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2 thoughts on “End of the Blind Apple Trade

  1. Thanks for the article…. What is your outlook information technology sector – are you favoring one sub-sector over another?

    • @stockpicker

      Thanks for the comment. Please see the graph of the Nasdaq 100 vs. the S&P 500 index.

      Despite all the media attention that big cap information technology companies get, since around April of 2012, big cap info tech has actually under-performed the broad S&P 500.

      The recent decline in Apple’s stock (since the most recent peak in Sept 2012) has a lot to do with the recent Nasdaq 100 relative decline to the S&P 500 since September 2012. The big fear is declining profit margins in the consumer mobile space, not just for all consumer PC’s.

      Mobile computers (smartphones as they are called), though relatively new, are just computers in the overall scheme. The Apple Iphone was the first real usable smart phone. Apple gets credit for getting it right and they have reaped the benefits of that good design work.

      Once the PC makers (along with Google and Microsoft….Android and Windows are the main competing consumer mobile operating systems) figure out how to operate with half decent, usable products in the consumer mobile space(ranging from smartphones, tablets, to laptops), the industry should settle down. But the one given is profit margins will come down for industry leading Apple.

      To answer your question on info tech subsectors, I prefer high end business focused software makers over consumer hardware makers and their supply chain, at least near-term while the PC makers margins get straightened out. But this is a company by company research and analysis task.

      The big prize for Apple and Google, and Microsoft’s big fear. If one of the three companies comes to dominate the mobile consumer space, that’s the company that will probably, over time, come to dominate the entire business segment as well. If you own the dominant mobile platform, you’ll eventually dominate the business desktop as well.

      Hope this helps. Please email (see the About VR View page) me if you need to go over any individual companies in detail.

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