by a virus that has forced millions of people to commit suicide. Since I don’t have many limited releases, I’m going to go ahead and review the movie which I got to see Monday night.
I haven’t read the book, but this is a really interesting decision for Bier, who has done smaller dramas for the most part, and Bird Box really allows her to up her game with a couple action set pieces as well as a lot more involved story.  Although much of the marketing has focused on Bullock’s boat trip with the two kids, the movie spends just as much time five years earlier as some kind of virus or event causes millions across the globe to kill themselves. It’s quickly determined that being outside with your eyes open causes you to become infected by the deadly virus.
Bullock’s character is pregnant and she ends up fleeing to a house full of a disparate group of characters played by John Malkovich, B.D. Wong, Trevante Rhodes from Moonlight, Rosa Salazar, Jacki Weaver, Lil Rel Howery (Get Out) and Machine Gun Kelly. They’re soon joined by an also-pregnant Danielle McDonald (Dumplin’), as the film cuts between this group trying to survive and get along with Bullock and the two kids rowing down the river with the blanks filled in as it goes along.
I really found this to be a fascinating high-concept premise that actually thrived from the interesting cast and Bier’s ability with pulling out great emotions from an audience through performances and the remarkable score by Trent Reznor and Atticus Ross. Of course, Bullock is as fantastic as always but I was equally impressed with Rhodes who is proving himself to be a heroic lead that audiences can root for.  The film has lots of twists that keep you guessing a out what might happen as others are introduced in to the mix, and frankly, I found myself liking this as much or more than A Quiet Place, mainly due to the cast. I also have to say that it was very enjoyable seeing the movie with an audience as well, and it will play in a couple theaters Friday.
Rating: 7.5/10
Also streaming on Netflix Friday is Irek Dobrowolski’s doc Struggle: The Life and Lost Art of Szukalski about the Polish surrealist who was rediscovered in 1968 by pop culture collector Glenn Bray who brought it to the attention of underground comic publisher George DiCaprio. (George and his famous son Leo are two of the producers on the film.)
REPERTORY
In some cases, this week is a continuation of series that began last week, so if you see your favorite repertory theater missing, then just go back and check last week’s column. Also, the Alamo Drafthouse in Brooklyn will be showing René Manzor’s 1989 French genre holiday film Dial Code Santa Claus (a new 2K restoration via AGFA)on Dec. 19 (sold out!) and Dec. 23.
METROGRAPH (NYC):
In the Year of the Grifter continues, while the weekend’s Playtime: Family Matinee is The Muppet Christmas Carol, while the Metrograph will continue to show some popular holiday favorites in its series Holidays at the Metrotraph, which includes The Umbrellas of Cherbourg  (1964), Vincente Minell’s Meet Me in St. Louis (1944), Joe Dante’s Gremlins (I984), John Landis’ Trading Places  (1983), Paul Thomas Anderson’s Phantom Thread  (2017) and of course, Todd Haynes’  Carol.
FILM FORUM (NYC):
Beginning on Friday is a new 4k restoration of Marcel Pagnol’s The Baker’s Wife  (Janus Films) from 1938, another French filmmaker who I know every little about, although this stars Raim, who also starred in Pagnol’s Marseilles Trilogy. This weekend’s Film Forum Jr.  is the late, great Charlie Chaplin’s 1928 filmThe Circus.
EGYPTIAN THEATRE (LA):
The theater’s Holiday Spirit 2018  series continues with double features of Tim Burton’s Batman Returns and Joe Dante’s Gremlins, as well as the even odder double feature ofDie Hard(1988) and Trail of Robin Hood  (1950). On Saturday night, there’s a “Cyberpunk Megazone” double feature of 1995’s Virtual Assassin  and Hologram Man with introduction by Rob Schrab. And on Saturday… It’s a Wonderful Life (1946) but also another oddball holiday double feature of The Dorm That Dripped Blood (1982) and The Oracle  (1985).
AERO  (LA):
American Cinemateque’s other L.A. theater is also getting into the Holiday Spirit  with The Lion in Winter (1968) on Thursday night, Will Ferrell’s Elf (2003) on Friday, Meet Me in St. Louis (1944) on Saturday and It’s a Wonderful Life  TWICE (!) on Sunday, because that seems to be the go-to for repertory theaters this season.
QUAD CINEMA (NYC):
Visconti’s Death in Venice (1971) continues through Thursday and the theater’s vast Rated X series will continue into the new year with Beyond the Valley of the Dolls  (1970), Sam Raimi’s The Evil Dead  (1981), the Japanese erotic drama In the Realm of the Senses  (1976) playing over the weekend, as well as many more.
IFC CENTER (NYC)
Yup, It’s a Wonderful Life will continue to play here as well, while this weekend’s Late Night Favorites  will be David Byrne’s Eraserhead, the Weekend Classics Coen Bros. movie is The Hudsucker Proxy  (1994) on 35mm, and this weekend’s Shaw Brothers Spectacular running Friday, Saturday and Sunday at midnight is Holy Flame of the Martial World  (1983).
THE NEW BEVERLY  (L.A.):
Tarantino’s renovated theater continues its holiday celebrations with double features of National Lampoon’s Christmas Vacation and Scrooged on Weds. and Thurs. (sold out online but with tickets at the door). It’s a Wonderful Life and A Christmas Story play as double features on Friday and Saturday, Arnold Schwarzenegger’s Jingle All the Way  has matinees on Saturday and Sunday, and then Die Hard and The Silent Partner play as double features on Sunday and Monday’s Christmas Eve.
LANDMARK THEATRES NUART  (LA):
Also showing Bruce Willis’ Die Hard at midnight on Friday night.
FILM SOCIETY OF LINCOLN CENTER(NYC):
The amazing Jacques Tourneur, Fearmaker series continues, and between this, the Quad’s Rated X series and all the great programming at the Metrograph, New York repertory-philes should be set for the weekend before Christmas and next week, as well.
MOMA (NYC):
Modern Matinees: Douglas Fairbanks Jr. continues with The Exile  (1947) on Weds., Sinbad the Sailor  (1947) and The Dawn Patrol  (1930) on Friday.
MUSEUM OF THE MOVING IMAGE (NYC):
A Cher For All Seasons continues.  
I was hoping this would be the last column of the year, but there are two new movies opening in wide release on Tuesday, Christmas Day,the Will Ferrell-John C. Reilly comedy HOLMES AND WATSON  (Sony) and the Will Ferrell-produced Adam McKay semi-comedy VICE (Annapurna Pictures). Instead of bombarding you with more numbers and info, I will post another mini-column NEXT MONDAY. Something to read while you wait for Santa to bring you better presents.
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dori-in-missouri · 6 years
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Hi, Dori,
You are one of the most abused children in America. There are children in hospitals right now with broken bones who are far less abused than you. People think because your arm hasn't been yanked out of its socket and you're not bleeding, your problems are no big deal. But they're wrong. Your problems are a huge deal. I don't mean to sound callous, but an injured child can recover from their injuries and have a happy life. Psychological damage, however, may last forever. And that’s what has happened to you: horrific psychological damage.
Dori, the social workers know that you are lying about sexual abuse. And they know who manipulated you into lying. They don’t care.
The person who manipulated you into lying is a child abuser. I believe it’s your mother. I believe you have been emotionally abused for years by her. Emotional abuse is child abuse, Dori.
You used to love me with all your heart. I believe your mother was jealous. So she poisoned you against me. I believe she told you lies; for example, that I didn’t love you and that I tried to poison your food, amongst other nonsense. You mentioned those things on your blog. I believe she told you lies about how I treated her while we were married so you would view her as a victim. I believe she told you lies until you hated me and didn't want to visit me anymore. After you completely hated me and had been successfully isolated from me, you became her puppet.
I believe your mother knew you wouldn't go along with her scheme if you were a good person, so she corrupted you. If you’ve done anything you’re ashamed of the past couple years, blame her, not yourself.
You were a good child your whole life until she ended visitation in December of 2015. I believe you still have a good heart. You can become good again, if you tell the truth.
You told the lie, Dori. Only you can tell the truth and undo the harm you did to me and your sisters who live with me. You can continue pretending that you were sexually abused, but if you do, you are hurting yourself. People can sense evil, Dori. If you don’t help yourself, the last bit of goodness remaining in you will go away. My fear is that eventually no decent person will want to have anything to do with you and you’ll gather wicked people as friends. You are at a crossroads, my child. Your decision will determine your future, for good or ill.
I believe you mother controls you through fear, and that she makes you fear things that you shouldn't fear. She will try to make you afraid to tell the truth. She will tell you that you'll be arrested. She'll tell you that nobody will ever believe anything you say ever again. She'll tell you that it's evil to tell the truth because the truth may get her in trouble.
From the Bible, book of Isaiah: “Woe to those who call evil good and good evil, who substitute darkness for light and light for darkness, who substitute bitter for sweet and sweet for bitter.”
Over the past two years, all the goodnes in your life has been exchanged for evil, and all the light has been exchanged for darkness.
After you tell the truth, Dori, everything will change for the better. The light will return.
You’ll move to Pensacola, Florida, to live with me and your two older sisters. We have a new, much bigger house.
There are a lot of reasons to move to Florida (beaches, sunshine, friendly strangers, etc.). The most important reasons, though, relate to you personally.
1) You should move to Florida to make up for lost time. I haven’t seen you in two and a half years!
2) You should move here because you frequently make posts on your blog about feeling lonely. Every time I read that, my heart aches. You won’t be lonely here. At the very least, you’ll have me and two sisters to keep you busy. We do stuff. The mall is 20 minutes away. Plus you’ll make friends.
3) You should move here because, according to your blog, you’re a lesbian. Pensacola has a lot of lesbians. It’s no big deal to see two girls hand-in-hand, walking the mall or on the beach. I know a teacher who is lesbian; everybody knows and nobody cares.
August 23-25 there is a LGBTQ film festival in downtown Pensacola. Check out this link: https://stampedfilmfest.com/
Did you know your oldest sister is LGBTQ? Well, she is. Do you know what would be awesome? If you and your sister attended the LGBTQ film festival together.
Your oldest sister would love to get your advice on LGBTQ things, also. A lot of the LGBTQ world is new to her and it seems like you have given a lot of thought to many LGBTQ issues, judging by your blog.
4) If you’re a lesbian, you need to get out of that small town. Seriously.
Your blog gave me the impression that you’d like to go on dates with a few different girls and eventually get a girlfriend. That will NEVER happen while you live there. Even if there are a few lesbians in the area, that doesn’t automatically mean you’ll be attracted to them or them to you.
5) At the time you stopped coming to Florida, you were mad at one of your sisters about something. Whatever the problem was, I’m sure you two will get along great now. She is an adult. She has a job, a driver’s license and goes to college. Today she bought me and her sister lunch at a restaurant called Bagelheads, and also put gas in the car. You will enjoy her company, when she’s not too busy doing adult stuff.
6) You should come to Pensacola to escape the future planned by your mother. Your mother decided years ago that you would be the one to take care of her in her old age. We talked about it. Patti took care of Gram. Your mother will take care of Patti. And you will take care of your mother. Your sisters had ambition and dreams, but you would be “the bird who never flew far from the nest.”
I think that’s one of the reasons she stopped visitation. I think she was afraid that if you kept coming to Pensacola, you might imagine a life beyond working in the local grocery store.
If you come to Pensacola, I’ll help you make your dreams come true, whatever they might be. I always thought one of my daughters would be an animator. Maybe it’ll be you? I taught your older sisters how to animate and they enjoyed it, but they didn’t have any passion for it. Whatever you want to do with your life, I’ll help you do it. It doesn’t have to be art-related.
7) I can tell by your blog that you are sick of being bored. Pensacola is where the excitement is.
8) Do you like to laugh? Living here, you’ll laugh several times a day. Crying will become a distant memory, I promise.
9) I’m not mad at you for lying, because you were manipulated into it. But you are fifteen years old now. You know right from wrong. You don’t need to apologize for lying, but your lying days are over.
You said some gross things when you lied, things that probably make you cringe now. I promise you, I don’t care. All your lies were so bizarre and preposterous, you may as well have accused me of being a robot. Your accusations were nonsense. I’ve never been able to take them seriously. You don’t need to be embarrassed.
10) It’s a crime to file a false police report. I recently contacted the police. Maybe you’ll be arrested. It’s better for you to confess now than later, after you are behind bars. If you refuse to do the right thing, I’m sorry but you deserve to be in jail. If you decide to be a good person and tell the truth before you are arrested, I won’t testify against you, so you probably won’t be prosecuted. Finish this letter, then read it again, and then leave the house immediately to tell the truth.
11) I believe the two social workers who interviewed you knew you were lying about sex crimes. It was obvious. But they didn’t care. I believe they are anti-Semites and didn’t want you raised a Jew, so they ignored the huge pile of evidence so you would remain in your mother’s house and continue going to a Christian church.
A civil rights investigation has been started to investigate the social workers. You and I need to talk about this. For example, Did the social workers ask you about Judaism? What did they say?Did they ask you about church attendance or God? Did they say anything about Jews going to hell? Try to remember if they said anything racist. If they did, they violated your civil rights — and mine. Violating civil rights is a serious offense. You and I could sue Social Services for millions of dollars, depending on what was said. Start writing down everything you remember and email it to me at (my first name)[email protected].
Dori, a lot of your suffering could have been prevented if those social workers had done their jobs. Ashlee Hodges was the social worker from 2017. Angela Mosby was the one from this year. I believe they decided it was better that you were emotionally abused and went to church than live with me and go to hell.
Jews don’t go to hell, by the way — in case you forgot.
Anti-Semitism is common in rural Missouri, Dori. I hope you haven’t become an anti-Semite. Your mother made anti-Semitic comments, so I am worried that you think negative things about Jews, too. I believe your mother made you hate everything about me, and since I am Jewish, she could’ve made you hate Jews as well. If you decide to keep lying and stay with her, I guess I’ll have my answer.
