I love old adages. “Nothing improves without change” is a favorite and gets one accustomed to, well, change. Another is, “In a capitalist world, everyone is out to get your money.” That one is difficult to dispute.
Another favorite, and one those of us who invest in stocks fully understand, is, “What goes up, must come down.” So it is with Apple and APPL. Just a few weeks ago Apple was flying high and APPL flying higher. What happened? What goes up, must come down. It was up. It came down.
So, what’s going on? I mean, other than a few weeks of seemingly anti-Apple and bad Apple news; much of which seems to be rumor sourced and little is fully audited for veracity. What is it? APPL Armageddon? Or, Apple Apocalypse? Both are poison for stockholders and the orange crew running The White House is not helping the situation with new threats of tariffs on smartphones and computers coming out of China.
With General Motors dropping half the company’s line of cars, maybe it’s a good thing Apple has yet to launch Apple Car.
What’s the problem? Emotion. Investors often have a herd mentality and react to bad news and good news– sell and buy– based upon headlines. Set the search for Past Week, then Google Apple Stocks and see what you get. Headlines. None of them are positive about Apple, other than a few tips to buy during the sell off.
Remember, for every stock sold, someone is buying. So, why are they buying? Smart investors buy when a stock gets hammered for reasons that have little to do with the company’s business model. They know that negative news impacts the herd mentality, so they wait until a precipitous drop, then buy more stock.
Who is buying? Those investors who do not follow the herd. Do you think Apple, sitting on tens of billions of dollars allocated for stock buybacks, is among those lined up to buy stocks as they fall?
What goes up, must come down.
The stock market has been riding high for many years; dating back to just after President Obama took office. Since then, savvy investors have made themselves rich, but if what goes up, must come down is an accurate meme, then up cannot continue forever. Apple and APPL and large chunks of the stock market have reached near Armageddon or Apocalypse status, relatively speaking, and it doesn’t appear as if anything can be done to stop it.
Unless Apple’s next quarterly financial report is another blow out. I see signs that indicate that will not happen. The auto industry, as cyclical as any, is in disarray; both GM and Ford are laying off workers, closing plants, and adjusting their product line to avoid financial disaster. Farmers may now regret their recent choice of politicians as product prices are down while expenses are up.
Armageddon? Apocalypse? Neither option sounds much like winning.