Apple iPad vs. Amazon Kindle

On May 3, Apple [AAPL:NSD] announced that 1,000,000 iPad units had been sold in just 24 days. To put that feat into perspective, it took the company 78 days to sell 1,000,000 iPhones back in 2007. Not only that, but the price of the iPad is about twice the cost of an iPhone, which mean this accomplishment deserves much more praise.

The launch of the iPad had analysts and industry professionals questioning if this would put a damper on the Amazon [AMZN:NSD] Kindle, the best selling tablet in the world. Apple has a strong foothold in the music player, computer, and smart phone industry, and its attempts to battle Kindle is being followed closely. Some are proclaiming the Kindle will continue to stay atop, with product publicity rising and positive reviews constantly streaming in.

Critics have termed the iPad as no miracle product and is like a giant iPhone, without the phone or camera capabilities. But what about the comparison between the iPad and the Kindle? Which stacks up better as an e-reader?


Head-to-head, the iPad (left photo) is a much better all around product compared to the Kindle (right photo), but as an e-reader, does the iPad compare? I researched the top five characteristics of e-readers that I thought would be most useful for those interested in one of these devices.

Battery Life
Apple products have always had short battery lives, and the iPad does very little to end this stigma. You would be very lucky if your iPad ran for more than 12 hours without a recharge. Compare that to the Kindle, which can last an entire week without being charged. Good for the electricity bill; good if you're on a weekend vacation; good if you forget to turn off the product once in a while. It's no contest, the Kindle wins on battery life.

Measurements
Size, weight, and even 'holdability' comes into play in this category. The 6-inch Kindle is no match for the 9.2-inch iPad, but that size comes with a cost. The weight difference is significant, a factor for those who carry backpacks or luggage. The iPad registers at 1.5 pounds - four times heavier than the Kindle (Note: The Kindle DX is a larger version of the Kindle and is similar to the iPad's measurements).

Users have also complained that the weight and size makes the iPad harder to hold, making it uncomfortable as a reading device. The Kindle is much smaller and avid readers point out they feel no significant difference with the Kindle or a hard-cover book.

The winner seems to be the Kindle, but if weight is not an issue, the iPad could be considered.

Readability
Both the Kindle and the iPad have had complaints about readability. The Kindle seems to struggle at night, because it uses a reflective screen with no back lighting, like a book, but works well in sun light. On the other side, the iPad's weakness is in the light, but works well in the dark, because it uses an LED backlighting.

Some people also experience problems with backlit screens (iPad), but this is quite rare. The belief is the pixel density is lower in the iPad, giving some people sore eyes and headaches. This problem is less prevalent with the Kindle.

Users and testers have already given the advantage to the Kindle in this category.

Downloading Content
When it comes to purchasing e-books, you can order iPad products from iTunes, and Kindle books from Amazon.com. In a form of irony, you can directly purchase books sold only in iTunes on the Kindle, but this is not reciprocal. The iPad requires you to log on to the Safari browser and purchase it online, even though the iPad has a Kindle app.

The prices of e-books are similar so no distinct differences will be remarked.

The Kindle however, uses AT&T's 3G network which allows users to download content all over the world, where the 3G network reaches. The iPad uses its Wi-Fi system, allowing it to be used in basements and areas with poor coverage. You can also tap into the AT&T 3G network with the iPad, but expect a service charge.

It is a toss up, but I believe the Kindle wins here because of its free worldwide network, universal reading, and ease of purchase.

Price
It's a little unfair to judge the price of the iPad with the Kindle because it is marketed as a multi-media tablet, not just a reading tablet. The Kindle DX, a larger version of the Kindle is $10 less than the iPad's $499 base price and offers much less. The iPad can come fully loaded at a cost of $829 too. The regular Kindle has a price tag of $259.

The Kindle wins on price easily, as it is only half the price, but for those who want to buy a larger screen, do not get the Kindle DX, get the iPad.

Overall, the Kindle has seemed to win all five main components for an e-reader. Many users and testers enjoyed the compact and compatibility of the Kindle. The iPad was deemed a larger iPhone with fewer services and did not justify the cost. If you already have an iPhone and wanted an e-reader, the Kindle is sufficient and an iPad would be redundant.

