Recommendations Performance/Apple

I’d like to give an update on some of the stock suggestions I’ve made as well as add a few new ones and I want to talk a little bit about everyone’s favorite stock: AAPL.

Apple has reached its once price target of $300 and doesn’t show any signs of slowing down. But is AAPL more valuable now then say, 3 months ago? The market does in fact say so, as it is beating the S&P 500 by about 20%. But then, the market as whole from 3 months ago is also up 10%, so that must mean that it is also 10% more valuable… I say no. This isn’t an earnings, or fundamental, or technical rally, it’s a quantitative easing rally as we all should know by now. But even in light of that fact, it hasn’t stopped the market cheerleaders from proclaiming themselves as geniuses because they recommended Apple at $250.

Don’t get me wrong, only a fool would think that they aren’t an outstanding company, but the point of this post is to show how and where QE hits the hardest, and also to show you why I think that there are better deals with higher upsides than AAPL, and several of them I have already recommended on this webpage. This rally can be covered using a 3 month chart, and all examples I list here will based on that time frame.

Let’s start with Revett Minerals, a speculative silver mining play that has no dividend, low volume, and almost no mainstream coverage. RVMIF is beating the S&P 500 by over 40% and AAPL by roughly 20%.

Aurizon Mines (AZK), a productive junior gold miner has also beaten the S&P and AAPL by 40% and 20% respectively.

Silver Wheaton Corp, symbol SLW, a company that I’ve named as the standard for silver miners- they are the AAPL of silver stocks, has outperformed the S&P by 60% in the last three months. That translates to 40% better than AAPL and they’re share price, like all others I’m naming, is a fraction of AAPL’s.

Endeavour Silver Corp (EXK) like the first two, has outperformed AAPL and the S&P by just under 40% and 20%.

First Majestic Silver (FRMSF) has beaten AAPL by……. nearly one hundred percent in the last three months. Also outperforming AAPL is Molycorp, symbol (MCP) by yet again just under one hundred percent.

As stated previously, the point of this article is not to rip on Apple, but rather to show you exactly what QE has done, what it will do in the future, and to point out that QE does not make companies more valuable, it simply has the ability to increase they’re share prices in nominal terms. The companies that own hard assets and are hedged against the dollar will beat the consumer based equities day in and day out when the policy makers are trying their best to devalue the currency. I honestly feel sorry for the bears of this market who had everything correct in technical terms but have been getting crushed by the quantitative easing mania.

Another (rather amusing) example is RIMM, up 5 points in the last 2 months, but underperforming AAPL by roughly 40%. Quantitative easing can have a “meltup” effect on equities including the underperforming companies that have no reason to be trading higher and RIMM, as well as the other companies that I listed above are a perfect example of that.

Advertisements

About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: