Apple 3.0: In defense of premarket trading reports

Farmers and cowmen, revisited.

From a recent email exchange with friend-of-the-blog Greg Bates:

GB: I worry your continued focus on the short term fluctuations in the stock price, announcing every morning whether Apple is red or green, could be hyping the stock, encouraging day trading—and losing readers money.

PED: Fair comment. I’ll try to answer. I feel like I’m serving two audiences at once: Investors and traders (farmers and cowmen, in the recurring metaphor). Most of what I do is in service of the investors, some of it—like red and green—is for the cowboys.

I like red and green because it gives me a way to start the day, and I don’t worry too much about what message it sends for three reasons:

    1. It’s not my job to tell readers how to live their lives
    2. Traders on Apple 3.0 tend to be pretty smart
    3. I have the impression the farmers get a vicarious thrill from the cowmen’s stories.

Hope that helps.

See also: The farmer and the cowman should be friends

19 Comments

  1. David Emery said:
    I’m with PED. I’m no day trader, but I enjoy reading the morning previews.

    And if you are a day trader, I’m not sure This Blog is the best source of information for daily action… 🙂

    6
    September 19, 2020
  2. Jerry Doyle said:
    The distinction we use is farmers vs cattlemen. A cow man usually is a dairy farmer. Some cattlemen also get involved in the selling of registered bull (cattle) semen. Farmers can vary from cultivating humongous acreage to small specialty farming for the local town markets. Having said all this, as an investor I welcome the red/green morning analysis as it is a morning business report of economic news to consider for the coming day. I would need to go seek it anyway, and still do, but you do a good job providing the initial synopsis. Your 3 reasons for not worrying much about the morning update is “spot-on.”

    1
    September 19, 2020
    • Ralph McDarmont said:
      The semen thing freaked me, but like you I support and look forward to everything PED offers. I see his red or green comment each morning, then I dig deeper if necessary. I like green.

      1
      September 19, 2020
  3. Kirk DeBernardi said:
    I look at PED’s red/green as him pouring the early morning cup of coffee for everyone at the table to fire up the conversation as we wipe the sleep from our eyes.

    😉

    3
    September 19, 2020
  4. Steven Philips said:
    And for that matter, if you left off red and green you could also leave off the statements by “analysts” that can be equally misleading!
    Just a daily open forum for the FoB’s!
    (Of course AFTER making Katy and a couple of others HONORARY FoBs.) 🙂

    2
    September 19, 2020
  5. jim.fonda@me.com said:
    I’m an aapl investor and not a trader. I subscribe to this site because I have found it the best at covering everything about Apple. Everything includes what is going on with the traders. So, yes, I like the green and red.

    4
    September 19, 2020
  6. John Blackburn said:
    Made me laugh out loud. Thanks, Philip!

    2
    September 19, 2020
  7. Kathy Corby said:
    As both an investor and a trader (first shares bought in 1998, last options trade placed 2 minutes before close of market Friday), I can attest that the second site I pull up after waking and before getting out of bed each weekday is AAPL premarket. (The first is the Finviz futures graphic.) I appreciate the references in PED’s “Apple is Red/Green” posts to videos from TV traders the day previously, but– and here to continue the analogy above– it is important for all of us to remember that those videos are dishing bullcrap. There is some pretty reliable info that if you follow the trading recommendations of Cramer, the Najarians, et al., you will lose money commensurate with the amount of capital you expose to their advice. They are entertainers, not investors.

    3
    September 19, 2020
    • Gregg Thurman said:
      Kathy I check 3 sites before the Open, the two you mention and this one

      https://tradingeconomics.com/stocks

      It’s a listed of every major index from around the world by region. It gives me a good sense of how the WORLD’s markets are doing before New York opens for business. It isn’t 100% accurate as a predictor of how the US markets will fare, but it is a strong indicator.

      I particularly watch the Japanese, Chinese (inc Hong Kong), Korean, Taiwanese, Vietnamese, Australian and European markets, as there are most important to Apple for both manufacturing and revenue (sales).

      0
      September 19, 2020
  8. Gregg Thurman said:
    Note that I’m not saying there is manipulation, only that the potential is there. (Friday may be a case in point, where the “trend” was set downward before the market even opened.)

    After Hours and Premarket are nothing more than an extension of regular session investor sentiment. If they influence it is only to the extent that a dip or rally does during regular session, BASED ON ECONOMIC AND/OR POLITICAL INFORMATION AVAILABLE AT THE MOMENT.

    1
    September 19, 2020
  9. David Drinkwater said:
    I totally support the morning wake-up call, just as I do the Weekly Trading Strategies report. It’s similar to what I call “standard work”. Stuff I do by rote every morning at the office. And, yes, sometimes I do benefit from looking back at the metrics from 3 weeks or 3 months ago. And occasionally, but very rarely from data that are three years old.

    We are all responsible for our own actions (I was gonna say “adults”, but I don’t want to be judgmental ;). It should not be necessary for PED to report with every post “I agree” or “I disagree” with the content presented herewithin, or to say “Don’t blame me if you have to sell the Bimmer/Porsche/boat/house doing anything you read about here”.

    PED’s earnings are not from trading. He bought shares so that he could sit with us at the Apple Investor meeting (which I really need to attend at some point), not to get rich. He earns his keep (and I really do think he earns it) writing about Apple. I think that’s really good stuff.

    The Commentator/Objector was off-base, IMNSHO.

    2
    September 19, 2020
  10. Robert Stack said:
    I don’t care that PED does these kinds of posts, but I certainly don’t mind either. If others find them useful or informative, that’s great but personally I just skip right over them. In a similar way, while I don’t have a Twitter account, I sometimes check in on Horace’s but don’t read everything – some of his posts I just skip right over. Isn’t that true of essentially all journalistic endeavors, whether a newspaper or even your favorite magazine?

    1
    September 19, 2020

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