Wednesday, June 27, 2018

AAPL Caution, Sugar Highs, and Wile E Coyote, Genius Investor

As I've written several times, I love buying Apple stock on downturns because while the price has its ups and downs, the company is unlikely to face existential crisis. So I can confidently buy on pessimistic downturns without fearing a runaway elevator ride to the basement.

Yet one must guard against smug over-confidence.

For example, China's a huge market for Apple. And Chinese countermeasures against Trump tariffs might well have begun with Apple. Trade wars are so lunkheaded and regressive that it's been easy to discount the possibility, yet here we are. If Apple were targeted, that would be deeply and enduringly consequential for their stock price. And that, I think, is why it's dropped some recently (though only a bit; it'd have sunk further, but investors are uniformly certain Trump's only bluffing the trade war as a negotiating tactic).

It looks - phew! - like Trump is pulling back from some of the brinksmanship, so Apple is looking a bit safer. But, in the big picture, the current market might come to be seen as having been a "sugar high", in denial re: the danger/stupidity/insanity of this administration. I'm part of that problem, myself. While I rue the gloom/doom, I nonetheless remain invested in this reckless, sky-high market, making me a hypocrite. Most scary of all, my mounting self-realization - picture Wile E. Coyote's horror as it dawns on him that he's stepped off a cliff - is surely being felt by more and more people. The fear will be sufficient to cause a market crash even if Trump completely avoids tariffs (or war, or whatever other unspeakably dumb and malevolent caprice).

Be careful out there!

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