"Where to begin?" asks friend-of-the-blog Bartley Yee.
From "Apple is a poor risk-reward: BTIG's Jonathan Krinsky" which aired on CNBC Friday:
Jonathan Krinsky, BTIG chief market technician, joins the 'Halftime Report' to give his technical take on Apple and what it means for the greater market.
Yee's take:
Where to begin? So if I hear this right, he wouldn’t buy AAPL here because there isn’t enough reward (gain) for the risk of buying in at this price. He still believes there’s a macromarket low to still be tested - I get that. But there’s no reward for the “long term” (6-12 month or more)? So essentially he’s really speaking to those who want to be in and out of the market by trading - essentially trying to time the market - get out when high, buy in when lower, and his technicals will show you this.
Sometimes I wonder if some of this is saying “if you didn’t see the lows like we did earlier this month (year), then it’s pretty much too late to eke out sufficient gain to make a move now, not enough upside near $154. Better to wait for a new low (near $130?) so there’s plenty of upside to make an investment.” Well, what about if/when AAPL pulls back to $144, $138, $134 or below? When does one know where the bottom is? That’s the problem with active trading, thinking you can outwit or time the market, and know when to buy the “lows” and sell the “highs”, not to mention the cash and tax implications if not in tax advantages or retirement funds.
The ironic thing is the slogan “past performance is not indicative or guarantee of future results”, yet this is precisely what these technical guys say all the time - we’ve seen this pattern before so we’ll look for the same patterns in the future to predict what will happen before it happens.
Well, we’ll see what long term holding (1-5 years) looks like at any entry points right here (15% below AAPL ATH). I’ll lay odds that Apple thinks it’s worthwhile (to the tune of $22-24B buybacks this last and current quarter each, and Buffet buying more as well.
The ability to make a trade at these levels and simply sleep well at night, IMO, is much more satisfying and prudent rather than to spend the mental energy and time to monitor, time, and decide when to get in, out, trade, etc. stocks IF you are literally not a pro at it with defined plans of attack (see brother Gregg Thurman). Us mere mortals at investing value companies and stocks like Apple/AAPL for the general market stability they are.
My take: Well, Krinsky is BTIG's chief market technician. Technical analysis -- like it or not -- is his job.
If one incurs tax impact on your trades, these short-term trades make less sense.
Other studies indicate that most retail active traders are subject to emotion, mainly fear of loss, which further hurts long term gains.
Finally correlation is not causation. It has no real predictive power. Patterns tell us nothing about unpredictable factors, such as what Putin may do next, as just one example.
Buffett get it. He buys Apple for the it’s ability to grow regardless of the unpredictable.
I went to to a seminar all about technical analysis about 30 years ago and appreciate the information that was provided. But as with anything else in investing, it’s a tool, not a panacea for making decisions about what’s right for your portfolio.
Just as many subscribers on this platform have stated that their decisions to purchase Apple were based on the return of Steve Jobs, or other significant leadership decisions undertaken by the company’s CEO’s that had nothing to do with a sterile technical approach.
After following Apple for several years and embracing their products and seeing them everywhere I went, a buy point presented itself when the technical analysis dolts fled the stock back in late 2018. That’s called an “opportunity!”
The Warren Buffet approach of: “Be greedy when others are fearful” has benefited me quite well in my investment decisions with Apple. As has all of the sage advice from everyone on this platform!
Lurkers need to sign up as you are only denying yourself benefits to help you better understand this company through interactive zoom calls and the slack channel only available to subscribers.
The problem here is that Mr. Krinkly is looking at a forest and not the Apple California Redwood. He is arguably right about the malaise continuing generally, but he is assuming an impact on Apple that he literally doesn’t have the knowledge base to back up.
This is far from uncommon with analysts, especially ones that look at the bigger picture. Apple just doesn’t fit the mold, and they are blind to the implications of that.
Playing Apple short term can be done, and we do a variant of that as well, in that we sell off more AAPL than normal (we are on fixed income and rely on AAPL sales for paying expenses). But we also and importantly invest deeply in the long term, principally by owning only AAPL.
Is Mr. Krinkly right? Is this the time to sell AAPL? He may be right or wrong for those interested in short term gain, so it’s even money either way those folks bet. But for those interested in a dynamite medium-to-long term investment, he is indisputably wrong.
Russia’s expansion plans have hit a very brutal wall, and exposed the Russia military as more of a paper tiger than a legitimate threat. Putin’s nuclear threat is so much woofing.
These realities will grow, lessening inflationary pressures around the world (except in Russia).
All in all I think the US economy is in great shape, all things considered,, and, should we go into recession, it will be shallow and short lived.
Nothing goes up forever. I think a great deal of the pullback from January highs is a reaction to locking in profits exacerbated by media hyped negativity (bad news sells) that will prove unfounded.
There’s always gonna be noise. Sometimes you just have to tune it out.