Neil Cybart: Apple not immune to a 20% coronavirus giveback

“We have an equities market eager for a reason (any reason) to pull back.”

apple coronavirus cybart givebackFrom an email sent Monday to Above Avalon subscribers ($):

For Apple, the risks found with coronavirus are significant. Slowing customer demand in China represent a risk to Apple as travel bans are expanded and people are recommended to avoid public areas. However, the much larger risk is found with Apple’s manufacturing apparatus.

A direct impact on Foxconn and Apple’s other contract manufacturers / suppliers from coronarvirus could be material as Apple’s product supply would be jeopardized. We then have to consider a scenario in which fears and anxiety spread to other countries including the U.S.

Set within this environment, we have an equities market eager for a reason (any reason) to pull back. The S&P 500 was up 10% in the past three months with little to no volatility. Based on current trading, the market is on track to give back about 20% of those gains from the recent high. AAPL shares haven’t been immune either.

My take: For Cybart, this particular glass is half-empty.

For contrary points of view, see:

7 Comments

  1. Gregg Thurman said:

    20% giveback on a 10% gain is 2%. Very, VERY, bad headline.

    This is a useless article full of a lot of “could happens” based on incomplete data. Articles Like this are just as dangerous as wild media speculation as to fallout from this or that event, that we find (in hindsight) never happened.

    As someone else posted (sorry responding on my iPhone and I forget who posted it) good old fashioned regular run of the mill flu kills about 80,000 per year in the US alone, and that’s after heavy advertising telling people to get their annual flu shot.

    Wake me up when Coronavirus kills more than 80,000 annually in the US.

    0
    January 27, 2020
    • John Konopka said:

      “Wake me up when Coronavirus kills more than 80,000 annually in the US.”

      I think that is the fear. This is a new virus with somewhat unknown behavior. Odds are it won’t be that bad. But rather than take that chance governments are doing what they can to shut it down.

      The response is not unusual. It is difficult to communicate nuance to the general public.

      0
      January 28, 2020
  2. Fred Stein said:

    A 20% pullback would be a buying opportunity.

    The long-term impact on Apple is zero.

    1
    January 27, 2020
    • Robert Paul Leitao said:

      Fred:

      For the majority of individual investors there are only two important prices. The first is the price per share at which the investor purchased shares. The other is the price price per share at which the the investor sells the shares. If an investor isn’t buying shares or selling shares, yesterday’s price per share, today’s price per share and tomorrow’s price per share really don’t matter.

      I agree. For an individual investor desiring to buy Apple shares, any pullback is a buying opportunity.

      0
      January 28, 2020
  3. Jerry Doyle said:

    I am reminded of a phrase from the 1933 inaugural address by one of our greatest presidents.

    “So, first of all, let me assert my firm belief that the only thing we have to fear is … fear itself — nameless, unreasoning, unjustified terror which “paralyzes” (emphasis added) needed efforts to convert retreat into advance.”

    4
    January 27, 2020
  4. John Konopka said:

    As I write this we about 14 hours away from Apple’s earnings announcement. Though it was down during the day AAPL was up almost a dollar after hours. I’m guessing it will be a very good quarter. I’m getting my popcorn ready to listen to the earnings conference call.

    They are becoming more interesting as I have begun to become acquainted with the names of questioners.

    1
    January 28, 2020

Leave a Reply