A Greek rescue was in jeopardy Friday causing a small dramatic shocking loss of -.7%. After some more riots and a lot of tear gas over the weekend however austerity measures were approved today and Greece is saved once again, resulting in a +.7% rise. Gotta love this market.
Interesting reads:
- Without Apple (AAPL) and AIG (AIG), S&P earnings growth is only 1.1% vs 8.4% - (MarketMontage)
- Obama reveals new $3.8 trillion budget - (CNN Money with Graphics at ZeroHedge)
- 1%+ days, aka "all or nothing days" are so last year - (Bespoke)
- Reminder, economists are really terrible at predicting the market - (WSJ)
The only thing that can (and will ultimately) derail this market rally is more investor euphoria over the immediate future. The US debt doesn't matter, our 2012 projected deficit doesn't matter, and Europe doesn't matter. Nothing matters but Apple's iPad 3 launching. Well eventually the music stops and these factors will abruptly become important once again. When that happens is anyone's guess, but just remember to consider adding some insurance to those new positions, stop losses do work.
Speaking of Apple (AAPL), the stock closed today at $502.60 giving the company a market cap of $468.61 Billion. The majority of this run has come post earnings where Apple announced its first ever $40 Billion+ quarter and most recently hype surrounding the iPad 3 has soared. Now, I am huge Apple nut and will be buying the iPad 3, however it seems to me that everyone and their mom is now buying Apple stock. I can't help but think the party is going to wind down sooner than later. I don't know how else to say this, but I have to admit, I have become a skeptic.
Stay frosty out there and I will see you tomorrow!
I agree Apple has ramped but growing at 75% a year with a PE of 13 is not reasonable. I am sure it will rest but certainly it deserves a much higher multiple...don't you think? Even if their rate of growth comes down to 20...the PE should be 16-20.
The argument can definitely be made. Focusing just on this latest leg up though there seems to be almost a craze to just own Apple stock regardless. It has moved up with the market and if the market continues its streak then Apple will certainly continue to move higher. You can only grow so much though and maintaining such a monster valuation is going to require Apple to keep releasing awesome products. While skeptical, I do not mind being proven wrong as a consumer