I try to refrain from writing posts on Apple. I’m a fan of the company, I like their products. We own many. I’ve said this on countless occasions. That said, my last two “moves’ in the stock have been sales, at 600 pre-split and 98 post. This morning I finally look right to have lightened up at 98 yet still look near sighted for selling at 600.
There in lies the point. Stocks move up and down for a myriad of reasons, but a constant in the market that we should all keep in mind. No stock is immune to a selloff. Do I think you can get a better price for Apple then 98 or whatever it’s at when I send this post to the great server in the sky. I would bet my life that you do. But why care so much?
I can assure you, you’re never really going to make money trading in and out of Apple. Sorry, I don't have a secret formula. Trading weekly options in Apple is akin to a trip to the horse track or a spin at the roulette wheel. It can work out fantastic, but the odds are against you.
We all know that Apple’s previous high was just over 700 which equates nicely to 100 today. It’s become “popular” to point out that not much has changed at Apple since then. I think that statement, said by some who I have great respect and admiration for, is utterly ridiculous.
Let’s take a look at what’s different:
Apple now pays a dividend, over 2% making it attractive to pension funds and income oriented investors. (they typically don’t “day trade”)
Apple has a huge buyback in place. They’ve bought a ton of stock back already and still have $30-$40 billion to go. Let’s call it the Cook put.
The market cap is not where it was at previous highs. Apple would need to trade right around $110/share to challenge it’s all-time high in market cap. (I’d sell some there if it went in a straight line)
There’s new products. (Watch,Beats) AND services (Apple Pay)
So not exactly the same. But I get it, no one wants to be blamed for saying to buy the top. I this day and age you’ll get lambasted later. Why take the risk?
Now we’re faced with bend gate and this iOS 8.01 glitch. No one I’ve talked to cares about the software glitch. Perhaps they’re like me and remember the days when it would take three startups to get a work PC functioning correctly for the day before being greeted with the blue screen of death around lunch time. Don’t forget about that special visit from the IT department who almost always favor the Windows platform because it guarantees job security. But I digress.
Bertha Coombs was on CNBC this morning and happened to mention she has now broken two iPhone 6’s, because they are slippery. She apparently shattered the screen twice and had a visual for her current phone which was shattered. So you can’t blame Bertha for heading out and buying herself a Passport this afternoon or a Galaxy.
Except that she’s not. She’s going to buy her THIRD iPhone this afternoon at the Apple store. For her sake I hope she invests in a screen protector. But this is just how sticky this ecosystem is. What do you think the Watch, Beats and Apple Pay have in common. Just call them handcuffs. You buy the Watch, start using Apple Pay and own a Mac and iPhone, GOOD LUCK getting out of this ecosystem. It’s hard enough as it is. I scored an iPhone 6 on launch day. I entered my iCloud ID and password and it was like I was using a better version of my old phone. Do you know what would have been involved if I switched? I’m trapped, for better or worse.
I do have some issues with Apple. The thinness factor is getting a bit ridiculous. The iPhone is like an attractive women who loses 10 pounds that she didn’t need to. The truth is the woman and the phone and looked and felt better a little “heavier”. Make the phone bigger and increase the battery size…and oh by the way, maybe the phone won’t bend at that point either Jony Ive.
In this 24-hour news cycle we’re going to hear about any issue at Apple endlessly. Good news will be greated with, “Well, that’s Apple”. Bad news will be greeted with “Is this the end of Apple?”
My advice is have your own opinion. This isn’t a hard stock to analyze. It makes stuff people want and makes A LOT of money doing it, probably to the iTune of $50 billion in free cash flow next year. When compared to many other technology companies in emerging product categories…that is different.
In this 24-hour news cycle we’re going to hear about any issue at Apple endlessly. Good news will be greated with, “Well, that’s Apple”. Bad news will be greeted with “Is this the end of Apple?”
My advice is have your own opinion. This isn’t a hard stock to analyze. It makes stuff people want and makes A LOT of money doing it, probably to the iTune of $50 billion in free cash flow next year. When compared to many other technology companies in emerging product categories…that is different.