This week, we’re going to breakdown Apple Inc’s past performance and investigate how Covid-19 impacted its performance.
What is NASDAQ: AAPL?
Did you know Apple also owns Shazam and Beats Electronics?
Apple has acquired many technology start-ups such as Shazam, Beats, and Polar Rose. Polar Rose is a Swedish tech company that developed a facial recognition technology that can tag faces and identify them.
Do you recall that you can sort your images in your iPhone based on faces? Credits goes to Polar Rose. These small tech companies are the reason why Apple is able to incorporate such innovative technologies into their new operating systems every year.
To decide if we should buy Apple’s stock, we need to evaluate its current performance.
So, how is Apple’s performing under Covid-19?
Despite the market meltdown in March 2020, Apple persists to excel under an economic recession. Today, Apple’s stock price is at an all-time high, 139.07USD. This implies that it costs you 139.07USD to buy one share.
What happened to Apple Inc during the Covid-19 meltdown (in March 2020)?
In just 45 days, Apple’s stock price fell by 32%. To put it into a better context, if you had $10,000 USD worth of Apple stocks, it would be worth $6798 USD during the meltdown. Other words, you’ve lost $3202 USD in 45 days.
Imagine if you have 1 million or 10 million worth of Apple stocks, how would it have affected your portfolio?
How did Apple go from $56.40 to $139.07 per share? (March 2020 to today)
Thanks to the nature of the tech industry, it was not affected as heavily. Compared to the retail, consumer goods, and airline industries, the tech industry can generate sales remotely.
As Apple’s online store has been running for years, lockdowns in many major cities did not affect Apple’s clients as they can easily purchase the new iPhone and AirPods online.
This is one of the major reason why Apple’s sales persisted to excel during lockdown periods.
Disclaimer: This is not meant to persuade you to buy Apple Inc stocks, this is purely research that I think is interesting and wanted to share with you all! Please remember to do your own research and trust your own judgements when it comes to investing. Everyone is so different!
So, is buying Apple Inc a good time now?
Personally, I do not think this is a good time to purchase Apple if you are looking for short term profits as Apple is overvalued relative to its peers. What does this mean?
It means that Apple is expensive and it is rip-off to buy it at the moment.
However, if you are looking to buy Apple for a long-term investment, it would be a much more justifiable action than the latter.
Why is Apple a good long horizon investment?
Apple persists to attract more customers and they have built up a large population of loyal customers to their products.
Even if Apple does not attract anymore new customers, their reach to their existing customers is sufficient for them to excel as long as they persist to launch innovative products.
Look at the recent iPhone 12 Pro release: despite it was released during the Covid-19, the first batch of iPhone 12 Pro was sold out immediately after the launch in China. How insane is that?
If I want to buy Apple Inc stocks, how can I do so?
Disclaimer: I am not receiving any money for recommending any of these stock brokers and I am recommending it because I genuinely believe it is a good service for investors to use.
The best way to buy any stocks is to NOT go through your bank, they’re truly a rip-off.
Buy your stocks through a credible stock broker such as Interactive Brokers and Futubull.
Between the choices of Interactive Brokers and Futubull, I personally enjoy the use of Futubull more as it is extremely user-friendly and supports English and Chinese users.
Moreover, Futubull automatically computes the risk level of your portfolio and allows you to easily manage your stocks via your iPhone, iPad, Andriod, Mac, or PC! Most importantly, it is commission-free and the transaction cost is minimal.
Quick history of Apple
Did you know that most successful business that exist today were created during an economic recession? Apple went public during the 1980s economic recession and yet it excelled.
How does Google, Amazon, Microsoft compare to Apple (data collected from today)?
By ranking the price of these tech giants, Amazon costs the most, followed by Google, Microsoft Corp, and Apple Inc.
Does it mean if Apple is the cheapest, I should buy more?
Absolutely NOT! To be a successful trader/investor, you must look for asymmetric risk and reward investments.
What does asymmetric risk and reward mean?
Asymmetric risk and reward is when the risk you bear in any investment is less than the expected return of investment.
Take for example, this stock’s risk is unexpectedly low, but its potential in skyrocketing is huge. However, not a lot of investors acknowledge this yet. You, who have this information, is going to invest in this stock that has “asymmetric risk and reward”.
One of the biggest hedge fund managers – Ray Dalio – claims that in every investment he makes has asymmetric risk and reward. It is the reason why he is so successful in managing his clients’ money.
Currently, Ray Dalio’s company (Bridgewater Associates) has $138 billion USD under management. Hence, it proves that investors are rewarded by looking for asymmetric risk/reward investments.
It is a tough concept to understand. Don’t feel down if you don’t understand it right away.
Read it through again and reach out to me if you need more clarifications!
Wow! It was a long article. Hope you learned a thing or two about Apple Inc!
If you enjoyed the financial analysis of Apple Inc, let me know so I can write more blogposts like this in the future. If you don’t agree with my analysis of Apple Inc, let me know about that too, I am interested in your take.