12) According to your blog, you want a lot of attention. There’s nothing wrong with that. Politicians and celebrities love attention, after all. But there is something wrong with wanting a lot of attention and lying about abuse to get it. But here’s the ironic thing, Dori. You were abused! Not sexually, but emotionally. What happened to you was so extreme, if you wanted attention, you could get more attention from the media than you could handle. Sex crimes are a dime a dozen, unfortunately. But being compelled to lie about sex crimes by your own mother, that’s remarkable. That is Front Page News. That is an appearance on “Ellen.”
I believe some good can arise from the nightmare you lived through. If you choose to, you can shed light on the emotional abuse of children. You could give talks or write a book or something.
I already have ideas for legislation to better protect children. These laws, if passed, would probably be called the Dori Laws, after you. The laws would discourage parents from using their children as weapons during a divorce and afterwards.
13) I am deeply concerned that your mother might hurt you if she suspected that you were going to tell the truth. I told the police that she might poison you and make it look like you intentionally overdosed on prescription pills. On your blog you recently mentioned suffering from horrific stomach pains and vomiting. I was afraid she had poisoned you. Please be careful.
14) You mentioned on your blog a few times that you wish you weren’t mentally ill. I believe a lot of your emotional issues would be resolved if you were here. If you moved to Florida, I would take you to a doctor to see if we could wean you off of all your medications one by one to see if you truly needed them.
Remember, before your mother cut-off your visitation to Pensacola, you had no mental problems.
15) I could include a lot of proof that you used to love me. You loved me with all your heart. Your emails were filled with love, up until a few weeks before your mother ended visitation. But instead I’m going to ask you to remember the love. Remember it, please. I have never done anything to hurt you in your whole life. All I have done is love you.
16) I haven’t mentioned Xennn yet. I believe that your mother turned Xennn against me as well. So please help Xennn by telling the truth. I’m hoping both of you will come to Pensacola. You can have a bedroom to yourself or share one with your oldest sister, which might be fun.
17) Coming to Pensacola will end the gaslighting.
Gaslighting is when an adult tells their victim that something happened when it never happened. The victim knows it didn’t happen, but the abuser keeps talking about the fictitious situation until the victim begins believing it. Basically, it’s implanting false memories.
Did your mother tell you that something bad happened to you, but you knew it wasn’t true? But she kept repeating it until you remembered it? That’s gaslighting. The way the brain works is, when somebody keeps telling you something happened that never actually happened, you eventually think it happened. If your mother told you, for example, that you had a bad nightmare about a man throwing you off a cliff, you would deny it and say that you never had a nightmare like that. But if she brought it up again a few days later, and then again a few days after that, your memory would change. You would recall the mental images she had put in your head and would think that yes, maybe you did have the nightmare. Later, if you were asked about the nightmare again, you would probably state that you remember having the nightmare, but what you are really remembering is the memories of the conversations you had had and the images you had imagined. This happens to easily to children and young teenagers.
If you think you have any memories of abuse, someone implanted those memories into your head.
By the way, sometimes this also happens in therapy by accident. For example, assume you have a disturbing dream and you tell your therapist. She says that maybe you dreamed about something you saw on the internet or in a movie, or maybe it happened to you. She tries to get you to recall if it happened. You say you don’t remember it. She tries again later, thinking maybe you repressed the memory. If you keep trying to remember something that never happened, you will eventually convince yourself that you remember it. What you are actually remembering, however, is all the thinking and visualizing that you did previously while trying to remember. I have an interesting book on the subject. Except in rare cases, repressed memories are false.
If your therapist makes you visualize being abused in an effort to uncover repressed memories, or if she thinks sexual dreams are reliable evidence of abuse, you should find a different therapist, in my opinion.
You can get therapy here in Florida, of course.
Dori, please come to Pensacola, where nobody knows you except your family. Start fresh in the Sunshine State.
You could be here as soon as tomorrow.
After reading your blog and talking to police officers, social workers and your sisters, these are the abusive things I think happened to you: your mother showed you pornography, she made you lie about sex crimes, she got you hooked on opioids, she starves you, she hits you, and she emotionally abuses you. When you start telling the truth, tell EVERYTHING.
Police officers thought I had given you XXXXXX, an incurable virus. I guess you told them I did. I have never had XXXXXX and took a test which proved it, so they know you lied. Not only do they know you lied, they know your mother lied, because she told them that I had XXXXXX.
Your mother got XXXXXX while we married, but she didn’t get it from me. I never contracted it from her. I was super careful.
If you have XXXXXX and you got it from her, you need to tell the police that as well.
You need to tell the police every secret.
Tell them you want to live with me immediately. According to the Parenting Plan, you are supposed to be in Florida now anyway. I expect that your mother will be arrested when you tell on her, but maybe not.
Even if you have already confessed to the police that you lied about sex crimes and your mother had nothing to do with it, go back and tell the truth. You need to take responsibility for what you did, and your mother needs to take responsibility for what she did. Don’t take the blame for her. In my opinion, she is 100% to blame.
If she recently hit you or threatened your life, tell the police. She will be arrested. If she hit you or threatened your life, I suggest that you fill-out an Ex Parte Order of Protection against her. It’s a form that’s easy to fill out. If you request the Order of Protection, she will be instantly forbidden from being near you or talking to you for two weeks or so, until a hearing in a courtroom occurs. Then it may be extended for a year or more. The judge will probably tell her to move out of the house right away. If your mother approaches you or tries to talk to you during that time, she will be arrested, so she will leave you alone. I will come get you before she will be allowed to talk to you again, so you don’t have to worry about her hurting you.
If Social Services becomes involved, remember that they failed you already. Remember that they intentionally left you in that house for over a year. The social workers knew you were being forced to lie about sex crimes, but they didn’t care. They don’t care about you, they only care about your mother. She charmed them and they like her. Insist on somebody else besides Ashlee Hodges and Angela Mosby. I suggest that you ask for Steve Corsi to help you. He’s their boss. I have written him a few times.
When you get a new social worker, tell them that you want to go to Florida immediately.
My phone number is (850) 503-(Xennn’s birth month)80, but I don’t always have my phone on me. Cxxxxx’s phone number is (850) (your age times two, minus two)5-9776. I suggest you call her. Once you’ve talked to the police, call Cxxxxx and tell her that you need us to come get you. Give Cxxxxx an address. You could be at a friend’s house or anywhere and we’ll get you.
Dori, it took a lot of guts to lie to the police. It will take a lot of guts to tell the truth, but I know you can do it.
Your whole life is a lie. But you have the power to end it. Be your own hero. A whole new world awaits you in Florida, Dori. You can bring your pets, of course. Pack the most important stuff. The rest we’ll get later, plus we’ll buy new stuff.
Write down Cxxxxx’s number. Go to the police. Tell the truth. Then call Cxxxxx. She and I will come get you. Your abuse will be over, just like that. You will be free.
Your mother fears that you will tell the truth to people — that’s why she doesn’t want you to talk to your sisters in Florida, or attend school or make friends. She’ll give you money or gifts to make you happy, so you’ll keep her evil secret. Please don’t be a sell-out, Dori. What she did to you is too horrible to be forgiven. Don’t absolve her of blame because she gives you money and toys and bakes you tasty food. Adult abusers manipulate their abused children by acting remorseful and spending money on them. Please don’t fall for it. She doesn’t want you telling on her, so she acts nice. Hold her accountable.
I am so sorry that I have never been able to rescue you from the abuse. You have no idea how hard I tried. I have written dozens of letters to police officers, social workers, teachers, even the governor. Until you tell are brave enough to tell the truth, there is nothing they can do.
I love you. You’re my daughter. I can’t leave you to suffer in that house. When I read your blog posts, my heart breaks. I’m going to remind you of the sequence of events that led to your filing of the false police report. Some years have gone by, so your memory is probably getting foggy. As an adult, I can remember the past few years with clarity, plus I have plenty of documents.
February, 2012. Your mother put into motion her plan to end the marriage. She directed you and your sisters to get in the car. She lied to me and said she was going to come back soon. Instead, she called the police and filed an Ex Parte Order of Protection and had me thrown out of the house. That’s when I learned that she wanted a divorce and didn’t want me to see my own children.
A few weeks later, there was an Order of Protection hearing in City Hall. She committed perjury. The judge believed her lies and granted the Order of Protection for one year. Note that she admitted in court that I had never threatened her or hit her during our 20-year marriage. I have the audio file. The judge also told us to work out a schedule for me to see you and your sisters.
Your mother refused to do as the judge said. She didn’t let you or your sisters visit me in March, April or May of 2012. She didn’t let you come to Florida the summer of 2012. You later told me that you were very upset because you couldn’t see me and you thought about starving yourself. You thought if you starved yourself, your mother might stop being mean and let you see me.
I had been a stay-at-home dad. I raised you and your sisters. I had a special bond with all of you. Being kept from my four daughters was beyond cruel. I think she hoped I would kill myself out of despair. I almost did.
Eventually your mother decided I could see you and your sisters a little bit. We met at Dairy Queen and had a good time. Your mother was supposed to allow us to visit for an hour, but she abruptly cut it down to 30 minutes. I believe she was angry that you and your sisters were telling me how much you loved me and missed me. I drove 30 hours round-trip for that brief visit. It was one of the happiest times of my life.
Your mother later let me visit you and your sisters in her lawyer’s office. We had a great time then, too. That visit was a little longer. Then she allowed us to visit in a church for a little bit.
During the divorce, your mother cut off my health insurance. That’s how cruel she was.
I asked her for my wedding band. I had left it in the house. She told me that everything she paid for during our marriage belonged to her. I didn’t think that was fair. She had bought almost everything we had, because I raised the children while she worked a job. Of course she had paid for almost everything.
We divorced in July, 2013. Your mother signed a Parenting Plan. She was made the primary custodian of you and your sisters and I was allowed visitation during holidays and over the summer. I had joint authority in matters of education and health concerns (she ignored this part).
Regarding our belongings, your mother kept all the good stuff and gave me the junk that had accumulated in the basement. I threw all of it away except for a couple things. She did spiteful, petty things to hurt me, like giving me empty music CD cases, while she kept the CDs.
My favorite painting, the only one I truly liked from my college years, was returned to me completely destroyed. Earlier, I had asked her to take special care of it.
Following the divorce, I got a job teaching children with disabilities. A person has to be very calm to work with children who may bite you and stab you with scissors. I saw other teachers get mad and have to leave the room and calm down. Me, I was always calm. I loved teaching disabled children.
After the divorce, you and your sisters visted me regularly in Pensacola — for a while. We had fun in 2013, 2014 and 2015. Your oldest sister, Cxxxxx, moved-in with me in 2013, after her 16th birthday.
We had a great summer vacation in 2015. I didn’t spend much money that summer because I was saving-up for a down payment on a house. We still had a blast, though.
Over a year later, you claimed that you had been violently raped that summer. You told the police that was the reason why you never returned to Florida — the reason wasn’t that your mother decided to end your visitation, it was because you were too upset about having been violently raped.
Well, after you returned to Missouri following 2015 summer vacation, you didn’t seem upset. Not with me, at least. You were upset with your mother. We spoke on the phone often and you always complained about her. One conversation you said that you had spent hours curled-up on the floor in your room crying because of her. I think you were hoping you could move-in with me before you turned 16.
I suggested you talk to Ms. Lavy, the school counselor. You were afraid to do so. You were worried that Ms. Lavy would tell your mother and you’d get in trouble for complaining about her. You mother is a teacher in the school district, so that was a reasonable concern. I asked you if you wanted me to get the ball rolling on counseling, and you said “yes.”
I emailed the principal of your school, Ms. Pund, and explained the situation: you wanted to talk to the school counselor but you didn’t want your mother to know. I still have all these emails, of course. So do the police. Anyhow, Ms. Pund talked to Ms. Lavy like I asked and you started counseling.
By the way, rapists don’t send their victims to a school counselor. That is one reason why the social workers knew you were lying.
After seeing Ms. Lavy, you emailed me that evening about the counseling sessions. You were happy and thanked me for getting counseling started and wrote that you loved me.
We talked on the phone later and you told me that you and Ms. Lavy had a secret Google Doc online, that way you could communicate after school hours. When you were at home, you explained, you could write in the document and Ms. Lavy could reply. You asked me if I wanted the password to the Google Doc, and I declined.
Ms. Lavy eventually betrayed you. She told your mother that you were crying in her office, talking about how badly you were being treated at home. I guess Ms. Lavy thought she was helping you. The thing is, she shouldn’t have told your mother. Ms. Lavy is a Mandated Reporter of Abuse. She is required BY LAW to file a child abuse report after you complained about emotional abuse at home. If she had done what she was supposed to do, you would not have been emotionally abused for the past two and a half years and made to file a false police report by your abuser.
I believe Ms. Lavy told the superintendent about your abuse and asked him what to do, and he told her to contact your mother. If that could be proven, he would be arrested. He is also a Mandated Reporter of Abuse. I think he acted in the best interests of your mother, not in your best interests. Down here, an assistant superintendent was recently arrested for not reporting child abuse. Being a Mandated Reporter is serious business.
What happened to that Google Doc? My attorney asked for it but the superintendent refused to send it. If you still have it, please send it to me.
You came to Florida for Thanksgiving in 2015, so you DID return after the summer of 2015. I have photos of you at the beach with your sisters, and you wrote about being in Florida and stuffing the turkey on your blog. You had a great time.
I believe your mother became furious when Ms. Lavy told her what you had been saying about her. I believe your mother decided that you must never see me again, or else you might tell me about how she abused you and I would get a lawyer and try to get custody of you to protect you.
You never came back to Florida.
After you returned to Missouri following the Thanksgiving visit, your mother decided that you wouldn’t come to Florida for Winter Break, even thought you were supposed to. To keep from getting in trouble for ignoring the Parenting Plan, she got you to do her dirty work. She is an expert at that.
