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Post by aaplsauce on Apr 24, 2022 22:13:25 GMT -8
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Post by CdnPhoto on Apr 25, 2022 6:16:58 GMT -8
🤮
Below $160. Who's BTFD right now?
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JDSoCal
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Aspiring oligarch
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Post by JDSoCal on Apr 25, 2022 6:27:13 GMT -8
I sure hope that rent pays off. But we need a government that defends our companies from shakedowns. Maybe the President should tour an Apple factory and take credit for it. Good optics.
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chinacat
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AAPL Long since 2006
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Post by chinacat on Apr 25, 2022 6:57:04 GMT -8
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4aapl
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Post by 4aapl on Apr 25, 2022 7:18:20 GMT -8
🤮 Below $160. Who's BTFD right now? RSI is around 37. Those sub-30 occasions are the real tough ones, but anywhere in the 30's is often a decently low price point. I'm not a chartist, but I think the general bullish hope is higher lows, so if looking for upside we definitely don't want to go below the $150.x level seen in the last dip, and ideally don't want to go below the $155.x dip before that. With earnings in the wings, and seemingly positive earnings with likely positive guidance, this may be the low. There's just a little more market-wide risk and worry on the table this time. This article on Yahoo thinks the recession worries are currently overblown. Our weekend activities (saw Wicked in a sold out ~1400 seat theatre, hotel and restaurants full and people willing to wait, lots of cars on the freeway both directions) concur with this, though it's important to see that the various Yahoo articles sometimes scatter-shoot, giving different articles for every viewpoint. finance.yahoo.com/news/recession-fears-overblown-morning-brief-100041693.html
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Post by archibaldtuttle on Apr 25, 2022 8:26:24 GMT -8
The problem for AAPL stock isn't the strength of the economy, it's that Fed tightening will lower PE multiples.
With interest rates at 0 over the last 2 years, investors and hedgies plowed more and more money into equities, expanding PE multiples.
The problem now is that the air is being let out of that balloon. With contraction in the amount of money sloshing around the equities markets, it doesn't matter how good Apple earnings are, the stock can still go down and down. Even at an increase to $7 EPS, with a 20 PE multiple, AAPL would be at 140.
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ono
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posted
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Post by ono on Apr 25, 2022 8:48:54 GMT -8
Updated today by Horace:
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4aapl
Moderator
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Post by 4aapl on Apr 25, 2022 12:53:04 GMT -8
The problem for AAPL stock isn't the strength of the economy, it's that Fed tightening will lower PE multiples. With interest rates at 0 over the last 2 years, investors and hedgies plowed more and more money into equities, expanding PE multiples. The problem now is that the air is being let out of that balloon. With contraction in the amount of money sloshing around the equities markets, it doesn't matter how good Apple earnings are, the stock can still go down and down. Even at an increase to $7 EPS, with a 20 PE multiple, AAPL would be at 140. In general it's a money supply issue, specifically with how that money is used for investments. Some pullback will happen due to people deleveraging, using less margin to keep from having to pay higher rates, but more-so to lower risk before potential unknowns of the coming years. For the big boys, the cost should be little. My rate went up from 1.2% to 1.45%, still a trivially small amount. Bigger players should have even lower costs there, but they might have more incentive to get out in a timely manner when worried about the tides changing, since if they are using more leverage they need to be more aware of the potential of a margin call. Along with moving investments around for those reasons, there are some that would be moving into bonds, and some that would be moving things into other assets. All of that plays together to pull money out of stock investments. Dropping tide lowers all ships. But it does affect some more than others. $140 wouldn't be great, but it's only a 14% drop from the closing price. Nice to see AAPL and the indexes change from red to green today. There's a lot that could go wrong in the coming 1-3 years, but there are also paths to continued strength in the economy. Worries and such react quickly, whereas good news and changing things back to a positive outlook/attitude take time.
