“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 $250! So what’s crazier now, a 300% gain to hit Munster’s target, or a 25% decline to reach 60?”
Full article here.
We live in interesting times.
I get a really good laugh out of all the people who try to give rational explanations or “technical analysis” for the stock market’s moves.
I get another good laugh out of the people who keep spouting a every chance about the ‘Dems’ taking over and killing the economy.
And the ones needing to complain about the government failing at everything while they drive on the roads to work where they’re protected from fires, etc., are special.
Hey, MacGenius! Make my day — insert one of your “matte screens” screeds to round out the collection in this thread.
Great comedy, folks. Keep it coming!
@MacGenius:
Sorry; all the good paying jobs are being exported (sorry “outsourced”) to India, China and Korea. In this regard, both Democrats and Republicans are to blame.
Americans keep self inflicting wounds, keep buying those Hyundais, Kias, and Volkswagens, that have 0% US content. (Yet we will all pay to subsidize the auto companies these folks will not buy cars from).
Must be the same majority that buy the PC’s (Dull at that, and then start a class action suit because M$ said they were Vista capable). They aren’t intelligent consumers just consumers!
China can’t wait for the US stimulus package to US taxpayers, so they can restock the shelves at the “Great Wall”mart.
Where’s that guy who used to boast about having his life’s savings in AAPL stock and how well he was doing?
Perhaps he could add a post to this thread.
Apple is going down because it’s fundamentals can’t support the ridiculous price it got up to. Darker days are ahead as consumers stop buying expensive electronic trinkets for Christmas and sit around the fire sipping gruel instead.
You forgot another key piece of Buffet advice, don’t invest in technology stocks. Ever.
Apple is going down because it’s fundamentals can’t support the ridiculous price it got up to.
Who ran the price up? Apple or the market?
If someone put a buy order in when AAPL was $199, who’s really to blame?
Why is it always someone else’s fault?
<i>Darker days are ahead as consumers stop buying expensive electronic trinkets for Christmas and sit around the fire sipping gruel instead.<i>
Oh please. IOW, within a year we’ve went from becoming billionaires to “sipping gruel”??
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You want expensive trinkets? I just got a Christmas catalog that featured a $6000 coffee maker (no kidding). I’d hate to be betting on sales of that one!!
Lest we forget, Apple is a profitable company, with a solid product line nicely positioned in the market. They’re almost ideally situated to survive any downturn. Compare to Dell and certain automakers, which were having trouble even in prosperous times…
Me being a dummy am already past looking at the stock market. I figured long ago when they passed on an opportunity for a 3-1 split when they were at $190 they were stupid. I am waiting for the bond market bubble to burst in the coming months. Just think of all those municipalities that issued bonds for school and other local projects that get approved in referendums and are created I’m the following months after an election. Does anyone honestly believe there are going to be returns after the stock markets downturn? First the muni’s then the treasury bonds. Do municipalities ever default or lose their credit rating? You betcha! What is happening now won’t be solved by throwing more money at it. Even the newly elected B.O. won’t solve this constitutionally. Maybe there will be another FDR grab for gold. Just something to think about.
“Who ran the price up? Apple or the market?”
It’s always the market of course, but that same market has now figured out that it was at an unsupportable level.
“Oh please. IOW, within a year we’ve went from becoming billionaires to “sipping gruel”??”
Yes, when you read the consumer confidence numbers, that’s how people feel. That translates directly into a reduction of discretionary purchases. Not by everyone, But only 20% need to defer a purchase for a company’s sales to decline 20%…
“They’re almost ideally situated to survive any downturn.”
They’re a luxury product maker at the very top end of the market where cheaper substitutes exist. That alone should tell you that they will be the relative loser compared to makers of cheaper products. Of course they’ll survive the downturn, but they won’t prosper during it.
Anyway, I’m still waiting to hear from the know nothing blowhard(s) who thought Apple couldn’t lose and has lost more than half their life’s savings.
I’ve been warning about this for some time now. When growth stocks roll over they often correct 72%. Never take more than a 7% loss. NEVER.
First rule: Protect your investment.
Second rule: Read rule one again and make sure you understand it.
Seriously, IBD spells this out clearly. I’ve been in cash since 11/07 except for day trading and I’m glad of it.
If your not day trading, consider the CAN SLIM method as a way to swing trade. Sometimes, that means staying out of the market. Never buy and hold because you have some misguided loyalty to a company. http://www.investors.com
I think it was Gerald Leob that said the secret to his success as an investor was that he always go in too late and out too soon. What he meant was, he waited for strength and then didn’t get greedy. He also wasn’t afraid to take a loss because he knew that if he kept his losses to a minimum and let his winners run then he could loose on over half of his investments and still make money.