She told you that she dearly wanted you to spend Christmas with her. She used a lot of emotional pressure, talking to you about how much fun you would have with her over the Christmas holidays since it would be just the two of you, as all your sisters would be in Pensacola. You were convinced. Over the phone, you told me what she said, and asked me if you could skip Winter Break. I politely said “no.” You sent me a long email asking again. I wrote back, again saying “no” and saying that I missed you and besides, you lived with your mother — you see her a lot already.
In December of 2015, we all met at the halfway point in Mississippi for the custody exchange. You refused to get in my car. I asked your mother to say something to you. Your mother refused. You didn’t come to Florida.
You posted on your blog several times over the Winter Break that you were lonely and crying. I have copies of the blog posts. They are very sad to read. You were manipulated into missing your Florida vacation to spend time with your mother, and then you were ignored by her.
Throughout 2016, you grew increasing disrespectful toward me whenever we spoke on the phone. I believe you mother was poisoning you against me. Do an internet search for Parental Alienation Syndrome. I believe that’s what happened to you. In my opinion, you have the most severe case of PAS that’s ever happened to a child.
According to your blog at the time, SOMEONE told you that I poisoned your food with substances that you were allergic to; that I didn’t believe you had food allergies; that I hated you before you were born; that I punished your mother for two years for giving birth to you; and a whole lot of other nonsense. Unfortunately, you believed every horrible thing you heard. You began to hate me with every fiber of your being. You began viewing your mother as a victim and began feeling like she needed revenge.
Near the beginning of the divorce, back in 2012, your mother wrote several pages of complaints about me. Based on your blog posts, I’m sure she gave them to you to read, so you know what I’m talking about. In those pages she complained about the way I cleaned the house; that I didn’t finish an animated cartoon I had been working on for years; that I was not good at pottery; that I didn’t use some art supplies she bought me; and other stuff along those lines. There were also a bunch of lies, like I threw away her antique sewing machine and tore up the carpet for no reason.
I have a letter from your allergist, by the way. She wanted me to remove the carpet to help your health, so I did. Your mother liked the carpet and was mad that I removed it. She accused me of getting rid of it so I wouldn’t have to vacuum. I think that’s why your mother mentioned the carpet in her letter of complaints. She was still mad.
She stays mad for a long time. Years, usually. As her husband, I learned to accomodate her every whim so she wouldn’t get mad at me. I also accomodated her every whim after the divorce. When I wouldn’t agree to let you stay in Missouri for Winter Break of 2015, that was a rare act of defiance on my part. And I paid the price. But I was worried about you and wanted to talk to you in person, not over the phone. In the multi-page letter to the judge, your mother claimed that I once called her a name, something like “stupid-face.” That was a lie. I never called her a name — not while we were married, at least.
Your mother was filled with hatred while she wrote those pages. She wasn’t writing only for the judge, she was also writing for me. She wanted to break my heart when I read her hate-filled words.
But think about this. If there was anything else your mother could’ve complained about, it would’ve been in that letter. She was venting and wanted to screech about everything that bugged her throughout our marriage, no matter how trivial. She was scraping the bottom of the barrel of her memory for incidents. She went all the way back to when we were dating, more than 20 years earlier. Nothing she wrote is 100% true. Many of the things she wrote were outright lies, and even the stuff with a kernal of truth were gross exaggerations. Nonetheless, think about what she DIDN’T write.
Did she accuse me of threatening her? NO. Did she accuse me of hitting her? NO. Did she accuse me of being an alcoholic or anything like that? NO. Did she accuse me of using drugs? NO. Did she accuse me of being addicted to pornography? NO. Did she accuse me of infidelity? NO. Did she accuse me of spending too much time on the internet? Yes, she did say that. But I disagree with her opinion.
I was obviously a pretty good husband, if those complaints were all she had to complain.
Anyhow, your mother ended your visitation in December of 2015.
At some point in early 2016, you started seeing an off-campus therapist in O’Fallon.
You blogged about feeling suicidal. I called and asked you if you were going to come to Florida for summer vacation of 2016. You said, “Don’t count on it.”
I called your mother and threatened to get a lawyer to force her to resume sending you to Florida. She threatened to stop sending Xennn as well. I backed down.
You refused to come to Pensacola for summer vacation of 2016. You blogged about hating me. You blogged about enjoying it when you mother talked bad about me.
Another one of your sisters turned 16 and moved to Florida. So now I had two daughters living with me and your mother had two.
You blogged about having nothing new to talk to your therapist about. It sounded like therapy had run its course. The end of therapy was near.
But…then you started blogging about sexual abuse. A whole new topic! Did your mother suggest it or did you come up with it? I bet it was her.
You didn’t come to Florida for Thanksgiving of 2016 or Winter Break of 2016. Xennn did, though. She mentioned that her mother may never let her come back to Florida. She said she wanted to live with me.
Early 2017: Your therapist contacts social services after you accuse me of a sex crime. You blog about it, expecting that I’ll be arrested. I’m not. It’s obvious you’re lying.
Your mother is mad. I believe she tells you to contact social services in Florida and accuse me of raping your sisters who live with me. Social workers and police officers come to our home. They interview your sisters. I am not arrested.
The social workers in Florida are way better than the ones in Missouri, by the way.
Some weeks later, a police officer in Pensacola asks me to come to the station to be interviewed. I go talk to him. He tells me that you accused me of sex crimes. I tell him that I’m innocent and that your mother put you up to it. I am not arrested.
I think your mother was furious that her plan wasn’t working. She ups the stakes. She provides the police with a medical document that indicates you contracted XXXXX and suggests that you got it from me. Your mother tells the officer that I have XXXXXX. The officer asks me get tested to prove that I don’t have XXXXXX.
I wait a while, then get tested. While waiting for the results, I am arrested. I spend 30 days in jail.  I lose my job teaching children with disabilities. The charges against me are dropped.
The test result come back negative. Yes, the charges were dropped before the state prosecutor even had the results. That’s how obvious it was that you were your mother’s puppet.
Of course, your mother doesn’t send you or Xennn to Florida the summer of 2017, violating the Parenting Plan, which is a felony. Unfortunately, I no longer have a job, so I can’t get a lawyer to take her to court.
Your mother doesn’t send you or Xennn to Florida for Thanksgiving or Winter Break of 2017.
Your sisters have stopped communicating with your mother as a way of supporting you. They are angry with her for what she is doing to you and to me.
In February of 2018, I wonder where you got XXXXXX and ask social services to investigate. You blog about giving blood for the test. Social services tells me that you don’t have XXXXXX after all. I ask the social worker Ms. Mosby to remove you from your mother’s house. I provide her with ample evidence that you are being abused. Ms. Mosby doesn’t care. She leaves you in your mother’s house. I believe she is an anti-Semite and doesn’t want you to be raised by a Jew. The weird XXXXXX test doesn’t concern Ms. Mosby, even though XXXXXX is incurable and you evidently got cured of it.
A few months later my arrest was expunged, so it no longer appears on background checks. Yay.
Summer vacation of 2018 starts. Your mother refuses to send you or Xennn to Florida. At this point, I haven’t seen you in over two years. I haven’t seen Xennn in a year and a half.
I contact the police and tell them that you filed a false police report and to arrest you and that I will testify against you.
And here we are, in the present. I am writing you this letter.
I love you!
Do the right thing!
PS: Was this letter sent by daddy or one of his daughters who loves you?
0 notes
junker-town · 6 years
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Teammate jersey name comedy: always amazing
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Every time this happens, it's good. Here are eight recent college football examples, plus one from the NBA.
Corners of the college football world were gripped on Thursday by a couple of happenstance arrangements of players with well-sequenced last names.
1. Louisville receiver Traveon Samuel and quarterback Lamar Jackson sat next to each other on the bench during the Cardinals’ thrashing of Charlotte, and their namesake approved:
If I wasn't feeling Football Fever already... NOW IT'S ON!!! Yeah MUPHUGGAUZZZZ!!! pic.twitter.com/iXqYcuAFbn
— Samuel L. Jackson (@SamuelLJackson) September 3, 2016
2. That keeps happening! two Hilltoppers named Joshua Samuel and Lucky Jackson stood next to each other:
Seriously what are the odds pic.twitter.com/Agu8EUGx58
— New & Improved Goose, now with Bachelors Degree (@TjRagusa_six) September 1, 2018
3. Wake Forest players Keegan Good and Augustus Fortune stood next to each other and offered the world something we could all use:
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4. Here are Arkansas State’s Jemar Clark and Darion Griswold two years ago:
"Roll 'em up!" pic.twitter.com/OAG04w32F1
— Justin Ferguson (@JFergusonAU) September 6, 2014
Good to see you, Mr. Griswold.
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5. Also a few years ago, a couple of UTEP players named Autrey Golden and Jameill Showers stood next to each other and reminded the world of a, well, unique way to practice hygiene (via a since-deleted tweet).
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That is probably the name of a retirement community in Arizona, right? Yep, no other meanings that I know of for that pair of words. Nope.
6. South Carolina holder Patrick Fish and kicker Elliott Fry, a duo for two years:
Fish Fry http://t.co/oLJbrrAMdF pic.twitter.com/OVoyvusmMC
— Timothy Burke (@bubbaprog) December 27, 2014
7. Michigan tight end Jake Butt, whose name is an endless source of comedy, alongside Kevin Gross at the 2016 Citrus Bowl, via MGoBlog:
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8. From 2000 or so, Marshall linebacker Gladstone Coke and punter Curtis Head, via ... well, that was a long time ago, so it's hard to say.
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9. From 2007, West Virginia defensive linemen Johnny Dingle and Scooter Berry (can't believe we forgot about this one!):
@SBNationCFB @SBNation you forgot the best one pic.twitter.com/qnFhUMkv9z
— Andy Reid (@misterAndyReid) September 2, 2016
10. This is not a phenomenon limited to college football, although the sport’s huge base of players and teams gives it a lot of chances to occur there.
The greatest moment in coincidental nameplate sequencing in sports history happened in the NBA in January 2015, when Los Angeles Lakers Ryan Kelly and Jordan Clarkson opted to stand next to each other on the sideline.
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It doesn’t get any better than this, folks.
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Entrepreneurs On Fire: October 2017 Income Report
October 2017 Income At-A-Glance
Gross Income for October: $218,762
Total Expenses for October: $56,827
Total Net Profit for October: $161,935
Difference b/t October & September: -$579
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation!
By documenting the struggles we encounter and the successes we celebrate as entrepreneurs every single month, we’re able to provide you with support – and a single resource – where we share what’s working, what’s not, and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
Let’s IGNITE!
**We’ll receive a commission on the affiliate links below.
Josh Bauerle’s Monthly Tax Tip
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
I’ve been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
October’s Tax Tip: Do I need a receipt for that?
If you’re like me, your answer to the question “would you like a receipt?” from a cashier is almost always a resounding “no”!
While some people, like my Dad, continue to stuff their gigantic wallet with the receipt for every purchase they have ever made, most of us despise paper receipts.
But what about for business owners?
What receipts do you need to keep for tax purposes and how long do you need to keep them?
In a world that is becoming more and more digital every day, this is a situation that is constantly changing.
So when Kate asked me for some best practices on keeping receipts for Entrepreneurs On Fire, we thought it’d be a great opportunity to review the current IRS regulations regarding keeping actual receipts in your business and share them with YOU in this month’s income report!
Everything you need to know when it comes to keeping receipts for business expenses
1. Documentation is King
In the world of the IRS, in the unlikely event you are ever audited, documentation is your best friend. And the more documentation you can provide, the safer you are. So on top of everything said after this, whenever you are in doubt, keep the receipt.
2. Cash is the Enemy
If at all possible, always avoid paying in cash. It’s far and away the hardest way to prove an expense.
First, a purchase via a credit card, debit card, PayPal, etc. are going to offer a decent amount of proof on your statements. Even if you don’t have a receipt, you can at least show the IRS exactly when and where the money was spent.
With cash, if you don’t have a receipt, you could very well be out of luck.
So for the few instances cash is the only option, always keep the receipt and make a note on it what the purchase was for if the receipt itself doesn’t give it. But avoid paying expenses with cash any time you can.
3. Under $75 Doesn’t Require a Receipt
If the purchase you make is under $75, the IRS does not require a receipt. This means those $15 lunches are technically receipt proof.
However, keep rules number 1 and 2 in mind here; documentation is king and cash is the enemy. So if you use cash for these smaller expenses, I’d still keep the receipt.
4. Always Go Digital
For both record keeping purposes and longevity, always keep digital receipts.
For online sales this is easy, they will just email the receipt.
For in-store purchases, several places now give you the option to have the receipt emailed to you. Always choose that option.
If a paper receipt is the only option, simply take a quick picture of it on your phone. Then take these receipts and put them in an online folder. There are also tons of apps out there to help with this, including my personal favorite, Shoeboxed.
5. Proper Bookkeeping is Most Important
Far and away the biggest key to surviving an IRS audit is proper bookkeeping, meaning you are using some type of accounting software to track and reconcile all of your income and expenses during the year. With that crucial practice alone, you will be able to at the worst pinpoint any expense in question and know where and when it occurred.
Receipts may still be required, but with proper bookkeeping you will be able to locate the needed receipts much easier.
We say it almost every week, but all these great tax perks offered to entrepreneurs comes with responsibilities. And one of those responsibilities is the need to track and prove the expenses you take.
By following the rules above you will put yourself in great position to survive any questions by the IRS.
As always, please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
*Bonus* Claim your spot in Josh’s FREE Course on Business Entities!
What Went Down In October
Thrive Las Vegas
October started off strong with John speaking at THRIVE: Make Money Matter in Las Vegas.
The event boasted several top-notch speakers and attendees, and as we often repeat, attending conferences and meeting others in person can’t be replaced.
Tune in to our income report recording to hear about John’s biggest takeaways from the event!
Closing Paradise
October was a big travel month for us, and it all started on the 12th with a flight from Houston to New Zealand.
In preparing for our travel, which will continue until November 18th, we made the decision to close the doors to Paradise while we were away.
