This week’s Apple trading strategy (8/9-8/13)

A place for Apple traders and investors to share their best ideas.

To get things rolling (and lacking anything better from my usual subjects), here’s Louis Rossmann — a Tim-Cook-merch-selling YouTuber — discovering this guy named John Gruber and being persuaded that his (Rossmann’s) first take on Apple’s child safety initiative had been wrong. If you didn’t read Gruber’s post all the way to the end, Rossmann will do it for you.

Below: Apple vs. the S&P 500 last week, normalized…

apple trading strategies 8-9-21Disclosure: 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.

9 Comments

  1. Rodney Avilla said:
    We have a cabin in the hills and a by-our-grandkids home that we had planned to pay off before retirement so not to have mortgage payments weigh our retirement budget down. I’m having a change of heart. I now plan to leave that money in aapl (ira) and take out 2-4 payments when aapl is hot, and wait thru the post-quarterly-reporting-dips.

    3
    August 8, 2021
  2. Gregg Thurman said:
    Last week marks the ninth of the last 10 weeks that my in-the-money Call Spread strategy has been profitable. The multi-year average has been 3 profitable per 4 weeks.

    The improvement in success has come from adopting a Pete Rose “singles vs home runs” mentality. The change has resulted in a much high overall ROI. Who knew?

    The trend is your friend until it isn’t any longer. My historical (10 years of data) trend chart indicates that AAPL has 3 weeks left in its current run, soooo….

    I’m going to trade tomorrow as I have for the last 10 weeks, waiting until I believe I have seen Monday’s intraday low, then acquiring AUG Call Spreads with a high Strike below that low.

    To help me identify Monday’s intraday low I have developed a little program that uses Friday’s Close to calculate Monday’s low. When AAPL’s volatility is low (like it is presently) that calculation has been quite accurate.

    Because I believe all forecasters should be held accountable for their utterances, I’m posting what that intraday calculation indicates as Monday’s low – $146.17. My strategy says buy the AUG 13 $145/$146 Call Spread. Risk management says buy the AUG 13 $144/$145 Call Spread. With an intraday low below $146.50 I’ll be buying the AUG 13 $144/$145. Above $146.50 I’ll have to make a gut value decision, lower ROI or greater risk. My recent successes has come from taking the lower ROI path.

    1
    August 8, 2021
  3. Jerry Doyle said:
    For what’s it worth, here are my thoughts on paying off debt as oppose to carrying debt.

    Money is cheap to borrow now, if not free of interest entirely. If one can carry the monthly financed note without economic stress, then do so is my advice to friends & relatives.

    One can make more money using his/her liquid assets to purchase more shares of Apple or keeping the shares for continuing investment instead of cashing them to pay off a note. Paying on a financed note builds higher levels of available credit and increases credit scores leading to easier borrowed money in the future at the lowest levels percentage rates. One saves little in paying off a financed note compared with all the positive benefits derived of carrying that note. It’s all about building premium credit and higher credit scores leading to ready access to money when you may need to borrow in the future; and getting the best possible loan rate when doing so. This is particularly true today with more companies financing their products at zero percent rate, such as Apple.

    Everyone is different and I respect that difference. So I don’t judge when someone ignores my advice. From a practical pecuniary tribute, though, carrying debt responsibly is the chosen path, if that path presents no fiscal (or emotional) problems. Even Apple chooses this path when it holds a seemingly insurmountable cash reserves it could tap easily.

    2
    August 8, 2021
    • Michael Goldfeder said:
      @Jerry Doyle: Very well stated Jerry. Back in the early 2000’s I borrowed against all of my lines of credit at 0% and put it into money market accounts that were paying me around 4%. I paid a few dollars over the minimum payment each month so it showed I was paying more than necessary while still enjoying the lions share of each credit line as I earned greater interest on the lenders funds.

      Your example of doing the same thing by investing in Apple stock makes total sense. Apple is doing that right now and not only making a great financial decision, but also that’s the only way possible for them to get to their goal (if ever) of becoming cash neutral.

      With the FCF they have been producing, and will in all likelihood continue generating, this is another way to innovate that nobody in the WS or analyst community seems to understand. Perhaps a few do, but they portray it incorrectly and poorly in a negative article.

      1
      August 8, 2021
      • Gregg Thurman said:
        I remember a member of a Yahoo Group (The AAPL Investor) that I created way back in the early ’00s. I had a member that used the moniker bud7777 who lived in Oakland, CA. At one point, when AAPL was trading particularly low and interest rates were equally low, he and his wife decided to mortgage their home and buy a great quantity of AAPL shares. If memory serves they borrowed $700,000. Their logic was that the dividend they earned made the payment on a 3-year interest-only loan.

        At the end of that 3 year period, AAPL had more than doubled in value.

        1
        August 9, 2021
  4. Kirk DeBernardi said:
    For what it’s worth and no matter if you embrace credit or eschew it, an accountant friend of mine gave me some sage advice a long time ago.

    You MIGHT earn on your borrowing, but you WILL pay for it.

    How well this interplay fares out is just a matter of time.

    1
    August 10, 2021

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