This week's Apple trading strategies (July 4th 2022 edition)

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

To get things rolling, here's Harsh Kumar -- the analyst who took over Gene Munster's Apple coverage at Piper Sandler -- explaining to CNBC listeners how Apple has become what Steve Jobs might call an orifice.

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.

2 Comments

Rodney Avilla said:

Question: How to play Apple in light of inflation. Inflation is normally a result of economic growth, where demand outpaces supply, so prices go up. The answer, suppress demand (and supply) by raising interest rates. Present day inflation (from pandemic), I believe, is different; it is not from economic growth, but from an increase in demand (loose money policies) and also a decrease in supply. And that supply decrease is three fold, all due to the pandemic. 1st, more workers are sick (than normal). 2nd, more workers took/take advantage of the loosened covid-related requirements for disability (cough twice out loud and get 10 days off, paid). And 3rd, the employees who worked (honest/vaccinated/lucky not sick) eventually were (and are) overburdened with long shifts, which is now showing up as work-induced sick leave (stress, physical exhaustion). I work in the medical field and see these happening almost on a daily basis.
What’s my point? The normal government response to inflation, raising interest rates, while may eventually slow inflation, will cause more damage in the process. Why? The demand is not higher because of economic growth, but is self-induced (loose money policies), and the demand factor is minor compared to the decrease in supply in its effect on inflation. And raising interest rates also hurts manufacturing, which is the opposite of what we need. The problem is, raising interest rates seems to be the only bullet the Federal Reserve has against inflation.
Luckily, inflation and high interest rates will have less affect on Apple than on cheaper cell phone sales, but it will indeed have an affect. Inflation and higher interest rates always seems to more greatly affect those lower on the socioeconomic scale. And Apple and China, etc, seem to be doing all they can to minimize the pandemic affect on manufacturing, although, again, we definitely are seeing strains in manufacturing.
Bottom line, I just wish there was someway government could help manufacturing, not suppress it.

2

July 3, 2022
Log in to Reply
- Joseph Bland said:
  
  @ Rodney:
  
  Good summation. I agree: Economies worldwide were forced into a slowdown due to the pandemic onslaught, and what we’re experiencing as “inflation” is unevenness as those economies “spin up” again. IOW, as you say, it’s a mismatch between demand and supply – but not for the usual reason.
  
  To your list of issues I’d also add a huge one; sheer unmitigated greed. We experienced that personally when a major shoulder injury I incurred forced us to try and find someone to trim about a dozen hedges at our house. I ended up paying $500 for about 2-3 hours work for two people, one of which was simple manual labor, or better than $150/hour.
  
  0
  
  July 3, 2022
  Log in to Reply