I don't think apple can be a short right now. It can be a stock you want to sell or hold if you are long. It can even be a stock you want to buy. But it can't, in my opinion, be a short. Never short a stock just because you think it is too high. Don't even short it because you think it will surely drop in price. You need more than that for a good short candidate. A stock that has a long history of trading in a regular, cyclical pattern can be shorted at the tops of cycles assuming there are not extenuating circumstances to suggest this time will be different. But apple does not fit here. Another type of excellent short candidate is one that has been recently pumped by Barrons to buy time for the big investors to exit gracefully, but when checked out shows seriously weak fundamentals,e.g., high debt, declining revenues, increasing losses, or facing potentially huge losses, failing brand name, loss of market share, very bad news on the horizon, etc. In "short", you need really dismal prospects, and getting worse, and you need to be one of the first to recognize it. For example, you find out that GM just had to pay nearly a million dollars to Fiat to exit from a deal that would have allowed Fiat to sell itself to GM. You check out GM's debt situation and sales and other fundamentals and discover that GM is a sinking ship with a clogged bilge pump.. Barron's comes up with a glowing account of GM's bright future. Wait for the "Barron's Bounce", then SHORT! Apple does not fit here. Do not short Apple. Again, just an opinion. Now you could short Apple and make a million, but that would not make me wrong and you right. It would make you darn lucky however! What I have written here does not apply to very short term trading of course.
Sorry, it should be nearly a billion, not "nearly a million dollars to Fiat". I must of been having a senior moment.
Piezoe, interesting, you got some good arguments but some contradictions too. For example, you told being cautious when Barron's (or any newspapers by the way or Goldman Sachs) is really positive with a stock. Of course ! And don't you think Apple (or Tesla) is not "hype" and being in front of any newspapers? Of course yes! I think Apple is a nice short and probably you will buy back @USD90 or USD80 or even USD70 this year or next year. Why ? Because all fund managers in the US own Apple stocks, and these guys (lemmings?) are ready to dump them (with losses) if Apple would go below USD100. And it will, I assure you! During history, every top stock in the S&P500 were big losers after 2/3 years of outperformance. Apple fits well, doesn't it? I will repeat and repeat again : WHAT was fashionable is quickly OUT OF FASHION. Last time I was bear with Apple : USD700. -45% after. History doesn't repeat itself but it does rhyme. Mark Twain Chris Mac
Shorting Apple depends very much on your time frame. If you day trade the stock you might short it on occasion on technicals only --I wouldn't though. On any other time scale I think it is a rotten choice for a short. Here's why! It's P/E is only 17!, and 2015 is projected to drop to 14. That can be because of increased earnings as well as declining stock price. If the stock drops in price and P/E drops that will make apple an attractive buy. Do you want to short in the face of all the buyers that are going to snap up Apple if its P/E drops? I wouldn't think so! Apple isn't a short because it is an outstanding company with outstanding products and plenty of money in the bank and analysts project earning growth above 10%/yr over the next 5 years. Naturally they can be wrong, but why short against the consensus? You're wanting to base a short on the reality that sooner or later every high flying stock must fall, but that's the worst reason in the world to short any stock. Never short a strong company whose products people love and can't get enough of, with lots of earnings, money in the bank, and a P/E ratio that is low compared to its peers -- Nokia has a P/E of 26, for example. Let me reiterate. AAPL may be a long, it may be a hold, it may be a sell, but it is in no way a short!
My friend You could have edit the same post 2 and half years ago.... same p/e superb new products tons of cash. ... AND shorters won max with 45 pct drawdown! Of course I want to be contrarian! Because lemmings die Pigs die Best pros take it all THESE ARE THE RULES Chris Mac
Let us know how it works out. There is such a thing as good luck, and you my have some. If the market falls it will take Apple with it.
Chris it's feeling a lot like 1997 right now right before the Asian Contagion and Dr. John Meredith (LTCM Hedge Fund) with Europe. Sorry for my spelling errors, writing in three languages screws the brain up at times. The move by the Swiss is making me a bit anxious as we see people move in to Defense Stocks while selling other stocks, allow me time to reflect on your posts. Biotech and Pharma plus Clorox, CHD, HSY, KRFT, KR, PF with REITs is based off fear, I have no idea about Apple but I knew Blackberry was a joke and came so close to buying the $13 Puts when the news hit, I was too busy unwinding my OCN Puts and churning KITE and ZIOP while watching Apple churn, something is strange with Apple, feeling like those feeling you had when Apple was $700. If Asia and Europe are slowing down as fast as professionals say, Pros will dump every stock no matter how great they are. Put lots of cash on the side lines and let's wait for a Flash-Crash Panic Sell because it's coming, that's what the News is telling my Guts, Cheers my friend! Jesse
Thought you would know by now that the first thing in trading to be beaten out of oneself is the need to be right. You really do appear to have some ego in this one.
Well what is the matter to get some ego? Trading is like pro sport No ego = no gain Ego pushes you to develop your skills and experience. Ego is why you want to be the best. But ok too much ego and arrogance= you will failed. It is a question of balance. In my case I dont care being right or wrong. I just know the rules and know how markets works. I know that if I lose today I will win sooner or later. But amateurs, greedy, lazy people, I just don t care. Markets will crush them AND I need them to make money. So to continue with the subject of the post Too many people think Apple will go up forever They want more and more. This is suicidal. Lemmings do the same. Pigs do the same. I say basic truths and I got too much ego? Lol. Chris Mac
Jesse, LTCM is a really good example! For the moment, we begin to ear that some brokers / hedge funds lost tons of money because of leverage, but we can only see the top of the iceberg! We can imagine like during russian crisis in 1998 a big fall of the S&P... And a bigger rebound with new highs! See graph ! Conclusion : I agree with you. It is too early to believe US market and Apple could rebound on a short term basis and I wait for better prices! And I am ready to buy everything (Nasdaq, Biotech, Apple....) after a major correction ! If I am right, perhaps one of the last rebound of the near-ending Bull market! Wait and see, markets don't give answers easily... Cheers Chris Mac