Apple Inc. (AAPL) earnings disappointment was pretty predictable with all these other big tech players falling also after good earnings. I don’t like to say “I told you so”, but this stock has been ready to fall hard. From the beginning of the year 2008 this stock has just trembled at every market moving news. Since it did not move UP into its big deal Mac Expo and analyst were boo-hooing the new products that should of made ANY Apple investor worried. Other Apple speculators are saying, “I’m buying AAPL on sell off” well I think they are very wrong on that decision. When a stock has fallen, then falls harder, you are going to buy it on the rush of a sell of? Are you crazy? For a prized stock that is falling there is good reason not to be buying.
This sums it up quoted in an associated press article:
“Apple’s guidance has historically been conservative, but such a divergence from Wall Street’s estimate rattled investors already skittish about the economy.”
“Tuesday’s stock plunge was likely worsened, Snorek said, by the exodus of a large number of investors who had hoped Apple’s stock would be a refuge from the economic pressures hurting the overall stock market.” – Jordan Robertson, AP Technology Writer
One good point is that Apple Inc. guidance is ALWAYS “conservative” so since they told investors their outlook would show some slower growth (duh!!! look at whats going on with other consumer growth stocks and their partner AT&T (T)) no wonder why AAPL dropped after earnings (just like the stock does many times over). Now will AAPL’s stock fall more? I’m sure of it. Will it continue on big charts to move up with hot products? Most definitely. This is a short-term hard down move, but likely to continue so if I was you or myself I wouldn’t be in a buying position of Apple Inc. anytime soon until the economy shows some recovery and Tech stocks show a real correction and real buying from bigger institutions. AT&T reported consumers slowed on buying bigger plans and defaulted on normal ones. Hello! This just proves that slow growth should happen on the iPhone since consumers can already not affoard their normal cellular plans.
Look at Hansen Foods (HANS) stocks has been falling with its major Monster Energy Drink brans, especially big in the X-Games, has been falling hard even with a peg of 1.06. This stock still has a bright growth future, but now are teenagers buying less $2 energy drinks? (or is it really the parents lower on cash so don’t buy the more expensive brand drinks?)
Oil prices at the pump haven’t changed much. I think most automobile consumersr are getting used to $3 gasoline prices which are liked to get a boost again with increasing oil prices that shouldn’t slow down anytime soon which will keep boosting profits for stocks like Southwestern Energy (SWN @ 51) and Ocean Outriggers (RIG @ $124).
I think solar stocks like First Solar (FSLR) and HOKU Scientific (HOKU @ $9.20) are likely to fall until a new President is in place and makes a real energy plan to keep boosting production and make solar “special” again. If you have been reading the reports 2009 will be a HUGE year for solar companies just because by then their new production plants will be made and producing tons of polycillicon very wanted in the industry going up in price making these small solar companies worth and valued you more in stock price (then they currently are).
But back to Apple Inc. I like the new laptop Air, I might even buy me one because they are the first to use flash memory for the harddrive. If you aren’t a computer nerd this means faster processing times, less harddrive crashes, and more efficient system. This could be a huge seller. Who cares that it is thin. It uses a flash harddrive and of course very sleek and hot looking. I don’t know how far Apple Inc. will drop, but I’m think below $100 (which would create a peg of 1.00). Where do I think it will be by November 2008 earnings? Hmm. Depends if these rate cuts do the trick and creates more money so people keep buying gadgets. If Apple continues to take more market share there is no reason its stock won’t stop charging pass $200 again. I think realistically Apple might do a 2:1 stocksplit since they just lost $40 billion in share holder value, maybe a split at $100, might get people think to buy it at $50 is cheap (even though its the same price/value). I like Apple. It really trys to innovate and create “new” and that is a company anyone wants to own. I should note the downgrade it got today just throws “warning signs” for future downtrend. Downgrade on Apple? Are you crazy analyst, well not so crazy at least for now…
Quote cited from:
Yahoo! Finance Associated Press Article on Apple Earnings
AAPL @ $169 as you can see everything shown at the Apple Mac expo 2008 wasn’t much of a surprise. As I noted earlier analyst were being very negative on this expo which made me think Apple was likely and predictably going to fall. Down -11pts is nothing what I expected from a company that sold a spectacular 4 million iPhones in 6 months, gains 8% of computer market, and comes out with a new sleek innovative products, nonetheless this is why investors are saying it is a recessing bear market.