I've provided a link to both the basic iPad and regular Kindle from the Amazon store below, so that you can take a look at each product and make your own conclusion. I would love to see comments later if you do make these purchases and let me know your experiences.

The Anatomy of a 1,000 Point Drop [Update 3]

May 6, 2010 is a day that will not be soon forgotten. The intra-day drop of almost 1,000 points (998.50) on the Dow Jones was the largest in its history. [Previous errors have been corrected] Shortly after the market drop, stocks quickly recovered, but now the industry is investigating what caused such a large drop. Rumours in the market are pointing fingers at a Citigroup trader who made an error on a trade. But for those of you who were working or had no idea what happened today, this is how it all unfolded.

2:30 PM - Dow Jones falls below 10,600.
At around 2:30 PM EST, the Dow fell below 10,600, triggering a wave of selling. The market at this time, was already down over 300 points. VIX (volatility index) spiked up to 35 and would continue to rise. The market would continue to fall and the Dow reached 9,869.62 (-9.18%).

Index options orders disappeared in the market. I personally had puts before this large drop and it got filled on the way down. Minutes after, all orders seemed to have left the market because nobody was comfortable trading. The bid was 0.00 and the ask was 7.40 for a Diamonds May106 put. It seemed as if traders were seeing what was going to transpire as the Dow reached a circuit breaker.

The stock market introduced circuit breakers in the 1980's. The circuit breakers have never been triggered, but today's drop was the closest seen in our history. 2010 Q2 circuit breakers are 1050, 2100, and 3150. Note, the time of the drop would have not created a halt, as a 10 per cent drop after 2:30 PM would not constitute a halt.

2:45 PM - Dow Jones reaches low of the day.
The market's obvious over selling reached its pinnacle and buyers would start coming back into the market. Many financial websites and their servers crashed during this time, and information was not being fed. BigCharts.com stopped streaming the charts of the US markets and Yahoo! website was down for almost two hours. The market would pare 600 points and was only down approximately 400 points.

Many believe the market rebounded only to prevent the exchange from halting. Although one can also argue the market was over sold, since it has fallen 12 per cent in three days.

2:47 PM - Accenture shares trade at 1 cent
Suspect trades start hitting the market. Accenture shares valued over $41 as of today, traded at one penny, Bloomberg reports. Apple shares also hit $100,000 a share today. Expect these trades to be cancelled.

3:10 PM - Dow Jones sudden rise flattens.
20 minutes after the sharp drop, then subsequent rise, the market started to flatten out. Reports started flowing into the market of computer trading or hedge funds selling.

Computer trading has been blamed for sudden drops in the past, when in 2008, 500-point drop days was a regular occurrence. Computer trading is used by large firms to sell when stocks reach a certain price below the current market price. These orders are called stop-loss orders.

3:45 PM - Reports of Human Error and Trades Questioned
After the market started to flatten out, news published that a trader at Citigroup made an error on a trade. Instead of selling one million shares, he put "B" for one billion shares. People speculated and are unsure if his order would cause a market-wide reaction.

4:00 PM - Proctor & Gamble shares in question.
At the end of the trading day, PG shares were being questioned as the stock plummeted over 35 per cent in a day. PG management does not know what happened, but technical glitches are being blamed.

[Section updated at 1:21 AM EST] A rumour has been swirling in the market claiming a Citigroup trader placed a trade for $16 billion instead of $16 million on stock index futures at the Chicago Mercantile Exchange. The CME has responded saying "[there] does not appear to be irregular or unusual in light of market activity today."

PG trades are only being questioned on the NASDAQ. And the Dow Jones finished lower 347.80 after the roller coaster ride. [Additional information added to this section at 1:21 AM EST] The exchange has said that PG shares, as well as Accenture, Apple, and many others, are being cancelled if they did not appear on the NYSE ticker. It is believed the erroneous trades occurred on the NASDAQ electronic platform.

[Additional information added] The NASDAQ and NYSE have announced they are cancelling orders many securities that deviated 60 per cent away from a trade at 2:40 PM. Here is the official list. You may have received this from your brokerage as well. Click here for list.