We made this decision for a few reasons:
We weren’t 100% positive what the Internet situation would be like along the way, thus making it difficult to schedule our bi-weekly live Webinars;
We’ll never sacrifice customer service, and with the travel we had setup we wanted to ensure we didn’t overload our team; and
We have a few improvements we’re excited to be working on behind the scenes!
So on October 7th we closed the doors to Paradise in preparation for our travel and in order to implement the improvements.
How we set up the close
Our closing Webinar on October 4th was BIG. We welcomed over 250 live attendees and throughout that day welcomed 50 new members to Paradise!
We promoted the live Webinar to our podcasting list, had the opt in front and center on PodcastersParadise.com, and we also ran Facebook ads.
This isn’t our first time closing Paradise, but we did take a different approach this time around (to check out how we ran the close last time, you can visit our December 2015 Income Report).
What’d we did differently
This time around we wanted to simplify things, and so instead of doing videos and price increases every day of the close like we did last time, we stuck with the basics:
We did a Live Webinar followed by 3 days of emails announcing the close and the diminishing bonuses.
Day 1: Oct 4 – the live webinar (welcomed 50 new members)
Day 2: Oct 5 – diminishing bonuses (welcomed 6 new members)
Day 3: Oct 6 – diminishing bonuses (welcomed 8 new members)
Day 4: Oct 7 – the close (welcomed 40 new members)
Kind of crazy to see the difference between the number of new members on the first and last day versus the two days in between, right?
While the diminishing bonuses were being sent out each day, the numbers don’t lie: urgency on the live webinar (for people to receive ALL bonuses) and on the last day (to get in before the doors close) was real.
So what were those diminishing bonuses?
Oct 4: One-on-one chat w/ John (plus everything below)
Oct 5: BOTH The Freedom & Mastery Journal (plus everything below)
Oct 6: Your choice of The Freedom OR Mastery Journal (plus everything below)
Oct 7: Access to a private 1-hour hangout with John – only for those who join Podcasters’ Paradise between 10/4 and 10/7
The close was a great success and far exceeded any expectations we had for it.
Again, our main goal was to simply keep our customer service capabilities high and have time to implement some improvements within, all while traveling for most of the month.
Lesson learned: the power behind Live Webinars lives on, and urgency is still a very viable strategy when it comes to marketing your products and services to your audience.
New Zealand + Australia
As mentioned above, it all started October 12th with a flight from Houston to Queenstown, New Zealand. This flight kicked off a 40-day adventure inspired not only by the fact that neither of us have ever traveled to New Zealand or Australia, but also by We Are Podcast.
A peek into our travel diary for October
Queenstown is the first of our stops on a 40-day travel journey through NZ, AUS and the UK, and it all started when we met up with our great friends plus business & travel buddies Jill & Josh Stanton of Screw the Nine to Five.
If you’ve never visited, Queenstown is one of the cutest little village towns I’ve ever seen and has the most beautiful scenery everywhere you look! Esp from our AirBnB:
The location we picked here couldn’t be better: we’re a 10 minute walk to the docks, shops, cafes and restaurants, in addition to a walking path, a garden park and – wait for it – frisbee golf!
(I’ve never played frisbee golf in my life, but it seems like a cool thing to have nearby).
Plus, New Zealand is known as the adventure capital of the world (proven by John and Josh, who did the Nevis bungee jump a few of days ago: 143 meters – 440 ft) > yikes!
See that little house-looking thing in the background below? …that’s where they jumped from (insert wide-eyed face with a lot of fear).
And there is so much to do in Queenstown!
Every time we turn around there’s another amazing opportunity for a beautiful walk, hike, or activity.
Here’s part of the walking path down by the water near our place:
So we haven’t been wasting any time…
First things first: we rented car at the airport, dropped everything off at the AirBnB, and we were off to find a market nearby to stock up on the necessities for yummy breakfasts and delicious dinners.
On the way home from the market is when John and Josh decided they should sign up for the Nevis bungee jump – the highest in the Southern Hemisphere.
That night we made burgers on the grill and called it an early night in an attempt to normalize our internal clocks.
The following morning we slept in, John and I went on a great run, and then we quickly established our “morning routine” with Jill & Josh: 2 of us stay and make breakfast and 2 of us go out to grab coffees, which has been working out quite well (except our AirBnB smells like bacon 24/7, which John sees as a positive).
Our wifi is pretty fabulous here (a major concern after what we’d heard from others who have traveled throughout NZ and AUS). So knock on wood… the few hours each day we’ve set aside for work have been productivity-packed!
An email here and there, a couple checks in Asana, and before we knew it we were headed to the bungee bus.
After a 40 minute beautiful bus ride with the other crazies who decided this would be a good idea, the 4 of us found ourselves in a metal basket attached to a chord with our 2 jump buddies, Scott and Travis (brothers from Ontario), heading to the middle of the line for the jump.
Jill and I paid to be able to actually go out to the jump spot with the guys – I knew this was as close as I was willing to get to actually jumping off the thing. Although Jill and Josh told us about a tandem jump you can do off a bridge – not too far from the Nevis jump – but only 34 meters instead of 134… that’s probably more my speed ;)
Such a cool experience to be out there with them when they jumped.
Here’s a video of John’s jump!
After the jump we made our way back to our place, and John and I decided to go on a hike up the hill behind our place, which was highly recommended by a local woman we met along our morning run.
She was absolutely right about the views at the top:
We figure we survived somewhere in the ballpark of 50 mph winds at the top, and luckily the plethora of sports stores around afforded us the perfect jackets for it.
New Zealand weather is no joke – it’s been in the low 40’s each morning, getting up to maybe the mid-50’s in the afternoon. They’re just headed into Spring now.
The following day was an absolutely blast, too! We spent the morning at our place chatting, making breakfast and getting a few work hours in.
Then, at [12:30] we met up with Jill’s parents, who are also here traveling alongside them, + Jill’s sister and husband (Ali & Ken) at the bottom of the gondola.
Yet another amazing thing that’s just a 10 minute walk from our place.
Once at the top, you can have lunch + they have a luge racing course! So cool!
So we went for the whole package: gondola ride + lunch + luge racing = awesome.
After lunch and a few times around the luge track, we came back down and enjoyed a few separate activities for the afternoon: frisbee golf for John, Josh, Ali & Ken; a great run in the park for me; and some work for Jill.
Yesterday was a combination of all things amazing: a scenic drive to Wanaka, another one of the cutest towns I’ve ever been to; water sports; and breathtaking views.
The drive was really amazing, and during the 1.5 hours it took us to climb up and through the mountains we saw enough sheep to fill approximately 4,376 petting zoos.
And all the little baby sheep!!!… SO CUTE.
We stopped off at a outlook point on the way up, and WOW… once you think you’ve seen all the views, another bright green valley with unbelievable mountains in the background appears.
Upon arrival we walked around a bit and decided that with the beautiful weather and long afternoon ahead we’d make our way out to Ruby Island via Kayaks – doubles, of course.
About 35 minutes later, we arrived here:
There was nothing on the island itself – outside of the breathtaking views.
We walked around the island (yes, it was that small) and then jumped back in our kayaks to even out our 2-hour roundtrip.
Next morning we decided we’d spend our last Queenstown day in a pretty laid back manner, but two things were definitely on our list: a ThunderJet ride on the water, and another round of frisbee golf (now I HAVE officially played!)
I’ll leave my score out of it, but John and Josh gave one another a pretty good run.
After frisbee golf we made our way over to the pier to jump on a ThunderJet with our incredible driver Kylie (who happens to be a part of Fire Nation! How cool is that?!)
The ThunderJet ride was INSANE, and Kylie’s driving skills were nothing short of impressive. Seriously… there were at least 5 times I thought we were in trouble.
I so wish I had video to share, but if you follow John on Instastories, then you saw a small portion of our experience.
If you’re from New Zealand and haven’t experienced ThunderJet yet, then it’s a must-do! And if you’re not from New Zealand but find yourself in Queenstown one day, then a ride with ThunderJet will make your trip!
Next morning we were off to Auckland, where we met up with Paul Spain, podcaster and hospitality-pro extraordinaire!
Paul helped us set up a meet up for Fire Nation that evening and was generous enough to help us with our entire stay in Auckland. So from 6-9pm we gathered with about 25 local podcasters / entrepreneurs and had a great time at a local cafe!
On Friday – our first full day in Auckland – we decided to make the trip to Hamilton on our way to Hobbiton.
We had been planning for Hobbiton because we’ve heard so many great things (that’s the movie set from the movie The Hobbit), but our stop in Hamilton was due an email offer from Dave, a Fire Nation faithful who lives in the area.
Dave was born and raised in Hamilton, had never been to Hobbiton, and assured us he’d be an amazing tour guide for the day. :)
So we picked Dave up at his co-working space (about 2/3rd’s of the way to Hobbiton) and made a quick stop at the Hamilton Gardens on his request before making the rest of the trip.
And the gardens were absolutely beautiful!!
We were a bit rushed because our 1:15pm tour was not going to wait for us.
Luckily Dave has a lot more experience driving on the wrong side of the road than I do ;) He grabbed the keys and we were off on the winding road to Hobbiton.
The drive was beautiful, and Hobbiton: breathtaking.
During our 2-hr tour of the grounds we learned a lot of fun facts about the movie set, (discovered by “Sir Peter Jackson” during a helicopter ride. He was granted access by the Alexander family who still owns the land today); how The Hobbit was filmed, (none of the Hobbit holes are actually furnished inside – every scene you see inside of one of the holes was done in a studio in Wellington); and were able to see how much detail went into actually putting this set back together, (it was actually taken down after they used it to film in Lord of the Rings, and later reconstructed ‘to stay’ for The Hobbit).
After our tour we decided our 3 hour drive home was better started sooner than later.
Fittingly, we decided to make a dinner at home and watch The Hobbit :)
I must say, I’m pretty impressed by my driving skills seeing as how I’ve never driven on this side of the road before, and the following day I continued my 100% record (knock on wood) with a drive to Piha, a local beach that had been recommended by almost everyone we’ve talked to.
And for good reason:
We spent hours at the beach walking on the black sands and on the several paths carved into the hillsides around it.
About 15,000 steps later we decided to make our way to the Piha Cafe and ended up eating the best pizza EVER.
It was a big risk: it was about 4pm and we had a 7pm dinner back in Glen Eden with Paul and his wife Selina.
But we took that risk. And were really glad for it.
Our dinner with Paul and Selina was amazing. We ate at a local place called Eden (so cute!) and enjoyed lamb and falafel. Delish!
Our last full day in Auckland we made our way out to Waiheke Island via ferry boat to explore what many had said was a “can’t miss” experience.
Boy, were they right… Waiheke-woahhhhh! (Enter Kate: picks jaw up off from ground; heart shaped eyes in full effect; breath taken away…)
Even though it was drizzling and cloudy the entire day, we still managed to make the most of it.
First thing on our agenda: the coastal sea walk, which you can pick up right off the ferry. It’s part of a network of trails that run throughout the entire island – and Waiheke isn’t a small island.
It’s called the Te Ara Hura trail, and if you check out the image below you’ll see the shape of the island, which much of the trails follow.
The coastal trail wasn’t anything like I imagined. First off, the beginning of it was only passable at certain times of the day. 1.5 hours on either side of high tide would make the actual trail impassable (in other words, under water).
While it probably would have stopped me from trekking through, it wasn’t going to stand in John’s way of making this walk our reality (I’m so glad he’s such a risk-taker, cause I can’t imagine our day without this walk).
I wish I had pictures, but that would have required a hands-free go-cam attached to my head because my two hands were occupied with holding onto roots and vegetation to avoid falling down a hill.
It literally felt like you weren’t actually on a trail – the entire way.
We were walking right by what were definitely multi-million dollar estates and we couldn’t have passed more than a handful of people.
You can see how minimal the actual ‘trail’ was in the picture below (see that little strip of dirt by John’s shoes?… that’s what this path was like the entire way)
There were loads of other activities we could have signed up for upon arrival on Waiheke – wine tours, zip lining, boat rides – but we’re becoming more and more confident in our ability to let an amazing day unfold without any actual plans in place :)
15,000 steps (and 3.5 hours later) were feeling pretty good about making the most of our coastal walk.
We celebrated with an amazing late brunch at a really cute Italian cafe before heading back to our place.
After brunch we made our way back home and snuck in a laundry mat trip before our departure to Sydney the following morning.
Speaking of the following morning… it came quickly, and before we knew it we were packing our bags and saying goodbye to New Zealand.
Before prior to our airport trip we met up with one of our Puerto Palooza alumni, Travis, and his wife, Jacqueline, for breakfast.
They had just arrived in New Zealand the night before and made the trip all the way from Los Angeles to attend We Are Podcast in Brisbane, Australia (Nov 2-4… this is the same event John and I are speaking at).
It was perfect timing to meet up with them before their New Zealand adventures began – and before we took off for AUS.
A quick Google search returned a cafe we could meet up at; little did we know it was actually inside of a Home Depot (explains the background of the photo below – LOL) But it was a great breakfast, and even better company.
Our flight to Sydney was uneventful, and by that afternoon we were taking in the view from our beautiful deck in Bronte, right near the famous Bondi Beach.
We spent the rest of the evening on the patio, enjoying the beautiful, warmer weather (more like low 70’s vs. low 40’s) and a GREAT takeout dinner from a place right up the street (so many cute cafes and restaurants just a block away!)
Yesterday (Tuesday) being our only real “full day” here in the Sydney area to explore, John and I decided to attempt the impossible: see Sydney in a day.
Jill & Josh had loads of work to do, so being “on our own” for the day we made a last-minute decision to snag an all-day hop-on, hop-off bus pass to help us cover as much ground as possible.
But first, I snuck in a run to explore the beach path right below our place…
Holy cow – this coast is absolutely beautiful!!
After a quick shower John and I walked right back onto the path and followed it all the way around to Bondi Beach (about a 30 minute walk around the water).
