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Bad Apple?
Bill Gross doesn't think you should buy the dip.
"Investors should not try to 'catch a falling knif
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I bought some Vietnam-tariff-tanked apparel names, betting on a “deal”.
I was curious if there was a good ETF (bonus points if it’s leveraged) to play the apparel companies with factories in Vietnam. Then again, probably best to yolo my retirement account into Newsmax.
China has a number of trade-related nuclear options, and I am on tenterhooks waiting to see what they’re going to deploy. For the most part, I expect them to be restrained. They’re waiting to pull the really big levers for something that matters a lot more (like the sanctions regime that will obtain when they make a move on Taiwan). Smaller levers abound though, and blowing up Apple is one of them.
At some point in the coming recession, the Megas will be rewarded for their quality and defensiveness. First they have to pay the price of being 30 cents of every index dollar sale.
“I’m actually more concerned, as a shareholder and also as a consumer, that the company hasn’t produced a new hit product since Steve Jobs died. . . .”
That.
I resisted the urge to catch that particular knife today, but I may succumb if the price continues to drop. Apple still builds beautiful machines–the packaging alone is amazing–but the lack of Jobs’ innovative vision is really clear now. He was always working on the next level of consumer tech, not just Apple’s new line. P/E ratio is still high, and they are really exposed as you have said.
Is this a sure buy signal? Or something to heed? It is noteworthy that the #1 unrelenting Apple bull is getting worried:
“Wall Street’s biggest tech bull warns of $3,500 iPhones as ‘economic Armageddon’ looms from Trump tariffs”
It’s not the price of the stock I’m watching, it’s the price of the phone. Verizon and AT&T can only handle so many $2000-3000 phones as cereal box toys. Soon people will have to buy them. Four i-phones at $2000 each is the price of a used car for their HS kid with a new license.
Since the country collectively freaks out if gasoline rises by $0.50/gallon or eggs rise by a few dollars a dozen, I don’t think we are going to see many purchases of $3,500 or even $2,000 phones.
I am at a bit of a loss to explain how people think these tariffs are either going to be absorbed or passed through (except at the margins), as opposed to stopping commercial activity entirely. By the same token, any projections of tariff windfalls sufficient to offset the cost of extending the tax cuts seem similarly misplaced.
I feel like Trump took one of those $19 Japanese strawberries, coated it in Splenda, and proclaimed that NOW it was the best strawberry anyone’s ever tasted, because sweetest is best and everyone likes sweet, right?
“new hit since Steve Jobs” so many of the new features on the hardware or in the software that they add or delete puts the thought in my head “Steve would have never signed off on that” Not much innovation, just remodeling with new curtains and paint.