“Can you see Apple (AAPL) under $60?” Zack Bass asks for Seeking Alpha. “I can, but first we have to deal with the next level of support, which is 74-ish. What really makes me a believer is how easily we broke through 85 yesterday. You know, 85 represents both long-term support, and an important psychological level. That’s because Apple hasn’t been below 85 since January 9th of 2007, the day Steve Jobs introduced the iPhone to the world.”
“How can this be? Apple’s fundamentals are strong, right? Yes they are. But that has absolutely no bearing here. Apple is simply falling with the rest of the market, and so long as there’s no confidence in the market, it will continue to fall. I suppose you could argue that Apple has taken more than it’s fair share, but trying to argue that point with the market is an argument you can’t win,” Bass writes. “You can only accept it for what it is.”
Bass writes, “Some have suggested that the incoming Obama administration announce its intentions, or at the very least work with a transitionary plan with the Bush administration. But that could have the effect of diminishing the Obama administration’s effectiveness if the economy should significantly deteriorate before he actually takes office. And I don’t think they want to cozy up with Bush in any shape or form. It goes against all historical precedent and may incite a public relations nightmare.”
Bass writes, “If we fall to the 666 level on the S&P, then this would equate to the next level of support for AAPL which would be in the 62-64 range. Although I find the support in this area to be quite vague, it wouldn’t be a stretch to see the lows of 2006 provide the next and hopefully final levels of support at 57 and 53. I know these numbers sound crazy, but who would have thought Apple would have lost over 60% of its value since it’s all-time high of 202 just 11 months ago? Also, if you recall, not more than a couple months back, we had respected Apple analyst Gene Munster reiterate his price target for Apple of $250! So what’s crazier now, a 300% gain to hit Munster’s target, or a 25% decline to reach 60?”
Full article here.
We live in interesting times.
we better not. I have lost enough already.
Just bought some at 80…I guess I would buy more at 70…and more again at 60….eventually, however, all my money will have evaporated.
I certainly can see aapl under $60, just as I can see the Dow under $600. The situation is bad on many fronts. But Apple Inc. is on the right track, and will certainly come back, so going long, no one should lose money here.
It’s called a Post Real Estate Bubble Recession.
People are paying most of their income to mortgages, limiting disposable income for other items such as computers and electronics.
This trend will continue for many years (as people have long mortgages) until several things occur.
1: More well paying jobs
2: Housing glut is down to a few months supply
3: Increase in population
The US economy is currently undergoing deflation, where prices getting lower because of low demand, because not many people have a whole lot of disposable income.
When the Democrats take full control of the government, (*shudders at the thought*), they will certainly increase the money supply substancialy to bail out everything and everyone. This will cause a sudden and dangerous HYPERINFLATION, where investments get wiped out and we all pay more for everyday items and including gasoline, which the Dems want to promote “clean” alternatives.
My advice, and Bill Gates has already put 2 billion dollars in, is buy Treasury Inflation Protected Securities and/or I-Bonds. Timing is essential, so read up on it before January when the auction is held for individuals, or you have to go to a broker. So when hyper-inflation hits, you buy those.
Or else you’ll watch your saving deteriorate anywhere between 8 and 20 percent PER YEAR due to inflation and gas reach $5 per gallon early spring.
Of course the gold bugs are predicting $2000-$3000 per ounce, but when it gets that high, who’s going to buy large amounts?
By the way Warren Buffet has bough huge amounts of ConocoPhillips, “skating to where the puck is going to be”
If your asleep of course your going to lose money.
Apple? Well, wait for the economic rebound when it occurs.
Must learn to use my stop losses. When will I ever learn. The October drop (for the whole market) was once in a lifetime though.
I gotta go shake the old change jars for investment money.
I’m waiting for it to go down a bit more.
A fun exercise:
1. Subtract Apple’s Cash & Short-term Investments position from its market cap to determine the market value of the enterprise.
2. Divide by number of shares outstanding to get market value per share.
3. Divide by consensus projected 2009 earnings to get adjusted P/E.
You get about 8.
In 2002, this value was around 5. That’s the lowest I ever saw it. Over the next five years the share price of AAPL went up 20x. And in 2002, Apple was bleeding and hurting bad. Now it is growing like crazy in the face of the worst slow-down since the 1930’s, if not since the Civil War.
So, best case scenario: the economy picks up a bit, and Apple continues to grow. AAPL goes up 20x from here, and in five years it reaches $1,600 per share.
I’m only half kidding.
Hey MacGenius, aren’t you Mr. Sunshine.
Unfortunately, you are probably mostly correct in your analysis.
You filthy American pigs have elected a man who will destroy your country. The capitalist pigs on Wall Street are busy establishing the value of America during his administration. They see great gloom and doom when The Chosen One takes control of your country.
well it’s been going back up in the last hour
you are a short with greed in your heart
stop listening to this ass hat ………..
He has no soul and his family needs diamond spoons to feel anything so zack
piss off will you please
I bought Apple at $29 and then sold at $68. Kicking myself ever since. If it goes back to $60s I can get back in the game, excellent.
Bass writes, “If we fall to the 666 level on the S&P;, then this would equate to the next level of support for AAPL which would be in the 62-64 range…”
Funny, the Chinese lowered their prime lending rate to 6.66% instead of in quarter or half points like everyone else.