A stop in an Internet cafe to print our bus tickets and a short 5 min wait and we were riding top deck, ready to rock!
There are 2 routes for the hop-on, hop-off bus: Bondi route and Sydney route. So we started on the Bondi route, then jumped over to the Sydney route, and here’s how the day went…
We also spent the following day here in Sydney (Wednesday), but this afternoon we’re headed to Nicole & Omar Zenhom’s place (of the $100 MBA Podcast and Webinar Ninja) for an afternoon tour of their area + dinner out :)
Once we arrived, we had an awesome couple of hours to chat at their place, and then we made our way out for a walk. While the rain stopped us from being able to walk around the park by their place (the same park where Nicole and Omar were married), it didn’t stop us from having a great night out.
The following day we were packing our bags again, this time headed to the Gold Coast in Australia with Jill & Josh.
After a 1-hr plane ride and a 10-min wait in the rental car line we were headed to our current home in a town called Surfers Paradise.
It’s definitely a fitting name: the beach stretches in either direction for miles with the softest sand I’ve ever felt between my toes. Like, literally so soft it squeaks when you walk in it.
A fun little fact I didn’t even mention from our last stop in Bronte / Sydney: it’s whale watching season here and we’ve been lucky enough to spot probably close to half a dozen whales playing in the ocean as they migrate.
Our last place had binoculars to help us enjoy the scenes, but it seems the lack of them at this place has been made up for by their proximity to the shore. Today we watched one play in the water not too far past some Jetski riders – it seemed so close!!
The weather here is incredible – it’s about 80 degrees and actually feels a lot like Puerto Rico (maybe not THAT hot and humid, but close).
Our first afternoon here (Thursday) was a little different. We got to our place around 2, and by about 4pm the clouds came rolling in and we experienced some legit thunder, lightening and quick rain.
I think travel has been catching up with all of us a bit, and that combined with the weather encouraged a couch and movie night (we watched Hall Pass – pretty funny if you like mindless comedies and Owen Wilson).
The next morning we spent time relaxing on the patio (view from our balcony pictured above), did some work, and then myself, John and Josh were off to Purling Falls – a hiking trail that Josh said was a must-do.
Jill hasn’t been so into the hiking, but I don’t blame her: she’s 6 mos pregnant and her bump is definitely not getting any smaller!
The hike down to the falls was really beautiful, and different from any of the other hikes we’ve been on for a few reasons:
It started with Josh warning us of poisonous snakes (and letting us know that it’s mating season for them, so I guess they’re all riled up AND are really good at hiding in the leaves below your feet)
It was very wood-sy (no clear-cut cement walking paths, so much more… wood-sy)
It led us down into a sub-tropical rain forest and spit us out at a beautiful waterfall, which the guys promptly got into their suits for:
The potential to see kuala bears was real, which was pretty cool (although I definitely spent the entire 2+ hours wondering if I was going to get bit by a poisonous snake).
Our reward after 10,000 steps was a stop at the fudge shop – SO YUM – followed by another relaxing evening at home.
…well, that is AFTER we played frisbee – cause how could you NOT play frisbee when you have a wide open beach like this right across the street???…
Post-frisbee we settled into the couch with the most amazing homemade tacos and fudge for dessert.
Our show of choice the past few nights has been LOST; I’m the only one who hasn’t seen it, but everyone else agreed it’d be a great show to re-watch.
Today has been another very relaxing day, which started off with a 2.5 mile walk down the beach to “Broadbeach” (the next beach over) for a great breakfast at a restaurant called Koi. The weather is holding steady and it was a perfect morning (and afternoon) to spend outside.
This afternoon John and I have been catching our breath and relaxing at home while Jill & Josh make the rounds to say goodbye to a lot of their family who they won’t see again before they leave (on Wed, Nov 1 we all head to Brisbane together, and that’s when they fly back to Canada).
For the first time on our trip the days have started to blend together…
Gold Coast has been both relaxing and nostalgic (reminds both myself and John of San Diego / Pacific Beach a lot.)
I’ll pick up where I left off last time:
We didn’t end up doing the Wildlife Sanctuary as planned the day after I sent our last email. Jill & Josh were out meeting up with friends and family, and the day sort of slipped away. Before we knew it, it was 2pm and the Sanctuary closed at 5 – not nearly enough time to do it all.
So John and I ended up spending the morning walking the beach, eating pancakes, playing putt putt golf, and getting some work done.
For the record, I won by 2 :)
That evening, after Jill & Josh were back, we took advantage of the tennis courts here and jumped in the pool for a nice swim. While swimming, we had a GREAT idea: to head down to the Hotel & Casino in Broadbeach, about 2 miles away. You know, just to check things out… ;)
A few card games and about 2 hours later we hopped in an Uber and made our way to the Casino.
We happened upon a great Asian place for dinner right in the lobby of the hotel, and before Jill and I had even finished our meals the boys were already checking out the tables in the Casino area.
We lost a bit of money, but had a really fun night out :)
The following day we decided to make it a chill morning and then me, John and Josh made our way to the Wildlife Sanctuary in Currumbin for the afternoon.
While the Sanctuary had nothing on Sea World or the San Diego Zoo, I must say it was SO COOL to see kuala bears and kangaroos IN PERSON!! Plus, 100% of proceeds go to protect local wildlife both inside and out of the sanctuary.
The “petting zoo” was quite different than what I’m used to seeing (goats, maybe a lamb here and there…)
This one was filled with kangaroos hopping (and sleeping) all over the place. We got to feed some kangaroos, stare down the alpha (he was SO HUGE!), and see a mama carrying a little joey in her front pocket.
Sheep sheering (where John made it up on stage to actually help sheer the sheep!), an impressive bird show, and a crocodile or two later we were making our last stop of the afternoon: holding a koala bear :)
I think I’d have to say that feeding and petting the kangaroos, and seeing the koala bears in person, were my highlights :)
We’ve been pretty beat come nighttime with all the running around we’ve been doing, and our Wildlife day was no different. We made our way back to the house and settled in for a homemade dinner and more episodes of LOST.
The following day we were determined to make Byron Bay happen.
Byron Bay was definitely beautiful, and it was really fun to watch the surfers ride “sideways” waves (you get to a point on the beach where it start curving around, and the way the rocks are the waves look as though they’re coming in sideways – pretty cool)
We also walked out to the most Easterly point in all of Australia, which was cool.
Last night we had 1 last hurrah before Jill & Josh packed it up to head back home bright & early this am. Our wild night out?… Korean BBQ.
It being my first time I had no idea what to expect, but was pleasantly surprised. All they had to tell me was that it’s like fondue ;)
This morning we closed down Gold Coast and made our way up to Brisbane. A quick check-in at the hotel, a great gym workout, and an awesome lunch later (we got to meet up with Michael O’Neal of the Solopreneur Hour, and reunite with Nicole & Omar – all from our SD crew – who are also here for the conference), and now we’re just settling in and getting prepped for the conference, which starts tomorrow.
Look out for future updates on the rest of our travels in next month’s income report, plus a full recap of We Are Podcast here on the blog!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
October 2017 Income Breakdown*
Product/Service Income: $148,578
TOTAL Journal sales: 644 Journals for a total of $24,423
The Freedom Journal: Accomplish your #1 goal in 100 days!
TheFreedomJournal.com: $2,744 (54 Hardcovers & 17 Digital Packs sold!)
Amazon: $9,906 (269 Freedom Journals sold!)
Total: $12,650
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
TheMasteryJournal.com: $4,012 (103 Hardcovers & 10 Digital Packs sold!)
Amazon: $7,761 (218 Mastery Journals sold!)
Total: $11,773
Podcasters’ Paradise: The #1 Podcasting community in the world!
Recurring: $19,089 (193 monthly)
New members: $35,325 (119 new members)
Total: $54,414
Podcast Sponsorship Income: $64,500
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Skills On Fire: $0
Podcast Launch: Audiobook: $204 | eBook: $37
Free Courses that result in the above revenue:
Free Podcast Course: A free 15-day course on Podcasting
Free Webinar Course: A free 10-day course on Webinars
Free Goals Course: A free 8-day course on Setting & Accomplishing Goals
Funnel On Fire: A free 8-day course on Creating a Funnel that Converts!
Kickstarter On Fire: A free 5-day course on going from Idea to Launch on Kickstarter!
Affiliate Income: $70,184
*Affiliate links below
Resources for Entrepreneurs: $49,756
Audible: $608
BlueHost: $150 (Step-by-step guide and 23 WordPress tutorials)
Click Funnels: $31,388
Coaching referrals: $850 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Mentorship: $15,000
ConvertKit: $163
Disclaimer Template: $0 (legal disclaimers for your website)
Fizzle: $195
LeadPages: $902
Infusionsoft: $500
Courses for Entrepreneurs: $16,829
Create Awesome Online Courses by DSG: $6,124
Webinars that convert by Amy Porterfield: $1,385
Bot Academy by Andrew Warner: $2,500
10k Readers by Josh Turner: $95
The Amazing Seller by Scott Voelker: $594
10k Subscribers by Bryan Harris: $98
Copywriting Academy by Ray Edwards: $0
Self Publishing School by Chandler Bolt: $3,789
ASK by Ryan Levesque: $2,244
Resources for Podcasters: $1,962
Pat Flynn’s Smart Podcast Player: $62
Podcasting Press: $720
Libsyn: $985 (Use promo code FIRE for the rest of this month & next free!)
UDemy Podcasting Course: $195
Other Resources: $1,637
Amazon Associates: $720
Other: $917
Total Gross Income in October: $218,762
Business Expenses: $53,371
Advertising: $3,375 (FB ad spend)
Affiliate Commissions (Paradise): $1,098
Accounting: $2,080
Cost of goods sold: $3,995
Design & Branding: $1,980
Education: $71
Legal & Professional: $122
Manychat: $78
Meals & Entertainment: $1,995
Merchant / bank fees: $992
Amazon fees: $9,297
Shopify fees: $271
Stripe fees: $3
PayPal fees: $268
Office expenses: $381
Payroll Tax Expenses / Fees: $1,428
Paradise Refunds: $1,260
Total Launch Package fees: $875
Sponsorships: $10,750
Show notes (email Mallard Creative!): $364
The Freedom & Mastery Journal: $5,000
Travel: $2,306
Virtual Assistant Fees: $3,973
Website Fees: $1,409
Recurring, Subscription-based Expenses: $3,456
Adobe Creative Cloud: $100
Boomerang: $70 (team package)
Brandisty: $24
Authorize.net: $91
Carbonite: $60 (annual fee)
Cell Phone: $197
Google: $45
Internet: $300
eVoice: $10
Focus At Will: $45 (annual fee)
Infusionsoft CRM: $396
Insurance: $551
Lastpass: $105 (annual fee)
Libsyn: $400
Manychat: $64
Chatroll: $49
PureChat: $20
ScheduleOnce: $9
Skype: $3
Shopify: $176
TaxJar: $19
Workflowy: $5
WPEngine: $49
MeetEdgar: $49
Taxes & Licenses: $300
Try Interact: $89
Vimeo Pro: $200 (annual fee)
Zapier: $15
Zoom: $15
Total Expenses in October: $56,827
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for October 2017: $161,935
Biggest Lesson Learned
How resilient is your business?
The definition of ‘resilient’ according to Google (in reference to a person or animal) is: able to withstand or recover quickly from difficult conditions. In reference to a substance or object: able to recoil or spring back into shape after bending, stretching, or being compressed.
When I was in Austin, TX for Screw U Live in September I was on a catch up call with my good friend Jodi Flynn of Women Taking the Lead. I was telling her about all the traveling John and I had been doing due to Hurricane Maria, and something she said really stuck with me:
It must be a great feeling to know your business is so resilient!
Which got me thinking…
Not only have we proven time and time again that our business is definitely location independent, but our travels throughout hurricane season – starting for me on Sept 5 just before Hurricane Irma passed Puerto Rico, then for John on Sept 26 just before Hurricane Maria – have also proven that our business is incredibly resilient.
Puerto Rico has taken a big hit, John and I have taken a big hit, yet the way we’ve built and set up Entrepreneurs On Fire would make it seem as though nothing has changed in our lives. The business continues to run and generate the same amount of revenue month after month, despite the drastic changes to our daily routine we’ve experienced over the past month plus.
So, I encourage you to think about this: if it came down to it, could your business survive without constant attention? If yes, for how long?
It’s important that you build a strong foundation for your business; it could mean the difference between being able to bounce back and folding should you experience a major, unexpected life event in the future.
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error. 
Click here for all of EOFire’s Income Reports
This post was written by Kate Erickson, Content Creator and Implementer at EOFire. Follow Kate on Social:
The post Entrepreneurs On Fire: October 2017 Income Report appeared first on Entrepreneurs on Fire with John Lee Dumas.
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Entrepreneurs On Fire: October 2017 Income Report
October 2017 Income At-A-Glance
Gross Income for October: $218,762
Total Expenses for October: $56,827
Total Net Profit for October: $161,935
Difference b/t October & September: -$579
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation!
By documenting the struggles we encounter and the successes we celebrate as entrepreneurs every single month, we’re able to provide you with support – and a single resource – where we share what’s working, what’s not, and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
Let’s IGNITE!
**We’ll receive a commission on the affiliate links below.
Josh Bauerle’s Monthly Tax Tip
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
I’ve been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
October’s Tax Tip: Do I need a receipt for that?
If you’re like me, your answer to the question “would you like a receipt?” from a cashier is almost always a resounding “no”!
While some people, like my Dad, continue to stuff their gigantic wallet with the receipt for every purchase they have ever made, most of us despise paper receipts.
But what about for business owners?
What receipts do you need to keep for tax purposes and how long do you need to keep them?
In a world that is becoming more and more digital every day, this is a situation that is constantly changing.
So when Kate asked me for some best practices on keeping receipts for Entrepreneurs On Fire, we thought it’d be a great opportunity to review the current IRS regulations regarding keeping actual receipts in your business and share them with YOU in this month’s income report!
