Monday, January 27, 2014
Have an exit plan. Tweet from Matt Drudge, The Drudge Report
Apple stock plunged $46 - 8% - in after hour trading this afternoon after releasing its 1st quarter fiscal year earnings. It's irrelevant whether or not they beat estimates because the estimates are rigged by Wall Street analysts to be beaten anyway. It lowered its outlook for 2014 and that was relevant. The net-net of it is, as I've been saying ad nauseum, the consumer is dying on a vine.
There's a lot of mutual and hedge funds who are highly overweighted in AAPL stock. Unless the Fed intervenes heavily tonight and tomorrow in the futures markets, the rest of this week could get ugly for the stock market. In addion, the NYSE released monthly margin debt numbers for November and it showed a new all-time high for margin debt, by a considerable amount. Historically market peaks occur when investor margin debt goes parabolic, which it has.
I have been warning anyone willing to listen that this is the most overvalued market in the history of this country, especially if you adjust earnings by using the GAAP accounting standards that were enforced 20 years ago. My advice is to sell now and get your money out of the system as much as possible. It won't be long before there's a stampede for the exits...foretold is forewarned.
Posted by Dave in Denver at 5:10 PM