Like it or not Apple looks like it is about to go vertical.
Its and old maxim “not to fight the tape “ when it comes to the market and bubbles always have more energy than the sceptic can possibly image.
As Maynard Keynes said, “Markets can remain irrational far longer than you or I can remain solvent.”
Of course the contra argument holds that Apple isn’t a bubble, it has a low p/e etc etc. and if the “market is always right,” they are right. I have to add, at least for now.
It seems the market is prepared to stomach the first ever $1 trillion stock and it look like it could be Apple.
The big weigh point is going to be the iPhone 5 launch.
All the sneek peeks on the web don’t support the idea that the new phone is going to be jaw-droppingly amazing, but if you believe the market then its going to be hot enough to open up new horizons for the already amazingly successful apple.
There is the hope that a small ipad will be wonderful and a new TV platform will open the TV market for apple and yet more creative cannibalization.
The market says this is right and I am wrong.
Apple at new highs triggers a break out of the upper bound of the box I wrote about in an artice a few months ago. For uber-bulls this would be a buying signal. Not that a buying signal seems to be needed by the market.
Clearly the buying is geared to the lead up to the launch of this autumns news products; a classic “buy Apple” strategy.
Happily I am not short and can simply look on and marvel.
Of course the stock markets themselves are bemoaning the lack of private investor interest in the stock market these days. The legions of investors of old have been annihilated by the dotcom crash and over a decade of sideways trading through cyclical boom and doom. Momentum investing cant work when there is a shortage of momentum.
The mass market of equity investors has gone, leaving a rump of high risk traders hooked on risky stocks with the boring gnarly evergreen old value investors left to poke around in the ruins.
Yet momentum lives on and it’s called Apple.
Apple is one of the last redoubts of the old style private investor, a new pod of which came to the market for the Facebook IPO and got culled.
For the wary Apple investor the Nasdaq index itself provides a worry in addition to any new product slip ups, the unstoppable rise of Apple might get check if their weighting in the Nasdaq was to be cut again.
That is meant to happen if Apple hits 25% of the index’s combined value and get so big it dominates the index again.
Like the Facebook lock up, it’s a technical event to watch out for but one unlike the definitely timed “lock up” release, that would only come about through a number of technical factors including the buoyancy of other stocks.
So Apple looks like it is on the brink of another gravity defying run cheered on by all including skeptics like me.
After all wouldn’t it be nice if this time it was different.