Everything you need to know when it comes to keeping receipts for business expenses
1. Documentation is King
In the world of the IRS, in the unlikely event you are ever audited, documentation is your best friend. And the more documentation you can provide, the safer you are. So on top of everything said after this, whenever you are in doubt, keep the receipt.
2. Cash is the Enemy
If at all possible, always avoid paying in cash. It’s far and away the hardest way to prove an expense.
First, a purchase via a credit card, debit card, PayPal, etc. are going to offer a decent amount of proof on your statements. Even if you don’t have a receipt, you can at least show the IRS exactly when and where the money was spent.
With cash, if you don’t have a receipt, you could very well be out of luck.
So for the few instances cash is the only option, always keep the receipt and make a note on it what the purchase was for if the receipt itself doesn’t give it. But avoid paying expenses with cash any time you can.
3. Under $75 Doesn’t Require a Receipt
If the purchase you make is under $75, the IRS does not require a receipt. This means those $15 lunches are technically receipt proof.
However, keep rules number 1 and 2 in mind here; documentation is king and cash is the enemy. So if you use cash for these smaller expenses, I’d still keep the receipt.
4. Always Go Digital
For both record keeping purposes and longevity, always keep digital receipts.
For online sales this is easy, they will just email the receipt.
For in-store purchases, several places now give you the option to have the receipt emailed to you. Always choose that option.
If a paper receipt is the only option, simply take a quick picture of it on your phone. Then take these receipts and put them in an online folder. There are also tons of apps out there to help with this, including my personal favorite, Shoeboxed.
5. Proper Bookkeeping is Most Important
Far and away the biggest key to surviving an IRS audit is proper bookkeeping, meaning you are using some type of accounting software to track and reconcile all of your income and expenses during the year. With that crucial practice alone, you will be able to at the worst pinpoint any expense in question and know where and when it occurred.
Receipts may still be required, but with proper bookkeeping you will be able to locate the needed receipts much easier.
We say it almost every week, but all these great tax perks offered to entrepreneurs comes with responsibilities. And one of those responsibilities is the need to track and prove the expenses you take.
By following the rules above you will put yourself in great position to survive any questions by the IRS.
As always, please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
*Bonus* Claim your spot in Josh’s FREE Course on Business Entities!
What Went Down In October
Thrive Las Vegas
October started off strong with John speaking at THRIVE: Make Money Matter in Las Vegas.
The event boasted several top-notch speakers and attendees, and as we often repeat, attending conferences and meeting others in person can’t be replaced.
Tune in to our income report recording to hear about John’s biggest takeaways from the event!
Closing Paradise
October was a big travel month for us, and it all started on the 12th with a flight from Houston to New Zealand.
In preparing for our travel, which will continue until November 18th, we made the decision to close the doors to Paradise while we were away.
We made this decision for a few reasons:
We weren’t 100% positive what the Internet situation would be like along the way, thus making it difficult to schedule our bi-weekly live Webinars;
We’ll never sacrifice customer service, and with the travel we had setup we wanted to ensure we didn’t overload our team; and
We have a few improvements we’re excited to be working on behind the scenes!
So on October 7th we closed the doors to Paradise in preparation for our travel and in order to implement the improvements.
How we set up the close
Our closing Webinar on October 4th was BIG. We welcomed over 250 live attendees and throughout that day welcomed 50 new members to Paradise!
We promoted the live Webinar to our podcasting list, had the opt in front and center on PodcastersParadise.com, and we also ran Facebook ads.
This isn’t our first time closing Paradise, but we did take a different approach this time around (to check out how we ran the close last time, you can visit our December 2015 Income Report).
What’d we did differently
This time around we wanted to simplify things, and so instead of doing videos and price increases every day of the close like we did last time, we stuck with the basics:
We did a Live Webinar followed by 3 days of emails announcing the close and the diminishing bonuses.
Day 1: Oct 4 – the live webinar (welcomed 50 new members)
Day 2: Oct 5 – diminishing bonuses (welcomed 6 new members)
Day 3: Oct 6 – diminishing bonuses (welcomed 8 new members)
Day 4: Oct 7 – the close (welcomed 40 new members)
Kind of crazy to see the difference between the number of new members on the first and last day versus the two days in between, right?
While the diminishing bonuses were being sent out each day, the numbers don’t lie: urgency on the live webinar (for people to receive ALL bonuses) and on the last day (to get in before the doors close) was real.
So what were those diminishing bonuses?
Oct 4: One-on-one chat w/ John (plus everything below)
Oct 5: BOTH The Freedom & Mastery Journal (plus everything below)
Oct 6: Your choice of The Freedom OR Mastery Journal (plus everything below)
Oct 7: Access to a private 1-hour hangout with John – only for those who join Podcasters’ Paradise between 10/4 and 10/7
The close was a great success and far exceeded any expectations we had for it.
Again, our main goal was to simply keep our customer service capabilities high and have time to implement some improvements within, all while traveling for most of the month.
Lesson learned: the power behind Live Webinars lives on, and urgency is still a very viable strategy when it comes to marketing your products and services to your audience.
New Zealand + Australia
As mentioned above, it all started October 12th with a flight from Houston to Queenstown, New Zealand. This flight kicked off a 40-day adventure inspired not only by the fact that neither of us have ever traveled to New Zealand or Australia, but also by We Are Podcast.
A peek into our travel diary for October
Queenstown is the first of our stops on a 40-day travel journey through NZ, AUS and the UK, and it all started when we met up with our great friends plus business & travel buddies Jill & Josh Stanton of Screw the Nine to Five.
If you’ve never visited, Queenstown is one of the cutest little village towns I’ve ever seen and has the most beautiful scenery everywhere you look! Esp from our AirBnB:
The location we picked here couldn’t be better: we’re a 10 minute walk to the docks, shops, cafes and restaurants, in addition to a walking path, a garden park and – wait for it – frisbee golf!
(I’ve never played frisbee golf in my life, but it seems like a cool thing to have nearby).
Plus, New Zealand is known as the adventure capital of the world (proven by John and Josh, who did the Nevis bungee jump a few of days ago: 143 meters – 440 ft) > yikes!
See that little house-looking thing in the background below? …that’s where they jumped from (insert wide-eyed face with a lot of fear).
And there is so much to do in Queenstown!
Every time we turn around there’s another amazing opportunity for a beautiful walk, hike, or activity.
Here’s part of the walking path down by the water near our place:
So we haven’t been wasting any time…
First things first: we rented car at the airport, dropped everything off at the AirBnB, and we were off to find a market nearby to stock up on the necessities for yummy breakfasts and delicious dinners.
On the way home from the market is when John and Josh decided they should sign up for the Nevis bungee jump – the highest in the Southern Hemisphere.
That night we made burgers on the grill and called it an early night in an attempt to normalize our internal clocks.
The following morning we slept in, John and I went on a great run, and then we quickly established our “morning routine” with Jill & Josh: 2 of us stay and make breakfast and 2 of us go out to grab coffees, which has been working out quite well (except our AirBnB smells like bacon 24/7, which John sees as a positive).
Our wifi is pretty fabulous here (a major concern after what we’d heard from others who have traveled throughout NZ and AUS). So knock on wood… the few hours each day we’ve set aside for work have been productivity-packed!
An email here and there, a couple checks in Asana, and before we knew it we were headed to the bungee bus.
After a 40 minute beautiful bus ride with the other crazies who decided this would be a good idea, the 4 of us found ourselves in a metal basket attached to a chord with our 2 jump buddies, Scott and Travis (brothers from Ontario), heading to the middle of the line for the jump.
Jill and I paid to be able to actually go out to the jump spot with the guys – I knew this was as close as I was willing to get to actually jumping off the thing. Although Jill and Josh told us about a tandem jump you can do off a bridge – not too far from the Nevis jump – but only 34 meters instead of 134… that’s probably more my speed ;)
Such a cool experience to be out there with them when they jumped.
Here’s a video of John’s jump!
After the jump we made our way back to our place, and John and I decided to go on a hike up the hill behind our place, which was highly recommended by a local woman we met along our morning run.
She was absolutely right about the views at the top:
We figure we survived somewhere in the ballpark of 50 mph winds at the top, and luckily the plethora of sports stores around afforded us the perfect jackets for it.
New Zealand weather is no joke – it’s been in the low 40’s each morning, getting up to maybe the mid-50’s in the afternoon. They’re just headed into Spring now.
The following day was an absolutely blast, too! We spent the morning at our place chatting, making breakfast and getting a few work hours in.
Then, at [12:30] we met up with Jill’s parents, who are also here traveling alongside them, + Jill’s sister and husband (Ali & Ken) at the bottom of the gondola.
Yet another amazing thing that’s just a 10 minute walk from our place.
Once at the top, you can have lunch + they have a luge racing course! So cool!
So we went for the whole package: gondola ride + lunch + luge racing = awesome.
After lunch and a few times around the luge track, we came back down and enjoyed a few separate activities for the afternoon: frisbee golf for John, Josh, Ali & Ken; a great run in the park for me; and some work for Jill.
Yesterday was a combination of all things amazing: a scenic drive to Wanaka, another one of the cutest towns I’ve ever been to; water sports; and breathtaking views.
The drive was really amazing, and during the 1.5 hours it took us to climb up and through the mountains we saw enough sheep to fill approximately 4,376 petting zoos.
And all the little baby sheep!!!… SO CUTE.
We stopped off at a outlook point on the way up, and WOW… once you think you’ve seen all the views, another bright green valley with unbelievable mountains in the background appears.
Upon arrival we walked around a bit and decided that with the beautiful weather and long afternoon ahead we’d make our way out to Ruby Island via Kayaks – doubles, of course.
About 35 minutes later, we arrived here:
There was nothing on the island itself – outside of the breathtaking views.
We walked around the island (yes, it was that small) and then jumped back in our kayaks to even out our 2-hour roundtrip.
Next morning we decided we’d spend our last Queenstown day in a pretty laid back manner, but two things were definitely on our list: a ThunderJet ride on the water, and another round of frisbee golf (now I HAVE officially played!)
I’ll leave my score out of it, but John and Josh gave one another a pretty good run.
After frisbee golf we made our way over to the pier to jump on a ThunderJet with our incredible driver Kylie (who happens to be a part of Fire Nation! How cool is that?!)
The ThunderJet ride was INSANE, and Kylie’s driving skills were nothing short of impressive. Seriously… there were at least 5 times I thought we were in trouble.
I so wish I had video to share, but if you follow John on Instastories, then you saw a small portion of our experience.
If you’re from New Zealand and haven’t experienced ThunderJet yet, then it’s a must-do! And if you’re not from New Zealand but find yourself in Queenstown one day, then a ride with ThunderJet will make your trip!
Next morning we were off to Auckland, where we met up with Paul Spain, podcaster and hospitality-pro extraordinaire!
Paul helped us set up a meet up for Fire Nation that evening and was generous enough to help us with our entire stay in Auckland. So from 6-9pm we gathered with about 25 local podcasters / entrepreneurs and had a great time at a local cafe!
On Friday – our first full day in Auckland – we decided to make the trip to Hamilton on our way to Hobbiton.
We had been planning for Hobbiton because we’ve heard so many great things (that’s the movie set from the movie The Hobbit), but our stop in Hamilton was due an email offer from Dave, a Fire Nation faithful who lives in the area.
Dave was born and raised in Hamilton, had never been to Hobbiton, and assured us he’d be an amazing tour guide for the day. :)
So we picked Dave up at his co-working space (about 2/3rd’s of the way to Hobbiton) and made a quick stop at the Hamilton Gardens on his request before making the rest of the trip.
And the gardens were absolutely beautiful!!
We were a bit rushed because our 1:15pm tour was not going to wait for us.
Luckily Dave has a lot more experience driving on the wrong side of the road than I do ;) He grabbed the keys and we were off on the winding road to Hobbiton.
The drive was beautiful, and Hobbiton: breathtaking.
During our 2-hr tour of the grounds we learned a lot of fun facts about the movie set, (discovered by “Sir Peter Jackson” during a helicopter ride. He was granted access by the Alexander family who still owns the land today); how The Hobbit was filmed, (none of the Hobbit holes are actually furnished inside – every scene you see inside of one of the holes was done in a studio in Wellington); and were able to see how much detail went into actually putting this set back together, (it was actually taken down after they used it to film in Lord of the Rings, and later reconstructed ‘to stay’ for The Hobbit).
After our tour we decided our 3 hour drive home was better started sooner than later.
Fittingly, we decided to make a dinner at home and watch The Hobbit :)
I must say, I’m pretty impressed by my driving skills seeing as how I’ve never driven on this side of the road before, and the following day I continued my 100% record (knock on wood) with a drive to Piha, a local beach that had been recommended by almost everyone we’ve talked to.
And for good reason:
We spent hours at the beach walking on the black sands and on the several paths carved into the hillsides around it.
About 15,000 steps later we decided to make our way to the Piha Cafe and ended up eating the best pizza EVER.
It was a big risk: it was about 4pm and we had a 7pm dinner back in Glen Eden with Paul and his wife Selina.
But we took that risk. And were really glad for it.
Our dinner with Paul and Selina was amazing. We ate at a local place called Eden (so cute!) and enjoyed lamb and falafel. Delish!
Our last full day in Auckland we made our way out to Waiheke Island via ferry boat to explore what many had said was a “can’t miss” experience.
Boy, were they right… Waiheke-woahhhhh! (Enter Kate: picks jaw up off from ground; heart shaped eyes in full effect; breath taken away…)
Even though it was drizzling and cloudy the entire day, we still managed to make the most of it.
First thing on our agenda: the coastal sea walk, which you can pick up right off the ferry. It’s part of a network of trails that run throughout the entire island – and Waiheke isn’t a small island.
It’s called the Te Ara Hura trail, and if you check out the image below you’ll see the shape of the island, which much of the trails follow.
