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More on Apple Stock Crash Prediction

by @ 10:25 pm
Filed under: financial — Tags: ,

Apple LogoWhen I posted this blog entry about Apple crashing to $45 a share, I didn't expect the company that made that prediction, BAM Investor, to contact me about it.

But that's just what the company did and I managed to have a phone chat with the company boss, JG Savoldi about his astonishing forecast.

You can read about it in my Reality Check column on Financial Tech Spotlight.

Disclaimer: Financial Tech Spotlight is one of the sister sites of TMCnet.com, a network of sites owned by my employer, TMC.

Oracle to the Rescue?

by @ 10:27 pm
Filed under: financial — Tags: ,

OracleThe market hasn't been feeling so well lately. Maybe it's the European crisis or the not so great news on jobs or the bad housing numbers or the gushing BP oil, or the brutal summer heat. It was yet another bad day with the Dow off 145 points or 1.4%.

What the market needs is a bit good news to cheer it up and it might have received that in the form of Oracle's earnings release tonight. Fresh off Sun's acquisition Oracle reported earnings of $0.46/share, handily beating the analysts' estimates. In response, Oracle's shares rose 4% in after-hours trading.

Oracle's good news could bode well for the market tomorrow, specially for the tech sector so we may finally see some solid gains. The rosy earnings could be interpreted as a signal that businesses have started robust spending. That should eventually translate into more hiring which is exactly what this economy needs to pull it out of its long malaise.

Apple to $45?

by @ 10:22 pm
Filed under: financial — Tags: ,

Apple LogoAccording to this article, citing a previously unknown investment/research company, BAM investor, Apple could fall to as low as $45/share within a few months based on their technical analysis.

Something tells me BAM investor needed a little publicity so they just dumped an outrageous claim on the wires and it received its due double-take. But can Apple really drop to $45/share from its current $270/share?

Sure it can. Anything is possible in the stock market. The DOW could also drop to 0, but chances of that happening is pretty low.

Apple has had a good (no, outstanding) run-up. Its out-sized market cap is based on a combination of optimism and momentum. No company can keep either factor going forever, so Apple, like many others will eventually face reality and its share price will get dragged into more realistic figures. That may be $100 or $120, but $45 just doesn't seem realistic. Yeah, it could happen but going by the same likelihood, it could hit $800.

BP Dividends in Jeopardy

by @ 11:37 pm
Filed under: business,financial — Tags: , , ,

As stated in my previous post, that 9.2% BP dividend yield was just wishful thinking. Now comes the word that lawmakers want BP to suspend any dividend payments because obviously the company has gotten one hell of a liability to deal with and paying the shareholders instead of the victims isn't going to sit well with anyone.

While BP shares rose modestly today in sympathy with the rest of the market which had a solid day, the news of the potential dividend cut will not please the investors and generally that's bad news for the stock.

More than likely BP shares will experience weakness tomorrow as a result. Right now about the only thing that can give BP a boost is sealing that oil well. Unless and until that happens the string of bad news will continue for BP.

I do wonder about one thing. If the outlook gets really nasty for BP, as in a risk of insolvency, will the British government step in with a bailout plan? Will the British public be in the mood for any more bailouts? Small chance, but a possibility nevertheless.

Apple Passes Microsoft

by @ 12:04 am
Filed under: financial,google,microsoft — Tags: , , ,

It's hard to believe, but today Apple's market cap of $222B is larger than that of Microsoft which finished at $219B. That makes Apple the biggest Tech company on the block today. Microsoft will probably reclaim the top spot tomorrow, but Steve Jobs must be happy to have surpassed its old nemesis.

And Google? Today its market cap stood at $151B. Still has a long way to go to catch up to the big guys. Don't shed any tears though, Google is much younger than the duo. It'll get there in due time.

Options Friday

by @ 10:55 pm
Filed under: financial — Tags: ,

With the stock market down about 4% today and tomorrow (Friday) being an options expiration day, market volatility is all but certain. Be on the right side of the May options bets and you could be rewarded handsomely, otherwise the losses could be heavy.

Here's my market prediction for Friday, down for most of the day and then going positive in the last 1-2 hours. It's a familiar pattern, I've seen it many times.

Gold to $800/oz

by @ 10:45 pm
Filed under: financial — Tags: ,

Just read this article on Fortune about predictions of gold prices falling to $800-$900/oz in the next 1-2 years. The justification being that with the world markets stabilizing, investment in gold will no longer be viewed as a prudent choice and investors will abandon the metal for more rewarding bets.

I don't see these predictions holding much weight. The fundamental issues that led to the most recent financial crisis are still largely unresolved, albeit temporarily patched, debt levels are still sky high and there are political uncertainties in Europe and US.

At $1,200/oz gold may be over-priced for a stable and calm world. Ours is anything but, and as long as that continues so does the marching onward and upward of gold prices. $2,000 may be a stretch but $1,500 is definitely within a striking distance.

Stock Market Rally, Euro

by @ 10:25 pm
Filed under: financial,money — Tags: , , ,

euroWe knew it was coming, but I didn't expect the Europeans to pull off a rescue plan as early and as boldly as they did. Good for them and good for the markets which responded in kind by rocketing up today around the globe. Banking shares, specially the battered European ones, like ING, were on fire today.

Now we know that Europe means business defending its currency, the euro. The real test however will be in the coming days and weeks as the euphoria and wishful thinking subsides and reality is back to being front and center. Will the storm become a faint memory, or will this so called contagion return with a vengeance. We will see what we will see.

Stock Market Drop

by @ 10:32 pm
Filed under: financial — Tags: , ,

As I saw the market take a deep dive around 2:30 today my reaction was a mixture of fear and excitement. I'd never seen anything like this before. I saw Apple's stock take a nosedive to under $200 in a matter of minutes. There were red figures everywhere, almost as if a child was commandeering the market.

By the time the Dow had plunged by near a 1,000 points, I knew this was an irrational panic and that we would see a snap back. It happened fast. In just a few minutes the DJIA recovered 600 points in the wildest whipsaw I'd ever seen. Now I don't play the market as I once did. Too bad, I could have made a killing today playing a few option contracts - Could have, should have, would have.

Then again, if I had acted on my own feelings on Apple a couple of weeks ago, I'd be reaping some decent profits today anyways. But it doesn't matter, with the stock market there's always another day and another chance. Although we may not see volatility like this again for quite some time.

Dollar Rally

by @ 11:49 pm
Filed under: financial,money — Tags: , , ,

The last time the euro was below $1.30 USD was over a year ago. It's below $1.30 once again. This despite the fact that the consensus had been for the US dollar to continue to be under pressure and see further declines. The fundamentals in the US haven't really changed much. There's still a monster-sized deficit and growing and there's even talk about the US spending all its income servicing debt in a few short years.

What's changed is the financial fiasco unraveling in Greece and gripping Europe by proxy. That has the investors scurrying and flying to the US dollar. It's a short term relief for the dollar where in normal conditions (in my opinion) should be trading at parity with the euro.

For now the market is nervous because it doesn't know how deep the rabbit hole in Europe goes and as usual the governments aren't saying much, lest they spook the markets even more. That has opened a short-term advantage for the dollar.

But my feeling is that the favorable period for the dollar will soon pass as Europe bites the bullet and faces the issue head-on, instead of wavering and hoping that the situation will correct itself. If the US hasn't addressed its deficit issue by then (and I see no evidence of that), the dollar will resume its slide and who knows how far the American rabbit hole will go.

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