It was really hard for me to do any writing this past weekend due to fighting with a computer.  For Christmas, my wife will be getting a new laptop and it hasn’t been easy to get it to do what I want it to – what my wife will need it to do.  First it was the wireless, then the VPN (virtual private network so she can connect to her job) client that wouldn’t work correctly.  Boy am I glad I don’t have this problem with my laptop.

I don’t have the same problems with my laptop because I have a MacBook.  Yes, regardless of what you may be thinking, Apple computers are less of a headache than a PC running Windows.  I’m not saying a Mac is the answer to easy computing, but it does have advantages.  Now you know I’m going to break it down – all the way down – so here we go.

Flavors

Microsoft has had many different operating systems over the years: Windows 3.0, Windows 95, Windows 98, Windows ME, Windows 2000, Windows XP and Windows Vista.  While each seem to offer more functionality than the previous edition, they are often bloated (the code takes up more space and more hard drive space is necessary) and half-baked – can you say service patch?  Vista is so bad that many people have “downgraded” to XP; I have had relative success with Vista.

I’m not an operating system historian when it comes to Mac computers, but I do know each new edition builds on the previous to the point where some of them are only different under the hood at first glance.  If the user experience is good, why fiddle too much with it?  An example of this is what both companies plan to offer in the future.  Microsoft is coming out with Windows 7 which uses a platform similar to Vista.  We know they want to ditch anything to do with the name Vista.  Apple is coming out with Snow Leopard – Leopard is the current operating system.  The main goal with Snow Leopard is simple: trim down the code and make it run faster.  Wouldn’t we be in a dream land if Windows 7 took up less space and ran faster?

When it comes to operating systems, the two companies have different philosophies.  Microsoft is mainstream so it can afford to (seemingly) re-invent the wheel every time.  Apple, on the other hand, relies upon customer loyalty and the best way to get this is to provide a consistently good user experience.  Apple’s user experience is also helped by the fact that Apple controls all the hardware too – Microsoft is all about software with a few exceptions like the Xbox 360.

User Experience

My recent frustrations come from the fact that Vista has so many hardware/software possibilities that it is easy for something not to work.  The VPN client I was trying to install was for 32-bit operating systems only and of course my wife’s new computer is running a 64-bit operating system.

I was also having problems with the wireless network card dropping the connection often.  This is a problem I didn’t have with two Apple computers, one computer running XP and another one running Vista.  But wait, the other computer running Vista isn’t 64-bit and doesn’t have the same network card so there was no easy solution or way for me to figure it out.

To be fair, my wife was having the hardest time fixing a word document on my MacBook.  The version of Microsoft Office – yes, there is Office for the Mac – is different than she is used to.  Hey, nothing is perfect.

The main drawbacks concerning Apple computers are price and the fact that the person to the right and left of you probably isn’t using one.  Familiarity makes people comfortable and Microsoft has a clear advantage in this department.  Also, where price is concerned Apple isn’t as over-priced as it seems.  There are many people out there using Macs that have been running fine for 5+ years.  Good luck doing that with a PC.  Another thing about Macs is resale value.  If you want to upgrade, you can actually sell your Mac and get a large portion of your money back.  Again, good luck trying that with a PC.

Both have their advantages.  Things just wouldn’t be as interesting if something was perfect now would it?

The next best thing to having a guest blogger is to have permission to repost a good article from another blog.  Thanks to Zach Bass from Investor in the Wilderness for allowing me to repost this article.

By the end of the summer of 2008 Apple will be in position to grab gold in the Desktop and the Mid to Hi-end Cellphone events. It’s all coming together for Apple, from the economic cycle to the Beijing Olympics. And I’m going to explain how it might play out, but first there’s a bitter pill that must be swallowed.

We’re in a down market and things don’t look good. The Dow has recently dropped below January lows, the S&P 500 is skirting along critical support, and the Nasdaq dropped nearly 100 points last week. The market internals are dismal with decliners leading advancers by 2 to 1, and new lows are outpacing new highs by an astonishing 10 to 1! And let me tell you right now, it’s going to get worse before it gets better. Ouch!

The reason it’s going to get worse, is that as bad as things are, investor sentiment has not yet reached the level of fear needed to affect a trend reversal. This is apparent by looking at the state of two key indicators, the Volatility Index (VIX), currently at a relatively mild mannered 23.44, and the Put-Call ratio, which is sitting at a complacent 1.13. During the recent March lows, volatility and fear were rampant, the VIX was teetering on 34, while the Put-Call ratio was spiking as high as 1.80-1.90 intraday.

When fear is rampant, and everyone thinks we’re going to hell in a hand basket, the markets invariably reverse direction. The problem is, that as bad as things are, we simply don’t have enough fear to incite a reversal. So, we need a good push down to ramp up the fear and get this market moving in the right direction. The VIX is climbing, and the Put-Calls are getting there as well. But first, it appears that we’re going to see a bounce before this Independence Day-shortened week is over due to extremely oversold conditions on all time frames.

VIX Inverse Head and Shoulder pattern

After we get the bounce, we need to move down to the depths required to get unbridle fear coursing through investor’s veins. This seems very likely, as the VIX is setting up in an inverse head and shoulders pattern, set to breakout soon. Now that may happen just before the long weekend, or just after, but in either case, when it does a reversal will be upon us soon after.

So, that’s the first act in this play. The second act is all Apple, with the release of the 3G iPhone on July 11th, with a 22 country rollout. Apple is clearly prepared for the event as FBR Capital Market analysts Craig Berger and Robert Pikover, released a note to clients this morning about Apple’s supply chains indicating that 2008 iPhone build volumes have been revised significantly higher to an estimated 15 million units for 3Q!

A follow up to act 2, is that Apple and China have apparently cleared the way when Apple dropped its revenue sharing demands. So now the question is, will Apple be able to get China Mobile online with iPhones in time for the Beijing Olympics? It would be awesome timing as Apple will be opening two Apple Retail Stores in China, the first on July 19th in Sanlitun, a fashionable bar area of the capital city, according to the Shanghai Daily website. The second store will open during the Olympics in Beijing. If iPhones are ready by then, expect Apple to leverage the awesome marketing power of the Olympics.

This heightened exposure of all things Apple, plus the reduced iPhone price of $199, will be a powerful attractor for returning college and high school students. The third act. iPhones and Macs of every flavor will be flying off the shelves and from online stores. Hopefully this will bring a boost to ailing carriers like UPS and Fedex.

So, what’s the outlook for investors. Well, next week, as I suggested, there will likely be a bounce from oversold conditions in the markets. If the bounce is weak, it will present a good opportunity to take short positions. If it is strong, then we’ll need to wait and see, as a retraction may not be immediate. Soon after the market has retracted from the bounce, I would expect the VIX to breakout, and the Put-Call ratio to spike. As the VIX crosses 30 and nears past highs, and the Put-Call ratio clears 1.50, cover those shorts and go long. At that point we should be near a bottom. Then ride this puppy into Labor Day, and at that time, Apple can take the winners podium and collect its gold!

As always, I’ll be providing daily guidance and intraday alerts to members of the Wilderness Investors Group(go to http://www.zacharybass.com/2008/06/apple-positioned-to-take-olympic-gold.html for mor information). You might want to check it out, it’s free and there are great discussions among many talented investors.

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