This week's Apple trading strategies (5/9-5/13/22)

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

To get things rolling, here's Downtown Josh Brown on CNBC in the heat of Wednesday's 900-point relief rally pointing to big tech -- and Apple in particular -- as the key to whether the rally would have legs or be (as it turned out) a one-day event:

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.

9 Comments

David Drinkwater said:

When I started my Saturday morning metrics run, I was terrified, but it turns out, I came out largely whole. So while Thursday wiped out Wednesday, it was largely a non-event either way.

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May 8, 2022
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- David Emery said:
  
  Same here, I do my weekly spreadsheet update every Friday. I was down about 2/3%. Of course, the previous 2 weeks were brutal, and I’m down 11 1/2% in the retirement accounts on the year (despite being 1/2 in non stock investments…)
  
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  May 8, 2022
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Robert Paul Leitao said:

Don’t buy stupid stuff. Interest rates are rising, inflation is raging and no moat enterprises will struggle to raise prices. Let’s take a lesson from history. In the High Middle Ages and following the Norman invasion of England, building technologies provided for the construction of stone castles and more elaborate defensive moats. Combined, castles and moats protected people from attack and store rooms within the castle provided for food while under siege. Today’s market is “going medieval” on enterprises that can’t adequately protect their market positions and profits. Just look at the performance differences between the DJIA & S&P 500 and the NASDAQ Composite Index. Buy quality, buy strength and put your investments behind castle walls and the protective moats of market leaders in select sectors of the economy.

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May 8, 2022
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- David Drinkwater said:
  
  You mean they were building Walled Gardens back before the Mac was invented?!?
  
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  May 8, 2022
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  - Robert Paul Leitao said:
    
    David: The Normans took lessons from the Romans on protective structures and Apple has smartly taken lessons from two of the greatest empires that ever existed. Though not visually imposing, in my view Apple builds the most effective profit castles and economic moats in today’s market even if they are under siege by any army of over zealous regulators and legislators.
    
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    May 8, 2022
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    - Michael Goldfeder said:
      
      @Robert: If Lina was around back in that era the Knights of the Round Table would have been banished, along with any imposing walls or structures in and around the castles.
      
      As for moats, they wouldn’t have been provided permits to be constructed, and all castle storerooms would only be allowed to contain enough unicorns and rainbows to be shared equally by everyone.
      
      Don’t get me started on the display of cannons or any other form of weaponry designed to protect any form of boundaries as that is just plainly intended to “Stifle Innovation” in any era!
      
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      May 8, 2022
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- Fred Stein said:
  
  Right on Robert.
  
  We’re seeing a de facto ponzi scheme. People buy assets hoping that new money comes in to buy that asset at a higher price. It’s not fraud, but has the same effect.
  
  Investors can buy AAPL as a fraction of Apple, i.e. a fraction of the future cash flows. At 4% and growing 10% p.a. Apple’s cash flow per share has good odds to beat rising interest rates.
  
  If thing go sour, temporary downturns in AAPL result in more buybacks and slightly higher future cash flow per share.
  
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  May 8, 2022
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  - Robert Paul Leitao said:
    
    Fred: By my calculations, Apple had about $15 billion in share repurchase authorizations remaining heading into the June quarter. Combined with the new $90 billion authorization, there’s enough fire power to reduce the fully diluted share count by 3.5% or more in the 12 months that began April 1st. In my view, it’s best to make use of that defensive resource now. Today’s economic issues will eventually resolve themselves. In the meantime, Apple can make effective use of the market downturn for the long-term benefit of shareholders. Securely positioned behind the digital castle walls, Apple can continue to innovate in the store rooms of IP while the economy ravages the ranks of the company’s prospective competitors in product and services markets. Bringing down the share count now feeds the army of loyal shareholders while putting ramparts around the share price.
    
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    May 8, 2022
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Robert Paul Leitao said:

Just a reminder: For those who are Apple shareholders, the quarterly dividend payment date is Thursday, May 12th. If you believe Apple is oversold in the sub-$160 per share range, you can “vote” with your dividend receipts by purchasing more shares. Just a thought and possibly an action step if you feeling “angst” over current market conditions. It’s not a recommendation. But it might be a therapeutic step for some and until the market finds a bit of direction to move higher. Please keep in mind you might be “competing” with Apple for the purchase of the same shares. The company has an even bigger repurchase authorization this year. Act early, if you are so inclined. Just saying… Of course, do your research and make your own decisions.

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May 8, 2022
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