BMO: Watch Apple to find out if the market’s reached euphoria

Brian Belski’s remarks on CNBC today were mostly over my head until the 1:47 minute mark, when he switched the topic to Apple:

The stock you need to continue to talk about is Apple. Because Apple, yes, is a proxy for the market, but it’s also a proxy for sentiment… The mere fact that people are debating Apple right here [at $308] means that there is not euphoria in the market. 

Cue the video:

My take: I wish I understood all this.

12 Comments

  1. Gregg Thurman said:
    I think the most important thing to come out of this run is that the narrative about Apple/AAPL has changed. Except for a few (and they are being chastised by the industry), Apple/AAPL and their respective futures are now being talked about in glowing terms.

    6
    January 9, 2020
    • John Konopka said:
      This is the most amazing thing. Having followed Apple for a long time I recall the days when every mention of Apple called it beleaguered.

      Apple tends to do things out in the open that don’t get noticed right away. I don’t have the words for this yet but it seems that Apple is designing a new world for us. This is more than just an ecosystem or walled garden. These are tools that work cooperatively to give us more leverage or access to the world.

      Where do you think the P/E will settle? Personally, if it gets much above 35 I’ll be getting nervous that we are seeing a bubble of sorts.

      The difficult thing to forecast is new products. What if the next Apple Watch has an oximiter and can measure blood pressure. That data goes into an encrypted part of the health app where it is secure, but can be shared with my physician along with reports from the Activity app, and so on. The woven fabric is much more valuable than the individual threads.

      3
      January 9, 2020
      • Gregg Thurman said:
        Where do you think the P/E will settle? Personally, if it gets much above 35 I’ll be getting nervous that we are seeing a bubble of sorts.

        I think it’s two, maybe three points above the S&P average. Above that Apple’s valuation will be driven by net income growth (that I believe will be substantial over the next 5 years).

        0
        January 9, 2020
  2. Ralph McDarmont said:
    “My Take: I wish I understood all this.” Don’t play games PED. You have been on top of the Apple scene forever and basically know everything. I respect that honorable writers cannot invest in matters they report, and that has undoubtedly cost you a second life. I admire and learn from your work. Thank you. Please be proud of every word you write.

    3
    January 9, 2020
    • “Don’t play games PED. You have been on top of the Apple scene forever and basically know everything.”

      I’m serious. He’s using words in contexts I’m not familiar with. For example, what’s a redemption tool when it’s at home?

      4
      January 9, 2020
      • Jacob Feenstra said:
        I’m reasonably informed–though by no means an expert–and I also had to look up ‘redemption tool’ (before I read that you don’t understand that term either). Even after a little reading I still don’t understand it. To be sure, I agree with Fred Stein, Brian Belski knows his stuff. Still, his communication skills may need some work…

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        January 10, 2020
  3. Norman Lotz said:
    I like Brian Belski’s point of view a lot. I finally saw that the bull is running for apple and momentum will carry the shares higher for now. International money piling in. Continued buybacks. And potentially great numbers posted soon for the December quarter, factoring in the jump in china iphone numbers and international app sales.

    But sometime in March, when the political noise builds, there is potential for gravity to take over and aapl experience a pullback. With so much algorithm trading, it could deflate very fast. Long term good. Medium term risk.

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    January 10, 2020

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