A place for Apple traders and investors to share their best ideas.
To get things rolling, here’s one of my favorite CNBC commentators — Downtown Josh Brown — on CNBC Wednesday setting up 2022 by dividing the market in half: Apple/Microsoft versus everything else.
Below: Apple vs. the S&P 500 last week, 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.
What other company can announce a $6 billion revenue shortfall due to supply chain constraints yet still predict a record holiday quarter? Analysts have been so quick to discount Apple’s future revenues and earnings with their favorite term of: “Sales pulled forward”, yet they have no commensurate buzz phrase for these sales not booked in the current reporting period.
I’m waiting for the genius phraseology coming from the grim WS crowd of Pierre, Rod, and Toni. As I see it, sales just means sales at some point. Much like insatiable demand for Apple products keeps increasing and the only logical answer is they build great products and keep delivering what consumers need and want!
Car or no car, the fundamentals for Apple products currently on shelves will keep this stock moving forward.
The most important one is the path of AAPL over the last 2 years versus the 8 years previous. The first thing you notice, of course, is the Big Revaluation that we had an inkling of in late 2019 but that got serious in March of 2020. The second thing you notice is the Year of Consolidation that is now behind us, when the market’s contention that AAPL didn’t belong in the 30 P/E value class underwent some serious testing. Even in that period, AAPL gained steadily, albeit in fairly pronounced ups and downs. But for most of the year AApL grew pretty much in keeping with the S&P 500.
So what lies in the future? Interesting that Microsoft and Alphabet are “compared” with AAPL (so I guess I’m not alone in my comparisons, Robert…), but more interesting that both leveled off, peaked, and retrenched about a month and a half ago, where AAPL has yet to show signs of leveling off, let alone peaking.
Alphabet, of course, has taken a shot across the bows from Apple’s privacy stance, as it looks to curtail earnings going forward. But MSFT, IMHO, was overly priced in comparison to the S&P and thus in comparison to AAPL. Squeezing those two valuations closer together is, from my POV, an inevitable result of a sense of reality taking hold in the investment ranks.
The future still is mostly about the pandemic. It hasn’t yet run its course, but we are finding ways to progress in spite of it. And the future will definitely not be about returning to the past. WFH is going to be a bigger part of things. Telepresence as well. Those are permanent changes that AAPL for one has definitely benefitted from.
A second issue that has just begun to be appreciated is personal privacy. Apple is clearly going to continue to benefit from its privacy stance, and companies like Facebook, Alphabet, and Amazon are going to suffer as the clamps come down.
And finally, there’s the reality that Apple is not standing still, but is highly proactive in the computer arena, and especially in the personal computer arena.
I expect AT THE LEAST that Apple will continue following the S&P 500, and that it will also continue to hang tough on its new 30+ valuation status, with a few trips back into the 20’s quite possible. All in all, I think Mr. Munster’s $250/share yearly target is a very real likelihood, and hopefully this time in 2022, we’ll be looking back at it from an even higher plateau….
I once emailed PED about it actually being a misnomer on this site as it seems to me that most commentators to this blog definitely sway toward the “buy & hold” mentality.
It’s been my experience since subscribing that very few of us lay down any “weekly trading strategies” at all, with Gregg Thurman’s options playing notions about the only regular-beat entries.
As for me…my “trading” strategy? The Milquetoast Buy & Hold Rinse & Repeat…and if you reinvest your dividends, then Bravo.
Point taken. Couldn’t agree more about gathering perspectives and info or pondering others comments, but I’m simply pointing out that a weekly post calling for “Apple TRADING strategies”, of any sort, usually garners little to none.