Yo, Pit Crazies,
Recently, I am reminded of a quote by Howard Lindzon, co-founder of Stocktwits, “All stocks become sad.”
This was 10 years ago when Research in Motion (Ticker: RIMM), the unassailable titan of Blackberry phones, was on a march from $89 to $12.
Sales evaporated when upstart Apple Inc. (Ticker: AAPL) invented the smartphone. The rest is history.
AAPL and Tesla (Ticker: TSLA) both pioneered industry changing technologies. After 10 years of dizzying heights both companies are in for sad times.
Right now both are close to a magic number.
What is it?
$100 Is the Big, Round Number
AAPL is one stock that is still way above the pre-COVID spending spree that set off the equity rocketship in 2020 and 2021.
AAPL is not worth 3x pre-Covid levels. The last time AAPL got into the maelstrom of rising rates it was a $40 stock.
I like AAPL to see $100 again as the multiple comes back to earth.
It’s just what it is, as Howard said, “All stocks become sad.”
AAPL has pressed the growth from the iPhone ecosystem for about 10 years.
It is starting to look more like a utility and less like a stock with a 21x multiplier on barely growing earnings.
If you want to get happy, check out Griff this week!
The Rundown
Win the Week
Bill really did win the week last week …
– SPDR S&P 500 Trust (Ticker: SPY) Jan06 382/381 put vertical closed for a 33% gain
– SPY Dec30 384/382 put spread closed for a 93% gain
– SPY Dec09 392/293 call vertical closed for a 10% gain
– Meta Inc (Ticker: META) Dec16 120/118 put vertical closed for a 39% gain
Pro Chat Room
Cat closed a Big Money Flow favorite Melco Co. (Ticker: MLCO) call as China reopens in fits and starts.
To Your Trading Success,
AG