Which Version of the iPad Should You Buy? My Perspective (Unrelated Post)

I have been working with my iPad for a few weeks now and have a perspective on the following:

Should I buy an iPad? And should I buy an iPad *now*?

It’s pretty clear from using the iPad that the future is moving towards tablet computing based on cloud computing. The general concept is that the instruments of consumption of the internet and of data in general will slowly be separated from the instruments of production of applications and manipulation of the data. In less technical terms it means that you don’t need a super powerful computer that is capable of creating applications and building reports to be able to use the applications and read the reports (even if the reports are interactive) because much less computing power and a much less sophisticated array of input devices are required for consumption as opposed to production.

So there is no doubt in my mind, we are going to see a continued trend to iPad-like devices.

Personally I think given the availability of bluetooth keyboards, VNC, and RDC (two specifications for working remotely) the laptop is dead in the long run. What you will have is personal servers that can keep data and run more sophisticated processes that iPad devices can make use of through cloud computing for low level tasks (like email). Additionally these devices can access a secure/private/VPN link and display server applications remotely for more sensitive data and more computationally intensive applications.

So long story short – you can join the trend now or later, but likely you will get tired of always carrying a laptop when you realize that you only use 10% (at best) of the functionality and can thus shed some weight by carrying an iPad instead.

So then the question is when to buy….

To me there is not a super pressing need to get the iPad if you are content with your laptop given the still developing state of many applications and the price of the top level iPads. So it depends on whether or not you really want to cut carrying weight now. To me the iPad becomes much more compelling after release of iOS4 -the OS of the new iPhone which is currently not released for the iPad yet. I’ve heard that this will come in September. Also many of the applications for the iPad are still buggy and many more are missing as developers are still working out how to best use the iPad’s features.

Should I buy the 3G or WiFi version of the iPad?

To me there is no debate on this given the current state of internet networks in the US and the world. Buy the 3G version (which inclides WiFi) if you don’t already have an iPhone. At some point you’ll make use of the 3G internet, and in any case it allows for more accurate positioning via GPS, which will also increasingly become important. The cost of the internet on the iPad for 1 month is basically equivalent to 1 day’s cost of internet at a hotel. So if you travel for work or leisure it’s worth it just for that.

If you do have an iPhone, then maybe it’s more debatable. My sense is that 3G for the iPad in this case becomes more of a luxury and a bet that in the future you will want to carry around your iPad and make use of advance internet features (beyond just Google Maps or email which you can do on your iPhone). I am pretty sure this will be the case… but the apps just aren’t there yet. There are some clear cases, I suppose when regardless you should get the dual band iPad. If you work in the real estate industry and need to look at land plots on Google Earth, get the 3G version without doubt as the full screen of the iPad is far superior to the iPhone for looking at plots. If you make use of RDC and VNC and want access wherever, then get the 3G version of the iPad. Etc. With time this argument will apply to more and more people as the apps become available.

What size iPad do I need – 16, 32, or 64 GB? 16 GB vs 32 GB vs 64GB

There are two important considerations – the size of your existing music collection and the size of potential videos. If you are not into music and will not watch videos – then the 16 GB will do. If you are a modest music lover and will not watch many videos then the 32GB will do. I have over 32GB of music alone and so there was no option – 64GB – if I want to keep everything on the iPad. In all fairness, I think that with time syncing between the computer and the iPad will get easier (and wireless) negating the need to carry everything and so probably 32GB is the right number. But if you want the luxury and longevity until the hi resolution iPad with a larger screen comes out in a few years, then consider splurging on the 64GB version.

Hope this helps! Now, back to the regularly scheduled programming….

Try not to lose money.

Arthur O’Keefe, São Paulo Value

EUR – S&P Correlation Breaks Down

The above is the FXE Euro Trust Currency Shares vs the S&P Trust. As much as I am fundamentally bearish in today’s environment, the above is Bullish for equity valuations – at least relative to Europe. Why? The general environment continues to me heavily macro and volatility driven. From the strengthening of the Euro, and its recent breakaway/outperformance, we see that despite fundamental weakness, the world is settling down.

So there are a couple of options in this environment. Maintain shorts and try to find high quality that will rally and hopefully hold in the subsequent selloff or cut shorts and delever.

The technicals for the S&P remain fundamentally poor in the long term. My primary fear comes from the 60-120 SMA death cross which marked the Jan 2008 – March 2009 Bear Market as can be seen below:

I remember a paper a number of years ago speaking of the predictive power of the 60-120 cross. Personally I don’t care of its power in a purely academic sense – ie without other inputs is it a decent signal. We *have* other inputs – namely withdrawl of stimulus, massive delveraging, and implicit and explicit increases in taxes to name a few, all of which is deflationary and therefore inherently dangerous for equities. Witness the following from the most recent St. Louis Fed Monetary trendes showing the decline of credit:

So we have short term bullish and long term bearish = continued volatility. Actually I am starting to get excited with investment opportunities now that immediate crises are over (Greece and many state governments will default but not today). Volatility creates great trading opportunities – but they are that – trading opportunities. Money is made in this environment providing liquidity and then taking it back as it becomes plentiful. Said another way – buying low and selling high.

There are core positions to be held, but exposures likely should be “traded around”. Underexposed net as things take off, and overexposed in the worst of times. It’s not an easy business.

Finally just for the record, I mentioned AIPC – American Italian Pasta Company – in a few posts. The company was bought out marking one of my most successful and interesting investments. I started getting into the stock at $9.00 after which is rather promptly went to $5.00 before starting it’s long and rewarding journey to $53.00. All of this occurred during a period of some of the worst returns of the S&P in history. Indeed in 2009 I believe AIPC was the 5th best performing stock in the market.

The point is that not all volatility is warranted and sometimes it takes the market a long times to see things – good and bad.

Try not to lose money.

Arthur O’Keefe, São Paulo Value

Update your RSS Feeds. Return to Blogging – Shift to WordPress 3. New Site

Quick announcement. Please update your RSS feeds by coming to http://www.spvalue.com and resubscribing to the RSS feed. Having returned from traveling as well as having finally dealt with a few pressing issues, I found time to rebuild the site including transferring to a more professional and scalable setup with WordPress 3.

I have to say that I am pretty impressed with the software. It wasn’t super easy to install, but it also wasn’t super difficult, and the tools that it gives are very strong.

I will have to write more about this general theme later, but basically I am coming to the conclusion across various levels – professional and personal- that knowing and expressing what to do should be separated from the tedious execution. For instance in this case, one does not need to know how to program to write a Blog. And actually they aren’t necessarily complementary. The best programmers may not write interesting Blogs, and the best Bloggers are probably to busy reading and writing to keep their programming skills up to speed.

Looking forward to starting up again. Lots to discuss.

Try not to lose money.

Arthur O’Keefe, São Paulo Value