I am continuing to follow my investment thesis of selling the rallies. Although Apple posted impressive quarterly results yesterday I don't think they will be immune to the slumping economy. Given the likely hood that Obama will be elected President of the United States and the continued likely hood that both houses in congress will be controlled by the Democratic party I believe the economy's troubles will deepen. At best, the current economic slump will probably last several years. I think that will be true regardless of who is elected. However, I think that the likely hood that taxes will rise due to the Democratic policy of "spreading the wealth around" and this will cause the down turn to be deeper and longer than my current best case scenario.
If a rising tide lifts all boats a falling tide does exactly the opposite. Apple may very well out perform its peers but virtually all of apples sales are from descretionary spending budgets and you don't have to be a genius to know that descretionay budgets are going to be smaller for a long time. Apple is priced for perfection (it is currently trading at $101 in the premarket session. I love apple but sometimes you have to sell the ones you love. Sell baby sell.
$97.37 (10/22/08)