My AAPL JAN 220 Calls are worth $.01 so even the $.04 play didn’t work out, wow.
This is why any novice trader tells you to practice trade before doing real trades. I actually do many practice trades. I don’t know what I’m missing from this big equation. I keep losing. I make a good profit, then I lose twice to three times as much as I win. Why? I really think I justify why I get into trades, but then why with conviction I keep losing more then gaining? I’m starting to come to the moron conclusion that options are very risky. If I would of bought Apple stock at $200 I still would have lost as much as I have even though my loss is limited at $4000 going into the option trade.
I wish, wish, I had someone to really guide me and teach me, discipline me as a student. I need regulation in my trading to get better. I feel I am just gambling my money away because I haven’t gotten anywhere. Every year I start with between $1000-10000 and I end up losing it all. If I would just buy an index fund or large cap stock I probably wouldn’t have losses near as bad but I wouldn’t have any incredible gains to boost my networth either. I’m not greedy I just want to reach my goals. My goals are hard so I expect cumbersome account to build to what I want.
Last year I said theres always next years mac expo. Here I am still empty handed. shit.
Okay so again I really fucked myself over. I bought my AAPL Jan 220 Calls entirely too early (@ $190 and apple currently @ $178). I suppose I was more “eager” to get in on a low price on apple and again buy options “cheap” then wait for better timing. I’m starting to understand that technicals mean little if you are eager to buy a stock and mean more when you are patient and the timing is right.
For instance my options I paid $.90 for now are worth a mill $.04 you are talking a mega percentage loss. Again, if I was patient and waited to buy my options the day before the Apple mac expo and picked them up at $.04 I could of bought probably 1000 more contracts for the price of 40 contracts (or roughly a $4000 trade) and my profits/loss would of turned out completely different.
I’m already factoring in I will lose my entire $4000. If something wild happens for some reason and the price goes to $200 by earnings I might get lucky and make just it back.
But if I was patient and waited and bought 1000 contracts at $.04 ($4000) realistically with ANY positive news at the expo and realistic very positive earnings I could of easily walked away in 3 days with a realistic 500-1000% profit or $20-50k profit if the stock moves to $200 or even $190. So again lesson learned. I wonder which year will my magic formulas start working or should I say I actually trade more smart, more patiently.
I can do this. I KNOW I can. I’m not smarter then anyone else or have an more insightful knowledge then anyone else, but I feel deep down inside convinced I can master this trading and make a living out of it if I can just discipline and keep patient all the time before making a decision to execute a trade.
I can always save up another $4000 g’s to trade next years Apple Mac Expo, but how long will Apple’s winning streak and big boy competition style go on for? I definitely AGREE that with the information age the digital industry is totally taking over entertainment and the home meaning digital movies, TV’s, and computers getting more robotic and innovative.
Recently I finished Alan Greenspans book and it ended basically saying that the baby boomers will bust the market just like so many other books like Rich Dad Poor Dad’s Prophecy and Boomernomics which I’m reading right now. Although the book was published it is very accurate on baby boomers and the information age become ultra successful. The only thing is is 100% wrong about is the housing market falling and prices never increasing. What baloney. It shows a major trend line from 1900’s to 1998 with a steady increase and then suddenly in 1999 to 2050 it falls straight down 30%? That makes no sense. You know the “trend is my friend” what were these economists thinking? The trend will just break and never move up again? One economists in the book they ruled out by himself believed there would be continual home price increases in another future bubble (wah-lah currently). I still think real estate is a good long-term investment. Home prices do go up even with big downs they have proved to build equity and create financial freedom for landlords and retirement equity money to sell off. I currently have $60,000 equity in my home it may come down some for a few years but I plan for my home to be worth 2-3x it is currently creating a nice seperate nest egg for me to sell later on and in the meanwhile have the mortgage being paid by rent.
well good luck and good trading for todays Apple Mac expo 2008.