This blog may be updated as more information is revealed through out the day. This blog was last updated at 1:36 PM EST (May 7, 2010).

Sell in May, Go Away!

"Sell in May and go away," or something to that effect is a common theme brought up by financial news outlets during this time of the year. For many of my readers, this may be something you have never heard of, but it is something that should not be discounted.

"Sell in May..." (properly termed the Halloween Indicator) is the phenomenon that the stock market returns low and even negative returns in the summer. Many are unsure as to why this is the case, but statistically speaking, this anomaly occurs frequently enough that many professionals even sell their shares or execute hedging strategies. Once Halloween has surpassed, buying pressures re-enter the market.

As seen in the chart, we see that the months between May to October have historically returned a monthly return of less than 1 per cent.

The most accepted theory as to why this occurs is the belief that traders and professionals take vacations during the summer, as most of us do, and as a result, fewer traders are in the market. Money does not flow into the equity markets. Instead, they are use to fund holidays. This theory has many valid points and does make sense to everyday individuals.

In a 2002 research, 37 countries were analyzed, and in 36 of them, the phenomenon occurred. They also determined that this effect has been in the market in the United Kingdom since 1694.

However, many professionals in the academics of finance still believe this is superstition and becomes a self-fulfilling prophecy. The selling of equities during the summer months results in drops in stock markets.

One reason why many academics discount this effect is because of the Efficient-Market Hypothesis. The Hypothesis states that people should not consistently be able to beat the stock market's average return and that the stock market should not be predictable. Fair market prices are deemed accurate based on all information available in the market.

Although it has been statistically proven that you can beat the market in any given year by selling in May, we can easily provide evidence that it is not always a good idea. In the summer of 2009, world stock markets continued to rise after a world wide crash, and had returns in excess of 20 per cent in many exchanges. Those who sold in May would have missed out on 20 per cent and would have returned much less than the average.

So you see, although the saying does hold some truth, backed with decades of statistical data, we can see that every few years, returns in the summer can be very strong. Many believe this summer will provide strong returns as well, considering consumers are spending again and businesses have ramped up investments.

Electron Boy Saves the City of Seattle

Last week, the city of Seattle was under attack by super villain Dr. Dark and his side kick Blackout Boy. The villains took over the city and threatened to bring eternal darkness to the land, but one boy was able to shed light and save the day. That boy is Electron Boy!

Sounds like a script to a comic book, but this all happened on April 30th when the Make-A-Wish Foundation granted 13-year old Erik Martin his greatest wish ever - to be a super hero for the day.

The Foundation organized one of the largest wishes ever with the assistance of hundreds of volunteers, including the local police, government, sports team, and tv celebrities. An article written in the Seattle Times provides the scripted events of that day, which I highly suggest you read.

Below is real-life footage of Electron Boy saving the Sounders who were trapped in their locker room.



Here is part 1 of 2 of the transmission seen by Electron Boy and the rest of Seattle. You may recognize the actors because they are the hosts of "Deadliest Catch" on Discovery Channel. Great job Edgar Hansen and Jake Anderson for volunteering your skills for the Foundation.



After watching these videos, I could not help but shed a tear. What a great and heart-warming story. It puts everything into perspective and shows what an entire city can do when everyone works together on a united goal.

2010 NHL Playoff Predictions: Semi Finals

Well, I went 5/8 in the quarter finals. I was not expecting any upsets in the Eastern Conference, with the top teams being such power houses full of offensive skill, great goaltending, and talent. The under dog teams in the East showed resilience and determination. You could sense that some of the top teams did not know what it took to win, take for example Ian Laperriere's blocked shot, which required 50-60 stitches above the eye.

So, which team now has the better chance winning their series? (Note, I have made these predictions before this post, but I was too busy to post this). Let's start in the Western Conference.

[1]San Jose Sharks vs. [5]Detroit Red Wings
The Sharks disposed of the Avalanche in six games and were well prepared for the Wings, especially in game 1. San Jose must continue to count on scoring by committee, because I am still unsure about Nabakhov's ability to win a game. Can Nabakhov play well with the Red Wing's net presence? Holmstrom and Franzen will drive and screen the net, making his life miserable. I do not believe the Avs tested him in this area, but we will see how he prevails.

