Posts filed under “Really, really bad calls”
With the stock markets down almost (OMG!) 5 percent from their all-time highs, lots of folks are looking for signs that the bull is dying, if not dead. One of the more portentous omens is the recent decline and volatility of Apple’s stock.
Or so it seems.
For reasons too numerous to list here, Apple captures an enormous amount of mindshare. I find that gratifying, as a fanboy since falling in love with a Mac Classic in 1988. I have jokingly noted that the five major asset classes are stocks, bonds, real estate, commodities and Apple. However, too many people seem to think it is the most important stock in the universe. Even if that were true, that doesn’t help us understand how markets work.
Of course, Apple is important. It had annual sales of $183 billion in the fiscal year that ended last September, almost 100,000 employees, some of the most successful retail stores ever and more than $200 billion in cash and liquid investments. It also is the world’s largest music retailer, reaps almost all of the profits in the mobile phone market and, of course, has a fanatical level of brand loyalty.
Apple’s influence is largely a function of its outsized weighting in various indexes. It is the largest component in the Standard & Poor’s 500 Index at about 3.62 percent. In the Nasdaq 100 Stock Index, it’s even more influential at 12.85 percent — that’s not quite double Microsoft’s weighting, the next biggest component, and almost three times the size of Amazon, at 4.76 percent. Apple ranks seventh in terms of influence in the Dow Jones Industrial Average, which uses a price weighting, meaning that companies with higher absolute share prices (but lower valuations), such as Goldman Sachs and IBM, have a greater impact.
Continues here: As Goes Apple, So Goes the Market?
@TBPInvictus I am reminded of the above law each and every day. And a law it is. Inviolable. No sooner had I posted the other day about the shoddy “work” coming out of AEI than, voilà, said shoddy “work” is being trumpeted by pompous blowhard Stuart Varney on Fox News. I’ve seen this happen…Read More
@TBPInvictus “He who knows nothing is closer to the truth than he whose mind is full of falsehoods and errors.” – Thomas Jefferson If you’ve followed me at all recently, you know I have a keen interest in the minimum wage experiment that is going on in the city of Seattle, which last year approved increases to…Read More
As Theodore Sturgeon famously observed, 90 percent of science fiction is crap, but then again 90 percent of everything is crap. In the world of online investment opinions, Sturgeon was an optimist. Not all that long ago, the perspectives of individual amateur investors and professional ones, too, were for the most part unknown. Most market…Read More
My Sunday Washington Post Business Section column is out. This morning, we look at how the internet evolved as a source of bad investment opinion. The print version had the full headline How to sort out the garbage of online investment advice; I like the online version hed, Hey, investment cranks: The Internet never forgets. Here’s an excerpt from…Read More
I always find it amusing whenever someone expresses surprise that the financial bailouts for Greece haven’t benefitted Greek citizens. “Bailout Money Goes to Greece, Only to Flow Out Again” in the New York Times is just the latest example. “The cash exodus is a small piece of a bigger puzzle over why — despite two…Read More