This week’s Apple trading strategies (9/2-9/6)

A place for Apple traders and investors share their best ideas.

For Apple—and the rest of the market—everything last week was about the US-China trade war. To get things rolling, here’s how the talking heads on CNBC were talking up the stock at the start of the week:

Disclaimer: Having never owned or traded Apple, I have nothing to add. Don’t blame me if you drain your IRA doing something you read about here.

See also: Last week’s trading strategies

13 Comments

  1. David Drinkwater said:

    My plan: take Monday off. Even the Markets are closed for Labor Day.

    0
    September 1, 2019
  2. Mark Visnic said:

    My take: “Trader” Vic consistently disappears without accountability because he consistently fails on his bearish Apple forecasts.

    1
    September 1, 2019
  3. Gregg Thurman said:

    Accountability in a forum such as this is difficult. The only real way to have it is announcing purchases before announcing sales.

    I haven’t seen much of that anywhere.

    As for Trader Vic, being wrong is not a crime, he has a long history of being right much more often than wrong.

    2
    September 1, 2019
    • David Drinkwater said:

      Imagine, then, what might happen if he brought honey instead of vinegar.

      1
      September 1, 2019
  4. Turley Muller said:

    That sucks slapped on iMac. Normally you could just stockpile them ahead of the tariffs, but a product like that many choose the specs. Looking at Apple’s website, if order the base model I can get by noon tomorrow (or in 15 hours) If I choose my own options, it’s next week. So I would assume it’s shipped from China. 30% on a $2000+ end price product kills GM dollars. However, it might not be so bad since those upgrades have huge margins I would think. And, there isn’t any wholesale discount since it’s a direct sale.

    These tariffs don’t make sense to me. For nearly any good, China is just the contract manufacturer. It’s not their brand, marketing efforts, R&D, distribution channels etc at risk – it’s American companies that are. It would be different if it were let’s say a Sony or Samsung. If it were Japanese tariffs, consumers that always buy Sony products might switch to Samsung and never switch back. That rhetorically could happen to Apple if it had to raise prices significantly and didn’t have as loyal users. That would have longterm lasting damage. I think it’s just irresponsible to even put American companies at such risk. It’s akin to sacrificing your queen to capture a Rook.

    2
    September 1, 2019
  5. Gregg Thurman said:

    The latest round of tariffs are the most serious re: China, as they Apple to the balance of previously exempt Chinese products. Importantly this group has the highest percent of Chinese content.

    The initial tariff primarily applied to the technology sector. Those products were composed of components manufactured in South Korea, Japan, Taiwan, Indonesia and the US, among other countries. Trump’s tariffs do not Apple to components used to produce Chinese technology, or other technology products shipped to the US.

    The second round of tariffs apply to goods that are primarily Chinese content.

    Net, net (and I’m getting tired of repeating this) this trade spat is having a much higher negative impact on the Chinese economy. What ever pain we feel here, the pain in China is 3X to 4X greater.

    0
    September 2, 2019
    • Turley Muller said:

      Gregg, I don’t think the the components matter. The tariff is assessed on the transaction value at customs. If the product is coming out of China it gets hit. Apple uses to buy-sell model whereby Apple buys all the parts from all the different suppliers, sells them to Hon Hai, then buys the finished iPhones back. Thus, the value at customs is the full COGS. Which includes the value of components made in the US. If China puts tariffs on the US made components they will get hit twice.

      The value of China content is relatively low, as display, processors, modems etc (high value) come elsewhere. But it doesn’t matter.

      Casing and assembly parts come from China; the labor which is single digit percentage.

      0
      September 2, 2019
  6. Gregg Thurman said:

    I don’t don’t know how much investors pay attention to FX with regard to the US$, but in the last 60 days the US$ has risen about 3.5% against all other currencies.

    This negatively impacts ALL US exports, not just those destined for China.

    Because the trade war will come to an end, in my opinion, FX (strength of US$) is a bigger concern than China.

    Further, currency traders (because of the continued rise in the value of the US$) don’t seem all that concerned about China trade issues.

    0
    September 2, 2019

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