Apple at $273: Suddenly, nobody is underwater

Even the uber bears think Apple has nowhere to go but up in the next 12 months.

Below: My full list of Apple price targets—now with gap between target and closing price—as accurate and up-to-date* as I can make it. Corrections appreciated.

Click to enlarge. *I rely on TipRanks ($) for the estimates of an analyst who shall remain nameless (long story).

4 Comments

  1. David Emery said:

    It’s an interesting question: Does “Coronavirus” count as a “Black Swan”, or is it just the trigger for the overdue correction that would have happened anyway? (I suspect it’s some of each.)

    0
    February 29, 2020
    • Fred Stein said:

      From Investopedia:

      A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.

      2
      February 29, 2020
      • David Drinkwater said:

        I don’t know if Fred is explicitly trying to say yes, but I am. COVID-19 is definitely a black swan event. It just erased 10% of US market cap ina week.

        I envy the Wise Fool who sold AAPL at $310 or so. Although I am a long-term investor, I di think some level of trading makes sense.

        Greg, do such things as low-cost high-gain short/mid term options exist that might capitalize on a situation like this (that do not require buying or selling/shorting full AAPL shares)? e.g. at $310, I believed AAPL would still see $290 over the next 6 months: how do I capitalize on that?

        0
        February 29, 2020
  2. Kathy Corby said:

    Indeed there are David. If you would like to employ leverage, and believe that at some point in 2022 Apple will be worth more than it currently is by a reasonable amount of money, you should buy LEAPs — Long-term equity anticipation securities. These are very long dated options. Mind you, they will not be cheap, and your ultimate breakeven will be the strike price plus the amount of money that you pay for them. However, I believe buyers will find that they made a good decision. And, as is the nature of options, you never actually have to buy the Apple shares at the end. You simply sell the options back to the market at any time between now and then. They will profit nicely on a timely upswing in the price.
    Alternatively, if you would simply like to double your money, let me suggest an at the money call spread composed of the same long dated options. For instance, buy a 270 call, and sell a 275 call. A significantly safer bet.
    And alternative is to sell a put spread, although your profit potential there is limited to the amount of money that you collect on the sale. Higher probability, lower reward.
    A rudimentary options education is available for free from many sources, as well as from certain brokers, notably TD Ameritrade. If you are willing to pay up, and get the best of the best, I suggest OptionsANIMAL, an options education Company. No financial arrangement with them, no kickbacks. I am just living my best retirement life thanks to what I learned from them.

    1
    March 1, 2020

Leave a Reply