This week’s Apple trading strategies (1/20-1/24)

A place for Apple traders and investor to share their best ideas.

To get things started, here’s Wedbush’s Daniel Ives, CNBC’s favorite Apple bull, making the case for Apple’s valuation ballooning to $2 trillion.

Cue the video:

One more chart: How Apple deviated from the DOW…

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 Apple trading strategies

16 Comments

  1. David Emery said:
    Worth a read: https://www.cnn.com/2020/01/17/tech/tim-cook-trump-encryption/index.html It’s clear that Trump’s actions have outsized impacts on Apple, both the trade relationship with China and this somewhat new encryption issue.

    But this article misses the core of Tim Cook’s approach, which is that you have to remain engaged to expect to have any impact/influence.

    On a related note, I got the Apple shareholder proxy statements, it was interesting reading the shareholder initiatives.

    1
    January 19, 2020
    • Jerry Doyle said:
      @David Emery: David, I read the news article link you posted. I want to expound on the following quote from the article: “…. It doesn’t matter what you’ve done in the past,” said one tech industry lobbyist, reflecting on Trump’s tactics. “It’s what he wants from you today. Trump appears to be moving the goalposts.”

      My take: No, Trump is not! Democracy requires a public aroused by the knowledge of what a president is doing in “their” name. Trump is doing no less than playing politically to his base supporters.

      Donald Trump may not be far removed from a president chiseled on Mount Rushmore: Theodore (Teddy) Roosevelt.

      When asked about her father Theodore Roosevelt, Alice Roosevelt Longworth later in life stated the following: “…. My father always wanted to be the corpse at every funeral, the bride at every wedding and the baby at every christening.”

      William Howard Taft, a close friend of President Roosevelt, once stated the following about his friend who later would support Taft to succeed Roosevelt in office: “…. Mr. Roosevelt is so constituted that it is impossible for him to go into a controversy without becoming personal.” Roosevelt once confided to President Taft that in every fight he strove “…. to get close up to a man, attacking not only the man’s argument but the man himself.” Taft also noted that Roosevelt was not a “planner,” but simply a man who “…. acts from day-to-day.”

      Roosevelt was a fighter, a leader and contentious. Many did not agree with him, even the assassin who shot Roosevelt point blank in the chest while Roosevelt was giving a political speech. Aides attempted to rush Roosevelt to a doctor, but even with a bullet in his chest and blood flowing, Roosevelt waved them away as he intended to finish his speech and did so. He came close to dying because he chose to delay medical intervention over political will to win his argument of the day.

      Please listen respectfully to me. I never would be so presumptuous to infer Trump is a “man-of-integrity” such as Roosevelt. My intent is to denote similarities of the two leaders, specifically, how they use their “bully pulpit” similarly, how, win or lose, each man is glad beyond measure that he is one of the many who in a fight stood ready to spend and to be spent.

      Trump may be the right man at the right period to get it all done. This is a president, the first incumbent to ever hold the office, able to defend a wrong premise and reach the right conclusion. Trump has exhibited for us a high degree of clarity in doing just so.

      Here is my thesis on Trump’s tweet: there is a story that after Theodore Roosevelt was in heaven a few days Teddy complained to St. Peter that the choir was weak and should be re-organized. “All right,” said St. Peter, “reorganized it.” And Teddy Roosevelt replied, “Well, I’ll need 10,000 sopranos, 10,000 altos and 10,000 tenors.

      “And what about the bases asked St. Peter?” “Oh,” said Teddy Roosevelt, “I’ll sing bass.”

      In summary, lobbyists and the media have no understanding, no conception of who is Donald J Trump. As for the media, all they know how to do is get the man re-elected.

      Trump and Cook’s relationship is as “solid-as-ever.” All that is happening here is the president is singing bass for his political base of supporters to hear his melodious voice do so.

      2
      January 19, 2020
      • David Drinkwater said:
        IMNSHO, you’re a little over the top here, Jerry, and totally not relevant to Apple/AAPL.

        I’ll stop there.

