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Stop the Presses!

March 02, 2006


Dear Fellow Options Investor,

Whenever Steve Jobs thinks the world has gotten wind of one of his ideas, he hastily calls for a press conference in Cupertino, Calif.

The Apple Computer CEO has a penchant for delivering magical offerings to the faithful just as he's done for years with the CGI animation over at Pixar Animation Studios. Such was the case last week, when the godfather of the iPod reached out with a compelling invitation to come see what the wizard had cooked up!

Such events get Wall Street buzzing, and on my daily CBS radio show in Chicago, we took dozens of calls about what the genius might have had up his sleeve.

True iPod phone?

Would it be an iPod phone? A strong possibility, we thought, as the Motorola ROKR phone (which features Apple's iTunes MP3-playing software) was not the true conversion device the Street was clamoring for.

If the maestro were to reach into his hat and pull out an iPod phone that actually sizzles, I'd think that would be good for a $5 pop in the stock, with more to follow.

Satellite iPod?

Another possibility that was bandied about was a satellite iPod. Even though Howard Stern lit the fuse over at Sirius Satellite Radio, the candle fizzled out and the buzz died. Mr. Stern and Sirius could make a comeback, but with only 3.1 million subscribers, I doubted the man who was shrewd enough to buy what was to become Pixar from George Lucas for $10 million would sink a significant amount of development into such a small market.

Keep in mind that Apple sold more than 14 million iPods in its most recent quarter, so 3 million subscribers on the Sirius side and another 6 million subscribers over on the non-Stern offerings at XM Satellite Radio Holdings would hardly excite Jobs enough to commit the assets.

iTunes movie site?

I thought the most likely offering would be an iTunes movie store. A movie download service through iTunes (which already offers a handful of television shows and music videos) could stake claim to some of the space and profits that Netflix virtually owns right now. Mr. Jobs' recent marriage with Disney (when he's wearing his Pixar hat) could certainly help stock the shelves for an iTunes movie site.

MAYBE OUR CALLERS SHOULD WORK IN APPLE PRODUCT DEVELOPMENT!

As three aforementioned postulates indicate, there was a wide divergence of opinion of what Mr. Jobs would be bringing to the table, but there was also a very strong belief that whatever it was would be very interesting.

With that as a backdrop, Mr. Jobs took the stage Tuesday in Cupertino at his headquarters and announced a $349 iPod hi-fi system.

The room was silent.

Undaunted, Mr. Jobs reminded the assembled masses that Apple has sold more than 42 million iPods since the original product debuted in 2001, and the online iTunes Music Store just passed its billionth download last week!

Mild acclaim, but no crazy screaming.

With one last try, Mr. Jobs offered, "It's home stereo reinvented for the iPod age."

Silence.

Why the indifference? Well, in case you hadn't noticed, there have been third-party iPod boom boxes for the past four years! I've had an Altec Lansing boom box for upward of three years and it even charges my iPod when I drop it in!

I did a quick Google search for iPod, boom box and speakers, and got 393,000 hits! One was for a Bose SoundDock for $299. That's not only $50 cheaper than Jobs' new system, but I'll hazard a guess most of you would rather have a Bose boom box than an Apple. Shoot, JBL makes iPod boom boxes. Sharper Image even makes iPod "Boom Chairs" and waterproof iPod boom boxes for your shower!

Bottom line, I love what Steve Jobs has done for digital music and for playing Jesus when Apple was lying in the grave like Lazarus. But I would hope the next time he reaches to pull a rabbit out of his hat, he'll also have a carrot up his sleeve!

CATCHING THE CHANGEWAVE -- LOOKING FOR HARD CASH IN ORACLE SOFTWARE

Oracle (ORCL) has announced its Oracle Secure Enterprise Search 10g, a comprehensive, standalone search engine that enables customers to make critical business information available to authorized users while enforcing corporate security policies.

Think of it as corporate Google, with search capabilities for database (of course, because it's Oracle!), as well as file systems, enterprise content management systems, portals, e-mail systems and enterprise applications.




Heat Seeker, our proprietary program that ferrets out unusual buying patterns in stocks, options and futures, has found very STRONG buying of the ORCL April 13 and 14 Calls. As always, we couldn't care less about mere volume. We care about buying on the offer, as this signals that someone is anxious enough to say, in effect, "Get me in at any price!"

Thus, I recommend telling your broker to buy the ORCL April 13 Calls (ORQDO) for up to 45 cents, as long as ORCL is trading at $12.75 or higher.

Folks, I apologize for sending this after market hours; this trade just got to a great entry point right before the close, and I think it's ready to run! Please be sure to place your order first thing tomorrow so that you can catch this price and enjoy the ride!

* Remember, you can pay up to 45 cents for the ORCL April 13 Calls (ORQDO) as long as ORCL shares trade for $12.75 or higher.

Good luck trading and remember -- pigs get fat, but hogs get slaughtered, so don't be a hog!

Jon "Dr. J." Najarian
Editor
ChangeWave Options Investor