Another Juicy Apple Bargain

So Apple is down 16% from its recent high. Corona virus is a legitimate economic factor that will absolutely affect its bottom line (Apple stores are already low on iPhone batteries). The stock price must crater. A company can't face tangible adversity and not have its price go down.

So what's the chance it never recovers to $327? The corona virus will eventually abate, and, all things being equal, Apple will return to printing money and dominating the market. But of course all things aren't always equal. Any number of freak things might prevent Apple from ever regaining its former position. $275 may turn out to be its new cap; it may never rise from here. In fact, it may finally settle, permanently, a bit lower.

If so, and if you'd bought shares now, you'd fail to profit. Perhaps lose a little. Disappointing, but certainly not a disaster scenario. It's also unlikely. Most likely is you'd make an easy 16% on your money if you're patient to wait for the nearly inevitable recovery. And 16% is great! Try finding a non-speculative pathway to an easy (if not certain) 16% gain! Try finding one with as little downside risk as this!

Complicating things, you won't want to sell for a year (to avoid high capital gains taxes) and it could recover and then fall yet again by then. So timing's uncertain. But, either way, your most likely risk - which, again, is unlikely - is failure to profit. That's not much risk.

But what's the risk that from here the company tanks into toastville, never ever recovering, and rendering your investment worthless? Very, very low, as explained here. This would be the bad outcome, and it's vanishingly unlikely. You're betting on a blue-chip stock, the most profitable company that's ever existed, with over $200 billion-with-a-"b" cash on hand. Some nest egg!

I can't imagine why a person wouldn't buy here. I will, and will buy more if it drops further. And I will be patient. After all, I won't need recovery for at least 12 months! And if corona virus drives it lower, well, that just sweetens the deal for buying more.


I may wait a couple days to see whether it dips much lower, but my greed will likely force me to pay more. Markets are efficient. Everyone knows "corona virus is bad", that's why the stock dipped. Everyone knows it might dip more, that's why it already dipped a lot. Any smart thought you or I could possibly have about this situation was baked in to the stock price long before we even thought it. We shrimpy little shrimps enjoy only one edge: a patient long view (framing!).

Update: sure enough, in the time it took me to write this, it went from $273 to $284!