The coastal trail wasn’t anything like I imagined. First off, the beginning of it was only passable at certain times of the day. 1.5 hours on either side of high tide would make the actual trail impassable (in other words, under water).
While it probably would have stopped me from trekking through, it wasn’t going to stand in John’s way of making this walk our reality (I’m so glad he’s such a risk-taker, cause I can’t imagine our day without this walk).
I wish I had pictures, but that would have required a hands-free go-cam attached to my head because my two hands were occupied with holding onto roots and vegetation to avoid falling down a hill.
It literally felt like you weren’t actually on a trail – the entire way.
We were walking right by what were definitely multi-million dollar estates and we couldn’t have passed more than a handful of people.
You can see how minimal the actual ‘trail’ was in the picture below (see that little strip of dirt by John’s shoes?… that’s what this path was like the entire way)
There were loads of other activities we could have signed up for upon arrival on Waiheke – wine tours, zip lining, boat rides – but we’re becoming more and more confident in our ability to let an amazing day unfold without any actual plans in place :)
15,000 steps (and 3.5 hours later) were feeling pretty good about making the most of our coastal walk.
We celebrated with an amazing late brunch at a really cute Italian cafe before heading back to our place.
After brunch we made our way back home and snuck in a laundry mat trip before our departure to Sydney the following morning.
Speaking of the following morning… it came quickly, and before we knew it we were packing our bags and saying goodbye to New Zealand.
Before prior to our airport trip we met up with one of our Puerto Palooza alumni, Travis, and his wife, Jacqueline, for breakfast.
They had just arrived in New Zealand the night before and made the trip all the way from Los Angeles to attend We Are Podcast in Brisbane, Australia (Nov 2-4… this is the same event John and I are speaking at).
It was perfect timing to meet up with them before their New Zealand adventures began – and before we took off for AUS.
A quick Google search returned a cafe we could meet up at; little did we know it was actually inside of a Home Depot (explains the background of the photo below – LOL) But it was a great breakfast, and even better company.
Our flight to Sydney was uneventful, and by that afternoon we were taking in the view from our beautiful deck in Bronte, right near the famous Bondi Beach.
We spent the rest of the evening on the patio, enjoying the beautiful, warmer weather (more like low 70’s vs. low 40’s) and a GREAT takeout dinner from a place right up the street (so many cute cafes and restaurants just a block away!)
Yesterday (Tuesday) being our only real “full day” here in the Sydney area to explore, John and I decided to attempt the impossible: see Sydney in a day.
Jill & Josh had loads of work to do, so being “on our own” for the day we made a last-minute decision to snag an all-day hop-on, hop-off bus pass to help us cover as much ground as possible.
But first, I snuck in a run to explore the beach path right below our place…
Holy cow – this coast is absolutely beautiful!!
After a quick shower John and I walked right back onto the path and followed it all the way around to Bondi Beach (about a 30 minute walk around the water).
A stop in an Internet cafe to print our bus tickets and a short 5 min wait and we were riding top deck, ready to rock!
There are 2 routes for the hop-on, hop-off bus: Bondi route and Sydney route. So we started on the Bondi route, then jumped over to the Sydney route, and here’s how the day went…
We also spent the following day here in Sydney (Wednesday), but this afternoon we’re headed to Nicole & Omar Zenhom’s place (of the $100 MBA Podcast and Webinar Ninja) for an afternoon tour of their area + dinner out :)
Once we arrived, we had an awesome couple of hours to chat at their place, and then we made our way out for a walk. While the rain stopped us from being able to walk around the park by their place (the same park where Nicole and Omar were married), it didn’t stop us from having a great night out.
The following day we were packing our bags again, this time headed to the Gold Coast in Australia with Jill & Josh.
After a 1-hr plane ride and a 10-min wait in the rental car line we were headed to our current home in a town called Surfers Paradise.
It’s definitely a fitting name: the beach stretches in either direction for miles with the softest sand I’ve ever felt between my toes. Like, literally so soft it squeaks when you walk in it.
A fun little fact I didn’t even mention from our last stop in Bronte / Sydney: it’s whale watching season here and we’ve been lucky enough to spot probably close to half a dozen whales playing in the ocean as they migrate.
Our last place had binoculars to help us enjoy the scenes, but it seems the lack of them at this place has been made up for by their proximity to the shore. Today we watched one play in the water not too far past some Jetski riders – it seemed so close!!
The weather here is incredible – it’s about 80 degrees and actually feels a lot like Puerto Rico (maybe not THAT hot and humid, but close).
Our first afternoon here (Thursday) was a little different. We got to our place around 2, and by about 4pm the clouds came rolling in and we experienced some legit thunder, lightening and quick rain.
I think travel has been catching up with all of us a bit, and that combined with the weather encouraged a couch and movie night (we watched Hall Pass – pretty funny if you like mindless comedies and Owen Wilson).
The next morning we spent time relaxing on the patio (view from our balcony pictured above), did some work, and then myself, John and Josh were off to Purling Falls – a hiking trail that Josh said was a must-do.
Jill hasn’t been so into the hiking, but I don’t blame her: she’s 6 mos pregnant and her bump is definitely not getting any smaller!
The hike down to the falls was really beautiful, and different from any of the other hikes we’ve been on for a few reasons:
It started with Josh warning us of poisonous snakes (and letting us know that it’s mating season for them, so I guess they’re all riled up AND are really good at hiding in the leaves below your feet)
It was very wood-sy (no clear-cut cement walking paths, so much more… wood-sy)
It led us down into a sub-tropical rain forest and spit us out at a beautiful waterfall, which the guys promptly got into their suits for:
The potential to see kuala bears was real, which was pretty cool (although I definitely spent the entire 2+ hours wondering if I was going to get bit by a poisonous snake).
Our reward after 10,000 steps was a stop at the fudge shop – SO YUM – followed by another relaxing evening at home.
…well, that is AFTER we played frisbee – cause how could you NOT play frisbee when you have a wide open beach like this right across the street???…
Post-frisbee we settled into the couch with the most amazing homemade tacos and fudge for dessert.
Our show of choice the past few nights has been LOST; I’m the only one who hasn’t seen it, but everyone else agreed it’d be a great show to re-watch.
Today has been another very relaxing day, which started off with a 2.5 mile walk down the beach to “Broadbeach” (the next beach over) for a great breakfast at a restaurant called Koi. The weather is holding steady and it was a perfect morning (and afternoon) to spend outside.
This afternoon John and I have been catching our breath and relaxing at home while Jill & Josh make the rounds to say goodbye to a lot of their family who they won’t see again before they leave (on Wed, Nov 1 we all head to Brisbane together, and that’s when they fly back to Canada).
For the first time on our trip the days have started to blend together…
Gold Coast has been both relaxing and nostalgic (reminds both myself and John of San Diego / Pacific Beach a lot.)
I’ll pick up where I left off last time:
We didn’t end up doing the Wildlife Sanctuary as planned the day after I sent our last email. Jill & Josh were out meeting up with friends and family, and the day sort of slipped away. Before we knew it, it was 2pm and the Sanctuary closed at 5 – not nearly enough time to do it all.
So John and I ended up spending the morning walking the beach, eating pancakes, playing putt putt golf, and getting some work done.
For the record, I won by 2 :)
That evening, after Jill & Josh were back, we took advantage of the tennis courts here and jumped in the pool for a nice swim. While swimming, we had a GREAT idea: to head down to the Hotel & Casino in Broadbeach, about 2 miles away. You know, just to check things out… ;)
A few card games and about 2 hours later we hopped in an Uber and made our way to the Casino.
We happened upon a great Asian place for dinner right in the lobby of the hotel, and before Jill and I had even finished our meals the boys were already checking out the tables in the Casino area.
We lost a bit of money, but had a really fun night out :)
The following day we decided to make it a chill morning and then me, John and Josh made our way to the Wildlife Sanctuary in Currumbin for the afternoon.
While the Sanctuary had nothing on Sea World or the San Diego Zoo, I must say it was SO COOL to see kuala bears and kangaroos IN PERSON!! Plus, 100% of proceeds go to protect local wildlife both inside and out of the sanctuary.
The “petting zoo” was quite different than what I’m used to seeing (goats, maybe a lamb here and there…)
This one was filled with kangaroos hopping (and sleeping) all over the place. We got to feed some kangaroos, stare down the alpha (he was SO HUGE!), and see a mama carrying a little joey in her front pocket.
Sheep sheering (where John made it up on stage to actually help sheer the sheep!), an impressive bird show, and a crocodile or two later we were making our last stop of the afternoon: holding a koala bear :)
I think I’d have to say that feeding and petting the kangaroos, and seeing the koala bears in person, were my highlights :)
We’ve been pretty beat come nighttime with all the running around we’ve been doing, and our Wildlife day was no different. We made our way back to the house and settled in for a homemade dinner and more episodes of LOST.
The following day we were determined to make Byron Bay happen.
Byron Bay was definitely beautiful, and it was really fun to watch the surfers ride “sideways” waves (you get to a point on the beach where it start curving around, and the way the rocks are the waves look as though they’re coming in sideways – pretty cool)
We also walked out to the most Easterly point in all of Australia, which was cool.
Last night we had 1 last hurrah before Jill & Josh packed it up to head back home bright & early this am. Our wild night out?… Korean BBQ.
It being my first time I had no idea what to expect, but was pleasantly surprised. All they had to tell me was that it’s like fondue ;)
This morning we closed down Gold Coast and made our way up to Brisbane. A quick check-in at the hotel, a great gym workout, and an awesome lunch later (we got to meet up with Michael O’Neal of the Solopreneur Hour, and reunite with Nicole & Omar – all from our SD crew – who are also here for the conference), and now we’re just settling in and getting prepped for the conference, which starts tomorrow.
Look out for future updates on the rest of our travels in next month’s income report, plus a full recap of We Are Podcast here on the blog!
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
October 2017 Income Breakdown*
Product/Service Income: $148,578
TOTAL Journal sales: 644 Journals for a total of $24,423
The Freedom Journal: Accomplish your #1 goal in 100 days!
TheFreedomJournal.com: $2,744 (54 Hardcovers & 17 Digital Packs sold!)
Amazon: $9,906 (269 Freedom Journals sold!)
Total: $12,650
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
TheMasteryJournal.com: $4,012 (103 Hardcovers & 10 Digital Packs sold!)
Amazon: $7,761 (218 Mastery Journals sold!)
Total: $11,773
Podcasters’ Paradise: The #1 Podcasting community in the world!
Recurring: $19,089 (193 monthly)
New members: $35,325 (119 new members)
Total: $54,414
Podcast Sponsorship Income: $64,500
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Skills On Fire: $0
Podcast Launch: Audiobook: $204 | eBook: $37
Free Courses that result in the above revenue:
Free Podcast Course: A free 15-day course on Podcasting
Free Webinar Course: A free 10-day course on Webinars
Free Goals Course: A free 8-day course on Setting & Accomplishing Goals
Funnel On Fire: A free 8-day course on Creating a Funnel that Converts!
Kickstarter On Fire: A free 5-day course on going from Idea to Launch on Kickstarter!
Affiliate Income: $70,184
*Affiliate links below
Resources for Entrepreneurs: $49,756
Audible: $608
BlueHost: $150 (Step-by-step guide and 23 WordPress tutorials)
Click Funnels: $31,388
Coaching referrals: $850 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Mentorship: $15,000
ConvertKit: $163
Disclaimer Template: $0 (legal disclaimers for your website)
Fizzle: $195
LeadPages: $902
Infusionsoft: $500
Courses for Entrepreneurs: $16,829
Create Awesome Online Courses by DSG: $6,124
Webinars that convert by Amy Porterfield: $1,385
Bot Academy by Andrew Warner: $2,500
10k Readers by Josh Turner: $95
The Amazing Seller by Scott Voelker: $594
10k Subscribers by Bryan Harris: $98
Copywriting Academy by Ray Edwards: $0
Self Publishing School by Chandler Bolt: $3,789
ASK by Ryan Levesque: $2,244
Resources for Podcasters: $1,962
Pat Flynn’s Smart Podcast Player: $62
Podcasting Press: $720
Libsyn: $985 (Use promo code FIRE for the rest of this month & next free!)
UDemy Podcasting Course: $195
Other Resources: $1,637
Amazon Associates: $720
Other: $917
Total Gross Income in October: $218,762
Business Expenses: $53,371
Advertising: $3,375 (FB ad spend)
Affiliate Commissions (Paradise): $1,098
Accounting: $2,080
Cost of goods sold: $3,995
Design & Branding: $1,980
Education: $71
Legal & Professional: $122
Manychat: $78
Meals & Entertainment: $1,995
Merchant / bank fees: $992
Amazon fees: $9,297
Shopify fees: $271
Stripe fees: $3
PayPal fees: $268
Office expenses: $381
Payroll Tax Expenses / Fees: $1,428
Paradise Refunds: $1,260
Total Launch Package fees: $875
Sponsorships: $10,750
Show notes (email Mallard Creative!): $364
The Freedom & Mastery Journal: $5,000
Travel: $2,306
Virtual Assistant Fees: $3,973
Website Fees: $1,409
Recurring, Subscription-based Expenses: $3,456
Adobe Creative Cloud: $100
Boomerang: $70 (team package)
Brandisty: $24
Authorize.net: $91
Carbonite: $60 (annual fee)
Cell Phone: $197
Google: $45
Internet: $300
eVoice: $10
Focus At Will: $45 (annual fee)
Infusionsoft CRM: $396
Insurance: $551
Lastpass: $105 (annual fee)
Libsyn: $400
Manychat: $64
Chatroll: $49
PureChat: $20
ScheduleOnce: $9
Skype: $3
Shopify: $176
TaxJar: $19
Workflowy: $5
WPEngine: $49
MeetEdgar: $49
Taxes & Licenses: $300
Try Interact: $89
Vimeo Pro: $200 (annual fee)
Zapier: $15
Zoom: $15
Total Expenses in October: $56,827
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for October 2017: $161,935
Biggest Lesson Learned
How resilient is your business?