Getting ready for the “Beast” to take the Oval Office I assume.
Buy gold and run for the hills.
I’ve been feeling a *little* better about passing it up at $7 (split-adjusted). Might pull the trigger if it gets much lower.
I’m not looking at where AAPL is going, but rather where the markets are going. Right now they are heading DOWN and I can see no reason for that trend to reverse right now. Bush certainly isn’t doing anything to restore confidence for consumers, improve unemployment or reduce home foreclosures.
And then there is the End of Year sell off where a lot of investors will dump stocks at a loss to cut their 08 taxes.
Watch the DOW. It went into the 7000’s – did we see a mass of buying? We might not see it when it goes into the 6000’s. I’ve already read that 5,700 will be the low point. That now seems possible, especially if the Big 3 auto makers continue to have problems, or file for bankruptcy.
The sad fact is that the market is in sad shape and isn’t going to get any better for a while. That leaves AAPL and other good stocks with risks of going a lot lower.
I’m staying away from stocks until the market improves AND there is a reason for that improvement. Without a reason for that improvement I can see gains being only short term.
I bought mine at 13. Now that I think about it, I guess I should have sold some when it was near 200. Dang!
Apple MacGenius wrote:
When the Democrats take full control of the government, (*shudders at the thought*)
I know exactly what you mean. The Rebublicans have been like psychopathic satanist Nazis hellbent on destruction. It’s hard to imagine how bad the Democrats will be.
No need to bring politics into this. While I can point to several Republicans who contributed directly to the current economic problems, SURPRISE … there was a Democrat or two who also contributed. And that’s just the twits in DC.
The price of AAPL has never really been about the value of the company. Or its business. Or anything ELSE about Apple. It has had only to do with the price of the STOCK. The price is dropping today mainly because the entire market is losing “value”. There is a floor on the price of AAPL, though. About $10. Because that is how much cash they have on hand. Most of the rest have a negative amount of “cash on hand” – generally called “debt”. No floor.
In the 1970’s didn’t everything trade at book, giving us about 27.50 on appl?
Just a year ago AAPL was called to hit $600.
Now it’s being called to go under $60?!?!
Folks, today it’s not about stock price, it’s about survival. Is Apple experiencing severe losses and/or dog-begging for a bailout? HARDLY!!
Apple will survive this, perhaps even thrive, and should bounce back very nicely when rest of the market returns from the dead.
It’s hard to imagine how bad the Democrats will be.
Depending how a few key Congressional race recounts go, the Democrats just might get a supermajority. THEN look out!
Bad is when ANY entity (Republicans, Democrats, whoever) gets enough of a toehold that they can circumvent our system of checks-and-balances.
Too much power concentrated in any single place (esp. a political party) is a Very Bad Thing.
Bass is talking in terms that completely shut me out from anything he has to say: TECHNICAL ANALYSIS. It’s a loser’s game. All the great minds in the stock market follow fundamental analysis. A stock’s price can be pushed around in the short term by negative or positive market sentiment. But in the long run, a stock’s price will track its earnings.
The good news is that Apple’s earnings have been stellar, even in the most recent quarter. It is not earnings that are driving down Apple’s stock price, but rather, fear. If Apple has another couple of strong quarters, the stock’s price will take care of itself.
Remember: you don’t realize a gain or loss on a stock until you sell it.
I’m not enjoying the current market turmoil any more than you. But I am convinced that Apple is a very well managed company, that Steve Jobs’ health is just fine, thank you, and that the company will continue to innovate and produce exceptional quality products. In the long run, I believe my patience will be rewarded. And as I have some extra change in my pocket, I will buy more Apple stock.
Remember the sage words of Warren Buffet: “Be greedy when others are fearful, and be fearful when others are greedy.”
Taken that way, these could be the best of times for a stock whose price has been beaten down way below its intrinsic value.
Apple will hit $10 a share before this is over. Hit $6 a share back in 2001. Has nothing to do with the performance of the company. Some shareholders will be forced to sell no matter what the price by the courts.
This is a double witch. Greed and Greed. The housing market only tanked because of Greed. Loans written with strange and unrealistic terms that could never be met. Buy a million dollar home at the price of a fifty thousand home…. for 3 years, then the whole amount is due…. get real… witch number two… Greed. The oil companies and speculators cranked up the price of gas to the point that the entire economy stalled. Spending stalled. No consumer could continue to spend. Everything was taken up in either an out of control balloon home loan, or gas prices that kept us from buying the goodies at the mall.
Our economy is driven by greed. That is not bad. But. It has it’s price, to everyone. Even the greedy. I expect things to get straight. Gas prices are now back to where they should be. The home loan people have learned their lesson. Oh… and the car folks got spanked. Ha!
The devaluation of Apple’s stock has been anal-ists fault from the beginning with there IDIOTIC tales on the web of doom and gloom.
High School kids writing STUPID stories on CNN. Nothing factual that points to such a tremendous drop and devaluation of Apple’s stock. Record profits every quarter, market share up every quarter, iPhone 3G record sales. Mac record sales. Does this sound like a company that should have lost over $100.00 a share in value? I don’t think so and I haven’t seen any FACTUAL INFORMATION that can explain this. This really pisses me off!