Something to think about as we watch the markets.
A. This started as a Democrat induced economic downturn primarily related to Congressional energy policy over the last 2 years. The cap and trade/AWG nonsense coupled with a strong anti-drilling policy by Reid and Pelosi drove gas prices to historically high levels over the last 18 months. When that happened, businesses that relied on low energy prices started going belly up. When that happened, people lost their jobs. When that happened, they couldn’t make their mortgage payments.
B. We’ve had ARM loans for a long time. So why only in the last year has their existence brought us this economic disaster? Well, the mortgage business was already fragile with people barely making their payments due to high energy costs. Energy prices spiked big time this last summer and not only did responsible homeowners get bit but all those risky loans that Obama, Dodd, and Frank were pushing banks to make to people who could barely afford to rent, became toxic. But bigtime Democrat operated Fannie and Freddie bought them up anyway and went bankrupt in the process.
C. There is not a single Repubican who can be pinned for the current economic mess (unless you blame Bush for not vetoing all the idiotic legislation that the Dems have been pushing for the last 8 years.) The Republicans were trying to avert this disaster and the records prove it.
Yes, I do hold Bush accountable for trying to get along with the Democrats instead of growing a pair and shouting “NO” to these power hungry idiots. But he didn’t and so, despite bringing a new tone of bipartisanship to Washington DC (which got him no love whatsoever), we’re all screwed.
D. Any item that is typically purchased with disposable income is now going to have a hard time surviving. Whether it be Vanilla Lattés, iPhones, or new automobiles. I only wish that the only people losing jobs right now were those who voted for the Liberals who caused this mess in the first place. THAT would be poetic justice.
Instead, we all suffer. Buy hey, we got “change”™. The market started tanking big time as soon as Obama won the election, the first time that has happened since the WWII era.
Our only hope?
Someone tells Obama he now must LEAD. Bush is a lame duck. He can’t make any proclamation that will calm the markets. Meanwhile, all the markets really need is to know what to expect. They need STABILITY.
Obama must tell the business community that he is not the Marxist that he told Joe the Plumber that he was. He needs to say he was kidding about that “spread the wealth” stuff and that he will veto any bill that raises taxes OF ANY KIND (especially cap gains taxes). This is what the market needs in order to recover.
Furthermore, he needs to make oil and gas exploration a cornerstone of his economic plan and tell Pelosi and Reid to find another way to screw the American public.
Finally, he needs to get out on television tomorrow and stop with the bromides and clichés and actually articulate a pro-growth economic policy that will bring companies back to America and restore confidence in the free-market.
After that we’ll watch pigs fly.
The point is not the values and prices of things… the point is the value of money!
@Jerry,
“And that’s all I have to say about that. Markets go down, they will inevitably come back up. Buy now and you can mock your friends two years from now when AAPL breaks $250 and you bought at $53 per share.”
Markets do but growth stocks don’t always recover as quickly. I’m not saying Apple won’t but it’s a much bigger risk until it sets up in a proper base. You could take the risk but a better strategy would be to buy leading stocks when the market turns around and make money on them vs. parking your money is a stock going down or staying flat for who knows how long.
@ Beeblebrox,
Actually the market started tanking after the Democrats took over Congress. It took them a some months to do it but B. Frank and C. Dodd lead the way down on the sub prime mess.
Also, your right about bush trying to ride the middle. To add to your point about the sub prime loan mess. Since 2003 or so Bush has tried 19, that’s right 19 times to do something about it and each time it was blocked by Dodd and Frank.
They’re a luxury product maker at the very top end of the market where cheaper substitutes exist.
Look at the auto market. Luxury makes at the upper end (within reason) are profitable; cheaper substitutes at the bottom end are not.
Apple is right where they need to be: not too high, not too low, profitable, and with a loyal customer base. Compare to money-losers like Dell (and certain automakers), whose price-only customers have come to expect perpetual fire-sale rebates. The party can’t go on, esp. in a recession….
“Look at the auto market. Luxury makes at the upper end (within reason) are profitable; cheaper substitutes at the bottom end are not.”
But during recessions, people always cut back, Not ALL people but you don’t need it to be ALL people. Only 10% of those who were going to but a BMW need to buy a cheaper car instead for BMW to hurt.
To deny this is to deny one of the basic things that happen during EVERY recession. People tighten their belts and some proportion defer purchases or make do with cheaper products. Apple is not some magical company that escapes this basic economic effect.
“Compare to money-losers like Dell”
My God, Dell is losing money? When did this loss at Dell occur? 1993? I think that’s it. They’ve been profitable every year for at least the last 4 years.