The definition of ‘resilient’ according to Google (in reference to a person or animal) is: able to withstand or recover quickly from difficult conditions. In reference to a substance or object: able to recoil or spring back into shape after bending, stretching, or being compressed.
When I was in Austin, TX for Screw U Live in September I was on a catch up call with my good friend Jodi Flynn of Women Taking the Lead. I was telling her about all the traveling John and I had been doing due to Hurricane Maria, and something she said really stuck with me:
It must be a great feeling to know your business is so resilient!
Which got me thinking…
Not only have we proven time and time again that our business is definitely location independent, but our travels throughout hurricane season – starting for me on Sept 5 just before Hurricane Irma passed Puerto Rico, then for John on Sept 26 just before Hurricane Maria – have also proven that our business is incredibly resilient.
Puerto Rico has taken a big hit, John and I have taken a big hit, yet the way we’ve built and set up Entrepreneurs On Fire would make it seem as though nothing has changed in our lives. The business continues to run and generate the same amount of revenue month after month, despite the drastic changes to our daily routine we’ve experienced over the past month plus.
So, I encourage you to think about this: if it came down to it, could your business survive without constant attention? If yes, for how long?
It’s important that you build a strong foundation for your business; it could mean the difference between being able to bounce back and folding should you experience a major, unexpected life event in the future.
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error. 
Click here for all of EOFire’s Income Reports
This post was written by Kate Erickson, Content Creator and Implementer at EOFire. Follow Kate on Social:
The post Entrepreneurs On Fire: October 2017 Income Report appeared first on Entrepreneurs on Fire with John Lee Dumas.
          via EntrepreneurOnFire.com | Inspiring interviews w/ today's most successful Entrepreneurs http://ift.tt/2yjGowA
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smartwebhostingblog · 6 years
Text
Apple Silly Season Is Upon Us
New Post has been published on http://croopdiseno.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
Apple Silly Season Is Upon Us
New Post has been published on http://croopdiseno.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes
lazilysillyprince · 6 years
Text
Apple Silly Season Is Upon Us
New Post has been published on http://croopdiseno.com/apple-silly-season-is-upon-us/
Apple Silly Season Is Upon Us
Silly Season Is Upon Us
That feeling when graffiti makes more sense than floor traders. By cogdogblog – Good Advice, CC0, Bring a towel, too. (2535543334).jpg
Apple (AAPL) is always subject to Silly Season in their Q1 (Christmas quarter). Q4 has 1-3 weeks of new iPhone sales, but the motherlode is Q1, so speculation is rampant. Apple is the most secretive company in the world, which allows the speculation to shape-shift into fact.
Apple is also the most written-about company in the world, and the best way to get clicks in the tech press is claim-chowder headlines about Apple’s days being numbered. One day, they will be right. But this past decade, how many times have they been wrong? Answer: many. Here’s a fun example from April of this year, long after everyone should have known better:
The iPhone X, Apple’s new flagship phone and heir apparent to the universal design of a smartphone, only accounted for 16% of the company’s smartphone sales so far in 2018, according to estimates from analyst Consumer Intelligence Research Partners. The share of all new iPhones sold in the first quarter of 2018 has slid to 60%, down from 78% in 2015, the report stated. The new models include the iPhone X and the iPhone 8 and 8 Plus—meaning the old versions of iPhone are selling almost as well as their updated counterparts.
Apple’s introduction of the iPhone X, and its elevated $1,000 price, indicated Apple had confidence that people would be willing spend more than ever on a new phone to get cutting-edge technology—but a 11-point slide year over year in sales might indicate that confidence is misplaced…
We’ll know soon enough what the quarter looked like for Apple, as the company reports its earnings May 1.
How’d that work out?
AAPL Revenue (Quarterly YoY Growth) data by YCharts
Oh, right. I wonder if Dave ever wrote a headline, “Boy, Was I Wrong About the iPhone X!”
This year, Silly Season is even bigger. If this past week wasn’t The Bear and The Bull engaged in thermonuclear war, I don’t know what was. The Animal Spirits are out. The headlines are flying fast and furious. Analysts are downgrading Apple left and right, focused on iPhone units instead of profit for some reason. Anytime someone reminds me that the iPhone has a small market share, I try and remind them they also take about 80% of ALL smartphone profits every quarter.
Anyway, not to pick on Peter Cohan specifically, but there’s been a lot of this:
Apple has been producing new iPhone versions and raising its prices on them. But its high price is not holding for the latest version, the iPhone X, so as Bloomberg reported, Apple is offering customers a 40 percent discount.
How so? On December 2, Apple added a new banner to the top of its website advertising the iPhone XR for $449, $300 less than its official sticker price. The deal, noted with an asterisk and described at the bottom of the page, requires customers to trade in an iPhone 7 Plus, a high-end handset from two years ago.
O how mighty Apple has fallen!
To put it in perspective, the plunge in the iPhone gross margin has been precipitous. As I mentioned, In 2012, the iPhone had a 71 percent gross margin. Before the 40 percent discount, the iPhone X had a much lower gross margin of 48 percent — its price was $749 and the cost of the parts was $390, according to IHS Markit.
By discounting the price to $449, the iPhone gross margin drops to 13 percent.
Bonus points for “O how mighty Apple has fallen!”
He is correct that Steve Jobs loved high gross margins so much that his wife was probably jealous of their relationship. But, unfortunately, arithmetic and common sense are Cohan’s nemeses here.
So What’s Wrong Here?
The first thing is plain common sense. Cohan and others weirdly assume that Apple is going to just chuck these trade-ins into the trash and call it a day. Does that sound like Apple to you? Does that sound like something any company would do? Of course, Apple refurbishes them, and sells them in its online store.
Secondly, as I will show below, Apple is most most likely increasing profits here, not decreasing them.
The Apple Trade-In Program
You wouldn’t know it from these articles, but Apple has had a trade-in program for years now. Two things have changed:
They raised the trade-in value for December. More so on the older phones.
They promoted the heck out of it for Christmas.
Here are the changes in trade-in value:
Device
Old Credit
New Credit
Change
iPhone 6
$75
$150
100%
iPhone 6 Plus
$100
$200
100%
iPhone 6s
$100
$200
100%
iPhone 6s Plus
$150
$250
67%
iPhone 7
$175
$250
43%
iPhone 7 Plus
$250
$300
20%
iPhone 8
$275
$300
9%
So I believe two things are going on here. Apple sees that the upgrade cycle is lengthening, and badly wants to get those people with very old phones into a new one. The extra credit only applies if you are buying a 2018-year phone (Apple also sells new previous year phones as a budget option). As we have learned many times in the past, this does not necessarily mean iPhone units are down, though I suspect they are anyway.
To me, the only units that matter are US dollars, to paraphrase Johnny Rotten.
Source: AZQutoes
The second thing I think is going on has to do with the iPhone 7 Plus, which I believe to be Apple’s focus here. This is pure speculation, so take it with a grain of salt, but in analyzing how they’ve set up the promotion, it just looks like to me that, while they’re taking all comers, they are particularly interested in that model. Apple is deliberate about every single detail of everything, and it can’t be an accident. Why?
First, let’s look at the economics of this transaction.
The Only Units
US dollars! Aren’t they the best? Completely fungible global reserve currency, and the easiest way to keep score. How odd it is that analysts insist on using phone units to keep score when dollars are just sitting right there.
Someone buys an iPhone XR for $449 plus an iPhone 7 Plus in “good” condition. There’s a lot of wiggle room between those two quotation marks, but Apple’s definition of “good” is “anything where the refurb cost is low enough that we can still make an acceptable profit.”
I looked on eBay to get a sense of where the market for used iPhone 7 Pluses stood as of today. I cataloged the last 100 completed transactions that fulfilled the following qualifications:
32GB
Described as good or better. Minor scratches and dings OK.
All components in good working order
No third-party screen replacement or any other third-party major component replacement.
Unlocked in all ways
No accessories required, just the phone
Also, there were a couple that were suspect, like the one that sold for $1100 to someone 10 miles away from the seller (LOL, money-laundering), so I omitted those.
I think this comes pretty close to what Apple is looking for. The last 100 phones sold in this category averaged in price $347.54.1 Apple could just turn around these phones that they are purchasing for $300, and make a 13.7% profit on them the same day. And remember, that’s the least expensive of the iPhone 7 Pluses. The 128GB and 256GB versions fetch about $60 and $120 more on eBay, respectively. Apple pays $300 regardless.
But they don’t sell them on eBay, of course. They send it back to Hon Hai, where they are rubbed and scrubbed and sold in the Apple refurb store, for $479, $569 and $649, depending on storage. Remember, that $649 version still cost Apple only $300. Let’s be super-conservative and say the average sale price is $500 because of heavy mix towards the 32GB phone. That means Apple’s profit here is $200 minus the cost of refurb.
Here’s the tricky part, because Apple is the most secretive company in the world, it’s impossible to know what that refurb cost is. Since they could just get $348 on the open market without the refurb, I would imagine the profit is much higher than that $48. I would guess much closer to $148 to $48, but that’s pure speculation. Let’s just call it $100. So instead of getting $749 for this iPhone XR, Apple got $849 ($449+$500-$100).
Apple does not give anything away. Ever. They like to put on a soft, PC face, but they are also the greediest company out there, because Steve Jobs understood that the scorecard was all in dollar signs, not phone units.
I think this is another brilliant lever-pull by Tim Cook, that no one else even saw, won’t understand until the May conference call, and maybe never. Or, I’m just completely wrong. Isn’t following Apple fun and exhausting?
I Think They’re Headed to Asia
Again, we’re into purely speculative territory here, but this is based on a few things:
Bigger phones tend to be popular in Asia. According to Device Atlas, in South Korea, home of Samsung (OTC:SSNLF), the most popular phone in 2018 is the iPhone 7 Plus with 11% share. The top Android phone is the Galaxy Note 8, also a large phone. It’s not true in every Asian country, but sales of larger phones tend to be better there, where it is often a person’s only device.
Right now, the dollar is strong and a good way for Apple to boost profits is selling abroad. The $749 iPhoneXR costs 990,000 Korean Won, or $887 in today’s exchange on xe.com. A brand new iPhone 7 Plus is $569 in the US, and $681 in Korea. Also, this income and profit gets funneled through their Irish “subsidiary” and they pay no US taxes on it.
Notice I didn’t tell you the price of a refurb iPhone 7 Plus in the Korean Apple Store? That’s because there are no iPhones there, or anywhere else in Asia that I looked. Like I said, Apple is very deliberate about things, and they may have a Very Good Reason why there are none. Or, they could be lacking in supply, and that’s what this is all about: getting supply of used inventory to sell in Asia.
But Wouldn’t This Cut Into New iPhone Sales?
Yes. Probably. I don’t care. More to the point, neither does Apple. The margins on the refurbs are high, it increases their user base in the fastest growing part of the world, and juicing foreign sales, where the profits are much higher, will make up for some of the reduced units on the top-line phones. Analysts may care where the dollars come from, but Apple does not.2 They are the only units that matter.
Implications for Apple Stock
As I write this, Apple sits at 156.23. It’s TTM PE is 13.15. Their cash-net-debt is about $22/share (probably more now, since the share count is likely lower than it was in September). So minus the cash, the market is currently valuing Apple at $134 with a PE of 11.30. That is, other than the cash, the entire rest of Apple is worth $636 billion. Other assets besides cash are $166 billion. So the non-asset value of the entire company is $470 billion. Come on, now.
But there is an old saying that the market can remain irrational longer than you can remain solvent. The Bull and The Bear are out, fighting for supremacy, with one fear trade on top of another. Say whatever you want about trade, the Fed, liquidity, whatever. We are into pure Animal Spirits and none of it matters until one of them wins.
So under these conditions, I can’t say that Apple stock won’t go even lower; you may even be able to get it as low as $100 if The Bear wins. But I also think that the price for Apple now is absurdly low, and a year from now will be a lot higher. I took another taste at $150, even though I am a big Fat Bear right now. If it goes to $100, I will probably buy more. That’s how I do Apple, I only buy, never sell. It’s working so far, until it doesn’t.
Conclusions: Who Knows?
Pictured L-R: Eddie Cue, Ho Chi Minh, Nikita Khrushchev, Phil Schiller, Leonid Brezhnev, Tim Cook and Jeff Williams. Scott Forestall was airbrushed out of that empty spot in the middle between Khrushchev and Schiller. Source: US Navy Public Archives
During the Cold War, solid data about the Soviet Union was very hard to come by. Frustrated political scientists came up with the field of “Sovietology,” which was more art than science. They would pour over articles and photos in Pravda looking for any clue into new policy or inner-circle machinations from article verbiage, and photo composition and airbrushing. You will probably be unsurprised to learn that, lacking data, their predictions were not very good.
Covering Apple is kind of similar and equally as frustrating. They are almost as secretive as the Soviets between SEC filings, and so we have to engage in a little educated guessing, and hope our record is better than the Sovietologists. Anyone from outside of Apple who tells you they know what is happening at Apple is a liar. Heck, most of the people inside Apple don’t know what’s going on beyond their own small world there.
As always, the speculation about this quarter will end with their 10-Q, and maybe we will get a couple of days’ break before the speculation on Q2 begins. Until then, speculate away!
Sadly…
My policy with heavily-followed companies like Apple is to not read or respond to comments, as they seem to attract a large amount of FUD and trolling. Feel free to send me a private message if you have a question or comment directed at me. If you are polite and respectful, you will almost certainly get a response that is also polite and respectful.
Endnotes
1 I included shipping for two reasons. 1. This is the full cost of what the buyer was willing to pay. 2. Low price + high shipping cost is the oldest trick in the book.
2 When the iPhone was first released, some analysts complained that it would cut into iPod sales and was therefore a bad idea. Seriously.
Disclosure: I am/we are long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Forever, and ever
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
0 notes