On the other side of the coin, no matter where the Wings are in the standings, I do not think they will ever be the under dog. The Wings faced the surprising Coyotes in the first round, but only in game 7 did they seem to step up their game. The Red Wings success will stem from rookie goalie Howard and the Wings offensive talent.

Both teams are so evenly matched that I believe this series will go to game 7. It is very hard to figure out who will win this, but I believe the Wings know-how to win will give them a slight edge. Wings in 7. Expect a high-scoring series as well.

[2]Chicago Black Hawks vs. [3]Vancouver Canucks

Last year, Vancouver was eliminated by Chicago in the semi-finals and how fitting that the two teams will face each other again in this year's playoffs. Luongo had told Kane in the Olympics when shaking hands at the end of the gold medal game, "See you in the playoffs." Luongo admitted it was a spur of the moment thing, but funny how fate works. We must now wait and see how this series turns out and if the Canucks can finally reach the third round, something they have not achieved since 1997.

The Black Hawks questions in goaltending were answered, temporarily, in the previous series. However, it was clear that Niemi was not playing at a Stanley Cup Champion calibre. He allowed weak goals, and was unable to make the timely save. Niemi can prove the doubters wrong by shutting down the Vancouver Canucks offensive talent. Secondary scoring will be required for Chicago to move on and getting in front of the net will pay dividends in the series. Vancouver's large defensive core will have their work cut out moving guys like Byfuglien, who loves going to the net, evidenced by last year's performance against Luongo.

The Canucks don't have much to worry about. Good offense, good defense, and good goaltending. Luongo has been able to step up his game, but his inconsistency has been a problem this year. He has allowed almost 4 goals a game against the Hawks this year and if that is to continue, the Canucks will be shown out the door.

Another series that will go down in seven, but I select the Hawks to triumph again over the Canucks. I'm going to select over in this series as well.

[4]Pittsburgh Penguins vs. [8]Montreal Canadiens
Wow! What an underdog story. The Habs beat the Capitals in 7 games, and did it trailing 3 games to 1. The Habs have a good shot at making the Finals if they can dispel the Penguins. The remaining two Eastern teams are ranked 6th and 7th. In 2006, the Oilers were able to make it to the finals when the top four teams were eliminated in the first round, allowing them an easier route, but an impressive run nonetheless.

The Penguins have it all. Scoring from three lines, hard working players like Guerin, a proven goalie, and a strong defensive core. There isn't much the Penguins need to do differently against the Habs, except beat Halak.

The Habs success will only continue of Halak has a strong performance. He did not do well in game 1 of this series, but rebounded in game 2. However, the Habs have lost significant man-power on the back-end, with Markov out most likely for the rest of the season. Subban, Begeron, and O'Byrne will need to rise to the occasion and allow this team to succeed.

This series will go the distance, with the Pens winning game 7. I believe that the fatigue will set in for the Habs and their back-end will not hold against Crosby, Malkin, and Staal.

[6]Boston Bruins vs. [7]Philadelphia Flyers
With the Eastern division leaders all eliminated, what's left? Two mediocre teams that won with grit, heart, and determination. I am a huge Flyers fan, so it pains me to say this, but the Flyers have almost no chance with half their all-stars gone.

The Bruins got some good news in the return of Savard, and how fitting if Savard can play against the Penguins in the Conference Finals and do some damage to Cooke? The Bruins offense will improve drastically with the addition of Savard. Rask must continue to play strong and Chara just has to be himself.

The Flyers have a strong core as well, but without three good forwards, their days are numbered. I would love to see the Flyers win, but Boucher may not be able to out dual Rask. You can only beat the best goalies so many times without run support.

I am not confident the Flyers offense will be strong enough to beat Rask, and Savard's return is both a moral win and offensive uprising. Sadly, I predict the Bruins in 7.

The great thing about all the series is that they will be extremely close, and one laps in the brain could change the respective series. Don't be surprised if all my predictions were wrong, because one mistake changed the momentum in game 4, or a lucky bounce won the triple OT of a game 6. For now, let's just leave it at that and get ready for round 2. The games shown already have all been good to watch.