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Apple Day: Skeptics have it wrong (again)

Jun 05, 2023

Good morning! 👋

The markets are mixed in early going, as I suspected might be the case when I got up in the middle of the night and sent this tweet.

No matter.

There is ALWAYS a way into the fight.

Speaking of which, I hope everyone in the One Bar Ahead® Family enjoyed the June issue. I’m super excited to see what our newest recommendation does over the next 12 months and, of course, all the growth that I think comes with it. I’m also putting a new price target on two of our current holdings, and I’ll have that in this morning’s update. Upgrade to Paid

Meanwhile, here’s my playbook.

Can the rally continue?

Definitely.

There are some caveats, of course, as I noted to Ashley Webster this morning just ahead of the opening bell, of course. (Watch)

Investing Implications: I told you to get on the gas starting last October and urged you to buy Big Tech in particular. I also said anybody who stayed on the sidelines would get caught like a deer in the proverbial headlights. That’s happening now, and you can feel the FOMO creeping in.

Investors who went to cash because they thought it was “safe” now have a very nasty problem on their hands because they’re going to have to play “catch up” and roll the dice while many savvy investors—present company included—are thinking about taking profits.

The lesson is simple.

You have to be “in to win,” or you won’t... win.

Apple Day: Skeptics have it wrong (again)

Skeptics say that Apple’s big day will be a dud.

Let’s review...

iPad—Skeptics said, “So what.” Now worth 10.8M units shipped in Q1 2023, generating $9.4B
AirPods—Skeptics said, “Who needs fancy earphones.” Now $13.5B worth of wearables (which includes ear pods and watches) sold in Q1 2023.
Apple Watch—Skeptics said, “Watches are for telling time.” In Q1 2023, 66% of those who bought an Apple Watch were first-time buyers. Apple sold more than 40 million Apple Watches in 2021 alone; estimates suggest the company has sold more than 195 million watches since introducing ‘em.

Anybody doubting Apple product cycles needs to take a quick spin through the history books.

Apple has returned 1,197.70% over the past decade because the company continually introduces new products after letting the competition do the hard learning, all the while learning from their mistakes and planning a superior offering. That’s enough to turn every $1,000 invested on June 5, 2013 into $12,977 today, according to FinMasters.

I can’t wait to see what Team Cook rolls out.

Apple at $200 is not difficult to imagine.

Tactical thought: Might be time to take some profits or think about Selling Covered Calls to lock in a few. That way, I can ride to higher prices but know that I’m getting paid if prices retreat a bit, too.

More oil cuts = higher prices

OPEC+ decided not to cut production AND made no plans to cut production for the rest of 2023, or at least that’s what is being reported. (Read)

The game ain’t over by a long shot, as I explained to the fabulous Ashley Webster this morning just ahead of the opening bell. (Watch) I believe the only reason OPEC didn’t enact mandatory cuts was because China didn’t have currency alternatives (to the USD) ready.

Will China have a Lost Decade of its own?

Macquarie’s Chief Economist Larry Hu says that China isn’t headed towards a Japanese-style 1990s stagnation just yet. Instead, he’s attributing the recent economic slowdown to a “premature” withdrawal of policy support after better-than-expected Q1 data. (Read)

I’m not sure I agree.

Having spent more than 30 years in the region—including a lot of time in mainland China—I definitely see similarities. I believe the answer depends on whether or not Beijing decides to alter the playbook again and, in the process, puts more stimulus into the mix.

Meanwhile, invest “because” of China, but not necessarily “in” China.

Pot farmers going broke

Pot was supposed to be the new investing gold rush a few years ago.

I said stay away because—legal or not—marijuana farmers would face all the same issues normal businesses do when legalized. Some of the biggies, right off the top of my head, include low prices, tough black-market competition, high state taxes, banking and export restrictions... all of which make it tough for legal growers to make money.

It would appear that my analysis was on track.

Fortune reports that pot farmers are lamenting the fact that they’re growing for a legal NY weed market that’s NOT taking off. “We’re all losing money,” says Seth Jacobs in the article. (Read)

And if you are absolutely convinced that the marijuana market is real?

You’ve got two choices.

You can take your chances with a start-up or try to pick the winner from dozens of upstart operations that may or may not have qualified management, operational excellence, and the financial wherewithal to survive in a highly competitive, rapidly evolving marketplace.

Or...

Consider buying a fertilizer company like Scotts Miracle-Gro (SMG) instead. It’s the pot industry’s version of a “must have” because every pot farmer needs fertilizer in one form or another. Doing so ensures you have the size, scope, and scale needed to overcome the difficulties of picking individual winners. And the 3.99% yield isn’t too shabby either.