        6
        January 19, 2020
  2. Jerry Doyle said:
    Dan says in his pecking order that Amazon ($1,865) is number two behind Apple not because of Amazon’s e-commerce side, but because of Amazon’s Cloud piece. He then states that Amazon’s Cloud component is going to draw the street’s attention for a re-rating higher. Dan did not name Microsoft ($167) in his pecking order, but then he denotes that Microsoft is the “very best Cloud play” in the market. Dan elaborates further by saying that Satya Nadella with Cloud is closing the gap on Amazon and that he sees Amazon as a $200 stock within the next twelve months.

    Microsoft pays a dividend yield of 1.23% with a 31 P/E while Amazon pays zilch with an 83 P/E. Amazon also has some regulatory and political headwinds with which to contend. Outside Apple, it seems Microsoft may be a better play then Amazon.

    It would be interesting to bring the above to Dan Ives’ attention to get his reaction.

    2
    January 19, 2020
    • David Emery said:
      Microsoft beat out Amazon for the DoD cloud contract. Despite all the claims of bias, I’d be very surprised if the award was not based on clear discriminators in the contract evaluation criteria. (That’s based on a career working on DoD acquisitions, including some really high visibility ones. A Source Selection Authority who overrode the evaluation criteria scoring on this one would likely have his ass handed to him by the GAO in a protest. But GAO so far has backed up the contract award, despite Oracle and Amazon protests.)

      0
      January 19, 2020
      • Jerry Doyle said:
        @David Emery: On the contract award to Microsoft over Amazon: I suspect it would be more appropriate for the IG staffs to investigate.

        0
        January 19, 2020
      • David Drinkwater said:
        If you write your requirements correctly, you can select your provider in spite of Hume-Rothery Rules.

        1
        January 19, 2020
        • David Emery said:
          Well, you might be able to use those to select a contractor, but that doesn’t mean the contractor can then deliver 🙁 That happened on a major program I worked on. The combination of transportability requirements and survivability requirements together proved to be physically unachievable. (Something about 10 lbs in a 5 lb bucket…)

          0
          January 19, 2020
          • David Drinkwater said:
            I didn‘t mean to imply that it was a good idea….

            1
            January 19, 2020
  3. Gregg Thurman said:
    The last two weeks, in recognition of AAPL’s tremendous run, I perched Call Spreads near Monday’s intraday low, for a Friday expiry then bought more on Thursday for a Friday expiry after AAPL’s run up. My ROI suffered, but the amount of actual profit soared.

    I’m going to continue that strategy again this week with a slight modification. At these levels, as much as I enjoy them, I’m concerned about profit taking that could result in AAPL trading lower of Friday than it did on Monday (Tuesday this week) so my Tuesday purchase will be deeper in the money with an ROI of about 10%. Then, should AAPL continue to run I’ll buy another round on Thursday, increasing profit at the expense of ROI.

    The amount I invest on Thursday does not exceed the amount of profit I expect to make on my Monday purchase. Essentially I’m using the Monday purchase as a hedge against the Thursday purchase.

    Doing this I have increased my profit by about 40% each of the last two weeks, but because of the larger amount at play my ROI has gone down. Knowing I can do this to increase profit has removed the urge to hit a homerun on Monday.

    1
    January 19, 2020
    • ”The amount I invest on Thursday does not exceed the amount of profit I expect to make on my Monday purchase. Essentially I’m using the Monday purchase as a hedge against the Thursday purchase.”

      Now THAT’S what i call a trading strategy.

      1
      January 19, 2020
  4. Martin Beutling said:
    When it comes to „Apple has to grow“, I am thinking of Apple having a special strategy: TC often tells us about the great products, that Apple has in its pipeline.
    What if these products aren’t being released because of their unfinished status but because Apple actually is in no need to generate a new revenue stream?
    I am thinking of the release of the first iPhone generations: first only at&t, only Edge, later faster bands, then the famous Verizon-phone, then abroad, then China and so on.

    They are in for the long run, so why not keep the powder dry until it is needed?

    1
    January 20, 2020

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