A place for Apple traders and investors to share their best ideas -- post U.S. election issue.
To get this rolling, here's Jim Cramer rejecting the advice he was given when he joined Goldman Sachs a hundred years ago. Then, he was advised to forget stocks and concentrate on bonds. Now, he says, bonds are the risky assets. It's Apple and the other megacap tech stocks that are the great repositories of wealth.
Below: Apple vs. the S&P 500 (normalized)…
Disclosure: Although I am now an Apple shareholder (see Why I bought a share of Apple, my first), I am in no position to give trading advice. Don’t blame me if you drain your IRA doing something you read about here.
See also last week’s trading strategies.
Apple can borrow (sell bonds) at 2% to buy AAPL with a future IRR of nearly 4%, and growing. This virtually eliminates risk:
1) Apple’s future IRR is likely to grow and stay ahead of prevailing bond rates by about 2X.
2) Apple buybacks defend its price, almost without limit.
“Apple buybacks defend its price, almost without limit.”
I strongly suspect that the pandemic this year brought this aspect of Apple into full focus, which explains why AAPL went from $245/share after Q1 earnings to $425/share after Q2 earnings. In a stroke, Apple achieved a valuation comparable to Microsoft and Google – which is where it should have been years ago….
Bear in mind, of course, that buyback percentages were cut in half last quarter when the stock value basically doubled, and the jury is still out on whether Apple will continue at the lower percentage, i.e., at the same dollar amount spent per quarter.
I will be doing it again tomorrow, waiting for what I believe to be the intraday low before buying. I don’t worry about missing the absolute low as at the money Call Spreads are only slight more risky (4 year average results).
https://asia.nikkei.com/Business/Technology/Apple-aims-to-make-2.5m-MacBooks-with-in-house-CPU-by-early-2021?utm_campaign=RN%20Free%20newsletter&utm_medium=one%20time%20newsletter%20free&utm_source=NAR%20Newsletter&utm_content=article%20link&del_type=3&pub_date=20201108093000&seq_num=17&si=10107229
Shifts of LIDAR components from iPad Pro to iPhone 12 Pro may affect overall iPad rev for this quarter depending on current product inventory and demand until component supplies can catch up. Utilizing common components among differing hardware lines leads to a useful and flexible repository of parts that can be shifted to hotter selling lines. Apple’s supply chain is humming.
If I’m interpreting these rumors of component shortages correctly, Apple underestimated demand for its higher end iPhones, and current supply (based on under estimated demand) shortages are the result of higher demand, not failures in production capability. Bottom line is I’m seeing these rumors as being a negative media slant on a real situation, and a very good thing for investors.