Apple Market Outlook...
January, 2009
With the US economy crashing around Apple's ears and with competitors
flooding the market with 'me too' smart phones, Apple's stock price shows
the kind of resilience that marks it out from the crumbling stock price of
most companies. Down 50% from the high is pretty good when you look at ream
after ream of performance tables for solid companies down 70-80 even 90%+.
Many investors remember the dotcom crash where lots of worthless companies,
puffed up by fraud and mania, plummeted. This crash is different. In this
stock market rout, bulwarks of the American economy are being pitched into
the void.
At $91 a share, Apple is worth $81 billion, which is 12 Fords and 32 GMs and
only half the mighty GE and Microsoft market valuations. Apple is worth four
Dells. You could buy Goldman Sachs, Citigroup and Boeing for the price of
Apple. Apple is worth more than Google!
The maker of snazzy computers, cool phones and music players is therefore
clearly still mesmerising the market.
Traditionally the Christmas market would be the pivot point for movements in
the stock price. In normal years Santa Claus is the key man when it comes to
the sales of consumer electronics. But this market is different and the key
to the coming months is whether this market has found a bottom or whether
there is a catastrophic final fall to come.
As the world economy totters on the cusp of a 1930's style depression,
nothing Apple does can really preserve it from that potential Armageddon.
Everyone is expecting an awful Christmas but if the hammer doesn't fall
again on the US and world economy, things in the market will start to look
up.
For good or ill, Apple cannot buck the trend of such seismic events. It will
take years for the real good times to roll again and against this background
it seems likely that Apple will gain yet more ground. In an environment
where even good companies can fail, great companies can be left the 'last
man standing.' If the doomsters turn out to be right only the stronger will
survive the next few years.
Clem Chambers is CEO of stocks and investment website ADVFN. For free
real-time stock prices go to: www.advfn.com
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