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mark
fire starter
Posts: 1,631
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Post by mark on Apr 25, 2022 15:44:53 GMT -8
The problem for AAPL stock isn't the strength of the economy, it's that Fed tightening will lower PE multiples. With interest rates at 0 over the last 2 years, investors and hedgies plowed more and more money into equities, expanding PE multiples. The problem now is that the air is being let out of that balloon. With contraction in the amount of money sloshing around the equities markets, it doesn't matter how good Apple earnings are, the stock can still go down and down. Even at an increase to $7 EPS, with a 20 PE multiple, AAPL would be at 140. In general it's a money supply issue, specifically with how that money is used for investments. Some pullback will happen due to people deleveraging, using less margin to keep from having to pay higher rates, but more-so to lower risk before potential unknowns of the coming years. For the big boys, the cost should be little. My rate went up from 1.2% to 1.45%, still a trivially small amount. Bigger players should have even lower costs there, but they might have more incentive to get out in a timely manner when worried about the tides changing, since if they are using more leverage they need to be more aware of the potential of a margin call. Along with moving investments around for those reasons, there are some that would be moving into bonds, and some that would be moving things into other assets. All of that plays together to pull money out of stock investments. Dropping tide lowers all ships. But it does affect some more than others. $140 wouldn't be great, but it's only a 14% drop from the closing price. Nice to see AAPL and the indexes change from red to green today. There's a lot that could go wrong in the coming 1-3 years, but there are also paths to continued strength in the economy. Worries and such react quickly, whereas good news and changing things back to a positive outlook/attitude take time. I would go even further. $140 should be almost expected in this environment (rates going up rapidly, world turmoil, supply chain issues, natural resource issues, etc.), the big, HUGE, question is if there will be a large overshoot* to the downside beyond $140. It's happened many times in recent years, and there is no reason it couldn't happen again. * Overshoot as in not a P/E of 20, but rather something like 15. At $7 EPS, that's about $100! Shudder!!!! 🤮
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4aapl
Moderator
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Post by 4aapl on Apr 25, 2022 17:20:21 GMT -8
I would go even further. $140 should be almost expected in this environment (rates going up rapidly, world turmoil, supply chain issues, natural resource issues, etc.), the big, HUGE, question is if there will be a large overshoot* to the downside beyond $140. It's happened many times in recent years, and there is no reason it couldn't happen again. * Overshoot as in not a P/E of 20, but rather something like 15. At $7 EPS, that's about $100! Shudder!!!! 🤮 Would all of those thing have to fail, along with employment going down, to get to that $100 level? A 30% decline from 182 would be 127. In general, I think most of those things would have to fail to hit that level. Energy and world turmoil are connected, though I don't have a good grasp on how much the global useage is throttled with higher prices, or how much new supply comes online within a month or two due to higher resource prices, particularly oil and NG. For the US a huge point is when businesses forcast enough upcoming slowness to start laying people off. It's a complex system, and each time is a little different. Both on a humanitarian level but also on an economic level, one of the best things would be to see closure of the conflict, but that has a timeframe and outcome that is hard to guess at. In the book I am just finishing, The behavioral investor, it feels that too much effort is put into guessing at issues with many complexities, and that it is better (more accurate, etc) to go with the wide view that doesn't attempt to be precise. ie giving a target for AAPL at $200 or $210, instead of $204.71. Too much false precision. On that front, I'd say the trick is to watch the interest rates, inflation, and employment. If most or all change quickly, that will be bad. But if they change slowly, then momentum should continue even if it changes.
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mark
fire starter
Posts: 1,631
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Post by mark on Apr 25, 2022 17:41:08 GMT -8
I would go even further. $140 should be almost expected in this environment (rates going up rapidly, world turmoil, supply chain issues, natural resource issues, etc.), the big, HUGE, question is if there will be a large overshoot* to the downside beyond $140. It's happened many times in recent years, and there is no reason it couldn't happen again. * Overshoot as in not a P/E of 20, but rather something like 15. At $7 EPS, that's about $100! Shudder!!!! 🤮 Would all of those things have to fail, along with employment going down, to get to that $100 level? A 30% decline from 182 would be 127. In general, I think most of those things would have to fail to hit that level. Energy and world turmoil are connected, though I don't have a good grasp on how much the global usage is throttled with higher prices, or how much new supply comes online within a month or two due to higher resource prices, particularly oil and NG. For the US a huge point is when businesses forcast enough upcoming slowness to start laying people off. I don't know ... how many "things" failed the last time we dropped 30+%? It's only a few years ago, and I don't recall so many things failing at once. In general I agree, once layoffs begin in earnest, followed/preceded/accompanied by recession, that's when bad stuff starts happening. Then the fed overreacts as usual ... causing other kinds of bad stuff to happen, rinse and repeat. BUT, I am also old enough to have lived in the 70s during the previous nasty bout of inflation, and it just ain't fun. My gut is telling me that if this inflation keeps up, bad stuff will almost inevitably happen. If the inflation keeps up AND growth slows, look out below! I always find it hilarious when an analyst sets a precise price target. Ranges are better, and if not ranges then round numbers. And most do exactly that. Just every once in a while you get a poser that is trying to "prove" that they are using an exact model ... that ends up with a target price of $204.71 ... LOL! And I completely agree that such complex systems can't be properly or accurately modeled. Even worse, some say that if you were able to accurately model a complex system, the VERY ACT of modeling it will "perturb" the system enough to change the eventual results. Kind of like if too many people use TA, and trade on it, the eventual results change such that the TA analysis doesn't work anymore.
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4aapl
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Post by 4aapl on Apr 25, 2022 19:19:36 GMT -8
And I completely agree that such complex systems can't be properly or accurately modeled. Even worse, some say that if you were able to accurately model a complex system, the VERY ACT of modeling it will "perturb" the system enough to change the eventual results. Kind of like if too many people use TA, and trade on it, the eventual results change such that the TA analysis doesn't work anymore. Wow, getting all Schrodinger on us. Watch out, cats. That was the end of the book, that there were certain TA things (like momentum and value investing) that kept on working, but then did so because people couldn't handle the truth. What do you mean I need to buy the cheap rundown stuff? I don't wanna. That's scary. I can be boring these days, not needing to beat the system. Still, it is fun when you see something that supposedly works, especially if there is good reasoning behind it. But jumping into a decade of momentum and value investing would be tough right now, especially if stocks go down. It's much easier when everyone is a winner, and you can choose to not look at the relative winning. It's much tougher to win by losing less. There's just not as much gratification in "I lost 15%, but the indexes lost 25% so I'm a winner!" type things. I'm just a simple buy and hold investor, who has enough past to be able to hold through anything, but it is temping at times. It's good to look at the worst case scenario and make sure you can last through it. But given that things aren't overly bubbly now, potential bad case scenarios should be much less worse than past worst case scenarios. And that's good news.
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