Apple’s COVID-19 bungee jump

23 Comments

  1. Thomas Nash said:
    Great news, but… Does the market know something about COVID-19 (and the competence being shown, or not, by Japan, Cambodia, the cruise ship lines…) that I don’t?

    0
    February 19, 2020
  2. Paul Brindze said:
    No, not something about Covid-19. Something about Apple, and the fact that, medium to long term , this will not be a significant hit on Apple earnings. That combined with a different type of AAPL investor, that doesn’t play the quarterly panic game anymore.

    Bottom line, COVID-19 is terrible for anyone involved, but not so bad for the stock price of AAPL.

    The Market now understands that this is a $400 stock on sale for under $325. A bargain to hard to resist.

    6
    February 19, 2020
  3. Fred Stein said:
    Agree on all points.

    Over the last six months, all dips in AAPL have been sort. Each low is higher than the last, validating your thesis that investors see the bargain.

    0
    February 19, 2020
  4. Fred Stein said:
    Another case of Tim Cook’s brilliant handling.

    It may take a decade. Tim Cook becomes the next paragon in business schools.

    4
    February 19, 2020
  5. Jerry Doyle said:
    Pretty tight V… I continue to be cautiously optimistic because nowhere do I read that China has this virus contained. If the virus bleeds into a third quarter, then I do believe a tight V is not what we may expect next time. That kind of a shock will have a longer impact not just on Apple, but on all global companies. The good news is that it will be a V shape for Apple even then, just not so tight unless the economies of the world are affected negatively by the virus and then many companies will find themselves in an L shape pattern.

    My take: I see a yellow light; not a green light at this juncture.

    It may be judicious for Tim C to come forth with revised guidance (as soon as he has numbers) commensurate with the level of transparency he exhibits in these matters. Tim placed analysts on notice, but each analyst has specific numbers cemented in “his-her” minds. Analysts are like herds of cattle. If they hear something different then what they are expecting, they “bolt.” If Tim C comes forth with numbers in some range analysts are not expecting, then analysts may overreact negatively.

    0
    February 19, 2020
  6. Gregg Thurman said:
    It may be judicious for Tim C to come forth with revised guidance

    I just hope that whatever revised guidance he issues he does it after the markets Close this Friday, and before the markets Opens on Monday.

    2
    February 19, 2020
  7. Martin Beutling said:
    @David Thall: I think you misinterpret the situation. You are right, this virus is far from as deadly as the common flu that hits us every year and from which we have to mourn tens of thousands of victims every year.

    BUT: the flu did never force the Chinese government to shut down whole cities or companies like Apple to close their stores.

    This is new.

    Although I am pretty confident, that this won’t have any effect on Apple FY 2020, I am also sure that we will see some trouble in the next 3-6 months.

    As a result, today I sold all of my AAPL stocks (nice 12k % ROI) and plan to get back in after the stock is trading 20-30 bucks lower.

    I can’t see any positive news in the next weeks that are able to propel the stock to new heights, especially when I think of the Aprils conference call.

    What is lying beneath this date…who knows, but the next 6 months will show some turbulences.

    0
    February 20, 2020
    • Gregg Thurman said:
      What is lying beneath this date…who knows, but the next 6 months will show some turbulences.

      For an options trader there is opportunity in turbulence. I hope you are right.

      1
      February 20, 2020
    • Paul Brindze said:
      Sorry Martin, I think you just made what will prove to be a costly mistake. This week’s action has pretty much locked in that near to mid term the upside odds for AAPL far outweigh the downside.

      0
      February 20, 2020
    • Gregg Thurman said:
      As a result, today I sold all of my AAPL stocks (nice 12k % ROI) and plan to get back in after the stock is trading 20-30 bucks lower.

      Unless those shares were in a tax deferred/free account you are going to take a substantial tax hit on those gains. Tac monies are gone forever, never to be seen again. A less expensive way to protect yourself from an unexpected events caused decline is to buy protective Put options. If the event occurs the options will go up as your shares go down. If the event does occur your protective Put options expire worthless, but that expensive is a lot less than the tax on 12,000% gains.

      1
      February 20, 2020
      • Martin Beutling said:
        My sold shares were 100% tax free.
        From now on, I will have to pay 25% on my profit.

        Because of my long investment, I have a nice 7-figure base for future Investments in AAPL

        I thought long about this step but the actual all-time-high and the implications of the corona virus made me nervous….the first time in 17 years.
        Maybe I was wrong, the next 6 months will show that.

        0
        February 21, 2020
  8. Brian Loftus said:
    Today was the first day I thought about your bungee jump analogy. When you do a bungee jump – depending on the elasticity of the cable – you probably end up overshooting the total decent about 20%. You go up and down for a while but settle down – not were you started. So we can expect a level of 320 at the end of the a week? tag inserted to prevent anyone from misinterpreting this statement.

    0
    February 21, 2020

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