Apple at $223: Hey CNBC, where’s that pullback?

13 Comments

  1. Michael Thompson said:

    It cannot be a short squeeze since fewer than 1% of all outstanding shares are currently shorted.

    It must be a combination of Apple’s buyback, more Berkshire Hathaway buying?, Vanguard and Blackrock must buy shares as Apple heads higher to match Apple’s weight in the various indexes, more institutional buying and finally retail buying.

    Apple longs laugh last. August, 2018 has been the finest financial month of my life. We are only getting started too.

    3
    August 29, 2018
  2. Fred Stein said:

    I get to gloat. Direct quote from my comment last time the pair were featured, referring only to Matt, “The pull back may have already occurred last week.” (That was the shallow flirtation with $215.

    However, Gina called it correctly saying sentiment has changed. I think investors finally get it: Limited downside; Considerable upside; Dividends increasing at 16% annually. Very few investments meet those criteria.

    3
    August 29, 2018
  3. John Konopka said:

    The volume was only about 10% more than average. Maybe there is a dearth of sellers? I’m just an amateur, but I wonder if the combination of Apple buybacks and Buffet going long have taken off the market shares used by day traders?

    0
    August 29, 2018
  4. Mark Visnic said:

    My vote is material change in perspective and long-term sentiment. Technicals have indicated 225-230ish short-term but, I wouldn’t trade it unless you need it. 🙂

    0
    August 29, 2018
  5. David Drinkwater said:

    What do you all think of Tim’s sale of his shares playing a role!? I suspect none, personally.

    I would be interested to know what the “cost basis” was for the shares Tim sold, since I think those may not be tied to today, but rather to some specific time in the past, so it might be an obvious and easy gain capture. That notwithstanding, I think the full sale is taxable, but one would also have to ask if that gets taxed as short-term (AKA Orfinary Income) or long-term capital gains.

    Still, the market squawks about it (Tim’s windfall and sale of AAPL).

    Does it matter?

    Comments welcome.

    0
    August 29, 2018
    • Ken Cheng said:

      I didn’t pay any attention to it, but just assumed the shares sold were to cover taxes. Is that not the case?

      1
      August 29, 2018
      • David Drinkwater said:

        Some of it was to pay taxes, but presumably not all.

        I’ll bookmark this and try to come back to it later. Tomorrow …

        https://www bizjournals dot com/sanjose/news/2018/08/29/tim-cook-aapl-performance-bonus-cashing-out-stock.html

        0
        August 30, 2018
  6. Gregg Thurman said:

    This morning I acted on my belief in a pullback and bought 100 contracts at $0.90. They are currently trading at $0.49. With the way AAPL trades in after hours (AH high $225). I will be closing that position at the Open tomorrow and taking the hit (~3% of total cash balance).

    1
    August 30, 2018
      • Gregg Thurman said:

        You’re welcome. I’ve always felt that boasting of profits must be countered by sharing losses as well.

        When I posted the above my Put contracts were selling for 49¢. Including fees, I paid 91¢.

        Instead of Closing the position outright I converted the position from debit spreads to credit spreads. I did this by selling the top leg of my debit spread ($220 Put) and replacing it (buying) with the $215 Put creating a credit spread. This trade returned 73¢ to cash reducing my potential loss from ~$4,500 to actual loss of ~$1,800 (~1.5% of total cash position).

        It’s still a loss, therefore, a bad trade, but I was able to greatly reduce the degree of my loss with this action.

        This bad trade was caused by me failing to recognize the underlying strength in sentiment for AAPL, that is being driven by WS eyeballs focused on FY2019 prospects.

        AAPL, since July earnings report, is trading unlike any previous year going back to FY2011. I should have recognized that and am paying the price for failing to do so.

        0
        August 31, 2018
        • Gregg Thurman said:

          Elaborating on the above a bit (for those that may not quite understand what I did), by changing my position from a $217.50/$220.00 Debit Put Spread to a $215.00/$217.50 Credit Spread I changed what AAPL had to do in relation to the Spread. Originally, with the debit Spread, AAPL had to Close below $217.50 to make maximum profit. By changing the position to a credit Spread AAPL has to Close above $217.50 to achieve maximum results.

          0
          August 31, 2018
  7. Kathy Corby said:

    Well, those of us who were stupid enough to sell calls against our long AAPL shares are stuck rolling them out to higher strikes or biting the bullet and buying them back. But I’m sure we’re not the only ones who need a pullback– there must be plenty of institutional investors who hedged their holdings to their detriment. This means that sometime soon, someone will find a rumor, a survey, a downgrade, an insider sale, some reason or other to convince gullible retail holders to let go of their shares at a lower price than today”s, and we can get out of those short calls less painlessly. They tried floating Tim’s sale and the rise of Huawei, but so far no takers. They’ll find something, though.
    A thought for you Gregg– if you want a bearish short term bet, what about bear call spreads? These can be adjusted by actually purchasing the shares on the open market (assuming your account balance is good for it) if the short strike is violated, and then rolling that short strike out for a credit to wherever you want. In the meantime, the long strike has appreciated as well, is probably profitable, and you can sell it back to the market at a profit. There– everybody happy?

    0
    August 31, 2018
  8. Gregg Thurman said:

    Thanks Kathy. I appreciate the ideas.

    I haven’t owned shares since my ex got them in the divorce (2005). I plan on accumulating in 2019.

    0
    August 31, 2018

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